TIDMINDV
RNS Number : 5938Q
Indivior PLC
28 October 2021
October 28, 2021
Indivior Announces Q3 and Nine Months 2021 Results;
Raises FY 2021 Guidance
Period to September Q3 Q3 % Change YTD YTD % Change
30th
2021 2020 2021 2020
$m $m $m $m
------------------------- ------ ------ --------- --- ------ ------ ---------
Net Revenue 187 159 18 568 462 23
------------------------- ------ ------ --------- --- ------ ------ ---------
Operating Profit/(Loss) 38 18 111 168 (147) NM
------------------------- ------ ------ --------- --- ------ ------ ---------
Net Income/(Loss) 27 10 170 169 (135) NM
------------------------- ------ ------ --------- --- ------ ------ ---------
EPS/(LPS) (cents
per share) 4 1 NM 23 (18) NM
------------------------- ------ ------ --------- --- ------ ------ ---------
Adj. Operating
Profit* 38 30 27 155 56 177
------------------------- ------ ------ --------- --- ------ ------ ---------
Adj. Net Income* 27 19 42 114 33 NM
------------------------- ------ ------ --------- --- ------ ------ ---------
Adj. EPS* 4 3 33 16 5 NM
========================= ====== ====== ========= === ====== ====== =========
(*) Adjusted (Adj.) basis excludes the impact of exceptional
items as referenced and reconciled in Note 4, 5 and 6. NM - Not
meaningful.
Comment by Mark Crossley, CEO of Indivior PLC
"We are pleased to report another quarter of good growth and
further strengthening of our leadership in addiction treatment.
Based on the strong commercial execution behind SUBLOCADE (R)
(buprenorphine extended-release) injection and the resilience of
our legacy US film business, we have again raised our 2021 net
revenue expectations for the overall Group and for SUBLOCADE. Our
strategy to focus on the large and growing opportunity in organized
health systems (OHS) has seen us deliver five consecutive quarters
of double-digit(1) underlying net revenue growth for SUBLOCADE,
providing us strong momentum as we look forward to 2022."
YTD / Q3 2021 Financial Highlights
-- YTD 2021 total net revenue (NR) of $568m increased 23% (YTD
2020: $462m); Q3 2021 total NR of $187m increased 18% (Q3 2020:
$159m). The strong increase in both periods was primarily driven by
higher NR from SUBLOCADE (+86% vs. YTD 2020, +97% vs. Q3 2020),
continued growth in the buprenorphine medication-assisted treatment
(BMAT) market, and by market share stability for SUBOXONE (R)
(buprenorphine and naloxone) Film in the US.
-- YTD 2021 reported operating profit was $168m (YTD 2020
operating loss: $147m); Q3 2021 reported operating profit of $38m
increased 111% (Q3 2020: $18m). On an adjusted basis, YTD 2021
operating profit was $155m (Adj. YTD 2020: $56m). Adj. Q3 2021
operating profit of $38m increased 27% (Adj. Q3 2020: $30m). The
substantial improvement in adjusted operating profit in both
periods was primarily driven by strong net revenue growth.
-- YTD 2021 reported net income was $169m (YTD 2020 net loss:
$135m); Q3 2021 reported net income was $27m (Q3 2020 net income:
$10m). On an adjusted basis, YTD 2021 net income was $114m (Adj.
YTD 2020 net income: $33m). Adj. Q3 2021 net income was $27m (Adj.
Q3 2020: $19m). The significant increases in adjusted net income in
both periods were primarily driven by higher operating profit,
partially offset by increased net finance expense.
-- YTD 2021 ending cash balance was $1,005m (FY 2020: $858m);
net cash was $756m (FY 2020: $623m). Higher operating profit,
relatively stable government rebate payables and proceeds from the
sale of the legacy TEMGESIC(R)/ BUPREX(R) / BUPREXX(R)
(buprenorphine) analgesic franchise outside of North America was
offset by cash used to repurchase ordinary shares as part of the
Group's $100m share repurchase program.
(1) Assumes net revenue of $54m in Q2 2021, which excludes a
large order of $7m from a criminal justice customer
YTD / Q3 2021 Operating Highlights
-- YTD 2021 SUBLOCADE NR of $169m (+86% vs. YTD 2020); Q3
SUBLOCADE NR of $65m (+97% vs. Q3 2020 and +7% vs. Q2 2021)
reflects strong growth in the OHS channel and increased new US
patient enrolments. Q3 2021 US dispenses were approx. 48,400 units
(+66% vs. Q3 2020 and +13% vs. Q2 2021).
-- YTD 2021 PERSERIS(R) (risperidone) extended-release injection
NR of $12m (+20% vs. YTD 2020); Q3 2021 PERSERIS NR of $5m (+67%
vs. Q3 2020 and +25% vs. Q2 2021) reflects improved commercial
access to US healthcare practitioners (HCPs) from the continued
reopening of the US healthcare system. The Group is currently
investing to expand the PERSERIS sales force to achieve US national
coverage in 2022.
-- YTD 2021 SUBOXONE Film share averaged 20% (YTD 2020: 21%) and
exited the quarter at 20% (Q3 2020: 21%). Share erosion since the
"at-risk" launch of generic buprenorphine/naloxone film products in
February 2019 has thus far been lower than historical industry
analogues(1) would suggest.
-- Outside the US: SUBLOCADE / SUBUTEX(R) prolonged release
solution for injection is available in Australia, Canada, and
Israel; approved in Sweden, Finland, New Zealand, Denmark, Germany,
Italy and Norway. SUBOXONE Film now available in Canada, Israel,
Germany, UK, Italy, Finland, Denmark, Sweden, and Norway.
Share Repurchase Program
On July 30, 2021, the Group announced an irrevocable share
repurchase program of up to $100m. Through September 30, 2021, the
Group has repurchased and cancelled 11,730,087 of the Group's
ordinary shares at a daily weighted average purchase price of
189.87p at a cost of approximately $31m. See Note 13 for further
discussion.
FY 2021 Guidance Raised
The Group is raising its FY 2021 guidance for NR and pre-tax
income as follows:
-- Total FY 2021 NR range expected to be $750m to $770m
(previously $705m to $740m), reflecting strong SUBLOCADE
performance and continued market share stability for SUBOXONE
Film.
-- SUBLOCADE FY 2021 NR range expected to be $235m to $245m
(previously $210m to $230m), based on stronger demand and progress
in the US criminal justice system (OHS sub-channel).
-- Positive adjusted pre-tax income at a higher level than previous management expectations.
FY 2021 guidance for the below items remains unchanged :
-- PERSERIS(R) (risperidone) extended-release injection FY 2021 NR range of $17m to $20m.
-- Adjusted gross margin in the low-80% range.
-- Adjusted operating expense (SG&A+R&D) range of $470m
to $480m, primarily reflecting commercial investments to grow the
Group's long-acting injectable (LAI) technologies, principally in
the US.
U.S. Opioid Use Disorder (OUD) Market Update
YTD 2021, the U.S. BMAT market grew in low single-digits.
Moderation in the growth rate versus 2020 reflects the high base
period for comparison in the year-ago quarter, when the BMAT market
grew in the low- to mid-teens as a result of COVID-19-related
demand and the implementation of new federal and state government
actions to facilitate access to medication-assisted treatment (MAT)
for OUD patients. Over the approximate two year period since the
beginning of 2020, BMAT market growth has averaged in the mid- to
high-single digits, which is in-line with the historical industry
growth rate and the Group's long-term expectations.
The Group continues to expect long-term U.S. market growth to be
sustained in the mid- to high-single digit percentage range due to
increased severity and overall public awareness of the opioid
epidemic and approved treatments, together with regulatory and
legislative actions that have expanded OUD treatment funding and
treatment capacity. The number of physicians, nurse practitioners
and physician assistants who have received a waiver to administer
MAT and those able to treat up to the permitted level of 275
patients continued to grow in Q3 2021.
As a result, there is increasing patient access to BMAT.
Indivior supports efforts to encourage more eligible healthcare
practitioners (HCPs) to provide BMAT, and the Group continues to
resource its compliance capabilities for the growing number of BMAT
prescribers and patients.
The Group's focus is to continue to expand access to SUBLOCADE
amongst OHS and core HCPs to ensure availability of this
potentially important treatment option to the estimated 1 million+
patients per month who are prescribed BMAT by HCPs.
(1) IMS Institute Report, January 2016, "Price Declines after
Branded Medicines Lose Exclusivity in the U.S."
Financial Performance 9 Mos. YTD and Q3 2021
Total YTD 2021 net revenue increased 23% to $568m at actual
exchange rates (YTD 2020: $462m; +21% at constant exchange rates).
In Q3 2021, total net revenue increased 18% at actual exchange
rates to $187m (Q3 2020: $159m; +18% at constant exchange
rates).
YTD 2021 U.S. net revenue increased 33% to $428m (YTD 2020:
$323m) and by 29% in Q3 2021 to $143m (Q3 2020: $111m). Strong
year-over-year SUBLOCADE net revenue growth, SUBOXONE Film share
resilience along with underlying BMAT market growth were the
principal drivers of the net revenue increase in both periods.
YTD 2021 Rest of World (ROW) net revenue increased 1% at actual
exchange rates to $140m (YTD 2020: $139m; -7% at constant exchange
rates). YTD 2021 and 2020 ROW SUBLOCADE net revenue were $11m and
$2m (at actual exchange rates), respectively. Foreign currency
translation benefits and SUBLOCADE net revenue contribution were
the principal drivers of the YTD net revenue increase. These
benefits were partially offset by ongoing competitive pressure in
the legacy tablet business in Western Europe.
In Q3 2021, ROW net revenue decreased 8% at actual exchange
rates to $44m (Q3 2020: $48m; -9% at constant exchange rates). Q3
2021 and 2020 ROW SUBLOCADE net revenue were $4m and $2m (at actual
exchange rates), respectively. The NR decline in Q3 was mainly
attributable to ongoing competitive pressure in the legacy tablet
business in Western Europe and the sale of the legacy TEMGESIC(R)/
BUPREX(R) / BUPREXX(R) analgesic franchise.
Gross margin as reported YTD 2021 was 85% (YTD 2020: 84%; Adj.
YTD 2020: 86%) and 86% in Q3 2021 (Q3 2020: 79%; Adj. Q3 2020:
82%). There were no exceptional costs recorded in gross margin for
the current periods. Adj. YTD 2020 and Q3 2020 excludes $11m and
$5m, respectively, of net exceptional costs of sales related to
inventory provisions due to the adverse impact of COVID-19. The
adjusted gross margin improvement in Q3 reflects a more favorable
product mix from the continued strong growth of SUBLOCADE while the
modest decline in YTD 2021 gross margin reflects the continued
relative strength of SUBOXONE Film.
YTD SG&A expenses as reported were $279m (YTD 2020: $509m).
