July 25, 2024
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Q2 2024 Results In Line with
Updated Guidance; $100m Share Buyback Announced
• Reports Q2 2024 SUBLOCADE® Net
Revenue (NR) of $192m (+24% versus Q2 2023)
• Announces new $100m share
repurchase program
• Announces expected settlement of
certain opioid litigation (See Notes 11 and 13).
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THIS
ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF
ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 (AS IT FORMS
PART OF DOMESTIC LAW IN THE UK BY VIRTUE OF THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018)
Comment by Mark Crossley, CEO of Indivior
PLC
"Our second quarter results are in
line with our July 9th business update and reflect +24% NR growth
for SUBLOCADE (buprenorphine extended-release injection). The
underlying demand for this transformative treatment for
moderate-to-severe opioid use disorder (OUD) remains strong in a
market that continues to be heavily under-treated. As previously
announced, SUBLOCADE's Q2 growth was adversely impacted by
transitory items, including Medicaid patient disenrollment
dynamics, lower channel stocking and longer sales lead times for
new criminal justice system accounts. We incorporated these items
into our FY 2024 guidance that we updated earlier this month. We
remain confident that we will deliver on our objectives for
SUBLOCADE, which include achieving a NR run rate of $1 billion as
we exit 2025 and peak annual NR of greater than $1.5
billion.
Separately, we took the difficult
decision earlier this month to end sales and marketing of
PERSERIS® due to impending market changes
that would make the product no longer financially
viable.
While 2024 has proved to be a more
challenging year than we had anticipated, we remain highly
confident in the underlying fundamentals of our business and
strategy, and that we are on a clear path to create substantial
shareholder value. Reflecting our confidence, we are today
announcing a new $100m share repurchase program which we intend to
execute over an accelerated time frame."
Expected Settlement of Opioid Litigation
Indivior continues to address
legacy litigation to create greater certainty for all stakeholders.
Today, the Group announces an expected settlement related to opioid
litigation, including certain parties in the opioid multi-district
litigation (MDL). The Group has recorded a related provision of
$75m, reflecting the net present value (NPV) at the risk-free rate
of the agreed amount with the plaintiffs' executive committee and
certain state attorneys general, expected to be paid over a
five-year period. The parties to the settlement still must
negotiate material terms and conditions of the final settlement
agreement, which Indivior expects to resolve in due course. Upon
final settlement, the provision will be reclassified to a liability
and the NPV will be remeasured using a risk-adjusted rate and
likely adjusted down to approximately $65m, reflecting the Group's
cost of debt versus the risk-free rate used to record the provision
(See Notes 11 and 13).
Period to June 30th (Unaudited)
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Q2
2024
$m
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Q2
2023
$m
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% Change
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H1
2024
$m
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H1
2023
$m
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% Change
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Net Revenue
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299
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276
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8%
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583
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529
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10%
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Operating (Loss) /
Profit
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(132)
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61
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NM
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(67)
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118
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NM
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Net (Loss)/Income
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(107)
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39
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NM
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(60)
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83
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NM
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Diluted EPS ($)
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$(0.79)
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$0.27
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NM
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$(0.44)
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$0.59
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NM
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Adjusted Basis
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Adj. Operating
Profit1
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79
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71
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11%
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149
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142
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5%
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Adj. Net
Income1
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60
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56
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7%
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111
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112
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-1%
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Adj. Diluted EPS1
($)
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$0.44
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$0.39
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13%
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$0.81
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$0.79
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3%
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1 Adjusted Basis excludes the
impact of exceptional items and other adjustments as referenced and
reconciled in the "Adjusted Results" appendix on page 28. Adjusted
results are not a substitute for, or superior to, reported results
presented in accordance with International Financial Reporting
Standards ("IFRS").
The "Company" refers to Indivior PLC and the "Group" refers to
the Company and its consolidated subsidiaries.
H1/ Q2 2024 Financial
Highlights
• H1
2024 total net revenue (NR) of $583m increased 10% (H1 2023:
$529m); Q2 2024 total NR of $299m increased 8% (Q2 2023:
$276m).
• H1
2024 reported operating loss was $67m (H1 2023 operating profit:
$118m); Q2 2024 reported operating loss was $132m (Q2 2023
operating profit: $61m). H1 2024 adjusted operating profit of $149m
increased 5% (Adjusted H1 2023: $142m). Q2 2024 adjusted operating
profit of $79m increased 11% (Adjusted Q2 2023: $71m).
•
H1 2024 reported net loss was $60m (H1 2023 net income:
$83m); Q2 2024
reported net loss was $107m (Q2 2023 net income: $39m).
H1 2024 adjusted net income was
$111m (Adjusted H1
2023: $112m). Q2
2024 adjusted net income of $60m
increased 7% (Adjusted Q2
2023: $56m).
• Cash
and investments totaled $405m at the end of
H1 2024 (including $26m restricted for
self-insurance) (FY 2023: $451m).
The decrease was primarily due to the
Group's litigation settlement payments of $70m and share repurchases of $70m, partly offset by
cash inflow from operating activities.
H1/ Q2 2024 Product
Highlights
•
SUBLOCADE: H1 2024 NR of $371m (+29% vs. H1
2023); Q2 2024 NR of $192m (+24% vs. Q2 2023 and
+7%vs. Q1 2024). Continued growth primarily reflects further
organized health system (OHS) and justice system channel
penetration in the U.S. resulting in increased new U.S. patient
enrollments. Q2 2024 U.S. units dispensed
were approx. 155,700 (+25% vs. Q2 2023 and +5% vs. Q1 2024).
Total U.S. patients on a 12-month rolling basis at the end of
Q2 2024 were approximately 160,400 (+49%
vs. Q2 2023 and +7% vs. Q1
2024).
• OPVEE®
(nalmefene) nasal spray: Q2
2024 NR was modest (under $1m); near-term launch focus is on
supporting policy changes to enable nalmefene opioid rescue
treatments, increasing product trial among targeted users and
readying supply for the U.S. Biomedical Advancement Research and
Development Authority (BARDA).
• PERSERIS (risperidone) extended release injection:
H1 2024 NR of $23m (+21% vs. H1 2023); Q2
2024 NR of $13m (+18% vs. Q2 2023 and +18% vs.
Q1 2024). As previously announced, sales
and marketing of PERSERIS have been discontinued.
•
SUBOXONE®
(buprenorphine/naloxone) Film: U.S.
share in Q2 2024 averaged 16% (Q2
2023: 19%).
FY 2024
Guidance
On July 9th, the Group updated its
financial guidance for FY 2024 to reflect continued near-term
adverse market dynamics impacting SUBLOCADE NR growth as well as
the initial commercial adoption of OPVEE and the cessation of
PERSERIS sales and marketing. The guidance set out is unchanged
from the July 9th guidance. At the midpoint, the Group expects
solid adjusted operating profit growth of 12% and adjusted
operating margin expansion of approximately 100 basis
points.
Guidance assumes no material change
in exchange rates for key currencies compared with FY 2023 average
rates, notably USD/GBP and USD/EUR.
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FY 2024
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Net Revenue (NR)
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$1,150m
to $1,215m
(+8% at midpoint vs. FY
2023)
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SUBLOCADE NR
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$765m to
$805m
(+25% at midpoint vs. FY 2023)
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OPVEE NR
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$9m to
$14m1
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PERSERIS NR
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$27m to
$33m
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SUBOXONE Film Market Share
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Assumes
historic rate of share decline in FY 2024 of 1 to 2 percentage
points and the potential impact from a fourth
buprenorphine/naloxone sublingual film generic in the U.S.
market
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Adjusted Gross Margin
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Low to
mid-80s % range
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Adjusted SG&A
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($550m)
to ($560m)
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R&D
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($120m)
to ($130m)
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Adjusted Operating Profit
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$285m to
$320m
(+12% at
midpoint vs. FY 2023)
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1 OPVEE NR guidance for FY 2024
includes approximately $8m as part of a multi-year agreement with
the U.S. Biomedical Advancement Research and Development Authority
(BARDA).
Primary U.S. Listing
Complete
On June 27th 2024, Indivior
transitioned its primary listing to the U.S. from the U.K. with the
transfer of the Group's listing category on the Official List of
the UK Financial Conduct Authority (FCA) from "Premium Listing
(commercial company)" to "Standard Listing (shares)." The Group
believes a primary U.S. listing is beneficial to Indivior
stakeholders because it is better aligned with its current and
future growth opportunities, is expected to attract more U.S.
investors and analysts, permits inclusion in U.S. indices over time
and reflects the growing proportion of its share capital owned by
U.S. based investors. The Board intends to maintain Indivior's U.K.
listing as a secondary listing.
On July 11th, 2024, the FCA
published its policy statement PS24/6 ("Primary Markets Effectiveness Review:
Feedback to CP23/31 and final UK Listing Rules") setting out
a series of final reforms to the FCA's Listing Rules to take effect
on July 29th, 2024, including the removal of the current "Premium"
and "Standard" listing categories and the introduction of new
listing categories in their place. Pursuant to these reforms, as an
English-incorporated company with an existing "Standard" listing,
Indivior expects that it will be mapped to the new "Equity Shares
(Transition)" category on July 29th, 2024. Indivior's inclusion in
the new "Equity Shares (Transition)" category will not impact the
location of Indivior's primary listing in the U.S. and Indivior
expects that the overall burden of compliance for it under the new
"Equity Shares (Transition)" category will be substantially
equivalent to that of the current "Standard Listing (shares)"
category.
Share Repurchase
Programs
On November 17th, 2023, Indivior
announced a share repurchase program of up to $100m. Through July
12, 2024, the Group repurchased and canceled 5,499,528 Indivior
ordinary shares, equivalent to approximately 4% of diluted shares
outstanding, at a daily weighted average purchase price of 1,357p.
The cost was approximately $95m, which includes
directly attributable transaction costs. The Group now expects to
conclude this program by the end of July (see today's separate
announcement and Note 15).
The Group also announces today that
the Board has approved a new non-discretionary $100m share
repurchase program that is expected to commence immediately upon
the conclusion of the Group's current $100m share repurchase
program. This new program will be executed over an accelerated time
frame (see today's separate announcement for more
details).
U.S. OUD Market
Update
In Q2 2024,
U.S. buprenorphine medication-assisted treatments (BMAT) grew in
mid-single digits in volume terms. The Group continues to expect
long-term U.S. growth to be sustained in the mid- to high-single
digit percentage range due to increased overall public awareness of
the opioid epidemic and approved treatments, together with
regulatory and legislative actions, such as the late 2022 enactment
of the Mainstreaming Addiction Treatment Act, that have expanded
OUD treatment funding and treatment capacity. The Group believes
these regulatory and legislative actions will help to normalize the
view of addiction as a chronic disease and expand access to
evidence-based buprenorphine treatment in the U.S. and supports
these actions.
Financial Performance in
H1/Q2 2024
Total NR in H1 2024 increased
10% to $583m (H1 2023: $529m) at actual exchange rates (+10% at
constant exchange rates1). In Q2 2024, total NR
increased 8% to $299m (Q2 2023: $276m) at actual exchange rates
(+9% at constant exchange rates).
U.S. NR increased 14% in H1
2024 to $494m (H1 2023: $435m) and by 12% in Q2 2024 to $254m (Q2
2023: $226m). Strong year-over-year SUBLOCADE volume growth
primarily drove the increases in NR in both periods. Pricing was
not a material factor in NR growth.
Rest of World (ROW) NR decreased 5% at actual exchange rates in H1 2024 to $89m (H1
2023: $94m) (-5% at constant exchange rates1). In Q2
2024, ROW NR decreased 10% at actual exchange rates to $45m (Q2
2023: $50m) (-8% at constant exchange rates1). In both
periods, positive contributions from new products (SUBLOCADE /
SUBUTEX® Prolonged Release
and SUBOXONE Film) were more than offset by the timing of shipments
of certain legacy tablet products, along with ongoing generic
erosion of the legacy tablet business and elevated stocking in Q2
2023. H1 2024 SUBLOCADE / SUBUTEX Prolonged
Release NR in ROW increased 25% to $25m (H1 2023: $20m) and
in Q2 2024 NR increased 30% to $13m (Q2 2023: $10m) at
actual exchange rates.
