Indivior PLC FY 2016 Financial Results

Full Year 2016 Adjusted Financial Results Ahead of Plan. Guidance for 2017

* adjusted basis, excluding impact of exceptional SD&A items of $1m in Q4 and $238m in FY and exceptional tax items of $30M in Q4 and $19m in the FY.

This announcement contains inside information.

The Company recorded a charge of $220m in the third quarter of 2016 for the investigative and antitrust litigation matters disclosed under Litigation Update on pages 8-9.  The Company continues in discussions with the Department of Justice about a possible resolution to its investigation.  The Company cannot predict with any certainty whether it will be able to reach ultimate resolution with the Department of Justice or any or all of the other parties, or the ultimate cost of resolving all of the matters.  The final cost may be materially higher than this reserve.

Full Year Financial Highlights

• Net revenue at $1,058m (2015: $1,014m) increased 4%. Net revenue at constant FX was +5%.
• Operating profit of $149m (2015: $346m) after exceptional costs of $238m. Adjusted operating profit of $387m (2015: $377m) +3%.
• Net income was $35m (2015: $228m) after net financing costs of $51m (2015: $61m). Adjusted tax rate of 25% (2015: 22%). Adjusted net income was $254m (2015: $246m) +3%.
• Cash balance at period end of $692m. Net cash of $131m (2015: net debt of $174m).

Full Year Operating Highlights

• US market growth in FY 2016 improved during the year to high single digit percentage. Suboxone® Film average market share was 61% (2015: 60%).
• New product pipeline progress. Analysis of completed Phase III trials of Buprenorphine Monthly Depot and Risperidone Monthly Depot on track for filing of NDAs in 2017 on previously published timetable (see detail on page 7).
• ANDA Litigation. Trial in the Orange Book listed patent lawsuit against Dr Reddy’s Laboratories and the process patent case against Dr Reddy’s, Actavis & Par completed in November with ruling expected in Q2.

Guidance

• Full year preliminary 2017 guidance: net revenue of $1,050m-$1,080m and net income in a range of $200m-$220m excluding exceptionals and at constant exchange rates assuming no material change to current market conditions in the US. The guidance also reflects a strategic decision to reinvest an additional $40m-$60m in driving future organic growth priorities.
• Indivior has today updated projected peak annual net revenues for both its potential monthly depots assuming no material change in market circumstances:
  • Buprenorphine Monthly Depot, peak annual net revenues now projected to be at least $1,000m (previously $400m-$700m).
  • Risperidone Monthly Depot, peak annual net revenues now projected to be in a range of $200m-$300m (previously $100m-$200m).

The majority of the $40-$60m of incremental investment will be focused on pre-launch preparation for these potential assets which require a different distribution and reimbursement model than the existing business.

Comment by Shaun Thaxter, CEO of Indivior PLC

“Indivior PLC had a strong second year as a public company.“ commented Shaun Thaxter, CEO of Indivior PLC. “We outperformed our financial plan for the year and we made significant strategic progress against our objectives. The treatment market in the US grew by high single digits, with many new doctors certified, and more patients in treatment.  Suboxone® Film share of 61% in the US demonstrated the resilience of our core business in the face a highly competitive market featuring multiple generic and branded competitors.  This resilience was underlined by our ANDA trial success in June against Actavis and Par; we retain belief in the strength of the IP on Suboxone® Film, which will be tested again this year.  We also took steps to further enhance our compliance capability to keep pace with the expected market growth. Our pipeline of potential treatments for addiction made progress.  The potentially transformational Monthly Depot of Buprenorphine completed its Phase III trials and is on track to submit its NDA in Q2 this year while our Monthly Risperidone Depot completed its Phase III trials and is on track for filing later this year.  We successfully filed our NDA for Suboxone® Tablets in China at the end of 2016.“

“Our guidance for 2017, if delivered, would represent another year of progress for the Company building on the growth achieved in 2016, albeit it assumes no material change in the US market.  We are looking for a second year of net revenue growth in a growing marketplace, and for profit to be resilient taking account of a more ambitious investment plan to drive longer-term organic opportunities.  The promise of our pipeline on top of the scale of the opioid crisis in the USA suggests there is room for sustained long-term growth in the business.  At the same time, we continue to work intensively to manage the risks to the business. We hope for further success in defending our IP in the ANDA litigation.  The Board has recorded a $220m charge in connection with the investigative and antitrust litigation matters although the Company cannot predict with any certainty whether we will be able to reach ultimate resolution with the Department of Justice or any or all of the other parties, or the ultimate cost of resolving all of the matters.  The final cost may be materially higher than this reserve.“

“Indivior PLC is focused on empowering patients and striving to improve their quality of life by pioneering innovative, high-quality, accessible and cost effective treatments,“ Shaun Thaxter continued.  “I am pleased with our progress towards realizing our vision and achieving key strategic priorities for 2016.  We strongly welcome recent regulatory and legislative change in the USA which recognizes the scale of the opioid crisis.  It can only be good news that 2016 saw record numbers of physicians qualifying to treat addiction with medication assisted treatment, that many have already qualified for the higher patient cap of 275, and that training is now developed for nurse practitioners and physician assistants to allow them to start treating patients.  The medical societies, addiction treatment experts, regulators and the industry need to co-operate further in 2017 to ensure that this progress continues for the sake of the more than 2.4m Americans who suffer from this chronic, relapsing condition.  Every step of progress at Indivior should help address the crisis by bringing more patients into treatment and by improving the range and quality of treatments available to them and their physicians.  That is our mission and our commitment.“

To view the full Press Release:  Indivior PLC FY 2016 Financial Results