YTD 2021 included $13m of net exceptional benefits primarily due to
other operating income recorded from the net proceeds received from
the sale of the legacy TEMGESIC(R)/ BUPREX(R) / BUPREXX(R)
(buprenorphine) analgesic franchise outside of North America
(+$19m), and non-cash adjustments to provisions related to
DOJ-related matters (+$18m) and ANDA litigation matter (-$24m). YTD
2020 reported SG&A included exceptional costs of $192m, which
were related to the DOJ matter (-$183m), the Group's strategic
alignment actions (-$7m) and lease impairments (-$2m).
Q3 SG&A expenses as reported were $112m in Q3 2021 (Q3 2020:
$100m). Q3 2021 exceptional items netted to $nil. Net proceeds
received from the sale of the legacy TEMGESIC(R)/ BUPREX(R) /
BUPREXX(R) (buprenorphine) analgesic franchise outside of North
America (+$19m) were fully offset by non-cash adjustments to
provisions related to the ANDA litigation matter (-$24m) and DOJ
related matters (+$5m). Q3 2020 reported SG&A included
exceptional costs (-$7m) related to the Group's strategic alignment
actions.
On an adjusted basis, YTD 2021 SG&A expenses decreased 8% to
$292m (Adj. YTD 2020: $317m); Q3 2021 adjusted SG&A expense
increased 20% to $112m (Adj. Q3 2020: $93m). The YTD 2021 decline
largely reflects incremental costs in the prior period related to
the US direct-to-consumer (DTC) advertising campaign for SUBLOCADE
that did not repeat in 2021, as well as lower legal fees and
expenses related to the DOJ matter (settled in Q3 2020). Higher Q3
2021 SG&A expense largely reflects planned commercial activity
investments, including increased sales and marketing investments
for SUBLOCADE and recruiting for the PERSERIS sales force
expansion.
YTD 2021 and Q3 2021 R&D expenses were $33m and $11m,
respectively (YTD 2020: $26m; Q3 2020: $8m). The increases over the
year-ago periods reflect planned higher R&D activity, as
certain projects and post-market studies were suspended in 2020 due
to the pandemic.
YTD 2021 operating profit as reported was $168m (YTD 2020 op.
loss: $147m). Exceptional benefits of $13m are included in the
current period while exceptional costs of $203m are included in the
year-ago period. On an adjusted basis, YTD 2021 operating profit
was $155m (Adj. YTD 2020: $56m). The increase on an adjusted basis
primarily reflects higher net revenue along with a decline in
SG&A expenses as detailed above.
Q3 2021 operating profit as reported was $38m (Q3 2020: $18m).
Net exceptional items of $nil are included in the current period
while exceptional costs of $12m are included in the Q3 2020
reported results. Q3 2021 operating profit of $38m versus adj. Q3
2020: $30m primarily reflects higher net revenue.
YTD 2021 net finance expense as reported was $18m (YTD 2020:
$12m expense). The additional net expense primarily reflects lower
interest income on the Group's cash balance due to lower short-term
interest rates versus the year-ago period and higher expense
primarily related to interest on the Group's outstanding DOJ
settlement amount. An exceptional expense of $1m is included in the
current period due to the write-off of deferred financing costs on
the previous term loan. On an adjusted basis, YTD 2021 net finance
expense was $17m. There was no adjustment in the prior period.
YTD 2021 reported tax benefit was $19m, or a rate of -13% (YTD
2020 tax benefit: $24m, 15%). Excluding the YTD 2021 $43m tax
benefit on exceptional items, the effective tax rate was 17% (YTD
2020 adj. tax charge: $11m; 25% rate). Q3 2021 reported total tax
expense was $4m, or a rate of 13% (Q3 2020: $3m, 23%). There were
no tax exceptional items recorded in Q3 2021. Excluding the QTD tax
benefit on exceptional items in Q3 2020, the effective tax rate was
24%.
YTD 2021 reported net income was $169m (YTD 2020 net loss:
$135m). On an adjusted basis, YTD 2021 net income was $114m and
excludes the $55m after-tax impact from exceptional items (Adj. YTD
2020: $33m, excl. $168m of exceptional items). The increase in net
income on an adjusted basis primarily reflects higher net revenue
and lower operating expenses mainly due to the SUBLOCADE DTC
campaign in Q1 2020.
Q3 2021 net income on a reported basis was $27m (Q3 2020: $10m).
There were no exceptional items recorded in Q3 2021 (Adj. Q3 2020:
$19m, excl. $9m of exceptional items). On an adjusted basis, higher
Q3 2021 net income was primarily due to increased net revenue.
YTD diluted earnings per share was 22 cents and 15 cents on an
adjusted diluted basis (YTD 2020: 18 cents loss per share on a
diluted basis and 4 cents earnings per share adjusted diluted
basis). In Q3 2021, earnings per share on a diluted and adjusted
diluted basis was 3 cents (Q3 2021: 1 cent earnings per share on a
diluted and 2 cents on an adjusted diluted basis). Higher YTD 2021
and Q3 2021 EPS on an adjusted diluted basis is primarily due to
higher net revenue and the impact of the share repurchase
program.
Balance Sheet & Cash Flow
September 30, 2021 cash and cash equivalents were $1,005m, an
increase of $147m versus the $858m position at year-end 2020. This
primarily reflects higher operating profit and relatively stable
government rebate payables. Gross borrowings, before issuance
costs, were $249m at the end of Q3 2021 (FY 2020: $235m). As a
result, net cash (as defined in Note 8) stood at $756m at the end
of Q3 2021 (FY 2020: $623m), a $133m increase over the YTD 2021
period.
Net working capital (inventory plus trade receivables, less
trade and other payables) was negative $278m at the end of Q3 2021
versus negative $252m at the end of FY 2020. The change in the
period was primarily a result of timing of payments made on
government rebate and trade payables. Separately, the current
portion of provisions and other liabilities increased by $66m in Q3
2021 for the remaining unfunded portion of the Group's share
repurchase program.
Cash generated by operating activities in YTD 2021 was $200m
(YTD 2020 cash used: $94m), representing a change of $294m
primarily due to strong YTD 2021 operating profit, timing of
government rebates payable and the surety bond refunded in Q1 2021.
Net cash inflow from operating activities was $186m in YTD 2021
(YTD 2020 net cash outflow: $122m) reflecting higher cash from
operations and an exceptional tax refund from the IRS which were
offset by taxes paid, interest paid, and transaction costs paid
related to the Group's debt refinancing.
YTD 2021 cash outflow from investing activities was $12m (YTD
2020: $2m) which reflects a payment made to Aelis Farma for an
exclusive option and license agreement to develop its leading
compound (AEF0117) targeting cannabis use disorders which was
partially offset by the proceeds received from the sale of the
legacy TEMGESIC(R)/ BUPREX(R) / BUPREXX(R) (buprenorphine)
analgesic franchise outside of North America.
YTD 2021 cash outflow from financing activities was $26m (YTD
2020: $7m) which reflects payments made for the Group's share
repurchase program and principal lease payments which were
partially offset by the gross proceeds received upon refinancing of
the Group's term loan facility. See Note 8 for further discussion
related to the debt refinancing.
R&D / Pipeline Update
Indivior's quarterly R&D and pipeline update may be found by
clicking here .
Principal Risk Factors
The Group utilizes a formal process to identify, evaluate and
manage significant risks. The Directors have reviewed the principal
risks and uncertainties for the remainder of the 2021 financial
year. In addition to the principal risks and uncertainties
affecting the Group's business activities, detailed on pages 39 to
45 of the Indivior PLC Annual Report 2020:
-- Business Operations
-- Product Pipeline, Regulatory & Safety
-- Commercialization
-- Economic & Financial
-- Supply
-- Legal & Intellectual Property
-- Compliance
During 2021, the COVID-19 pandemic has continued to impact the
Group's principal risks. Governments worldwide have started
deploying vaccination programs and other health measures to lower
virus infection and mortality rates and enable people and companies
to start resuming normality. However, infections caused by the
virus (including its variants) have resurged to various degrees in
some countries the Group has operations in or is targeting for
growth. In June 2021, the Group started to partially reopen its
offices worldwide following local guidelines and regulations while
also continuing to ensure the welfare of its employees. A full
reopening is planned for the fourth quarter, which assumes the
virus or its variants remain relatively contained and that local
guidelines and regulations permit reopening. Reopenings have eased
the challenging business environment in which the Group and
companies across industries have been operating for over a year,
and the Group has experienced some improvements (e.g., increased
number of in-person engagements with healthcare professionals and
members of Organized
Health Systems and easing of certain travel restrictions).
However, some new challenges associated with the reopening of the
economy also have emerged (e.g., high demand with limited supply
for several goods and services resulting in price increases and
project delays). As a result, pre-pandemic business conditions have
not yet been observed or experienced. Therefore, the overall risks
related to the Group's business and operations have only marginally
decreased for the following principal risks: business operations;
product pipeline and regulatory; commercialization; supply; and
economic and financial.
Given the dynamic nature of the current environment, the Group
is closely monitoring health, business, and economic conditions
(including a virus resurgence or new government containment
measures) and their related impact on our employees, as well as on
the workforce of our key third parties, which ultimately may impact
our operations. Given the still mostly remote working environment,
the Group is also continuing to closely monitor the cross-industry
increase in cybersecurity threats and the overall operating
effectiveness of its monitoring and control activities. Despite the
risk mitigation measures the Group has taken, and its on-going
efforts to ensure that contingency actions are appropriate and
effective, if health and business conditions deteriorate, they may
adversely affect Indivior's operations and/or performance, and have
a heightened effect on certain principal risks, including as
related to business operations, product pipeline and regulatory,
commercialization, supply, and economic and financial
Other than in respect to the above, the Directors consider the
principal risks and uncertainties which could have a material
impact on the Group's performance for the rest of the year to
remain the same as described on pages 39 to 45 of the Annual Report
2020.
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:
9 Months to September 9 Months to September
30, 30,
2021 2020
GB GBP period end 1.3530 1.2852
---------------------- ----------------------
GB GBP average rate 1.3853 1.2716
---------------------- ----------------------
EUR Euro period end 1.1682 1.1656
---------------------- ----------------------
EUR Euro average 1.1971 1.1237
---------------------- ----------------------
Webcast Details
There will be a live webcast presentation at 13:00 BST (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 .
Webcast link: https://edge.media-server.com/mmc/p/oy28w6i3
Confirmation Code: 6677702
Participants, Local - London, United Kingdom: +44 (0) 2071 928338
Participants, Local - New York, United
States of America: +1 646 7413167
For Further Information
Investor Enquiries Jason Thompson VP Investor Relations, +1 804 402 7123
Indivior PLC jason.thompson@indivior.com
Media Enquiries Jonathan Sibun Tulchan Communications +44 (0) 2073 534200
US Media Inquiries +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 addiction
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 addiction.