Gross margin as reported in H1
2024 was 76% (H1 2023: 83%) and 69% in Q2
2024 (Q2 2023: 82%). H1 2024 and Q2 2024 included $41m of exceptional costs
related to the discontinuation of sales and marketing for PERSERIS.
In addition, adjustments for amortization of
acquired intangible assets within cost of sales of $6m in H1 2024
and $3m in Q2 2024 were also included in the reported gross
margin. Excluding these exceptional costs
and adjustments, adjusted gross margin was 84% in both H1 2024 and
Q2 2024 (H1 2023 and Q2 2023:
84% and 83%,
respectively). The adjusted gross margin in H1
2024 primarily reflects improved product mix from the continued
growth of SUBLOCADE offset by cost inflation. Additionally, both
periods benefited from favorable manufacturing
variances.
[1] Net
revenue at constant exchange rates is an alternative performance
measure used by management to evaluate underlying performance of
the business and is calculated by applying the prior year exchange
rate to current year net revenue in the currencies of the foreign
entities.
SG&A expenses as reported
in H1 2024 were $457m (H1 2023: $264m)
and $311m in Q2
2024 (Q2 2023:
$133m). H1 2024 and Q2 2024
included $169m and
$167m of exceptional items, respectively,
(H1 2023 and Q2
2023: $22m and $8m, respectively). See "Appendix" for adjusted results
details of exceptional SG&A expenses for H1 and Q2 2024 and
2023, which include expenses related to completed and proposed
legal settlements, the acquisition of Opiant Pharmaceuticals, Inc. and the aseptic
manufacturing site, the U.S. listing, and
the discontinuation of sales and marketing for
PERSERIS.
Excluding exceptional items, H1
2024 adjusted SG&A expense increased 19% to $288m (Adjusted H1 2023: $242m); Q2
2024 adjusted SG&A expense increased
15% to $144m (Adjusted Q2 2023:
$125m). The increases in both periods
primarily reflect greater sales and marketing investments primarily
related to SUBLOCADE, OPVEE launch expenses and cost
inflation.
R&D expenses in H1 2024
and Q2 2024 were $54m and $27m, respectively (H1 2023:
$59m; Q2 2023: $32m), and represented decreases of 8%
and 16%, respectively.
The decreases in both periods were primarily due
to phasing of activity related to post-marketing studies for
SUBLOCADE, partially offset by investments to advance the Group's
pipeline assets.
Operating loss as reported
was $67m in H1 2024 (H1 2023 operating profit: $118m). The
change on a reported basis reflects higher NR offset by
lower gross margin and investments in sales
and marketing primarily related to SUBLOCADE.(see
"Appendix" for adjusted results details of
exceptional expenses included in operating profit.)
After excluding exceptional
items and other adjustments of $216m and $24m
in H1 2024 and H1 2023,
respectively, H1 2024 adjusted operating profit
increased 5% to $149m (H1 2023:
$142m). The increase primarily reflects higher total NR partially
offset by increased SG&A expenses.
Q2 2024 operating loss as reported
was $132m (Q2 2023
operating profit: $61m). On an adjusted
basis, Q2 2024 operating profit increased 11% to $79m (adjusted Q2 2023:
$71m), excluding exceptional costs and other
adjustments of $211m (Q2 2023:
$10m). The increase on an
adjusted basis primarily reflected the same factors as noted
above.
Net finance expense was $5m in
H1 2024 (H1 2023: $2m income) reflecting
a decrease in interest income on lower cash and
investment balances.
Reported tax benefit was $12m
in H1 2024 and the effective tax rate was 17% (H1 2023 tax
expense/rate: $37m, 31%). H1 2024 adjusted tax expense was $33m,
and the adjusted effective tax rate was 23% (H1 2023 adjusted tax
expense/rate: $32m, 22%). The adjusted
results exclude tax benefits on exceptional items and other
adjustments. The movement in the effective tax rate on adjusted
profits was impacted by an increase in the U.K. corporation tax
rate from 23.5% to 25%. The Q2 2024 reported tax benefit was $28m,
and the effective tax rate was 21% (Q2 2023: $23m, 37%). The tax
expense on Q2 2024 adjusted profits was $16m, and the adjusted
effective tax rate was 21%. The tax expense on Q2 2023 adjusted
profits amounted to $16m, for a comparable adjusted effective tax
rate of 22%.
Reported net loss in H1 2024
was $60m and adjusted net income was $111m (H1 2023 reported net
income: $83m, adjusted net income: $112m). The 1% decrease in net
income on an adjusted basis primarily reflected the increase in
operating expense, partly offset by higher total NR. Q2 2024 net
loss on a reported basis was $107m
(Q2 2023: net
income $39m), and net income of $60m
on an adjusted basis excluding the net after-tax
impact from exceptional items and other adjustments
(Adjusted Q2 2023: $56m). Higher Q2 2024 net income on an adjusted
basis was primarily due to strong NR growth.
Diluted (losses) earnings per share were $(0.44) on a reported basis and $0.81 on an adjusted
basis in H1 2024 (H1 2023: $0.59 diluted earnings per share and
$0.79 adjusted diluted earnings per share). In Q2 2024, diluted losses per share
and adjusted diluted earnings per share were $(0.79)
and $0.44, respectively
(Q2 2023: $0.27 earnings per share on a diluted basis and $0.39
earnings per share adjusted diluted
basis).
Balance Sheet & Cash
Flow
Cash and investments totaled
$405m at the end of Q2 2024, a decrease of $46m versus the $451m
position at the end of 2023. The decrease was primarily due to the
Group's litigation settlement payments of
$70m and share repurchases of $70m, partly
offset by cash inflow from operating activities.
Net working capital, defined by
management as inventory plus trade receivables, less trade and
other payables, was negative $379m on June 30, 2024, versus
negative $347m at the end of FY 2023.
Cash generated from operations in H1 2024 was $82m (H1 2023 cash used in
operations: $26m), reflecting ongoing
operating performance partially offset by scheduled litigation
payments. Excluding litigation settlement payments, cash generated
from operations in H1 2024 was $152m. The
H1 2024 reported operating outflow primarily relates to litigation
settlements not yet paid. Net cash flow from
operating activities was $33m in H1 2024 (H1 2023 cash outflow:
$55m) primarily reflecting cash generated from operations less tax
payments.
Cash inflow from investing activities in
H1 2024
was $27m (H1 2023 cash outflow: $103m) reflecting the net reduction
in invested liquidity, partially offset by capital expenditure. In
the prior year period, the outflow from investing activities
primarily reflected the Opiant acquisition, net of cash assumed,
partially offset by a net reduction in invested
liquidity.
Cash outflow from financing activities in
H1 2024
was $74m (H1 2023 cash outflow: $24m) primarily reflecting shares
repurchased and canceled. In the prior year period, the outflow
from financing activities primarily reflected shares repurchased
and canceled and the extinguishment of debt assumed in the Opiant
acquisition.
Principal Risks
Update
The principal risks facing the
Group for the second half of 2024 are expected to be consistent
with those disclosed in the 2023 Annual Report and
Accounts.
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:
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6 Months to June
30,
2024
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6 Months to June
30,
2023
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GB £ period end
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1.2626
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1.2648
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GB £ average rate
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1.2654
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1.2329
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€ Euro period end
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1.0682
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1.0911
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€ Euro average
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1.0815
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1.0807
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Webcast
Details
A live webcast presentation will be
held on July 25, 2024, at 13:00 GMT (8:00 am EDT) hosted by Mark
Crossley, CEO. The details are below. All materials will be
available on the Group's website prior to the event at
www.indivior.com. Please
copy and paste the below web links into your browser.
The webcast link: https://edge.media-server.com/mmc/p/jpgy4cd9
Participants may access the
presentation telephonically by registering with the following link
(please cut and paste into your browser):
https://register.vevent.com/register/BIdf08b662a5f24248bf5f8677f59ef713
(Registrants will have an option to be called
back directly immediately prior to the call or be provided a
call-in # with a unique pin code following their
registration)
For Further
Information
Investor Enquiries
|
Jason Thompson
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VP, Investor Relations
Indivior PLC
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+1 804 402 7123
jason.thompson@indivior.com
|
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Tim Owens
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Director, Investor Relations
Indivior PLC
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+1 804 263 3978
timothy.owens@indivior.com
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Media Enquiries
|
Jonathan Sibun
|
Teneo
U.S. Media Inquiries
|
+44 (0)20 7353 4200
+1 804 594 0836
Indiviormediacontacts@indivior.com
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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.
The person responsible for making
this announcement is Kathryn Hudson, Company Secretary.
About
Indivior
Indivior is a global pharmaceutical
company working to help change patients' lives by developing
medicines to treat substance use disorders (SUD), overdose and
serious mental illnesses. Our vision is that all patients around
the world will have access to evidence-based treatment for the
chronic conditions and co-occurring disorders of SUD. Indivior is
dedicated to transforming SUD from a global human crisis to a
recognized and treated chronic disease. Building on its global
portfolio of OUD treatments, Indivior has a pipeline of product
candidates designed to both expand on its heritage in this category
and potentially address other chronic conditions and co-occurring
disorders of SUD, including alcohol use disorder and cannabis use
disorder. Headquartered in the United States in Richmond, VA,
Indivior employs over 1,000 individuals globally and its portfolio
of products is available in 37 countries worldwide. Visit
www.indivior.com to learn more. Connect with Indivior on LinkedIn
by visiting www.linkedin.com/company/Indivior.
Important Cautionary Note
Regarding Forward-Looking Statements
This announcement contains certain statements that are forward-looking.
Forward-looking statements include, among other things, express and
implied statements regarding: the Indivior Group's financial
guidance including operating and profit margins for 2024 and its
medium- and long-term growth outlook, including the expected
duration of factors affecting revenues including Medicaid
disenrollments, lower channel stocking, and longer sales lead times
for new criminal justice system accounts; our expectations
regarding the expected final terms, scope, and settlement related
to the provision we recorded regarding opioid litigation (including
the MDL) brought by certain municipalities and tribal nations;
assumptions regarding expected changes in share and expectations
regarding the extent and impact of competition; assumptions
regarding future exchange rates; strategic priorities, strategies
for value creation, and operational goals; expected future growth
and expectations for sales levels for particular products, and
expectations regarding the future impact of factors that have
affected sales in the past; expected growth rates, growing
normalization of medically assisted treatment for opioid use
disorder, and expanded access to treatment; our
product development pipeline and potential future products,
expectations regarding regulatory approval of such product
candidates, the timing of such approvals, and the timing of
commercial launch of such products or product candidates, and
eventual annual revenues of such future products; expectations
regarding future production at the Group's Raleigh, North Carolina
manufacturing facility; expected benefits of a primary U.S. listing
and our intention to retain a secondary listing on the London Stock
Exchange; the expected amount of shares the Group will repurchase,
and the timing of such repurchases; and other statements
containing the words "believe," "anticipate," "plan," "expect,"
"intend," "estimate," "forecast," "strategy," "target," "guidance,"
"outlook," "potential," "project," "priority," "may," "will,"
"should," "would," "could," "can," "outlook," "guidance," the
negatives thereof, and variations thereon and similar expressions.
By their nature, forward-looking statements involve risks and
uncertainties as they relate to events or circumstances that may or
may not occur in the future.
