Indivior Pharmaceuticals, Inc. Q1 FY2025 earnings call

Key Points

• Overall Q1 results were in line with expectations and consistent with full-year 2025 outlook.
• Total net revenue decline due to intensified competition from generic film providers and discontinuation of PERSERIS.
• SUBLOCADE revenue decline impacted by justice system funding challenges but growth in organized health system. SUBLOCADE net revenue performance in Q1 was primarily affected by justice system funding challenges, partially offset by growth in the organized health system channel.
• Non-GAAP adjusted operating profit increased 10% year on year, reflecting lower expenses offsetting net revenue reduction.
• Streamlining efforts aim to drive over $100 million in gross savings in 2025, with $50 million reinvested in SUBLOCADE pipeline.
• Mark Crossley to step down as CEO in May, with confidence in team under Joe's leadership to drive future growth.

Total net revenue in the first quarter was $266 million, declining 6% year on year. SUBLOCADE net revenue decreased 2% year on year, with US performance affected by near-term justice system funding challenges but growth in the organized health system channel. Suboxone Film in the US had an average share of approximately 15% in Q1, down ~3 percentage points year on year. Opti net revenue was immaterial in Q1.

• Confirmed SUBLOCADE net revenue guidance of $725 million to $755 million for full year 2025.
• Opti net revenue expected to be $10 million to $15 million for full year 2025, including an $8 million product order from BARDA.
• Confident in delivering financial results articulated in February, on track to meet guidance.

• Intensified competition from generic film providers leading to lower Suboxone film pricing.
• Near-term justice system funding challenges impacting SUBLOCADE revenue.
• Tariffs potentially impacting margins, though manageable within non-GAAP gross margin guidance range.
• Pending litigation developments, including opioid MDL settlement and ongoing shareholder claims.

Q: Proposals regarding Medicaid funding that might change your outlook?

A: Monitoring evolving situation, bipartisan support for opioid use disorder treatment, 19 states with 1115 waivers which may relieve justice system funding pressure.

Q: When will SUBLOCADE start to see return to growth?

A: Growth expected through marketing initiatives, label enhancements, with new patient share stabilized and organized health system growth accelerating. New leadership to be evaluated by Joe, with initial onboarding underway.

Q: CGS funding dynamics and expectations for rest of year?

A: Short-term funding challenges, but growth expected as justice systems move budgets, apply for abatement funds, and utilize 1115 waivers.

Q: Suboxone pricing guidance and recent pressure?

A: Price erosion factored in guidance, with pricing pressure continuing through year, typically picking up between Q2 and Q4.

Q: OpV progress and partnership with specialty pharmacies?

A: Making progress on alternate sites of care with 8 partners and over 1,500 sites, continuing to seek more foundational partners for frictionless experience.

Q: Cash position and looming litigation outflows?

A: Confident in cash generation from growing business to cover known litigation obligations, including opioid MDL settlement and other pending litigations.