Indivior is dedicated to transforming addiction from a global human
crisis to a recognized and treated chronic disease. Building on its
global portfolio of opioid dependence 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 cooccurring disorders of addiction, including
alcohol use disorder. Headquartered in the United States in
Richmond, VA, Indivior employs more than 800 individuals globally
and its portfolio of products is available in over 40 countries
worldwide. Visit www.indivior.com to learn more. Connect with
Indivior on LinkedIn by visiting www.linkedin.com/company/indivior
.
Forward-Looking Statements
This announcement contains certain statements that are
forward-looking. 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.
Forward-looking statements include, among other things, statements
regarding the Indivior Group's financial guidance for 2021 and its
medium- and long-term growth outlook, its operational goals, its
product development pipeline and statements regarding ongoing
litigation and other statements containing the words "subject to",
"believe", "anticipate", "plan", "expect", "intend", "estimate",
"project", "may", "will", "should", "would", "could", "can", the
negatives thereof, variations thereon and similar expressions.
Various factors may cause differences between Indivior's
expectations and actual results, including, among others (including
those described in the risk factors described in the most recent
Indivior PLC Annual Report and in subsequent releases): factors
affecting sales of Indivior Group's products and financial
position; the outcome of research and development activities;
decisions by regulatory authorities regarding the Indivior Group's
drug applications or authorizations; the speed with which
regulatory authorizations, pricing approvals and product launches
may be achieved, if at all; the outcome of post-approval clinical
trials; competitive developments; difficulties or delays in
manufacturing and in the supply chain; disruptions in or failure of
information technology systems; the impact of existing and future
legislation and regulatory provisions on product exclusivity;
trends toward managed care and healthcare cost containment;
legislation or regulatory action affecting pharmaceutical product
pricing, reimbursement or access; challenges in the commercial
execution; claims and concerns that may arise regarding the safety
or efficacy of the Indivior Group's products and product
candidates; risks related to legal proceedings, including
compliance with the Group's agreements with the U.S. Department of
Justice and with the Office of Inspector General of the Department
of Health and Human Services, noncompliance with which could result
in potential exclusion from U.S. Federal health care programs; the
ongoing investigative and antitrust litigation matters; the opioid
multi-district litigation; the Indivior Group's ability to protect
its patents and other intellectual property; the outcome of patent
infringement litigation relating to Indivior Group's products,
including the ongoing ANDA lawsuits; changes in governmental laws
and regulations; issues related to the outsourcing of certain
operational and staff functions to third parties; risks related to
the evolving COVID-19 pandemic and the potential impact of COVID-19
on the Indivior Group's operations and financial condition, which
cannot be predicted with confidence; uncertainties related to
general economic, political, business, industry, regulatory and
market conditions; and the impact of acquisitions, divestitures,
restructurings, internal reorganizations, product recalls and
withdrawals and other unusual items.
Consequently, 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. You should not place undue
reliance on forward-looking statements. We cannot guarantee future
results, events, levels of activity, performance, or achievements.
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.
About SUBOXONE(R)
SUBOXONE (buprenorphine and naloxone) Sublingual Film (CIII)
INDICATION AND USAGE
SUBOXONE(R) (buprenorphine and naloxone) Sublingual Film (CIII)
is indicated for treatment of opioid dependence. SUBOXONE Film
should be used as part of a complete treatment plan that includes
counseling and psychosocial support.
HIGHLIGHTED SAFETY INFORMATION
Prescription use of this product is limited under the Drug
Addiction Treatment Act.
CONTRAINDICATIONS
SUBOXONE Film is contraindicated in patients with a history of
hypersensitivity to buprenorphine or naloxone.
WARNINGS AND PRECAUTIONS
Addiction, Abuse, and Misuse : Buprenorphine can be abused in a
manner similar to other opioids and is subject to criminal
diversion. Monitor patients for conditions indicative of diversion
or progression of opioid dependence and addictive behaviors.
Multiple refills should not be prescribed early in treatment or
without appropriate patient follow-up visits.
Respiratory Depression : Life--threatening respiratory
depression and death have occurred in association with
buprenorphine use. Warn patients of the potential danger of
self--administration of benzodiazepines or other CNS depressants
while under treatment with SUBOXONE Film.
Strongly consider prescribing naloxone at the time SUBOXONE Film
is initiated or renewed because patients being treated for opioid
use disorder have the potential for relapse, putting them at risk
for opioid overdose. Educate patients and caregivers on how to
recognize respiratory depression and, if naloxone is prescribed,
how to treat with naloxone.
Unintentional Pediatric Exposure: Store SUBOXONE Film safely out
of the sight and reach of children. Buprenorphine can cause severe,
possibly fatal, respiratory depression in children.
Neonatal Opioid Withdrawal Syndrome: Neonatal opioid withdrawal
syndrome (NOWS) is an expected and treatable outcome of prolonged
use of opioids during pregnancy.
Adrenal Insufficiency : If diagnosed, treat with physiologic
replacement of corticosteroids, and wean patient off the
opioid.
Risk of Opioid Withdrawal with Abrupt discontinuation : If
treatment is temporarily interrupted or discontinued, monitor
patients for withdrawal and treat appropriately.
Risk of Hepatitis, Hepatic Events: Monitor liver function tests
prior to initiation and during treatment and evaluate suspected
hepatic events.
Precipitation of Opioid Withdrawal Sign and Symptoms: An opioid
withdrawal syndrome is likely to occur with parenteral misuse of
SUBOXONE Film by individuals physically dependent on full opioid
agonists, or by sublingual or buccal administration before the
agonist effects of other opioids have subsided.
Risk of Overdose in Opioid Naïve Patients: SUBOXONE Film is not
appropriate as an analgesic. There have been reported deaths of
opioid naïve individuals who received a 2 mg sublingual dose.
ADVERSE REACTIONS
Adverse events commonly observed with the sublingual/buccal
administration of the SUBOXONE Film are oral hypoesthesia,
glossodynia, oral mucosal erythema, headache, nausea, vomiting,
hyperhidrosis, constipation, signs and symptoms of withdrawal,
insomnia, pain, and peripheral edema.
DRUG INTERACTIONS
Benzodiazepines: Use caution in prescribing SUBOXONE Film for
patients receiving benzodiazepines or other CNS depressants and
warn patients against concomitant self--administration/misuse.
CYP3A4 Inhibitors and Inducers : Monitor patients starting or
ending CYP3A4 inhibitors or inducers for potential over-- or
under-- dosing.
Antiretrovirals: Patients who are on chronic buprenorphine
treatment should have their dose monitored if NNRTIs are added to
their treatment regimen. Monitor patients taking buprenorphine and
atazanavir with and without ritonavir. Dose reduction of
buprenorphine may be warranted.
Serotonergic Drugs: Concomitant use may result in serotonin
syndrome. Discontinue SUBOXONE Film if serotonin syndrome is
suspected.
USE IN SPECIFIC POPULATIONS
Lactation: Buprenorphine passes into the mother's milk.
Geriatric Patients: Monitor geriatric patients receiving
SUBOXONE Film for sedation or respiratory depression.
Moderate or Severe Hepatic Impairment: Buprenorphine/naloxone
products are not recommended in patients with severe hepatic
impairment and may not be appropriate for patients with moderate
hepatic impairment.
To report pregnancy or side effects associated with taking
SUBOXONE Film, please call 1-877-782-6966.
For more information about SUBOXONE Film, the full Prescribing
Information, and Medication Guide visit www.suboxone.com . For REMS
information visit www.suboxoneREMS.com .
About SUBLOCADE(R) (7)
SUBLOCADE (buprenorphine extended-release) injection, for
subcutaneous use (CIII)
INDICATION AND HIGHLIGHTED SAFETY INFORMATION
INDICATION
SUBLOCADE is indicated for the treatment of moderate to severe
opioid use disorder in patients who have initiated treatment with a
transmucosal buprenorphine-containing product, followed by dose
adjustment for a minimum of 7 days.
SUBLOCADE should be used as part of a complete treatment plan
that includes counseling and psychosocial support.
HIGHLIGHTED SAFETY INFORMATION
WARNING: RISK OF SERIOUS HARM OR DEATH WITH INTRAVENOUS
ADMINISTRATION; SUBLOCADE RISK EVALUATION AND MITIGATION
STRATEGY
-- Serious harm or death could result if administered intravenously. SUBLOCADE
forms a solid mass upon contact with body fluids and may cause
occlusion,
local tissue damage, and thrombo-embolic events, including life
threatening
pulmonary emboli, if administered intravenously.
-- Because of the risk of serious harm or death that could result from intravenous
self-administration, SUBLOCADE is only available through a
restricted program called
the SUBLOCADE REMS Program. Healthcare settings and pharmacies
that order and
dispense SUBLOCADE must be certified in this program and comply
with the REMS
requirements.
Prescription use of this product is limited under the Drug
Addiction Treatment Act.
CONTRAINDICATIONS
SUBLOCADE should not be administered to patients who have been
shown to be hypersensitive to buprenorphine or any component of the
ATRIGEL(R) delivery system
WARNINGS AND PRECAUTIONS
Addiction, Abuse, and Misuse: SUBLOCADE contains buprenorphine,
a Schedule III controlled substance that can be abused in a manner
similar to other opioids. Monitor patients for conditions
indicative of diversion or progression of opioid dependence and
addictive behaviors.
Respiratory Depression: Life threatening respiratory depression
and death have occurred in association with buprenorphine. Warn
patients of the potential danger of self-administration of
benzodiazepines or other CNS depressants while under treatment with
SUBLOCADE.
Opioids can cause sleep-related breathing disorders e.g.,
central sleep apnea (CSA), sleep-related hypoxemia. Opioid use
increases the risk of CSA in a dose-dependent fashion. Consider
decreasing the opioid using best practices for opioid taper if CSA
occurs.
Strongly consider prescribing naloxone at SUBLOCADE initiation
or renewal because patients being treated for opioid use disorder
have the potential for relapse, putting them at risk for opioid
overdose. Educate patients and caregivers on how to recognize
respiratory depression and how to treat with naloxone if
prescribed.
Risk of Serious Injection Site Reactions: The most common
injection site reactions are pain, erythema and pruritis with some
involving abscess, ulceration, and necrosis. The likelihood of
serious injection site reactions may increase with inadvertent
intramuscular or intradermal administration.
Neonatal Opioid Withdrawal Syndrome: Neonatal opioid withdrawal
syndrome is an expected and treatable outcome of prolonged use of
opioids during pregnancy.
Adrenal Insufficiency: If diagnosed, treat with physiologic
replacement of corticosteroids, and wean patient off the
opioid.
Risk of Opioid Withdrawal With Abrupt Discontinuation: If
treatment with SUBLOCADE is discontinued, monitor patients for
several months for withdrawal and treat appropriately.
Risk of Hepatitis, Hepatic Events: Monitor liver function tests
prior to and during treatment.