Actual results may differ
materially from those because they relate to future events. Various
factors may cause differences between Indivior's expectations and
actual results, including, among others, the material risks
described in the most recent Indivior PLC Annual Report and in
subsequent releases; legal and market restrictions that may limit
how quickly we can repurchase our shares; the substantial
litigation and ongoing investigations to which we are or may become
a party; our reliance on third parties to manufacture commercial
supplies of most of our products, conduct our clinical trials and
at times to collaborate on products in our pipeline; our ability to
comply with legal and regulatory settlements, healthcare laws and
regulations, requirements imposed by regulatory agencies and
payment and reporting obligations under government pricing
programs; risks related to the manufacture and distribution of our
products, most of which contain controlled substances; market
acceptance of our products as well as our ability to commercialize
our products and compete with other market participants;
competition; the uncertainties related to the development of new
products, including through acquisitions, and the related
regulatory approval process; our dependence on third-party payors
for the reimbursement of our products and the increasing focus on
pricing and competition in our industry; unintended side effects
caused by the clinical study or commercial use of our products; our
ability to successfully execute acquisitions, partnerships, joint
ventures, dispositions or other strategic acquisitions; our ability
to protect our intellectual property rights and the substantial
cost of litigation or other proceedings related to intellectual
property rights; the risks related to product liability claims or
product recalls; the significant amount of laws and regulations
that we are subject to, including due to the international nature
of our business; macroeconomic trends and other global developments
such as armed conflicts and pandemics; the terms of our debt
instruments, changes in our credit ratings and our ability to
service our indebtedness and other obligations as they come due;
changes in applicable tax rate or tax rules, regulations or
interpretations and our ability to realize our deferred tax assets;
and volatility in our share price due to factors unrelated to our
operating performance or that may result from the potential move of
our primary listing to the U.S.
Forward-looking statements speak
only as of the date that they are made and should be regarded
solely as our current plans, estimates and beliefs. Except as
required by law, we do not undertake and specifically decline any
obligation to update, republish or revise forward-looking
statements to reflect future events or circumstances or to reflect
the occurrences of unanticipated events.
Unaudited condensed
consolidated interim income statement
|
|
Q2
2024
|
Q2
2023
|
H1
2024
|
H1
2023
|
For the three and six months ended June 30
|
Notes
|
$m
|
$m
|
$m
|
$m
|
Net Revenue
|
2
|
299
|
276
|
583
|
529
|
Cost of sales
|
|
(93)
|
(50)
|
(139)
|
(89)
|
Gross Profit
|
|
206
|
226
|
444
|
440
|
Selling, general and administrative
expenses
|
3
|
(311)
|
(133)
|
(457)
|
(264)
|
Research and development
expenses
|
3
|
(27)
|
(32)
|
(54)
|
(59)
|
Net other operating
income
|
|
-
|
-
|
-
|
1
|
Operating (Loss)/Profit
|
|
(132)
|
61
|
(67)
|
118
|
Finance income
|
4
|
6
|
11
|
13
|
21
|
Finance expense
|
4
|
(9)
|
(10)
|
(18)
|
(19)
|
Net Finance (Expense)/Income
|
|
(3)
|
1
|
(5)
|
2
|
(Loss)/Profit Before Taxation
|
|
(135)
|
62
|
(72)
|
120
|
Income tax
income/(expense)
|
5
|
28
|
(23)
|
12
|
(37)
|
Net (Loss)/Income
|
|
(107)
|
39
|
(60)
|
83
|
|
|
|
|
|
|
Earnings per ordinary share (in dollars)
|
|
|
|
|
|
Basic (loss)/earnings per
share
|
6
|
$(0.79)
|
$0.28
|
$(0.44)
|
$0.61
|
Diluted (loss)/earnings per
share
|
6
|
$(0.79)
|
$0.27
|
$(0.44)
|
$0.59
|
Unaudited condensed
consolidated interim statement of comprehensive
income
|
Q2
2024
|
Q2
2023
|
2024
|
2023
|
For the three and six months ended June 30
|
$m
|
$m
|
$m
|
$m
|
Net (loss)/income
|
(107)
|
39
|
(60)
|
83
|
Other comprehensive loss
|
|
|
|
|
Items that may be reclassified to profit or loss in subsequent
years:
|
|
|
|
|
Foreign currency translation
adjustment, net
|
1
|
4
|
(2)
|
4
|
Other comprehensive
(loss)/income
|
1
|
4
|
(2)
|
4
|
Total comprehensive (loss)/income
|
(106)
|
43
|
(62)
|
87
|
The
notes are an integral part of these unaudited condensed
consolidated interim financial statements.
Unaudited condensed
consolidated interim balance sheet
|
|
Jun 30,
2024
|
Dec 31,
2023 (Retrospectively
adjusted1)
|
|
Notes
|
$m
|
$m
|
ASSETS
|
|
|
|
Non-current assets
|
|
|
|
Intangible assets
|
7
|
218
|
234
|
Property, plant and
equipment
|
|
74
|
82
|
Right-of-use assets
|
|
33
|
33
|
Deferred tax assets
|
5
|
290
|
267
|
Investments
|
8
|
26
|
41
|
Other assets
|
9
|
30
|
28
|
|
|
671
|
685
|
Current assets
|
|
|
|
Inventories
|
|
171
|
142
|
Trade receivables
|
|
259
|
254
|
Other assets
|
9
|
33
|
457
|
Current tax receivable
|
5
|
22
|
-
|
Investments
|
8
|
77
|
94
|
Cash and cash
equivalents
|
|
302
|
316
|
|
|
864
|
1,263
|
Total assets
|
|
1,535
|
1,948
|
|
|
|
|
LIABILITIES
|
|
|
|
Current liabilities
|
|
|
|
Borrowings
|
10
|
(3)
|
(3)
|
Provisions
|
11
|
(34)
|
(408)
|
Other liabilities
|
11
|
(148)
|
(125)
|
Trade and other payables
|
14
|
(809)
|
(743)
|
Lease liabilities
|
|
(10)
|
(9)
|
Current tax liabilities
|
5
|
(8)
|
(18)
|
|
|
(1,012)
|
(1,306)
|
Non-current liabilities
|
|
|
|
Borrowings
|
10
|
(235)
|
(236)
|
Provisions
|
11
|
(62)
|
(5)
|
Other liabilities
|
11
|
(314)
|
(367)
|
Lease liabilities
|
|
(33)
|
(34)
|
|
|
(644)
|
(642)
|
Total liabilities
|
|
(1,656)
|
(1,948)
|
Net liabilities
|
|
(121)
|
-
|
|
|
|
|
EQUITY
|
|
|
|
Capital and reserves
|
|
|
|
Share capital
|
15
|
67
|
68
|
Share premium
|
|
11
|
11
|
Capital redemption
reserve
|
|
9
|
7
|
Other reserve
|
|
(1,295)
|
(1,295)
|
Foreign currency translation
reserve
|
|
(37)
|
(35)
|
Retained earnings
|
|
1,124
|
1,244
|
Total equity
|
|
(121)
|
-
|
1The unaudited condensed consolidated interim balance sheet as
of December 31, 2023 was retrospectively adjusted during Q1 2024 to
reflect measurement period adjustments related to the November 2023
acquisition of an aseptic manufacturing facility. Refer to Note 1
and Note 17.
The
notes are an integral part of these unaudited condensed
consolidated interim financial statements.
Unaudited condensed
consolidated statement of changes in equity
|
Notes
|
Share
capital
|
Share
premium
|
Capital
redemption reserve
|
Other
reserve
|
Foreign
currency translation reserve
|
Retained
earnings
|
Total
equity
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Balance at January 1, 2023
|
|
68
|
8
|
6
|
(1,295)
|
(39)
|
1,303
|
51
|
Comprehensive income
|
|
|
|
|
|
|
|
|
Net income
|
|
-
|
-
|
-
|
-
|
-
|
83
|
83
|
Other comprehensive loss
|
|
-
|
-
|
-
|
-
|
4
|
-
|
4
|
Total comprehensive income
|
|
-
|
-
|
-
|
-
|
4
|
83
|
87
|
Transactions recognized directly in equity
|
|
|
|
|
|
|
|
|
Shares issued
|
|
1
|
1
|
-
|
-
|
-
|
-
|
2
|
Share-based plans
|
|
-
|
-
|
-
|
-
|
-
|
11
|
11
|
Settlement of tax on equity
awards
|
|
-
|
-
|
-
|
-
|
-
|
(21)
|
(21)
|
Shares repurchased and
canceled
|
|
-
|
-
|
-
|
-
|
-
|
(11)
|
(11)
|
Transfer to share repurchase
liability
|
|
-
|
-
|
-
|
-
|
-
|
9
|
9
|
Taxation on share-based
plans
|
|
-
|
-
|
-
|
-
|
-
|
(11)
|
(11)
|
Balance at June 30, 2023
|
|
69
|
9
|
6
|
(1,295)
|
(35)
|
1,363
|
117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2024
|
|
68
|
11
|
7
|
(1,295)
|
(35)
|
1,244
|
-
|
Comprehensive income
|
|
|
|
|
|
|
|
|
Net loss
|
|
-
|
-
|
-
|
-
|
-
|
(60)
|
(60)
|
Other comprehensive loss
|
|
-
|
-
|
-
|
-
|
(2)
|
-
|
(2)
|
Total comprehensive loss
|
|
-
|
-
|
-
|
-
|
(2)
|
(60)
|
(62)
|
Transactions recognized directly in equity
|
|
|
|
|
|
|
|
|
Shares issued
|
|
1
|
-
|
-
|
-
|
-
|
-
|
1
|
Share-based plans
|
|
-
|
-
|
-
|
-
|
-
|
11
|
11
|
Settlement of tax on equity
awards
|
|
-
|
-
|
-
|
-
|
-
|
(20)
|
(20)
|
Shares repurchased and
canceled
|
|
(2)
|
-
|
2
|
-
|
-
|
(70)
|
(70)
|
Transfer to share repurchase
liability
|
|
-
|
-
|
-
|
-
|
-
|
(4)
|
(4)
|
Transfer from share repurchase
liability
|
|
-
|
-
|
-
|
-
|
-
|
22
|
22
|
Taxation on share-based
plans
|
|
-
|
-
|
-
|
-
|
-
|
1
|
1
|
Balance at June 30, 2024
|
|
67
|
11
|
9
|
(1,295)
|
(37)
|
1,124
|
(121)
|
The
notes are an integral part of these unaudited condensed
consolidated interim financial statements.
Unaudited condensed
consolidated cash flow statement
|
2024
|
2023
|
For the six months ended June 30
|
$m
|
$m
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
Operating (loss)/profit
|
(67)
|
118
|
Depreciation and amortization of
property, plant and equipment and intangible
assets1
|
30
|
7
|
Depreciation of right-of-use
assets
|
4
|
5
|
Share-based payments
|
11
|
11
|
Impact from foreign exchange
movements
|
-
|
2
|
Unrealized gain on equity
investment
|
-
|
(1)
|
Settlement of tax on employee
awards
|
(20)
|
(21)
|
Decrease in trade
receivables
|
(6)
|
(8)
|
Decrease/(increase) in current and
non-current other assets2
|
421
|
(8)
|
Increase in inventories
|
(29)
|
(11)
|
Increase in trade and other
payables
|
68
|
60
|
Decrease in provisions and other
liabilities2 3
|
(330)
|
(180)
|
Cash generated from/(used in) operations
|
82
|
(26)
|
Interest paid
|
(17)
|
(17)
|
Interest received
|
12
|
21
|
Taxes paid
|
(44)
|
(33)
|
Net cash inflow/(outflow) from operating
activities
|
33
|
(55)
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
Acquisition of assets, net of cash
acquired
|
-
|
(124)
|
Purchase of property, plant and
equipment
|
(6)
|
(2)
|
Purchase of investments
|
(9)
|
(36)
|
Maturity of investments
|
42
|
64
|
Purchase of intangible
asset
|
-
|
(5)
|
Net cash inflow/(outflow) from investing
activities
|
27
|
(103)
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
Repayment of borrowings
|
(1)
|
(11)
|
Principal elements of lease
payments
|
(4)
|
(4)
|
Shares repurchased and
canceled
|
(70)
|
(11)
|
Proceeds from the issuance of
ordinary shares
|
1
|
2
|
Net cash outflow from financing activities
|
(74)
|
(24)
|
|
|
|
Exchange difference on cash and
cash equivalents
|
-
|
-
|
|
|
|
Net decrease in cash and cash equivalents
|
(14)
|
(182)
|
Cash and cash equivalents at
beginning of the period
|
316
|
774
|
Cash and cash equivalents at end of the
period
|
302
|
592
|
1Includes impairment and write down of intangible and tangible
assets related to the discontinuation of PERSERIS sales and
marketing (refer to Note 18)
2Changes in the line items current and non-current other assets
and provisions and other liabilities for H1 2024 include the
utilization of the Antitrust MDL liabilities (refer to Note 13) and
release of related escrow funding following final court
approval.