Risk of Withdrawal in Patients Dependent on Full Agonist
Opioids: Verify that patient is clinically stable on transmucosal
buprenorphine before injecting SUBLOCADE.
Treatment of Emergent Acute Pain: Treat pain with a non-opioid
analgesic whenever possible. If opioid therapy is required, monitor
patients closely because higher doses may be required for analgesic
effect.
ADVERSE REACTIONS
Adverse reactions commonly associated with SUBLOCADE (in >=5%
of subjects) were constipation, headache, nausea, injection site
pruritus, vomiting, increased hepatic enzymes, fatigue, and
injection site pain.
For more information about SUBLOCADE, the full Prescribing
Information including BOXED WARNING, and Medication Guide, visit
www.sublocade.com .
PERSERIS(TM) (risperidone) for extended-release injectable
suspension
INDICATION AND HIGHLIGHTED SAFETY INFORMATION
PERSERIS(TM) (risperidone) is indicated for the treatment of
schizophrenia in adults.
WARNING: INCREASED MORTALITY IN ELDERLY PATIENTS WITH
DEMENTIA-RELATED PSYCHOSIS
See full prescribing information for complete boxed warning.
-- Elderly patients with dementia-related psychosis treated with
antipsychotic drugs are at an increased risk of death.
-- PERSERIS is not approved for use in patients with dementia-related psychosis.
CONTRAINDICATIONS
PERSERIS should not be administered to patients with known
hypersensitivity to risperidone, paliperidone, or other components
of PERSERIS.
WARNINGS AND PRECAUTIONS
Cerebrovascular Adverse Reactions, Including Stroke in Elderly
Patients with Dementia-Related Psychosis: Increased risk of
cerebrovascular adverse reactions (e.g., stroke, transient ischemic
attack), including fatalities. PERSERIS is not approved for use in
patients with dementia-related psychosis.
Neuroleptic Malignant Syndrome (NMS): Manage with immediate
discontinuation and close monitoring.
Tardive Dyskinesia: Discontinue treatment if clinically
appropriate.
Metabolic Changes: Monitor for hyperglycemia, dyslipidemia and
weight gain.
Hyperprolactinemia: Prolactin elevations occur and persist
during chronic administration. Long-standing hyperprolactinemia,
when associated with hypogonadism, may lead to decreased bone
density in females and males.
Orthostatic Hypotension: Monitor heart rate and blood pressure
and warn patients with known cardiovascular disease or
cerebrovascular disease, and risk of dehydration or syncope.
Leukopenia, Neutropenia, and Agranulocytosis: Perform complete
blood counts (CBC) in patients with a history of a clinically
significant low white blood cell count (WBC) or history of
leukopenia or neutropenia. Consider discontinuing PERSERIS if a
clinically significant decline in WBC occurs in absence of other
causative factors.
Potential for Cognitive and Motor Impairment: Use caution when
operating machinery.
Seizures: Use caution in patients with a history of seizures or
with conditions that lower the seizure threshold.
ADVERSE REACTIONS
The most common adverse reactions in clinical trials (>= 5%
and greater than twice placebo) were increased weight,
sedation/somnolence and musculoskeletal pain. The most common
injection site reactions (>= 5%) were injection site pain and
erythema (reddening of the skin).
For more information about PERSERIS, the full Prescribing
Information including BOXED WARNING, and Medication Guide visit
www.perseris.com .
Condensed consolidated interim income statement
Unaudited Unaudited Unaudited Unaudited
Q3 Q3 YTD YTD
2021 2020 2021 2020
For the three and nine months
ended September 30 Notes $m $m $m $m
Net Revenue 2 187 159 568 462
Cost of sales (26) (33) (88) (74)
Gross Profit 161 126 480 388
------------------------------------- ------ ---------- ---------- ---------- ----------
Gross profit before exceptional
items 4 161 131 480 399
Exceptional items 4 - (5) - (11)
------------------------------------- ------ ---------- ---------- ---------- ----------
Selling, general and administrative
expenses 3 (112) (100) (279) (509)
Research and development
expenses 3 (11) (8) (33) (26)
------------------------------------- ------ ---------- ---------- ---------- ----------
Operating Profit/(Loss) 38 18 168 (147)
------------------------------------- ------ ---------- ---------- ---------- ----------
Operating profit before exceptional
items 4 38 30 155 56
Exceptional items 4 - (12) 13 (203)
------------------------------------- ------ ---------- ---------- ---------- ----------
Finance income - 1 3 6
Finance expense (7) (6) (21) (18)
------------------------------------- ------ ---------- ---------- ---------- ----------
Net Finance Expense (7) (5) (18) (12)
------------------------------------- ------ ---------- ---------- ---------- ----------
Net finance expense before
exceptional items (7) (5) (17) (12)
Exceptional items within
finance expense 4 - - (1) -
------------------------------------- ------ ---------- ---------- ---------- ----------
Profit/(Loss) Before Taxation 31 13 150 (159)
------------------------------------- ------ ---------- ---------- ---------- ----------
Income tax (expense)/benefit (4) (3) 19 24
------------------------------------- ------ ---------- ---------- ---------- ----------
Taxation before exceptional
items 5 (4) (6) (24) (11)
Exceptional items within
taxation 4,5 - 3 43 35
------------------------------------- ------ ---------- ---------- ---------- ----------
Net Income/(Loss) 27 10 169 (135)
------------------------------------- ------ ---------- ---------- ---------- ----------
Earnings/(loss) per ordinary
share (cents)
Basic earnings/(loss) per
share 6 4 1 23 (18)
Diluted earnings/(loss) per
share 6 3 1 22 (18)
Condensed consolidated interim statement of comprehensive
(loss)/income
Unaudited Unaudited Unaudited Unaudited
Q3 Q3 YTD YTD
2021 2020 2021 2020
For the three and nine months
ended September 30 $m $m $m $m
----------------------------------- ---------- ---------- ---------- ----------
Net income/(loss) 27 10 169 (135)
Other comprehensive (loss)/income
Items that may be reclassified
to profit or loss in subsequent
years:
Net exchange adjustments on
foreign currency translation (8) 8 (6) (5)
Other comprehensive (loss)/income (8) 8 (6) (5)
Total comprehensive income/(loss) 19 18 163 (140)
----------------------------------- ---------- ---------- ---------- ----------
The notes are an integral part of these condensed consolidated
interim financial statements.
Condensed consolidated interim balance sheet
Unaudited Audited
Sep 30, Dec 31,
2021 2020
Notes $m $m
ASSETS
Non-current assets
Intangible assets 84 62
Property, plant and equipment 57 60
Right-of-use assets 38 43
Deferred tax assets 102 75
Other assets 7 105 104
386 344
Current assets
Inventories 97 93
Trade receivables 175 179
Other assets 7 37 50
Current tax receivable - 7
Cash and cash equivalents 8 1,005 858
1,314 1,187
Total assets 1,700 1,531
-------------------------------------- ------ ---------- ---------
LIABILITIES
Current liabilities
Borrowings 8 (3) (4)
Provisions and other liabilities 9 (136) (48)
Trade and other payables 12 (550) (524)
Lease liabilities (8) (8)
Current tax liabilities 5 (15) (15)
-------------------------------------- ------ ---------- ---------
(712) (599)
-------------------------------------- ------ ---------- ---------
Non-current liabilities
Borrowings 8 (239) (230)
Provisions and other liabilities 9 (550) (577)
Lease liabilities (38) (43)
(827) (850)
Total liabilities (1,539) (1,449)
-------------------------------------- ------ ---------- ---------
Net assets 161 82
-------------------------------------- ------ ---------- ---------
EQUITY
Capital and reserves
Share capital 13 72 73
Share premium 7 6
Capital redemption reserve 13 1 -
Other reserves (1,295) (1,295)
Foreign currency translation reserve (19) (13)
Retained earnings 1,395 1,311
-------------------------------------- ------ ---------- ---------
Total equity 161 82
-------------------------------------- ------ ---------- ---------
The notes are an integral part of these condensed consolidated
interim financial statements.
Condensed consolidated interim statement of changes in
equity
Foreign
Capital currency
Share Share redemption Other translation Retained Total
Notes capital premium reserve reserve reserve earnings equity
Unaudited $m $m $m $m $m $m $m
------------------------- ------- --------- --------- ------------ --------- ------------- ---------- --------
Balance at January 1,
2021 73 6 - (1,295) (13) 1,311 82
---------------------------------- --------- --------- ------------ --------- ------------- ---------- --------
Comprehensive income
Net income - - - - - 169 169
Other comprehensive loss - - - - (6) - (6)
Total comprehensive income - - - - (6) 169 163
---------------------------------- --------- --------- ------------ --------- ------------- ---------- --------
Transactions recognised
directly in equity
Shares issued - 1 - - - - 1
Share-based plans - - - - - 7 7
Deferred taxation on share-based
plans - - - - - 8 8
Transfer to share repurchase
liability - - - - - (100) (100)
Transfer to capital redemption
reserve for shares repurchased
and cancelled (1) - 1 - - - -
Balance at September 30,
2021 72 7 1 (1,295) (19) 1,395 161
---------------------------------- --------- --------- ------------ --------- ------------- ---------- --------
Balance at January 1,
2020 73 5 - (1,295) (23) 1,449 209
---------------------------------- --------- --------- ------------ --------- ------------- ---------- --------
Comprehensive loss
Net loss - - - - - (135) (135)
Other comprehensive loss - - - - (5) - (5)
Total comprehensive loss - - - - (5) (135) (140)
---------------------------------- --------- --------- ------------ --------- ------------- ---------- --------
Transactions recognised
directly in equity
Shares issued - 1 - - - - 1
Share-based plans - - - - - 9 9
Deferred taxation on share-based
plans - - - - - 1 1
Balance at September 30,
2020 73 6 - (1,295) (28) 1,324 80
---------------------------------- --------- --------- ------------ --------- ------------- ---------- --------
The notes are an integral part of these condensed consolidated
interim financial statements.