3Changes in the line item provisions and other liabilities for
H1 2024 also include litigation settlement payments totaling $70m
(H1 2023: $177m). $3m of interest paid on the DOJ Resolution in H1
2024 has been recorded in the interest paid line item (H1 2023:
$3m).
The
notes are an integral part of these unaudited condensed
consolidated interim financial statements.
Notes to the unaudited
condensed consolidated interim financial
statements
1. BASIS OF PREPARATION AND ACCOUNTING
POLICIES
Indivior PLC (the 'Company') is a
public limited company incorporated on September 26, 2014 and
domiciled in the United Kingdom. In these unaudited condensed
consolidated 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 U.K. adopted International
Accounting Standard 34, Interim
Financial Reporting. The Condensed Financial Statements have
been reviewed and are unaudited and do not include all the
information and disclosures required in the annual financial
statements. Therefore, the Condensed Financial Statements should be
read in conjunction with the Group's Annual Report and Accounts for
the year ended December 31, 2023, which were prepared in
accordance with U.K. adopted International Accounting Standards and
in conformity with the Companies Act 2006
as applicable to companies reporting under those standards. These
Condensed Financial Statements were approved for issue on
July 25, 2024.
In preparing these
Condensed Financial Statements, the significant judgments made by
management in applying the Group's accounting policies and the key
sources of estimation uncertainty were the same as those that
applied to the consolidated financial statements for the year ended
December 31, 2023, except for changes in estimates that
are required in determining the provision for income
taxes.
In 2023, the Group acquired an
aseptic manufacturing facility which was accounted for as a
business combination. As the acquisition was completed in late
2023, a provisional fair value of assets acquired and liabilities
assumed at the date of acquisition was disclosed in the
consolidated financial statements for the year ended December 31,
2023. In Q1 2024, based on new information obtained about facts and
circumstances that existed as of the acquisition date, the Group
adjusted the provisional fair values for acquired property, plant
and equipment and the assumed onerous contract provision, with an
adjustment to goodwill equal to the change in the net assets
acquired. These measurement period adjustments are reflected in the
comparative period presented in the Condensed Financial Statements
in accordance with IFRS 3 Business Combinations. The effect on
depreciation and other changes in the related balances from the
acquisition date to December 31, 2023 was immaterial. Refer to Note
17 for a reconciliation of the previously reported provisional fair
value of net assets acquired to the adjusted provisional fair
value.
Effective January 1, 2024, the
functional currency of Indivior U.K. Limited, one of the Group's
significant subsidiaries, changed from pound sterling to U.S.
dollar (USD). This was the result of a change in the primary
economic environment in which Indivior U.K. Limited operates,
driven by growth of USD-denominated net revenue combined with an
increase in USD-denominated costs and culminating with a shift in
investing activities to USD securities. The Group determined the
USD had become the dominant currency from January 2024.
The Directors have assessed the
Group's ability to maintain sufficient liquidity to fund its
operations, fulfill financial and compliance obligations as set out
in Note 11, and comply with the minimum liquidity covenant in the
Group's term loan for the period to December 2025 (the going
concern period). A base case model was produced
reflecting:
•
Board reviewed financial plans for the period; and
•
settlement of liabilities and provisions in line with contractual
terms.
The Directors also assessed a
'severe but plausible' downside scenario which included the
following key changes to the base case within the going concern
period:
• the
risk that SUBLOCADE will not meet revenue growth expectations by
modeling a 10% decline on forecasts;
• an
accelerated decline in U.S. SUBOXONE Film net revenue to generic
analogues; and
• a
further decline in rest of world sublingual product net
revenues.
Under both the base case and the
downside scenario, sufficient liquidity exists and is generated
from operations such that all business and covenant requirements
are met for the going concern period. Additionally, no material
legal cases are expected to come to trial during the going concern
period. As a result of the analysis described above, the Directors
reasonably expect the Group to have adequate resources to continue
in operational existence for at least one year from the approval of
these Condensed Financial Statements and therefore consider the
going concern basis to be appropriate for the accounting and
preparation of these Condensed Financial Statements.
The financial information contained
in this document does not constitute statutory accounts as defined
in section 434 and 435 of the Companies Act 2006. The Group's
statutory financial statements for the year ended December 31,
2023, were approved by the Board of Directors on March 5, 2024 and
will be delivered to the Registrar of Companies in due course. The
auditor's report on those accounts was unqualified, did not contain
an emphasis of matter paragraph and did not contain any
statement under section 498 of the Companies Act 2006.
2. SEGMENT
INFORMATION
The Group is engaged in a single
business activity, which is predominantly the development,
manufacture, and sale of buprenorphine-based prescription drugs for
treatment of opioid dependence and related disorders. The CEO
reviews disaggregated net revenue on a geographical and product
basis and allocates resources on a functional basis between
Commercial, Supply, Research and Development, and other Group
functions. Financial results are reviewed on a consolidated basis
for evaluating financial performance and allocating resources.
Accordingly, the Group operates in a single reportable
segment.
Net revenue
Revenue is attributed
geographically based on the country where the sale originates. The
following table represents net revenue by country:
|
Q2
2024
|
Q2
2023
|
H1
2024
|
H1
2023
|
For
the three and six months ended June 30
|
$m
|
$m
|
$m
|
$m
|
United States
|
254
|
226
|
494
|
435
|
Rest of World
|
45
|
50
|
89
|
94
|
Total
|
299
|
276
|
583
|
529
|
On a disaggregated basis, the
Group's net revenue by major product line:
|
Q2
2024
|
Q2
2023
|
H1
2024
|
H1
2023
|
For
the three and six months ended June 30
|
$m
|
$m
|
$m
|
$m
|
SUBLOCADE®
|
192
|
155
|
371
|
287
|
PERSERIS®1
|
13
|
11
|
23
|
19
|
Sublingual/other2
|
94
|
110
|
189
|
223
|
Total
|
299
|
276
|
583
|
529
|
1Sales and marketing for PERSERIS® have been discontinued.
Refer to Note 18.
2 Net revenue for OPVEE® was not material for the periods ended
June 30, 2024 and has therefore been included within
sublingual/other.
Non-current assets
The following
table represents non-current assets, net of accumulated
depreciation, amortization and impairment, by country. Non-current
assets for this purpose consist of intangible assets, property,
plant and equipment, right-of-use assets, investments, and other
assets.
|
Jun 30,
2024
|
Dec 31,
2023 (Retrospectively
adjusted1)
|
|
$m
|
$m
|
United States
|
200
|
209
|
Rest of World
|
181
|
209
|
Total
|
381
|
418
|
1 The non-current asset balance in the United States as of
December 31, 2023 was retrospectively adjusted in Q1 2024 to
reflect measurement period adjustments of $2m to property, plant
and equipment and $3m to intangible assets related to the November
2023 acquisition of an aseptic manufacturing facility. Refer to
Note 17.
3. OPERATING
EXPENSES
The table below sets out selected
operating costs and expense information:
|
Q2
2024
|
Q2
2023
|
H1
2024
|
H1
2023
|
For the three and six months ended June 30
|
$m
|
$m
|
$m
|
$m
|
Research and development expenses
|
(27)
|
(32)
|
(54)
|
(59)
|
|
|
|
|
|
Selling and marketing
expenses
|
(66)
|
(58)
|
(132)
|
(111)
|
Administrative and general
expenses1
|
(245)
|
(75)
|
(325)
|
(153)
|
Selling, general, and administrative
expenses
|
(311)
|
(133)
|
(457)
|
(264)
|
|
|
|
|
|
Depreciation and
amortization2
|
(5)
|
(3)
|
(8)
|
(7)
|
1 Administrative and general expenses in the 2024 periods
include costs related to a legal settlement (see notes 11 and 13),
the US primary listing, the aseptic
manufacturing site in Raleigh, NC (see note 17) and impacts related
to discontinuation of sales and marketing for PERSERIS. Expenses in
the 2023 periods include the acquisition of Opiant Pharmaceuticals,
Inc. ("Opiant", Note 16) and the preparation of the additional
listing of Indivior shares on Nasdaq.
2 Depreciation and amortization expense represents amounts
included in research and development and selling, general and
administrative expenses. In addition, depreciation and amortization
expense in H1 2024 of $27m (H1 2023: $5m) and Q2 2024 of $21m (Q2
2023: $3m) for intangible assets and right-of-use assets is
included within cost of sales and includes the impact of the
discontinuation of sales and marketing for PERSERIS.
4. NET FINANCE
(EXPENSE)/INCOME
|
Q2
2024
|
Q2
2023
|
H1
2024
|
H1
2023
|
For the three and six months ended June 30
|
$m
|
$m
|
$m
|
$m
|
Finance income
|
|
|
|
|
Interest income on cash and cash
equivalents/investments
|
6
|
11
|
12
|
21
|
Other finance income
|
-
|
-
|
1
|
-
|
Total finance income
|
6
|
11
|
13
|
21
|
Finance expense
|
|
|
|
|
Interest expense on
borrowings
|
(6)
|
(7)
|
(12)
|
(13)
|
Interest expense on lease
liabilities
|
-
|
-
|
(1)
|
(1)
|
Interest expense on legal matters,
including the effect of discounting
|
(2)
|
(2)
|
(3)
|
(4)
|
Other interest expense
|
(1)
|
(1)
|
(2)
|
(1)
|
Total finance expense
|
(9)
|
(10)
|
(18)
|
(19)
|
Net finance (expense)/income
|
(3)
|
1
|
(5)
|
2
|
5. TAXATION
The Group calculates tax expense
for interim periods using the expected full year rates, considering
the pre-tax income and statutory rates for each jurisdiction. To
the extent practicable, a separate estimated average annual
effective income tax rate is determined for each taxing
jurisdiction and applied individually to the interim period pre-tax
income of each jurisdiction. Similarly, if different income tax
rates apply to different categories of income (such as capital
gains or income earned in particular industries), to the extent
practicable a separate rate is applied to each individual category
of interim period pre-tax income. The resulting expense is
allocated between current and deferred taxes based on actual
movement in deferred tax for the quarter, with the balance recorded
to the current tax accounts.
|
Q2
2024
|
Q2
2023
|
H1
2024
|
H1
2023
|
For the three and six months ended June 30
|
$m
|
$m
|
$m
|
$m
|
Total tax benefit
(expense)
|
28
|
(23)
|
12
|
(37)
|
Effective tax rate (%)
|
21
%
|
37 %
|
17
%
|
31 %
|
In the six months ended
June 30, 2024, the decrease in the effective tax rate was
primarily driven by prior year disallowance of executive
compensation and higher litigation expenses.
|
Jun 30,
2024
|
Dec 31,
2023 (Retrospectively
adjusted1)
|
|
$m
|
$m
|
Current tax receivable
|
22
|
-
|
Current tax liabilities
|
(8)
|
(18)
|
Deferred tax assets
|
290
|
267
|
1 The deferred tax assets balance as of December 31, 2023 has
been retrospectively adjusted to reflect a measurement period
adjustment related to the November 2023 acquisition of an aseptic
manufacturing facility. Refer to Note 17.
The Group recognizes deferred tax
assets to the extent that sufficient future taxable profits are
probable against which these future tax deductions can be utilized.
At June 30, 2024, the Group's net deferred tax assets of $290m
relate primarily to net operating loss carryforwards, inventory
costs capitalized for tax purposes, and litigation liabilities.
Recognition of deferred tax assets is reliant on forecast taxable
profits arising in the jurisdiction in which the deferred tax asset
is recognized. The Group has assessed recoverability of deferred
tax assets using Group-level budgets and forecasts consistent with
those used for the assessment of viability and asset impairments,
particularly in relation to levels of future net revenues. These
forecasts are subject to similar uncertainties to those
assessments. This is reviewed each quarter and, to the extent
required, an adjustment to the recognized deferred tax asset may be
made. With the exception of specific assets that are not currently
considered realizable, management have concluded full recognition
of deferred tax assets to be appropriate and do not believe a
significant risk of material change in their assessment exists in
the next 12 months from the balance sheet date.
Other tax matters
The Group is subject to Pillar Two
legislation effective January 1, 2024. As such, the Group performed
an assessment of the potential exposure to Pillar Two income taxes
including modeling of adjusted accounting data for the period ended
December 31, 2023 and a review of forecasts for the year ended
December 31, 2024. Based on the assessment, the Group did not
record any current tax liability related to Pillar Two. The Group
has applied the recent amendment to IAS 12 which provides temporary
relief to the recognition of deferred taxes relating to top-up
income taxes.
As a multinational group, tax
uncertainties remain in relation to Group financing, intercompany
pricing, the location of taxable operations, and certain
non-recurring costs. Management have concluded tax provisions made
to be appropriate and do not believe a significant risk of material
change to uncertain tax positions exists in the next 12 months from
the balance sheet date. Including matters under audit, an estimate
of reasonably possible additional tax liabilities and interest that
could arise in later periods on resolution of these uncertainties
is in the range from nil to $56m.
6. EARNINGS PER
SHARE
The table below sets out basic and
diluted (loss) earnings per share for each period:
|
Q2
2024
|
Q2
2023
|
H1
2024
|
H1
2023
|
For the three and six months ended June 30
|
$
|
$
|
$
|
$
|
Basic (loss) earnings per
share
|
$(0.79)
|
$0.28
|
$(0.44)
|
$0.61
|
Diluted (loss) earnings per
share
|
$(0.79)
|
$0.27
|
$(0.44)
|
$0.59
|
Weighted average number of shares
The weighted average number of
ordinary shares outstanding (on a basic basis) for H1 2024 includes the favorable
impact of 3,898k ordinary shares
repurchased in H1 2024 and 1,413k ordinary shares
repurchased from April to December 2023. See Note 15 for further
discussion. Conditional awards of 1,700k and 1,761k were granted under the Group's Long-Term
Incentive Plan in H1 2024 and H1 2023, respectively.
|
Q2
2024
|
Q2
2023
|
H1
2024
|
H1
2023
|
For the three and six months ended June 30
|
thousands
|
thousands
|
thousands
|
thousands
|
Weighted average shares on a basic
basis
|
134,848
|
138,101
|
135,293
|
137,098
|
Dilution from share awards and
options
|
2,442
|
4,629
|
2,394
|
4,531
|
Weighted average shares on a
diluted basis
|
137,290
|
142,730
|
137,687
|
141,629
|
7. INTANGIBLE
ASSETS
|
Jun 30,
2024
|
Dec 31,
2023 (Retrospectively
adjusted1)
|
Intangible assets, net of accumulated amortization and
impairment
|
$m
|
$m
|
Products in development
|
79
|
79
|
Marketed products
|
136
|
150
|
Goodwill
|
2
|
2
|
Software
|
1
|
3
|
Total
|
218
|
234
|
1 The goodwill balance as of December 31, 2023 was
retrospectively adjusted to reflect measurement period adjustments
related to the November 2023 acquisition of an aseptic
manufacturing facility. Refer to Note 17.
The $14m decrease in marketed
products intangible assets primarily relates to the discontinuation
of PERSERIS sales and marketing (refer to Note 18) which resulted
in impairment of the related intangible asset of $9m.
8.
INVESTMENTS
|
Jun 30,
2024
|
Dec
31,
2023
|
Current and non-current investments
|
$m
|
$m
|
Equity securities at
FVPL
|
9
|
10
|
Debt securities held at amortized
cost
|
68
|
84
|
Total investments, current
|
77
|
94
|
Debt securities held at amortized
cost
|
26
|
41
|
Total investments, non-current
|
26
|
41
|
Total
|
103
|
135
|
The Group's investments in debt and
equity securities do not create significant credit risk, liquidity
risk, or interest rate risk. Debt
securities held at amortized cost consist of investment-grade debt.
As of June 30, 2024, expected credit
losses for the Group's investments held at amortized cost are
deemed to be immaterial.
Fair value hierarchy
Fair value is the price that would
be received to sell an asset or transfer a liability in an orderly
transaction between market participants at the measurement date.
The different levels have been defined as follows:
• Level 1: Quoted prices
(unadjusted) in active markets for identical assets or
liabilities
• Level 2: Inputs other than quoted
prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly
• Level 3: Unobservable inputs for
the asset or liability
The Group's only financial
instruments which are measured at fair value are equity securities
at FVPL. The fair value of equity securities at FVPL is based on
quoted market prices on the measurement date. The following table
categorizes the Group's financial assets measured at fair value by
valuation methodology used in determining their fair
value:
At
June 30, 2024
|
Level
1
$m
|
Level
2
$m
|
Level
3
$m
|
Total
$m
|
Equity securities at
FVPL
|
9
|
-
|
-
|
9
|
At December 31, 2023
|
Level
1
$m
|
Level
2
$m
|
Level
3
$m
|
Total
$m
|
Equity securities at
FVPL
|
10
|
-
|
-
|
10
|
The Group also has certain
financial instruments which are not measured at fair value. The
carrying value of cash and cash equivalents, trade receivables,
other assets, and trade and other payables is assumed to
approximate fair value due to their short-term nature. At
June 30, 2024, the carrying value of investments held at
amortized cost approximated the fair value. The fair value of
investments held at amortized cost was calculated based on quoted
market prices which would be classified as Level 1 in the fair
value hierarchy above.
9. CURRENT AND NON-CURRENT
OTHER ASSETS
|
Jun 30,
2024
|
Dec
31,
2023
|
Current and non-current other assets
|
$m
|
$m
|
Current prepaid expenses
|
18
|
23
|
Other current assets
|
15
|
434
|
Total other current assets
|
33
|
457
|
Non-current prepaid
expenses
|
18
|
19
|
Other non-current assets
|
12
|
9
|
Total other non-current assets
|
30
|
28
|
Total
|
63
|
485
|
The decrease in other current
assets primarily relates to release of escrow funding of $415m for
the Antitrust MDL (direct purchaser and end payor class
settlements) since the courts provided final approval of the
settlements during Q1 2024. Refer to Note 13. Long-term prepaid
expenses primarily relate to payments for contract
manufacturing capacity.
10. FINANCIAL LIABILITIES -
BORROWINGS
The table below sets out the
current and non-current portion obligation of the Group's term
loan:
|
Jun 30,
2024
|
Dec
31,
2023
|
Term loan
|
$m
|
$m
|
Term loan - current
|
(3)
|
(3)
|
Term loan - non-current
|
(235)
|
(236)
|
Total term loan
|
(238)
|
(239)
|
*Total term loan borrowings reflect
the principal amount drawn including debt issuance costs of $5m (FY 2023:
$5m).
At June 30, 2024, the term
loan fair value was approximately 100% (FY
2023: 100%) of par value. The key terms of this loan in
effect at June 30, 2024, are as follows:
|
|
Currency
|
Nominal interest
margin
|
Maturity
|
Required annual
repayments
|
Minimum
liquidity
|
Term loan facility
|
|
USD
|
SOFR +
0.26% + 5.25%
|
2026
|
1%
|
Larger
of $100m or 50% of loan balance
|
The term loan amounting to $243m
(FY 2023: $244m) is secured against the
assets of certain subsidiaries of the Group in the form of
guarantees issued by respective subsidiaries.
• Nominal interest margin is
calculated as USD SOFR plus 26 bps, subject to a floor of 0.75%,
plus a credit spread adjustment of 5.25%.
• There are no revolving
credit commitments.
11. PROVISIONS AND OTHER
LIABILITIES
Provisions
|
|
|
Total
|
|
|
Total
|
|
Current
|
Non-Current
|
Jun 30,
2024
|
Current
|
Non-Current
|
Dec 31, 2023
(Retrospectively
adjusted1)
|
Current and non-current provisions
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Multi-district antitrust class and
state claims
|
-
|
-
|
-
|
(385)
|
-
|
(385)
|
Opioid litigation
|
(15)
|
(60)
|
(75)
|
-
|
-
|
-
|
Onerous contracts
|
(15)
|
-
|
(15)
|
(19)
|
(3)
|
(22)
|
False claims allegations
|
(4)
|
-
|
(4)
|
(4)
|
-
|
(4)
|
Other
|
-
|
(2)
|
(2)
|
-
|
(2)
|
(2)
|
Total provisions
|
(34)
|
(62)
|
(96)
|
(408)
|
(5)
|
(413)
|
1 The provision for onerous contracts as of December 31, 2023
was retrospectively adjusted during the first quarter of 2024 to
reflect a measurement period adjustment related to the November
2023 acquisition of an aseptic manufacturing facility. Refer to
Note 17.
Multi-district antitrust class and state
claims
As previously disclosed, settlement
agreements were entered into during 2023 with three plaintiff
classes to fully resolve certain multi-district antitrust claims.
Indivior has no further obligations related to this
matter.
Opioid litigation
A provision of $75m was recorded in
Q2 2024, reflecting the present value of the agreed amount in a
preliminary settlement between Indivior, the plaintiffs' executive
committee and certain state attorneys general covering certain
opioid litigation (including the Opioid MDL) brought by
municipalities and tribes. The outflow of resources is expected to
occur over five years. The parties still must negotiate material
terms and conditions of the final settlement agreement, including
structure, and scope of releases. The provision is measured using a
risk free rate and will be remeasured at a risk-adjusted rate upon
reaching a final settlement agreement, at which time the Group
expects to make a further disclosure. Refer to Note 13.
Onerous contracts
In November 2023, the Group
acquired a business consisting of a manufacturing facility,
workforce, and supply contracts. The facility is obligated to
fulfill contracts that existed pre-acquisition for which the
expected costs are in excess of the consideration expected to be
received. The Group recorded a provision for these onerous
contracts in the allocation of purchase price, with a balance at
the end of the quarter of $15m (FY 2023: $22m). During the quarter, net operating losses
attributable to the contracts of $2m were recorded against the
provision. Refer to Note 17. Manufacturing under the onerous
contracts is expected to be completed during Q1 2025 and the
provision is recorded at its discounted value, using a market rate
at the time of the transaction determined to be 7.6%.
False Claims Act allegations
The Group carries
a provision of $4m (FY 2023: $4m) pertaining to an outstanding
False Claims Act allegation as discussed in Note 13. This matter is
expected to be settled within the next 12 months.
Other
Other provisions of $2m (FY 2023:
$2m) represent retirement benefit costs which are not expected to
be settled within one year.
Other liabilities
|
|
|
Total
|
|
|
Total
|
|
Current
|
Non-Current
|
Jun 30,
2024
|
Current
|
Non-Current
|
Dec 31,
2023
|
Current and non-current other liabilities
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
DOJ resolution
|
(51)
|
(295)
|
(346)
|
(53)
|
(344)
|
(397)
|
Multi-district antitrust class and
state claims
|
-
|
-
|
-
|
(30)
|
-
|
(30)
|
Other antitrust matters
|
(85)
|
-
|
(85)
|
-
|
-
|
-
|
Intellectual property related
matters
|
-
|
-
|
-
|
(11)
|
-
|
(11)
|
RB indemnity settlement
|
(8)
|
(7)
|
(15)
|
(8)
|
(15)
|
(23)
|
Share repurchase
|
(4)
|
-
|
(4)
|
(23)
|
-
|
(23)
|
Other
|
-
|
(12)
|
(12)
|
-
|
(8)
|
(8)
|
Total other liabilities
|
(148)
|
(314)
|
(462)
|
(125)
|
(367)
|
(492)
|
DOJ Resolution Agreement
In July 2020, the Group settled
criminal and civil liability with the United States Department of
Justice (DOJ), the U.S. Federal Trade Commission (FTC), and U.S.
state attorneys general. Pursuant to the resolution agreement,
aggregate payments of $263m (including interest) have been made
through June 30, 2024, including a payment of $53m in January
2024. Annual installments of $50m plus interest are due every
January 15 from 2025 to 2027, with the final installment of $200m
due in December 2027. The Group has the option to prepay. Interest
accrues at 1.25% on certain portions of the
resolution and will be paid with the installment payments. For
non-interest-bearing portions, the liability has been recorded at
the net present value based on timing of the estimated payments
using a discount rate equal to the interest rate on the
interest-bearing portions. In H1 2024, the Group recorded interest
expense totaling $2m (H1 2023: $3m).