Condensed consolidated interim cash flow statement
Unaudited Unaudited
2021 2020
For the nine months ended September 30 $m $m
----------------------------------------------------------------- ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Operating Profit/(Loss) 168 (147)
Depreciation, amortization, and impairment 12 14
Gain on disposal of right-of-use assets - (2)
Gain on disposal of intangible assets (20) -
Depreciation and impairment of right-of-use assets 6 6
Share-based payments 7 9
Impact from foreign exchange movements (3) (3)
Decrease in trade receivables 3 31
Decrease/(Increase) in current and non-current other assets 12 (47)
Increase in inventories (5) (11)
Increase/(Decrease) in trade and other payables 30 (132)
(Decrease)/Increase in provisions and other liabilities* (10) 188
Cash generated from/(used in) operations 200 (94)
Interest paid (14) (13)
Interest received 1 8
Exceptional tax refund 31 -
Taxes paid (24) (23)
Transaction costs related to debt refinancing (8) -
Net cash inflow/(outflow) from operating activities 186 (122)
----------------------------------------------------------------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (2) (2)
Purchase of intangible asset (30) -
Exceptional net proceeds from disposal of intangible assets 20 -
Net cash outflow from investing activities (12) (2)
----------------------------------------------------------------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings 250 -
Repayment of borrowings (236) (3)
Payment of lease liabilities (6) (5)
Proceeds from the issuance of ordinary shares - 1
Cash paid for the repurchase and cancellation of shares (34) -
Net cash outflow from financing activities (26) (7)
----------------------------------------------------------------- ---------- ----------
Net increase/(decrease) in cash and cash equivalents 148 (131)
Cash and cash equivalents at beginning of the period 858 1,060
Exchange difference (1) -
Cash and cash equivalents at end of the period 1,005 929
----------------------------------------------------------------- ---------- ----------
* - Changes in provisions and other liabilities line include
exceptional payments of $10m for the RB settlement agreement and
$6m for DOJ related matters.
The notes are an integral part of these condensed consolidated
interim financial statements.
Notes to the 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 Condensed consolidated interim 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 UK adopted International Accounting Standard 34,
'Interim Financial Reporting'("IAS 34"). The Condensed Financial
Statements should be read in conjunction with the annual financial
statements for the year ended 31 December 2020 which have been
prepared in accordance with International Financial Reporting
Standards (IFRS) and IFRS Interpretations Committee interpretations
in conformity with the Companies Act 2006 and pursuant to
Regulation (EC) No 1606/2002 as it applies to the European Union.
In respect of accounting standards applicable to the Group in the
current period, there is no difference between IFRS in conformity
with the Companies Act 2006, the UK-adopted IFRS and International
Accounting Standards Board (IASB)-adopted IFRS. 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, 2020, with the exception of changes in estimates that
are required in determining the provision for income taxes. The Q3
2020 statement of cash flows has been expanded to present trade
receivables and other assets (current) in separate line items to
improve the transparency and consistency.
The Condensed Financial Statements do not include all the
information and disclosures required in the annual financial
statements and should be read in conjunction with the Group's
annual financial statements at December 31, 2020. These Condensed
Financial Statements have been reviewed and not audited. These
Condensed Financial Statements were approved for issue on October
27, 2021.
As disclosed in Notes 9, 10, and 11, the Group has liabilities
and provisions totaling $539m (FY 2020: $568m) for the Department
of Justice (DOJ) Resolution and related matters and the Reckitt
Benckiser (RB) settlement. The Directors have assessed the Group's
ability to comply with the minimum liquidity covenant in the
Group's debt facility, maintain sufficient liquidity to fund its
operations, fulfill obligations under the DOJ and RB agreements,
and address the reasonably possible financial implications of the
ongoing legal proceedings. The Directors have also modeled the risk
that SUBLOCADE will not meet revenue growth expectations due to the
continued impact from the COVID-19 pandemic or other market driven
factors (considering a 15% decline on forecasts) as part of the
Group's going concern assessment and downside scenario. These risks
were balanced against the Group's current and forecast working
capital position and impact of the cost saving actions taken to
date. As a result of the factors set out above, the Directors of
the Group have a reasonable expectation the Group has 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, 2020 were approved by the Board of
Directors on March 18, 2021 and have been filed with Companies
House.
2. SEGMENT INFORMATION
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker
('CODM'). The CODM, who is responsible for allocating resources and
assessing performance of the operating segments, has been
identified as the Chief Executive Officer (CEO). The Group is
predominantly engaged in a single business activity, which is 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. 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 revenues and non-current assets
Revenues are attributed to countries based on the country where
the sale originates. The following tables represent net revenues
from continuing operations and non-current assets, net of
accumulated depreciation and amortization, by country. Non-current
assets for this purpose consist of intangible assets, property,
plant and equipment, right-of-use assets, and other assets. Net
revenues and non-current assets for the three and nine months to
September 30, 2021 and 2020 were as follows:
Net revenue:
Q3 Q3 YTD YTD
2021 2020 2021 2020
For the three and nine months ended $m $m $m $m
September 30
------------------------------------- ------ ------ ------ ------
United States 143 111 428 323
Rest of World 44 48 140 139
------------------------------------- ------ ------ ------ ------
Total net revenues 187 159 568 462
------------------------------------- ------ ------ ------ ------
On a disaggregated basis, the Group's net revenue by major
product line:
Q3 Q3 YTD YTD
2021 2020 2021 2020
For the three and nine months ended $m $m $m $m
September 30
------------------------------------- ------ ------ ------ ------
Sublingual/other 117 123 387 361
SUBLOCADE 65 33 169 91
PERSERIS 5 3 12 10
------------------------------------- ------ ------ ------ ------
Total 187 159 568 462
------------------------------------- ------ ------ ------ ------
Non-current assets:
Sep 30, Dec 31,
2021 2020
$m $m
--------------- -------- --------
United States 135 141
Rest of World 149 128
--------------- -------- --------
Total 284 269
--------------- -------- --------
3. OPERATING EXPENSES
The table below sets out selected operating costs and expense
information:
Q3 Q3 YTD YTD
2021 2020 2021 2020
For the three and nine months ended $m $m $m $m
September 30
----------------------------------------------- ------ ------ ------ ------
Research and development expenses (11) (8) (33) (26)
----------------------------------------------- ------ ------ ------ ------
Selling and general expenses (51) (40) (128) (149)
Administrative expenses(1) (58) (57) (141) (346)
Depreciation, amortization, and impairment(2) (3) (3) (10) (14)
Total (112) (100) (279) (509)
----------------------------------------------- ------ ------ ------ ------
(1) Administrative expenses include exceptional items in the
current and prior period as outlined in Note 4.
(2) Additional YTD 2021 depreciation and amortization of $8m
(YTD 2020: $6m) for intangibles and ROU assets is included within
cost of sales.
4. EXCEPTIONAL ITEMS AND ADJUSTED RESULTS
Exceptional items
Where significant expenses or income occur that do not reflect
the Group's ongoing operations, these items are disclosed as
exceptional items in the income statement. Examples of such items
could include income or restructuring and related expenses for the
reconfiguration of the Group's activities and/or capital structure,
impairment of current and non-current assets, proceeds from the
sale of intangible assets, certain costs arising as a result of
material and non-recurring regulatory and litigation matters,
certain non-recurring benefits, and certain tax related
matters.
The table below sets out exceptional income/(expense) recorded
in each period:
Q3 Q3 YTD YTD
2021 2020 2021 2020
For the three and nine months ended $m $m $m $m
September 30
-------------------------------------- ------ ------ ------ ------
Exceptional items within cost of
sales
Cost of sales(1) - (5) - (11)
-------------------------------------- ------ ------ ------ ------
Total exceptional items within cost
of sales - (5) - (11)
Exceptional items within SG&A
Restructuring(2) - (7) - (9)
Legal expenses/provision(3) 5 - 18 (183)
ANDA litigation(4) (24) - (24) -
Other operating income(5) 19 - 20 -
Debt refinancing(6) - - (1) -
-------------------------------------- ------ ------ ------ ------
Total exceptional items within SG&A - (7) 13 (192)
Exceptional items within net finance
expense
Finance expense (6) - - (1) -
-------------------------------------- ------ ------ ------ ------
Total exceptional items within net - - (1) -
finance expense
-------------------------------------- ------ ------ ------ ------
Total exceptional items before taxes - (12) 12 (203)
-------------------------------------- ------ ------ ------ ------
Tax benefit on exceptional items(3) - 3 - 35
Exceptional tax item(7) - - 43 -
-------------------------------------- ------ ------ ------ ------
Total exceptional items - (9) 55 (168)
-------------------------------------- ------ ------ ------ ------
1. Exceptional cost of sales relate to inventory provisions due
to the adverse impact of COVID-19 on the business.
2. Restructuring costs incurred in Q3 2020 relate to cost saving
actions taken by the Group to protect the financial and operational
flexibility in response to ongoing challenges posed by COVID-19.
Remaining restructuring costs in YTD 2020 consist primarily of
lease disposals. These costs are included in SG&A.
3. Negotiation with DOJ related plaintiffs in Q3 2021 and YTD
2021 led to a change in the Group's provision for DOJ related
matters which resulted in a provision release of $5m and $18m,
respectively. $183m of legal costs and an exceptional tax benefit
of $35m were recorded YTD 2020 in relation to the DOJ Resolution.
Exceptional legal costs are included within SG&A.
4. In Q3 2021, upon conclusion of expert discovery, the Group
increased the provision for intellectual property related matters -
ANDA Litigation, to $73m, resulting in an exceptional charge for
$24m. See Note 9 and 11 for further discussion. Exceptional legal
costs are included within SG&A.
5. Exceptional other operating income in Q3 2021 relates to the
net proceeds received from the sale of the TEMGESIC / BUPREX /
BUPREXX (buprenorphine) analgesic franchise outside of North
America to Eumedica Pharmaceuticals AG for $19m. Remaining
exceptional income in YTD 2021 relates to the proceeds received
from the out-licensing of nasal naloxone opioid overdose patents
for $1m. Exceptional income items are included within SG&A.
6. Debt refinancing costs in YTD 2021 consist of advisory and
legal fees incurred related to the Group's June 2021 debt
refinancing. These costs are included in SG&A. Additionally, in
YTD 2021 the Group wrote-off $1m of unamortised deferred financing
costs due to extinguishment and settlement of the previous term
loan. These costs are included within finance expense.
7. Exceptional tax benefit recorded YTD 2021 relates to the
approval of tax credits by the Internal Revenue Service in relation
to development credits for SUBLOCADE claimed for years 2014 to
2017, the tax impact of settlement costs incurred with Reckitt
Benckiser (RB) which were recorded in the prior year, reactivation
of prior year interest expense restriction, impact of the ANDA
accrual and a tax expense in relation to exceptional other
operating income. Q3 2021 exceptional tax benefit of $nil includes
the reactivation of prior year interest expense restriction, impact
of the ANDA accrual and a tax expense in relation to exceptional
other operating income.
Adjusted results
The Board and management team use adjusted results and measures
to provide incremental insight to the financial results of the
Group and the way it is managed. The tables below show the list of
adjustments between the reported and adjusted results for both
Q3/YTD 2021 and Q3/YTD 2020.