Multi-district antitrust class and state
claims
As previously disclosed, settlement
agreements were entered into during 2023 with three plaintiff
classes to fully resolve certain multi-district antitrust claims.
Indivior has no further obligations related to this
matter.
Other antitrust matters
Certain antitrust cases filed in
Virginia state court by Health Care Service Corp. (HCSC), Blue
Cross Blue Shield of Massachusetts, Blue Cross Blue Shield of
Florida, Molina, and Aetna were settled by agreement of the parties
on July 8, 2024 for $85m and mutual releases of claims and
counterclaims. A liability was recorded at June 30, 2024 and the
settlement will be paid in July 2024. Refer to note 13.
IP
related matters
Other liabilities for intellectual
property related matters relate to the settlement of litigation
with DRL in June 2022. Under the settlement agreement, the Group
made a final payment to DRL of $12m during Q1 2024 and has no
further obligations related to this matter.
RB
indemnity settlement
Under the RB indemnity settlement,
the Group has paid $34m of the $50m settlement agreement through
June 30, 2024 including $8m paid in January 2024. Remaining
annual installment payments of $8m are due in January 2025 and
2026. The Group carries a liability totaling $15m (FY 2023: $23m)
related to this settlement. This liability has been recorded at the
net present value, using a market interest rate at the time of the
settlement determined to be 3.75%, considering the timing of
payments and other factors. In H1 2024, the
Group recorded nil of finance expense (H1 2023: nil) for time value
of money on the liability.
Share repurchase
In November 2023, the Group
commenced a share repurchase program of $100m. As of June 30,
2024, the liability of $4m represents the amount to be spent under
the program through July 26, 2024, after which date the Company has
the ability to modify or terminate the program. As of December 31,
2023, the current liability of $23m represented the amount to be
spent under the program through February 23,
2024.
Other
Other liabilities primarily
represent employee related liabilities which are non-current as of
June 30, 2024.
12. CONTINGENT
LIABILITIES
The Group has assessed certain
legal and other matters to be not probable based upon current facts
and circumstances, including any potential impact the DOJ
resolution could have on these matters. Where liabilities related
to these matters are determined to be possible, they represent
contingent liabilities. Except for those matters discussed in Note
13 under "Civil Opioid Litigation" and "False Claims Act
Allegations", for which provisions have been recognized, Note 13
sets out the details for legal and other disputes which the Group
has assessed as contingent liabilities. Where the Group believes it
is possible to reasonably estimate a range for the contingent
liability, this has been disclosed.
13. LEGAL PROCEEDINGS
There are certain ongoing legal
proceedings or threats of legal proceedings in which the Group is a
party, but in which the Group believes the possibility of an
adverse impact is remote and they are not discussed in this
Note.
Antitrust Litigation and Consumer Protection
• Beginning in 2020, cases by (1) Blue Cross and Blue Shield of
Massachusetts, Inc., Blue Cross and Blue Shield of Massachusetts
HMO Blue, Inc., (2) Health Care Service Corp., (3) Blue Cross and
Blue Shield of Florida, Inc., Health Options, Inc., (4) BCBSM, Inc.
(d/b/a Blue Cross and Blue Shield of Minnesota) and HMO Minnesota
(d/b/a Blue Plus), (5) Molina Healthcare, Inc., and (6) Aetna Inc.
were filed in the Circuit Court for the County of Roanoke,
Virginia. See Health Care
Services Corp. v. Indivior Inc., No. CL20-1474 (Lead Case)
(Va. Cir. Ct.) (Roanoke Cnty). In July
2023, Indivior Inc. and BCBSM, Inc. and HMO Minnesota agreed to
mutual releases and settlement. The remaining
plaintiffs asserted claims under federal and state RICO statutes,
state antitrust statutes, state statutes prohibiting unfair and
deceptive practices, state statutes prohibiting insurance fraud,
and common law fraud, negligent misrepresentation, and unjust
enrichment. The Group filed demurrers, which the court sustained in
part and overruled in part. Separately, Indivior Inc. filed
counterclaims against several plaintiffs alleging violations of
certain insurance fraud statutes. The plaintiffs demurred. The
court overruled HCSC's demurrer but sustained the demurrers of the
remaining plaintiffs named in Indivior Inc.'s counterclaims. A jury
trial on the merits was set for July 15, 2024 - August 15, 2024.
The parties participated in an in-person mediation session on June
11, 2024. On July 8, 2024, the parties reached an agreement to
settle all claims and counterclaims for $85m.
•
Humana, Inc. filed a Complaint in state court in Kentucky on August
20, 2021 with claims substantially similar to those asserted by
other end payors in the HCSC consolidated litigation. See Humana Inc. v. Indivior Inc., No.
21-CI-004833 (Ky. Cir. Ct.) (Jefferson Cnty). The court lifted a
stay on October 30, 2023. Indivior moved to dismiss the complaint
in February 2024. Indivior's motion remains pending. The
Group has begun its evaluation of the claims, believes it has
meritorious defenses, and intends to vigorously defend itself.
Given the status and preliminary stage of the litigation,
no estimate of possible loss can be made at this
time.
•
Centene Corporation, Wellcare Healthcare Plans, Inc., New York
Quality Healthcare Corp. (d/b/a Fidelis Care), and Health Net, LLC
filed a complaint in the Circuit Court for the County of Roanoke,
Virginia alleging similar claims on January 13, 2023. See Centene Corp. v. Indivior Inc.,
No. CL23000054-00 (Va. Cir. Ct.) (Roanoke Cnty). Indivior demurred
to the complaint and asserted pleas in bar in early February 2024.
In May 2024, the court sustained in part and overruled in part
Indivior's demurrers, and took under advisement Indivior's demurrer
on statute of limitations grounds. The Group has begun its
evaluation of the claims, believes it has meritorious defenses, and
intends to vigorously defend itself. Given the status and
preliminary stage of the litigation, no estimate of possible
loss can be made at this time.
•
As previously disclosed in 2023, Indivior Inc.
settled claims of all plaintiff groups in the company's antitrust
multi-district litigation ("Antitrust MDL") namely, (i) 41 states and the District of Columbia (the
"States"), (ii) end payors, and (iii) direct purchasers
(collectively, the "Plaintiffs"). Indivior Inc. reached a
settlement with the States for $103m on June 1, 2023. Indivior Inc.
entered into a settlement agreement with the end payor class for
$30m on August 14, 2023 and received final court approval on
December 5, 2023. On October 22, 2023, Indivior Inc. entered into a
settlement agreement with the remaining direct purchaser class for
$385m, which received final court approval on February 27,
2024.
• In 2013, Reckitt Benckiser Pharmaceuticals Inc. "RBPI," now
known as Indivior Inc. received notice that it and other companies
were defendants in a lawsuit initiated by writ in the Philadelphia
County (Pennsylvania) Court of Common Pleas. See Carefirst of Maryland, Inc. et al. v. Reckitt
Benckiser Inc., et al., Case. No. 2875, December Term 2013.
The plaintiffs included approximately 79 entities, most of which
appeared to be insurance companies or other providers of health
benefits plans. The claims of all plaintiffs in the Carefirst action except Humana Inc.
and certain of its affiliates were resolved in connection with
final approval of the end payor settlement in the Antitrust MDL,
and accordingly dismissed on February 14, 2024. The claims of
Humana Inc. and certain of its affiliates in the Carefirst action remain pending. The
Group has begun its evaluation of the claims, believes it has
meritorious defenses, and intends to vigorously defend itself.
Given the status and preliminary stage of the litigation,
no estimate of possible loss can be made at this
time.
Civil Opioid Litigation
• The
Group has been named as a defendant in more than 400 civil lawsuits
alleging that manufacturers, distributors, and retailers of opioids
engaged in a longstanding practice to market opioids as safe and
effective for the treatment of long-term chronic pain to increase
the market for opioids and their own market shares for opioids, or
alleging individual personal injury claims. Most of these cases
have been consolidated and are pending in a federal multi-district
litigation in the U.S. District Court for the Northern District of
Ohio. See In re National
Prescription Opiate Litigation, MDL No. 2804 (N.D.
Ohio) (the "Opioid MDL"). Nearly two-thirds of the cases in
the Opioid MDL were filed by cities and counties, while nearly
one-third of the cases were filed by individual plaintiffs, most of
whom assert claims relating to neonatal abstinence syndrome
("NAS"). Litigation against the Group in the Opioid MDL is
stayed.
•
Pursuant to mediation, the Group, the Plaintiffs' Executive
Committee in the Opioid MDL, and certain state attorneys general
reached agreement on the amount of a potential settlement. The
Group has recorded a related provision of $75m, reflecting the net
present value (NPV) of the agreed amount (See Note 11). The
parties, however, still must negotiate material terms and
conditions of the final settlement agreement, including structure
and scope of the release. The proposed settlement does not include
private plaintiffs.
•
Separately, Indivior Inc. was named as one of
numerous defendants in civil opioid cases that are not part of the
Opioid MDL:
◦ Indivior was named as one of numerous defendants in various
other federal and state court cases that are not in the Opioid MDL
and were brought by municipalities. These cases include, for
example, 35 actions filed in New York state court that were removed
to federal court, as well as cases filed in federal district courts
sitting in Alabama, Florida, Georgia, and New Mexico. On motion of
the plaintiffs, the New York cases were remanded back to state
court. Other named defendants have filed a notice of appeal
regarding the remand. The plaintiffs in the case filed in the
Northern District of Alabama voluntarily dismissed their complaint,
subject to certain tolling agreements. The various other federal
actions currently are stayed, except Indivior moved to
dismiss the complaint in San
Miguel Hospital Corp. d/b/a Alta Vista Regional Medical Center v.
Johnson & Johnson, et al., No. 1:23-cv-00903 (D.N.M.) in
May 2024. Indivior's motion to dismiss remains
pending.
◦ Indivior Inc. was named as a defendant in five individual
complaints filed in West Virginia state court that were transferred
to West Virginia's Mass Litigation Panel. See In re Opioid
Litigation, No. 22-C-9000 NAS (W.V.
Kanawha Cnty. Cir. Ct.) ("WV MLP Action"). All five of Indivior
Inc.'s cases in the WV MLP Action involve claims related to NAS.
Indivior Inc. moved to dismiss all five complaints
on January 30, 2023. By order dated April 17, 2023, the court
granted Indivior's motions to dismiss. The plaintiffs filed a
notice of appeal on June 30, 2023. Oral argument on the appeal has
been set for September 17, 2024.
•
Additionally, on May 23, 2024, the Consumer
Protection Division of the Office of the Attorney General of
Maryland served on Indivior Inc. an administrative subpoena related
generally to opioid products marketed and sold in
Maryland.
•
The Group has begun its evaluation of the claims,
believes it has meritorious defenses, and intends to vigorously
defend itself in the private plaintiff actions. Given the status
and preliminary stage of litigation in both the Opioid MDL and the
separate federal and state court actions for the private plaintiff
cases, no estimate of possible loss in the opioid litigation
for the private plaintiffs can be made at this
time.
False Claims Act Allegations
• In
August 2018, the United States District Court for the Western
District of Virginia unsealed a declined qui tam complaint alleging causes of
action under the Federal and state False Claims Acts against
certain entities within the Group predicated on best price issues
and claims of retaliation. See United States ex rel. Miller v. Reckitt
Benckiser Group PLC et al., Case No. 1:15-cv-00017 (W.D.
Va.). The suit also seeks reasonable attorneys' fees and costs. The
Group filed a Motion to Dismiss in June 2021, which was granted in
part and denied in part on October 17, 2023. The relator filed a
sixth amended complaint against only Indivior Inc. on December 7,
2023. Indivior answered the sixth amended complaint on March 18,
2024.
• In
May 2018, Indivior Inc. received an informal request from the
United States Attorney's Office ("USAO") for the Southern District
of New York, seeking records relating to the SUBOXONE Film
manufacturing process. The Group provided the USAO certain
information regarding allegations that the government received
regarding SUBOXONE Film. There has been no communication regarding
this matter with the USAO since 2022.
U.K. Shareholder Claims
• On
September 21, 2022, certain shareholders issued representative and
multiparty claims against Indivior PLC in the High Court of Justice
for the Business and Property Courts of England and Wales, King's
Bench Division. On January 16, 2023, the representative served its
Particular of Claims setting forth in more detail the claims
against the Group, while the same law firm that represents the
representative also sent its draft Particular of Claims for the
multiparty action. The claims made in both the representative and
multiparty actions generally allege that Indivior PLC violated the
U.K. Financial Services and Markets Act 2000 ("FSMA 2000") by
making false or misleading statements or material omissions in
public disclosures, including the 2014 Demerger Prospectus,
regarding an alleged product-hopping scheme regarding the switch
from SUBOXONE Tablets to SUBOXONE Film. Indivior PLC filed an
application to strike out the representative action. On December 5,
2023, the court handed down a judgment allowing the Group's
application to strike out the representative action. The court
subsequently awarded certain costs to the Group. On January 23,
2024, the claimants requested permission to appeal the decision to
the court of appeals. The appellate court has indicated that it
will hear the appeal between December 10 and 12, 2024. The Group has begun its evaluation of the claims, believes it
has meritorious defenses, and intends to vigorously defend itself.
Given the status and preliminary stage of the litigation,
no estimate of possible loss can be made at this
time.
Opiant Shareholder Claims
• On
November 8, 2023, plaintiff James Litten filed a class action
complaint in the Delaware Court of Chancery alleging that former
officers and directors of Opiant Pharmaceuticals, Inc. ("Opiant")
breached fiduciary duties of care, loyalty, and good faith in
connection with Indivior PLC's 2022 acquisition of Opiant. The
defendants moved to dismiss the complaint on January 26, 2024. On
March 21, 2024, the plaintiff filed an amended complaint, which
added Lazard Freres & Co. LLC, which was Opiant's advisor in
the acquisition as a defendant. The defendants moved to dismiss the
amended complaint on June 21, 2024. The motion to dismiss remains
pending. The Group has begun its evaluation of the claims, believes
it has meritorious defenses, and intends to vigorously defend
itself. Given the status and preliminary stage of the litigation,
no estimate of possible loss can be made at this
time.
Dental Allegations
• The
Group has been named as a defendant in numerous lawsuits alleging
that Suboxone® Film was defectively designed and caused dental
injury, and that the Group failed to properly warn of the risks of
such injuries. The plaintiffs generally seek compensatory damages,
as well as punitive damages and attorneys' fees and costs.
Plaintiffs and potential plaintiffs related to these lawsuits
generally can be grouped as follows:
▪ Dental MDL Plaintiffs:
More than 675 of these cases have been consolidated in
multi-district litigation in the Northern District of Ohio. See In
Re Suboxone (Buprenorphine/Naloxone) Film Products Liability
Litigation, MDL No. 3092 (N.D. Oh.) (the "Dental MDL").
▪ Dental MDL Schedule A
Plaintiffs: One complaint filed in the Dental MDL on June 14, 2024
attached a schedule of nearly 10,000 plaintiffs (the "Schedule A
Plaintiffs"). The parties are in the process of negotiating a
tolling agreement for the Schedule A Plaintiffs that would permit
plaintiffs' counsel additional time to investigate issues such as
whether and when the Schedule A Plaintiffs used any Indivior
product before determining whether to file individual complaints
that ultimately would be coordinated with the Dental
MDL.
▪ State Court Plaintiffs:
One complaint has been filed in New Jersey state court, and the
parties have agreed to toll the claims of more than 850 other
individuals in Delaware, New Jersey, and Virginia. Complaints
have not yet been filed on behalf of the tolled
individuals.
•
Product liability cases such as these typically involve issues
relating to medical causation, label warnings and reliance on those
warnings, scientific evidence and findings, actual/provable injury
and other matters. These cases are in their preliminary stages.
These lawsuits and claims follow a June 2022 required revision to
the Prescribing Information and Patient Medication Guide about
dental problems reported in connection with buprenorphine medicines
dissolved in the mouth to treat opioid use disorder. This revision
was required by the FDA of all manufacturers of these products. The
Group has been informed by its primary insurance carrier that
defense costs for the Dental MDL should begin to be reimbursed now
that the Group's self-insurance retention has been exhausted. To
date, the primary insurance carrier has reimbursed the Group for
$0.1m in defense costs. Additionally, the Group's primary insurance
carrier has issued a reservation of rights against payment of any
liability costs. In the event of a liability finding, various
factors could affect reimbursement or payment by insurers, if any,
including (i) the scope of the insurers' purported defenses and
exclusions to avoid coverage, (ii) the outcome of negotiations with
insurers, (iii) delays in or avoidance of payment by insurers and
(iv) the extent to which insurers may become insolvent in the
future. The Group has begun its evaluation of the claims, believes
it has meritorious defenses, and intends to vigorously defend
itself. Given the status and preliminary stage of the litigation,
no estimate of possible loss can be made at this time.
•
Applications to file class actions based on
similar allegations as in the Dental MDL were filed in Quebec and
British Columbia against various subsidiaries of the Group, among
other defendants, in April 2024. The Group has begun its evaluation
of the claims, believes it has meritorious defenses, and intends to
vigorously defend itself. Given the status and preliminary stage of
the litigation, no estimate of possible loss can be made at this
time.
14. TRADE AND OTHER PAYABLES
|
Jun 30,
2024
|
Dec
31,
2023
|
|
$m
|
$m
|
Accrual for rebates, discounts and
returns
|
(589)
|
(507)
|
Rebates payable
|
(2)
|
(28)
|
Accounts payable
|
(46)
|
(39)
|
Accruals and other
payables
|
(155)
|
(150)
|
Other tax and social security
payable
|
(17)
|
(19)
|
Total trade and other
payables
|
(809)
|
(743)
|
15. SHARE
CAPITAL
|
Equity ordinary shares
(thousands)
|
Nominal value paid per
share
|
Aggregate nominal value
$m
|
Issued and fully paid
|
|
|
|
At
January 1, 2024
|
136,526
|
$0.50
|
68
|
Ordinary shares issued
|
1,356
|
$0.50
|
1
|
Shares repurchased and
canceled
|
(3,898)
|
$0.50
|
(2)
|
At
June 30, 2024
|
133,984
|
|
67
|
|
Equity
ordinary shares (thousands)
|
Nominal
value paid per share
|
Aggregate
nominal value $m
|
Issued and fully paid
|
|
|
|
At January 1, 2023
|
136,481
|
$0.50
|
68
|
Ordinary shares issued
|
1,882
|
$0.50
|
1
|
Shares repurchased and
canceled
|
(484)
|
$0.50
|
-
|
At June 30, 2023
|
137,879
|
|
69
|
Ordinary shares issued
During the period, 1,356k ordinary
shares at $0.50 each (H1 2023: 1,882k at $0.50 each) were issued to
satisfy vesting/exercises under the Group's Long-Term Incentive
Plan, the Indivior U.K. Savings-Related Share Option Scheme, and
the U.S. Employee Stock Purchase Plan. In H1 2024, net settlement
of tax on employee equity awards was $20m (H1 2023:
$21m).
Shares repurchased and canceled
On May 3, 2022, the Group commenced
a share repurchase program for an aggregate purchase price up to no
more than $100m or 39,699k of ordinary shares, (equivalent shares
post share consolidation: 7,940k) which concluded on February 28,
2023. During the prior period, the Company repurchased and
canceled 484k
ordinary shares with a nominal value of $0.50 each.
On November 17, 2023, the Group
commenced a share repurchase program for an aggregate purchase
price up to no more than $100m or 13,632k of ordinary shares and
ending no later than August 30, 2024. During the period, the Group
repurchased and canceled a total of 3,898k
ordinary shares at $0.50 per share under this program for an
aggregate nominal value of $2m.
All ordinary shares repurchased
during the period under share repurchase programs were canceled
resulting in a transfer of the aggregate nominal value to a capital
redemption reserve. The total cost of the purchases made under the
share repurchase program during the period, including directly
attributable transaction costs, was $70m (H1 2023: $11m). A net
repurchase amount of $4m has been recorded as a financial liability
and reduction of retained earnings which represents the amount to
be spent under the program through July 26, 2024, after which date
the Company has the ability to modify or terminate the program.
Total purchases under the share repurchase program
will be made out of distributable profits.
16. ACQUISITION OF
OPIANT
On March 2, 2023, the Group
acquired 100% of the share capital of
Opiant for upfront cash consideration of $146m and
an additional maximum amount of $8.00 per share in
Contingent Value Rights (CVR) to be potentially
paid upon achievement of net sales milestones. As a result of the
acquisition, the Group added OPVEE
(nalmefene nasal spray), an opioid overdose
treatment well-suited to confront illicit synthetic opioids like
fentanyl, to its addiction science portfolio. OPVEE
was approved by the FDA in May 2023 and launched
in October 2023.
Since substantially all of the fair
value of the gross assets acquired was concentrated in the OPVEE
in-process research and development, the Group accounted for the
transaction as an asset acquisition and recorded an intangible
asset of $126m.
The cash outflow for the
acquisition was $124m in Q1 2023, net of cash acquired, and
inclusive of direct transaction costs. As part of the acquisition,
the Group assumed outstanding debt of $10m which was settled and
included as a cash outflow from financing activities.
Additional acquisition-related
costs of $16m were incurred in H1 2023 and included in selling,
general, and administrative expenses, primarily relating to
severance, acceleration of vesting of Opiant employee share
compensation, and short-term retention accruals.
17. BUSINESS COMBINATION
On November 1, 2023, the Group
acquired an aseptic manufacturing facility (the "Facility") in the
United States for upfront consideration of $5m in cash and
assumption of certain contract manufacturing obligations. The
Facility will be further developed to secure the long-term
production and supply of SUBLOCADE.
The acquisition was accounted for
as a business combination using the acquisition method of
accounting in accordance with IFRS 3 Business Combinations. The assets
acquired and liabilities assumed were recorded at fair value, with
the excess of the purchase price over the fair value of the
identifiable assets and liabilities recognized as goodwill. An
onerous contract provision was recorded at fair value to reflect
the present value of the expected losses from assumed contractual
manufacturing obligations. Net operating losses attributable to
these contractual obligations will be recorded against the onerous
contract provision from the date of acquisition through fulfillment
of the contracts in early 2025.
As of June 30, 2024, committed
capital spend for the Facility is approximately $7m.
Identifiable assets acquired and liabilities
assumed
As the acquisition was completed in
late 2023, the provisional fair value of assets acquired and
liabilities assumed at the date of acquisition was disclosed in the
consolidated financial statements for the year ended December 31,
2023. During Q1 2024, based on new information obtained about facts
and circumstances that existed as of the acquisition date, the
Group adjusted the provisional fair values for acquired property,
plant and equipment and the assumed onerous contract provision,
with an adjustment to goodwill equal to the change in the net
assets acquired. These measurement period adjustments were
reflected in the comparative period presented in the Condensed
Financial Statements in accordance with IFRS 3 Business Combinations.The following
table provides a reconciliation from the provisional fair values of
assets acquired and liabilities assumed at the date of acquisition
as reported in the 2023 annual financial statements to the
provisional fair values as adjusted during Q1 2024:
|
Provisional
values
|
|
As Previously
Reported
|
Measurement period
adjustment
|
As adjusted
|
Net assets acquired
|
$m
|
$m
|
$m
|
Property, plant and
equipment
|
28
|
(2)
|
26
|
Deferred tax assets
|
2
|
(1)
|
1
|
Trade and other payables
|
(1)
|
-
|
(1)
|
Provisions
|
(29)
|
6
|
(23)
|
Total net assets acquired
|
-
|
3
|
3
|
Goodwill
Goodwill arising from the
acquisition has been recognized as follows, reflecting the Q1 2024
measurement period adjustments:
|
Provisional
values
|
|
As Previously
Reported
|
Measurement period
adjustment
|
As adjusted
|
|
$m
|
$m
|
$m
|
Consideration
transferred
|
5
|
-
|
5
|
Less: Fair value of net assets
acquired
|
-
|
(3)
|
(3)
|
Goodwill
|
5
|
(3)
|
2
|
The goodwill is primarily
attributable to Indivior-specific synergies relating to accelerated
in-sourcing of SUBLOCADE production and the skills and technical
talent of the Facility's workforce.