Reconciliation of gross profit to adjusted gross profit
Q3 Q3 YTD YTD
2021 2020 2021 2020
For the three and nine months ended $m $m $m $m
September 30
------------------------------------- ------ ------ ------ ------
Gross profit 161 126 480 388
------------------------------------- ------ ------ ------ ------
Exceptional cost of sales - 5 - 11
Adjusted gross profit 161 131 480 399
------------------------------------- ------ ------ ------ ------
Reconciliation of operating profit/(loss) to adjusted operating
profit
Q3 Q3 YTD YTD
2021 2020 2021 2020
For the three and nine months ended $m $m $m $m
September 30
------------------------------------------------- ------ ------ ------ ------
Operating profit/(loss) 38 18 168 (147)
------------------------------------------------- ------ ------ ------ ------
Exceptional cost of sales - 5 - 11
Exceptional selling, general and administrative
expenses - 7 (13) 192
Adjusted operating profit 38 30 155 56
------------------------------------------------- ------ ------ ------ ------
Reconciliation of profit/(loss) before taxation to adjusted
profit before taxation
Q3 Q3 YTD YTD
2021 2020 2021 2020
For the three and nine months ended $m $m $m $m
September 30
------------------------------------------------- ------ ------ ------ ------
Profit/(loss) before taxation 31 13 150 (159)
------------------------------------------------- ------ ------ ------ ------
Exceptional cost of sales - 5 - 11
Exceptional selling, general and administrative
expenses - 7 (13) 192
Exceptional finance expense - - 1 -
------------------------------------------------- ------ ------ ------ ------
Adjusted profit before taxation 31 25 138 44
------------------------------------------------- ------ ------ ------ ------
Reconciliation of net income/(loss) to adjusted net income
Q3 Q3 YTD YTD
2021 2020 2021 2020
For the three and nine months ended $m $m $m $m
September 30
------------------------------------------------- ------ ------ ------ ------
Net income/(loss) 27 10 169 (135)
------------------------------------------------- ------ ------ ------ ------
Exceptional cost of sales - 5 - 11
Exceptional selling, general and administrative
expenses - 7 (13) 192
Exceptional finance expense - - 1 -
Tax benefit on exceptional items - (3) - (35)
Tax exceptional - - (43) -
------------------------------------------------- ------ ------ ------ ------
Adjusted net income 27 19 114 33
------------------------------------------------- ------ ------ ------ ------
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 upon the forecasted full year ratio. The effective tax rate
was primarily driven by the relative contribution to pre-tax income
by taxing jurisdiction in the period and permanent differences.
In the nine months ended September 30, 2021, the reported total
tax benefit was $19m, or a rate of -13% (YTD 2020 tax benefit:
$24m, 15%). The tax expense on adjusted profits amounted to $24m
(YTD 2020: $11m) and represented a year-to-date effective tax rate
of 17% (YTD 2020: 25%).
The YTD 2021 exceptional benefit recorded in tax of $43m relates
to the approval of tax credits by the Internal Revenue Service in
relation to development credits for SUBLOCADE claimed for years
2014 to 2017 and the tax impact of settlement costs incurred with
Reckitt Benckiser (RB) which were recorded in the prior year, and
reactivation of prior year interest expense restriction, impact of
ANDA accrual and a tax expense in relation to the exceptional
income, as set out in Note 4.
The Group's balance sheet at September 30, 2021 included a
current tax payable of $15m (FY 2020: $15m), and deferred tax asset
of $102m (FY 2020: $75m). The increase in the deferred tax asset is
due to current year activity including the tax impact of the
settlement costs and share awards.
Other tax matters
The European Commission issued a press release on April 2, 2019
announcing its conclusion that the UK Finance Company Partial
Exemption Rules are partly justified. The UK government has made an
annulment application to the General Court against this decision.
The UK government was required to initiate recovery of the alleged
State Aid irrespective of any appeal against the decision and where
they assess a benefit of the potential State Aid has been received.
HMRC has confirmed that there has been no such benefit to the group
and therefore the enquiry in relation to this matter is regarded as
closed.
The enacted United Kingdom Statutory Corporation Tax rate is 19%
for the year ended December 31, 2021. On March 3, 2021 the UK
Chancellor announced an increase in the corporation tax rate from
19% to 25% with effect from April 1, 2023. The increase to the
corporation tax rate was substantively enacted on May 24, 2021. The
effect of the rate change is less than $1m.
As disclosed in Note 9, the Group reached a settlement with
Reckitt Benckiser (RB) on January 25, 2021. Based on the strength
of external advice received, a $7m tax benefit from the settlement
cost has been recognized as of September 30, 2021. Tax authorities
may potentially challenge the Group's position.
6. EARNINGS/(LOSS) PER SHARE
Q3 Q3 YTD YTD
2021 2020 2021 2020
For the three and nine months ended cents cents cents cents
September 30
------------------------------------- ------- ------- ------- -------
Basic earnings/(loss) per share 4 1 23 (18)
Diluted earnings/(loss) per share 3 1 22 (18)
Adjusted basic earnings per share 4 3 16 5
Adjusted diluted earnings per share 3 2 15 4
------------------------------------- ------- ------- ------- -------
Basic
Basic earnings/(loss) per share ("EPS" or "LPS") is calculated
by dividing profit/(loss) for the period attributable to owners of
the Company by the weighted average number of ordinary shares in
issue during the period.
Diluted
Diluted earnings/(loss) per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. The Company
has dilutive potential ordinary shares in the form of stock options
and awards. The weighted average number of shares is adjusted for
the number of shares granted assuming the exercise of stock
options.
The weighted average number of ordinary shares outstanding for
2021 includes the favorable impact of the share repurchase program.
Refer to Note 13 for further details.
2021 2020
Weighted average number of shares thousands thousands
---------------------------------------- ----------- -----------
On a basic basis 733,324 732,634
Dilution from share awards and options 43,800 40,001
On a diluted basis 777,124 772,635
----------------------------------------- ----------- -----------
Adjusted Earnings
The Directors believe that diluted earnings per share, adjusted
for the impact of exceptional items after the appropriate tax
amount, provides more meaningful information on underlying trends
to shareholders in respect of earnings per ordinary share. A
reconciliation of net income to adjusted net income is included in
Note 4.
7. CURRENT AND NON-CURRENT OTHER ASSETS
Sep 30 Dec 31
2021 2020
Current and non-current other assets $m $m
-------------------------------------- ---- ------- -------
Short-term prepaid expenses 27 17
Other current assets 10 33
-------------------------------------------- ------- -------
Total other current assets 37 50
-------
Long-term prepaid expenses 23 22
Other non-current assets 82 82
-------
Total other non-current assets 105 104
-------------------------------------------- ------- -------
Total 142 154
-------------------------------------------- ------- -------
Other current and non-current assets as of December 31, 2020
primarily represent the funding of surety bonds in relation to
intellectual property related matters (see Note 11 for further
discussion) . In Q1 2021, one of the surety bond holders returned
$26m causing a decrease in other current assets.
8. FINANCIAL LIABILITIES - BORROWINGS
On June 30, 2021, the Group completed a refinancing of its term
loan, repaying in full the existing $235m term loan and replacing
it with a new term loan with a principal amount of $250m. As a
result of the debt refinancing, in YTD 2021, the Group incurred a
collective charge of $2m related to writing off unamortized
deferred financing costs due to the extinguishment and settlement
of previous term loan ($1m) and advisory fees incurred in
conjunction with the refinancing ($1m). These costs were classified
as exceptional. See Note 4 for further details.
The Group capitalized $8m of deferred financing and original
issue discount costs related to the new term loan, which were
netted against the total amount borrowed and are amortized over the
maturity period. The key terms of the new term loan in effect at
September 30, 2021 are as follows:
Required
Nominal interest annual Minimum
Currency margin Maturity repayments liquidity
---------- --------- ----------------- --------- ------------ ---------------------
Term Loan USD Libor* (0.75%) 2026 1% Larger of $100m or
facility + 5.25% 50% of Loan Balance
---------- --------- ----------------- --------- ------------ ---------------------
*While the new term loan is USD LIBOR based, the new term loan
contains fallback language to convert to a new reference rate when
USD LIBOR is discontinued or becomes non-representative, which is
expected to occur in early 2023.
-- Nominal interest margin is calculated over three-month USD
LIBOR subject to a floor of 0.75%.
-- The minimum liquidity is the larger of $100m or 50% of the
outstanding loan balance.
-- There are no revolving credit commitments under the new Term
Loan.
The table below sets out the current and non-current portion
obligation of the Term Loan:
Sep Dec
30 31
2021 2020
Term loan $m $m
------------------------- ---- ------ ------
Term loan - current (3) (4)
Term loan - non-current (239) (230)
------------------------------- ------ ------
Total term loan (242) (234)
------------------------------- ------ ------
At September 30, 2021, the term loan fair value was
approximately 98% (FY 2020: 98%) of par value. Cash at bank, trade
receivables, and trade payables are assumed to approximate their
fair values.
Net cash (as defined) is presented consistently with prior
periods and represents a measure of liquidity considered by the
Directors.
Sep Dec
30 31
2021 2020
Analysis of net cash $m $m
--------------------------- ---- ------ ------
Cash and cash equivalents 1,005 858
Term loan borrowings* (249) (235)
Total net cash 756 623
--------------------------------- ------ ------
*Borrowings reflect the principal amount drawn before debt
issuance costs of $7m (FY 2020: $1m). These do not include lease
liabilities of $46m (FY 2020: $51m).
YTD YTD
2021 2020
Reconciliation of net cash $m $m
------------------------------------- ---- ------ ------
The movements in the period were as
follows:
Net cash at beginning of period 623 821
Net increase/(decrease) in cash and
cash equivalents 148 (202)
New borrowings (250) -
Repayment of borrowings 236 4
Exchange adjustments (1) -
Net cash at end of period 756 623
------------------------------------------- ------ ------
9. PROVISIONS AND OTHER LIABILITIES
Sep Dec
30 31
2021 2020
Provisions and other liabilities $m $m
---------------------------------------- ---- ------ ------
Provisions
DOJ related matters (8) (32)
Intellectual property related matters (73) (47)
Restructuring costs (1) (6)
Other (3) (4)
---------------------------------------------- ------ ------
Total provisions (85) (89)
---------------------------------------------- ------ ------
Other liabilities
DOJ resolution (491) (486)
RB indemnity settlement (40) (50)
Share repurchase program (66) -
Other (4) -
Total other liabilities (601) (536)
---------------------------------------------- ------ ------
Total provisions and other liabilities (686) (625)
---------------------------------------------- ------ ------
The Group is involved in legal and intellectual property
disputes as described in Note 11, "Legal Proceedings."
Provisions
Provisions are recognized when the Group has a present legal or
constructive obligation as a result of past events, an outflow of
resources to settle that obligation is probable, and the amount can
be reliably estimated. Provisions are measured at the present value
of management's best estimate of the expenditure required to settle
the present obligation at the reporting date.
The Group carries a provision of $8m (FY 2020: $32m) pertaining
to DOJ related matters as discussed in Note 11. Negotiations with
DOJ related plaintiffs resulted in an exceptional provision release
of $18m in YTD 2021 (see Note 4). The remaining movement of $6m in
the provision relates to amounts settled and paid in the year. DOJ
related matters of $8m are expected to be settled within the next
12 months.
The Group carries provisions totaling $73m (FY 2020: $47m) for
intellectual property related matters, all of which relate to
potential redress for ongoing intellectual property litigation with
Dr. Reddy's Laboratories, S.A., and Dr. Reddy's Laboratories Inc.
(collectively, "DRL") and Alvogen Pharmaceuticals (Alvogen), should
the Group not be successful with those cases outlined in Note 11,
Intellectual property related matters - ANDA litigation. In Q3
2021, upon conclusion of expert discovery, the Group increased the
provision for intellectual property related matters to $73m,
resulting in an exceptional charge of $24m. The provision
represents the Group's best estimate of potential damages owed to
DRL and Alvogen for the period between FDA approval and lifting of
the preliminary injunction. This provision has been recorded at the
net present value, using a risk-free rate, considering the
estimated timing of settlement in 2023/2024. In YTD 2021, the Group
recorded finance expense totaling $2m (YTD 2020: $2m) for time
value of money on this provision. The Group does not expect this
matter to be settled within a year and therefore the provision of
$73m is classified as non-current.
The restructuring provision relates to cost saving initiatives
announced and implemented in 2020 and consist of redundancy and
related costs, which are expected to be paid within one year.
Other provisions totaling $3m (FY 2020: $4m) primarily represent
retirement benefit costs which are not expected to be settled
within one year.
Other liabilities
Other liabilities represent contractual obligations to third
parties where the amount and timing of payments is fixed. Where
other liabilities are not interest-bearing and the impact of
discounting is significant, other liabilities are recorded at their
present value, generally using a risk-free rate.
On July 24, 2020, the Group reached a resolution with the DOJ
and other litigants described in Note 11 under "DOJ Resolution",
which was finalized i n November 2020 and the first payment of
$103m (including interest) was made. Subsequently, six annual
instalments of $50m will be due every January 15 from 2022 to 2027
with the final instalment of $200m due in December 2027. Interest
accrues on certain portions of the resolution which will be paid
together with the annual instalment payments. For
non-interest-bearing portions, the liability has been recorded at
the net present value based on timing of the estimated payments.
The discount rate and interest rate are 1.25%. In YTD 2021, the
Group recorded interest expense totaling $5m (YTD 2020: $4m). As of
September 30, 2021, $53m has been classified as current on the
Group's balance sheet.
On January 25, 2021, the Group reached a resolution with Reckitt
Benckiser (RB) to resolve claims which RB issued in the Commercial
Court in London on November 13, 2020, seeking indemnity under the
2014 Demerger Agreement. Pursuant to the settlement, RB withdrew
the US $1.4b claim to release Indivior from any claim for indemnity
under the Demerger Agreement relating to the DOJ and FTC
settlements which RB entered into in July 2019, as well as other
claims for indemnity arising from those matters. The Group has
agreed to pay RB a total of $50m and has agreed to release RB from
any claims to seek damages relating to its settlement with the DOJ
and the FTC. The Group made an initial payment of $10m in February
2021, following the resolution. Subsequently, annual instalment
payments of $8m will be due every January from 2022 to 2026. The
Group carries a liability totaling $40m (FY 2020: $50m) related to
this settlement. The effect of discounting was not material. The
next instalment payment is due in January 2022 and therefore $8m
has been classified as current.
On July 30, 2021, the Group commenced an irrevocable share
repurchase program of up to $100m. As of September 30, 2021, the
Group recorded a liability for $66m, which represents the remaining
amount to be spent under the program. This liability has been
classified as current as the Group expects the remaining shares
will be purchased within one year. Refer to Note 13 for further
discussion.
Other liabilities represent deferred revenue related to a supply
agreement which is non-current as of September 30, 2021.
10. 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.
These represent contingent liabilities. Except for those matters
discussed in Note 11 under "DOJ Resolution", "DOJ Related Matters"
and "Intellectual Property Related Matters", for which provisions
have been recognized, Note 11 sets out the contingent liabilities
for legal and other disputes for which the Group has assessed as
contingent liabilities. Refer to Note 5 for discussion on State Aid
and other tax related contingent liabilities.
11. LEGAL PROCEEDINGS
DOJ Resolution
Agreement to Resolve Criminal Charges and Civil Complaints
Related to SUBOXONE Film
-- The Group settled with the United States Department of
Justice (Justice Department or DOJ), the U.S. Federal Trade
Commission (FTC), and U.S. state attorneys general the criminal and
civil liability in connection with a multi-count indictment brought
in April 2019 by a grand jury in the Western District of Virginia,
a civil lawsuit joined by the Justice Department in 2018, and an
FTC investigation. Under the terms of the resolution agreement with
the Justice Department, the Group has agreed to compliance terms
regarding its sales and marketing practices. Compliance with these
terms is subject to annual Board and CEO certifications submitted
to the U.S. Attorney's Office.
-- As part of the resolution with the FTC and as detailed in the
text of the stipulated order, for a ten-year period Indivior Inc.
is required to make specified disclosures to the FTC and is
prohibited from certain conduct.
-- Under the terms of the five-year Corporate Integrity
Agreement with the HHS Office of the Inspector General (HHS-OIG),
the Group will continue its commitment to promote compliance with
laws and regulations and its ongoing evolution of an effective
compliance program, including written standards, training,
reporting, and monitoring procedures. The Group will be subject to
reporting and monitoring requirements, including annual reports and
compliance certifications from key management and the Board
Nominating & Governance Committee submitted to HHS-OIG. In
addition, the Group will be subject to monitoring by an Independent
Review Organization, who will submit audit findings to HHS-OIG, and
review by a Board Compliance Expert, who will prepare two
compliance assessment reports in the first and third reporting
periods of the Corporate Integrity Agreement.
In November 2020, the Group made a payment of $103 million
(including interest) when the resolution was approved by a judge.
Subsequently, six annual instalments of $50 million will be due
every January 15 from 2022 through 2027. The final instalment of
$200 million will be due in December 2027. The Group carries a
liability totaling of $491 million (FY 2020: $486m) pertaining to
the DOJ resolution.
DOJ Related Matters
Federal FCA Qui Tam Suits
-- In August 2018, the United States unsealed three qui tam
suits pending in the Western District of Virginia that made a
variety of allegations under state and federal False Claims Act
statutes regarding marketing and promotion practices related to
SUBOXONE, and in some instances claiming unlawful retaliation. The
suits were also seeking reasonable attorney's fees and costs. Many
of the civil claims concern the same conduct at issue in the
Superseding Indictment filed by the Justice Department. Indivior
has resolved additional claims previously pending in the District
of New Jersey regarding similar allegations about marketing and
promotion practices which were resolved along with the three
Western District of Virginia qui tam suits in the federal civil
settlement agreement with the Justice Department; and resolved with
the state Attorney Generals in civil settlement agreements with the
fifty states, D.C., and Puerto Rico. The Group is in discussions
with certain relators aimed toward resolving the retaliation claims
and claims for attorney's fees and costs.
State and Local Matters
-- In November 2016, Indivior was served with a subpoena for
records from the State of California Department of Insurance under
its civil California insurance code authority. Certain of the qui
tam suits filed in the Western District of Virginia and the
District of New Jersey assert claims under the civil California
insurance code. The Group settled with the relators and the
California Department of Insurance for approximately $3 million
plus attorney fees.
-- In June 2019, the Group learned that the State of Illinois
Insurance Department is investigating potential violations of its
civil Insurance Claims Fraud Prevention Act with respect to its
sales and marketing activity. Certain of the qui tam suits filed in
the Western District of Virginia and the District of New Jersey
assert claims under this statute, including claims for associated
attorney's fees and costs. The Group settled with the relators and
the Illinois Insurance Department for approximately $1.5 million
plus attorney fees.
-- In addition to the federal and state health program claims,
claims have been asserted under the city false claims acts of
Chicago and New York City regarding the promotion of Suboxone film.
The Group has resolved the matter with the City of Chicago.
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 (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. We understand that all government
plaintiffs have declined to intervene. The Group was served with
the complaint in January 2021. We are in discussions regarding this
matter with the plaintiff-relator. The Group filed a Motion to
Dismiss on June 24, 2021.
-- In May 2018, Indivior Inc. received an informal request from
the Office of the United States Attorney for the Southern District
of New York, seeking records relating to the Suboxone manufacturing
process.
Securities Class Action Litigation
-- In April 2019, Michael Van Dorp filed a putative class action
lawsuit in the United States District Court for the District of New
Jersey on behalf of holders of publicly traded Indivior securities
alleging violations of U.S. federal securities laws under the
Securities Exchange Act of 1934. The complaint names Indivior PLC,
Shaun Thaxter, Mark Crossley and Cary J. Claiborne as defendants.
In February 2021, the parties reached a settlement agreement. A
Motion for Entry of Order Preliminarily Approving Settlement was
granted by the court in September 2021. A settlement fairness
hearing is scheduled for January 2022.
I ntellectual Property Related Matters
ANDA Litigation
-- Litigation against DRL is currently pending in the District
of New Jersey regarding U.S. Patent No. 9,687,454 and 9,931,305
("the '454 and '305 Patents"). DRL received final FDA approval for
all four strengths of its generic buprenorphine/naloxone film
product in June 2018, and immediately launched its generic
buprenorphine/naloxone film product "at-risk." In July 2018, the
District Court issued a ruling granting Indivior a Preliminary
Injunction (PI) pending the outcome of a trial on the merits of the
'305 Patent. Indivior was required to post a surety bond for $72
million in connection with the PI. In November 2018, the CAFC
issued a decision vacating the PI against DRL. DRL launched its
product at-risk in February 2019. In June 2019, DRL filed a motion
for leave to file their first amended Answer, Affirmative Defenses,
and Counterclaims to add various antitrust counterclaims resulting
from the injunction that was issued against DRL. The motion was
granted in November 2019. In January 2020, Indivior and DRL entered
into a joint stipulation that DRL did not infringe the '305 Patent
based on the District Court's claim construction ruling, but that
Indivior retained its right to appeal the issue of infringement of
the '305 Patent. Indivior maintains its infringement claims on the
'454 patent, and DRL maintains its counterclaims. No trial date has
been set for either the patent claims or the antitrust
counterclaims.
-- In November 2018, DRL filed two separate petitions for inter
partes review ("IPR") of the '454 Patent with the USPTO. The USPTO
denied institution of one of the IPR petitions but granted
institution for the second IPR petition. The Patent Trial and
Appeal Board (USPTO) issued a decision in June 2020, holding that
claims 1-5, 7, and 9-14 were unpatentable, but that DRL had not
shown that claim 8 is unpatentable. Claim 6 was not challenged and
therefore was not addressed in the PTAB decision. Indivior appealed
to the Court of Appeals for the Federal Circuit in July 2020. Oral
argument took place in September 2021 and a decision is pending
with the court.
-- Litigation against Alvogen is pending in the United States
District Court for the District of New Jersey regarding the '454
and '305 Patents. In January 2019, Indivior filed a motion for a
temporary restraining order ("TRO") and preliminary injunction in
the District of New Jersey, requesting that the Court restrain the
launch of Alvogen's generic buprenorphine/naloxone film product
until a trial on the merits of the '305 Patent. Alvogen received
approval for its generic product in January 2019. The same day, the
District of New Jersey granted a TRO until February 7, 2019. In
January 2019, Indivior and Alvogen entered in to an agreement
whereby Alvogen was enjoined from the use, offer to sell, or sale
within the United States, or importation into the United States, of
its generic buprenorphine and naloxone sublingual film product
unless and until the CAFC issued a mandate vacating the PI against
DRL. The mandate vacating the DRL PI issued in February 2019, and
Alvogen launched its generic product. Any sales in the US are on an
"at-risk" basis, subject to the ongoing litigation against Alvogen
in the District of New Jersey. In August 2019, Alvogen filed a
motion for leave to file an amended Answer to Complaint and
Separate Defenses and Counterclaims to add various antitrust
counterclaims. The motion was granted in November 2019. In January
2020, Indivior and Alvogen entered into a joint stipulation that
Alvogen did not infringe the '305 Patent based on the District
Court's claim construction ruling, but that Indivior retained its
right to appeal the issue of infringement of the '305 Patent.
Indivior maintains its infringement claims on the '454 patent, and
Alvogen maintains its counterclaims. No trial date has been set for
either the patent claims or the antitrust counterclaims.
Opposition to SUBLOCADE European Patent
-- In October 2018, Teva Pharmaceutical Industries Ltd. ("Teva")
filed a Notice of Opposition with the European Patent Office
seeking to revoke European Patent No. EP 2579874 ("EP 874"), which
relates to the formulation for SUBLOCADE. Oral proceedings took
place in September 2021 and the patent was maintained as
granted.
-- In March 2021, the law firm Elkington & Fife LLP filed a
Notice of Opposition with the European Patent Office seeking to
revoke European Patent No. EP 3215223 ("EP 223"), which relates to
the dosing regimen for SUBLOCADE. The Opposition alleges that the
claims of EP 223 lack inventive step and extend beyond the content
of the application as originally filed. The Group responded to the
Opposition in August 2021.
Antitrust Litigation and Consumer Protection
Antitrust Class and State Claims
-- Civil antitrust claims have been filed by (a) a class of
direct purchasers, (b) a class of end payor plaintiffs, and (c) a
group of states, now numbering 41, and the District of Columbia.
Each set of plaintiffs filed generally similar claims alleging,
among other things, that Indivior violated U.S. federal and/or
state antitrust and consumer protection laws in attempting to delay
generic entry of alternatives to SUBOXONE Tablets. Plaintiffs
further allege that Indivior unlawfully acted to lower the market
share of these products. These antitrust cases are pending in
federal court in the Eastern District of Pennsylvania. The court
has not set a trial date. Summary judgment motions related to the
Direct Purchaser, End Payor, and States actions are fully briefed,
and no hearing date has been set.
-- In 2013, Reckitt Benckiser Pharmaceuticals, Inc. (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 include approximately 79
entities, most of which appear to be insurance companies or other
providers of health benefits plans. The Carefirst Plaintiffs have
not served a complaint, but they have indicated that their claims
are related to those asserted by the plaintiffs in re Suboxone, MDL
No. 2445 (E.D. Pa.). In February 2021, the Court sent a Notice of
Proposed Termination. The Carefirst case remains pending.
The Group has evaluated the antitrust class and state claims in
light of the DOJ settlement under which a Group subsidiary pled
guilty to one count of making a false statement relating to health
care matters in one state in 2012. The Group continues to believe
in its defenses and continues to vigorously defend itself. Select
plaintiffs in these matters have previously made settlement demands
(which were not accepted and most of which are not current offers),
totaling approximately $290m, which was used for contingency
planning only to model possible downside financial effects. The
final aggregate cost of these matters, whether resolved by
litigation or by settlement, may be materially different. If the
Group were to entertain further settlement discussions, we make no
representations as to what amounts, if any, it may agree to pay,
nor regarding what amounts the plaintiffs will demand.
Other Antitrust and Consumer Protection Claims
-- In July 2019, the Indiana Attorney General issued a Civil
Investigative Demand investigating potential violations of
Indiana's Civil Deceptive Consumer Sales Act with respect to sales
and marketing activity by the Company. The Group has cooperated
fully in this civil investigation.
-- In 2020, the Group was served with lawsuits from a number of
insurance companies, some of whom are proceeding both on their own
claims and through the assignment of claims from affiliated
companies. Cases filed by (1) Humana Inc. and (2) Centene
Corporation, Wellcare Healthcare Plans, Inc., New York Quality
Healthcare Corp. (d/b/a Fidelis Care), and Health Net, LLC were
pending in the Eastern District of Pennsylvania. The complaints
were dismissed with prejudice on July 22, 2021. Plaintiffs filed
Notices of Appeal in August 2021. Humana also filed a Complaint in
state court in Kentucky with substantially the same claims as were
raised in the Federal Court case. That case has been stayed pending
a decision in the Federal Court appeal. 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. are pending in the Circuit
Court for the County of Roanoke, Virginia. The allegations in these
cases include many allegations made in other litigations, including
prior antitrust complaints, indictments, and qui tam complaints.
These plaintiffs have 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. At a June 17, 2021 hearing, defendants'
motion to stay was denied and certain claims were dismissed without
prejudice.
The Group has begun its preliminary evaluation of the claims,
believes in its defenses, and intends to vigorously defend itself.
Currently, engagement with the claimants has been minimal and the
Group's evaluation of the various claims is in preliminary stages.
Accordingly, no estimate of the range of potential loss can be made
at this time.
Civil Opioid Litigation
-- Indivior has been named as a defendant in approximately 400
civil lawsuits brought by state and local governments, public
health agencies, and individuals against manufacturers,
distributors and retailers of opioids alleging that they engaged in
a longstanding practice to market opioids as safe and effective for
the treatment of long term chronic pain in order to increase the
market for opioids and their own market share. The vast majority of
these cases have been consolidated and are pending in a federal
multi-district litigation (MDL) in U.S. District Court for the
Northern District of Ohio. At the present time, litigation against
Indivior in the MDL is stayed. Given the status and preliminary
stage of litigation in both the MDL and state courts, no estimate
of possible loss in the opioid litigation can be made at this
time.
12. TRADE AND OTHER PAYABLES
Sep 30 Dec
31
2021 2020
$m $m
---------------------------------------- ---- ------- ------
Sales returns and rebates (404) (396)
Trade payables (33) (20)
Accruals (103) (99)
Other tax and social security payables (10) (9)
Total (550) (524)
---------------------------------------------- ------- ------
Sales return and rebate accruals, primarily in the U.S., are
provided in respect of the estimated rebates, discounts or
allowances payable to direct and indirect customers. Accruals are
made at the time of sale while the actual amounts to be paid are
based on claims made some time after the initial recognition of the
sale. As the amounts are estimated, they may not fully reflect the
final outcome and are subject to change dependent upon, amongst
other things, the payor channel (e.g. Medicaid, Medicare, Managed
Care, etc.) and product mix. The level of accrual is reviewed and
adjusted in the light of historical experience of actual rebates,
discounts or allowances given and returns made, and any changes in
arrangements or rules. Future events may cause the assumptions on
which the accruals are based to change, which could affect the
future results of the Group.
13. SHARE CAPITAL
Nominal Aggregate
value nominal
Equity paid value
ordinary per $m
shares share
---------------------------------- ------------- -------- ----------
Issued and fully paid
At January 1, 2021 733,635,511 $0.10 73
Allotments 1,679,825 $0.10 -
Shares repurchased and cancelled (11,730,087) $0.10 (1)
At September 30, 2021 723,585,249 72
----------------------------------- ------------- -------- ----------
Nominal Aggregate
value nominal
Equity paid value
ordinary per $m
shares share
----------------------- ------------ -------- ----------
Issued and fully paid
At January 1, 2020 730,787,719 $0.10 73
Allotments 2,716,823 $0.10 -
At September 30, 2020 733,504,542 73
------------------------ ------------ -------- ----------
Allotment of ordinary shares
During the period, 1,679,825 ordinary shares (YTD 2020:
2,716,823) were allotted to satisfy vestings/exercises under the
Group's Long-Term Incentive Plan and U.S. Employee Stock Purchase
Plan.
Shares repurchased and cancelled
On July 30, 2021, the Group commenced an irrevocable share
repurchase program for an aggregate purchase price up to no more
than $100m or 73,462,098 of ordinary shares. Through September 30,
2021, the Group has repurchased and cancelled 11,730,087 of the
Company's ordinary shares for an aggregate nominal value of $1m
($0.10 per share). All ordinary shares repurchased under the share
repurchase program were cancelled 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 $31m. A net repurchase amount of $66m has been recorded
as a financial liability which represents the remaining amount to
be spent under the program of $69m offset by $3m of advanced
funding remitted to the agent bank. The effect of discounting is
not material. Total purchases under the share repurchase program
will be made out of distributable profits and accordingly $100m has
been transferred from retained earnings. The share repurchase
program is expected to end in Q1/Q2 2022.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors declare that, to the best of their knowledge:
-- This set of Condensed Financial Statements, which have been
prepared in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting'("IAS 34"), 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 all current 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
October 27, 2021
Independent review report to Indivior PLC
Report on the Condensed consolidated interim financial
statements
Our conclusion
We have reviewed Indivior PLC's Condensed consolidated interim
financial statements (the "interim financial statements") in the Q3
and Nine Months 2021 Results of Indivior PLC for the three and nine
month periods ended 30 September 2021 (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'("IAS 34").
What we have reviewed
The interim financial statements comprise:
-- the Condensed consolidated interim balance sheet as at 30
September 2021;
-- the Condensed consolidated interim income statement and
Condensed consolidated interim statement of comprehensive (loss) /
income for the three and nine month periods then ended;
-- the Condensed consolidated interim statement of changes in
equity for the nine month period then ended;
-- the Condensed consolidated interim cash flow statement for
the nine month period then ended; and
-- the explanatory notes to the interim financial
statements.
The interim financial statements included in the Q3 and Nine
Months 2021 Results of Indivior PLC have been prepared in
accordance with IAS 34.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the directors
The Q3 and Nine Months 2021 Results, including the interim
financial statements, is the responsibility of, and has been
approved by the directors. The directors are responsible for
preparing the Q3 and Nine Months 2021 Results in accordance with
IAS 34.
Our responsibility is to express a conclusion on the interim
financial statements in the Q3 and Nine Months 2021 Results based
on our review. 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.
What a review of interim financial statements involves
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. 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 Q3 and Nine
Months 2021 Results and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
London
27 October 2021
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END
QRTUWURRAOURUAA
(END) Dow Jones Newswires
October 28, 2021 07:12 ET (11:12 GMT)
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