18. DISCONTINUATION OF PERSERIS SALES &
MARKETING
As announced on July 9, 2024, the
Group discontinued sales and marketing support for PERSERIS. This
decision was taken in consideration of guidance on regulatory
changes announced during Q2 2024 which are expected to intensify
payor management of the treatment category in which PERSERIS
competes and would make PERSERIS no longer financial viable. While
the Group will continue to supply PERSERIS for the foreseeable
future, the expected adverse impacts represented an impairment
indicator for PERSERIS-related assets, resulting in an impairment
charge across the following asset classes:
|
Q2 2024
|
Impairment charges and write downs
|
$m
|
Charged to cost of goods sold
|
|
Marketed product
intangible
|
9
|
Plant and equipment
|
8
|
Inventory
|
24
|
Sub-total: Cost of goods sold
|
41
|
Charged to SG&A: Other assets
|
1
|
Total impairment charges
|
42
|
See also Note 19.
19. SUBSEQUENT
EVENTS
In addition to the impairment
charges recognized in the Condensed Financial Statements discussed
in Note 18, the decision to discontinue sales and marketing of
PERSERIS resulted in a headcount reduction of approximately 130
employees and decisions to terminate related contract manufacturing
agreements. As a result of these actions, the Group expects to
recognize severance and contract termination costs of approximately
$23m during Q3 2024, the bulk of which will be paid during H2
2024.
On July 23, 2024, the Company's
Board of Directors approved a $100m share repurchase program under
its authority from the shareholder resolution announced at the 2024
Annual General Meeting. This new program is
expected to commence immediately upon the conclusion of the Group's
current $100m share repurchase program.
DIRECTORS' RESPONSIBILITY STATEMENT
The directors confirm that these
condensed interim financial statements have been prepared in
accordance with UK adopted International Accounting Standard 34,
'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority and that the interim management report includes a
fair review of the information required by DTR 4.2.7 and DTR 4.2.8,
namely:
• an
indication of important events that have occurred during the first
six months and their impact on the condensed set of financial
statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year;
and
•
material related-party transactions in the first six months and any
material changes in the related-party transactions described in the
last annual report
The Directors are responsible for
the maintenance and integrity of the Group's website. Legislation
in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other
jurisdictions.
Details of Indivior PLC's Directors
are available on our website at www.indivior.com
By order of the Board
Mark Crossley
|
Ryan Preblick
|
Chief Executive Officer
|
Chief Financial Officer
|
July 24, 2024
Independent review report to
Indivior PLC
Report on the condensed consolidated interim financial
statements
We have reviewed Indivior PLC's
condensed consolidated interim financial statements (the "interim
financial statements") in the H1 and Q2 2024 Financial Results of
Indivior PLC for the three and six month periods ended 30 June
2024.
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' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
The interim financial statements
comprise:
• the
Condensed consolidated interim balance sheet as at 30 June
2024;
• the
Condensed consolidated interim income statement and Condensed
consolidated interim statement of comprehensive income for the
three and six month periods then ended;
• the
Condensed consolidated interim cash flow statement for the six
month period then ended;
• the
Condensed consolidated interim statement of changes in equity for
the six month period then ended; and
• the
explanatory notes to the interim financial statements.
The interim financial statements
included in the H1 and Q2 2024 Financial Results of Indivior PLC
have been prepared in accordance with UK adopted International
Accounting Standard 34, 'Interim Financial Reporting' and the
Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority.
We conducted our review in
accordance with International Standard on Review Engagements (UK)
2410, 'Review of Interim Financial Information Performed by the
Independent Auditor of the Entity' issued by the Financial
Reporting Council for use in the United Kingdom ("ISRE (UK) 2410").
A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures.
A review is substantially less in
scope than an audit conducted in accordance with International
Standards on Auditing (UK) and, consequently, does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
We have read the other information
contained in the H1 and Q2 2024 Financial Results and considered
whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial
statements.
Conclusions relating to going concern
|
Based on our review procedures,
which are less extensive than those performed in an audit as
described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors
have inappropriately adopted the going concern basis of accounting
or that the directors have identified material uncertainties
relating to going concern that are not appropriately disclosed.
This conclusion is based on the review procedures performed in
accordance with ISRE (UK) 2410. However, future events or
conditions may cause the group to cease to continue as a going
concern.
Responsibilities for the interim financial statements and the
review
|
Our responsibilities and those of the
directors
|
The H1 and Q2 2024 Financial
Results, including the interim financial statements, is the
responsibility of, and has been approved by the directors. The
directors are responsible for preparing the H1 and Q2 2024
Financial Results in accordance with the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority. In preparing the H1 and Q2 2024 Financial
Results, including the interim financial statements, the directors
are responsible for assessing the group's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or to cease
operations, or have no realistic alternative but to do
so.
Our responsibility is to express a
conclusion on the interim financial statements in the H1 and Q2
2024 Financial Results based on our review. Our conclusion,
including our Conclusions relating to going concern, is based on
procedures that are less extensive than audit procedures, as
described in the Basis for conclusion paragraph of this report.
This report, including the conclusion, has been prepared for and
only for the company for the purpose of complying with the
Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority and for no other purpose. We
do not, in giving this conclusion, accept or assume responsibility
for any other purpose or to any other person to whom this report is
shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
PricewaterhouseCoopers
LLP
Chartered Accountants
London
24 July 2024
APPENDIX: ADJUSTED
RESULTS
Exceptional items and other adjustments
Exceptional items and other
adjustments represent significant expenses or income that do not
reflect the Group's ongoing operations or the adjustment of which
may help with the comparison to prior periods. Exceptional items
and other adjustments are excluded from adjusted results consistent
with the internal reporting provided to management and the
Directors. Examples of such items could include income or
restructuring and related expenses from the reconfiguration of the
Group's activities and/or capital structure, amortization of
acquired intangible assets, impairment of current and non-current
assets, gains and losses from the sale of intangible assets,
certain costs arising as a result of significant and non-recurring
regulatory and litigation matters, and certain tax related
matters.
Adjusted results are not measures
defined by IFRS and are not a substitute for, or superior to,
reported results presented in accordance with IFRS. Adjusted
results as presented by the Group are not necessarily comparable to
similarly titled measures used by other companies. As a result,
these performance measures should not be considered in isolation
from, or as a substitute analysis for, the Group's reported results
presented in accordance with IFRS. Management performs a
quantitative and qualitative assessment to determine if an item
should be considered for adjustment. The table below sets out
exceptional items and other adjustments recorded in each
period:
|
Q2
2024
|
Q2
2023
|
H1
2024
|
H1
2023
|
For the three and six months ended June 30
|
$m
|
$m
|
$m
|
$m
|
Exceptional items and other
adjustments within cost of sales
|
|
|
|
|
Amortization of acquired intangible
assets1
|
(3)
|
(2)
|
(6)
|
(2)
|
Discontinuation of sales and
marketing for PERSERIS2
|
(41)
|
-
|
(41)
|
-
|
Total exceptional items and other
adjustments within cost of sales
|
(44)
|
(2)
|
(47)
|
(2)
|
|
|
|
|
|
Exceptional items and other
adjustments within SG&A
|
|
|
|
|
Legal
costs/provision3
|
(160)
|
-
|
(160)
|
-
|
Discontinuation of sales and
marketing for PERSERIS2
|
(1)
|
-
|
(1)
|
-
|
Acquisition-related
costs4
|
(2)
|
(4)
|
(4)
|
(16)
|
U.S. listing
costs5
|
(4)
|
(4)
|
(4)
|
(6)
|
Total exceptional items and other
adjustments within SG&A
|
(167)
|
(8)
|
(169)
|
(22)
|
|
|
|
|
|
Total exceptional items and other adjustments before
taxes
|
(211)
|
(10)
|
(216)
|
(24)
|
Tax on exceptional items and other
adjustments
|
44
|
1
|
45
|
3
|
Exceptional tax
items8
|
-
|
(8)
|
-
|
(8)
|
Total exceptional items and other
adjustments
|
(167)
|
(17)
|
(171)
|
(29)
|
1. The Group
reported adjusted cost of sales to exclude amortization of acquired
intangible assets.
2. In H1 2024 and Q2
2024, the Group recognized $41m of exceptional costs related to the
discontinuation of sales and marketing for PERSERIS.
3. In H1 and Q2
2024, the Group recognized exceptional costs of $85m related to the
July 8, 2024 settlement of certain antitrust legal matters and $75m
related to the Opioid MDL (refer to Notes 11 and 13).
4. In H1 2024 and Q2
2024, the Group recognized $4m and
$2m, respectively, of exceptional costs
related to the acquisition and integration of the aseptic
manufacturing site acquired in November 2023 (refer to note 17). In
H1 2023 and Q2 2023, the Group recognized $16m
and $4m of exceptional costs related to the
acquisition of Opiant (refer to Note 16).
5. The Group
recognized exceptional costs related to listing Indivior shares on
NASDAQ as the primary listing of $4m In
H1 2024 and
Q2 2024 (H1 2023:
$6m and Q2 2023:
$4m).
6.
Exceptional tax items in H1 and Q2 2023 are
comprised of $5m write off of deferred tax assets and tax expense
due to limitation on the deduction of executive compensation by
U.S. publicly traded companies and $3m change in estimate as to the
tax benefit of legal provisions booked in the prior
year.
Adjusted results
Management provides certain
adjusted financial measures which may be useful to investors. These
adjusted financial measures exclude items which do not reflect the
Group's day-to-day operations and therefore may help with
comparisons to prior periods or among companies. Management may use
these financial measures to better understand trends in the
business.
The tables below present the
adjustments between reported and adjusted results for both Q2/H1
2024 and Q2/H1 2023.
Reconciliation of gross profit to adjusted gross
profit
|
Q2
2024
|
Q2
2023
|
H1
2024
|
H1
2023
|
For the three and six months ended June 30
|
$m
|
$m
|
$m
|
$m
|
Gross profit
|
206
|
226
|
444
|
440
|
Exceptional items and other
adjustments in cost of sales
|
44
|
2
|
47
|
2
|
Adjusted gross profit
|
250
|
228
|
491
|
442
|
We define adjusted gross margin as
adjusted gross profit divided by net revenue.
Reconciliation of selling, general and administrative expenses
to adjusted selling, general and administrative
expenses
|
Q2
2024
|
Q2
2023
|
H1
2024
|
H1
2023
|
For the three and six months ended June 30
|
$m
|
$m
|
$m
|
$m
|
Selling, general and administrative expenses
|
(311)
|
(133)
|
(457)
|
(264)
|
Exceptional items and other
adjustments in selling, general and administrative
expenses
|
167
|
8
|
169
|
22
|
Adjusted selling, general and administrative
expenses
|
(144)
|
(125)
|
(288)
|
(242)
|
Reconciliation of operating profit to adjusted operating
profit
|
Q2
2024
|
Q2
2023
|
H1
2024
|
H1
2023
|
For the three and six months ended June 30
|
$m
|
$m
|
$m
|
$m
|
Operating profit
|
(132)
|
61
|
(67)
|
118
|
Exceptional items and other
adjustments in cost of sales
|
44
|
2
|
47
|
2
|
Exceptional items and other
adjustments in selling, general and administrative
expenses
|
167
|
8
|
169
|
22
|
Adjusted operating profit
|
79
|
71
|
149
|
142
|
We define adjusted operating margin
as adjusted operating profit divided by net revenue.
Reconciliation of profit before taxation to adjusted profit
before taxation
|
Q2
2024
|
Q2
2023
|
H1
2024
|
H1
2023
|
For the three and six months ended June 30
|
$m
|
$m
|
$m
|
$m
|
Profit before taxation
|
(135)
|
62
|
(72)
|
120
|
Exceptional items and other
adjustments in cost of sales
|
44
|
2
|
47
|
2
|
Exceptional items and other
adjustments in selling, general and administrative
expenses
|
167
|
8
|
169
|
22
|
Adjusted profit before taxation
|
76
|
72
|
144
|
144
|
Reconciliation of tax expense to adjusted tax
expense
|
Q2
2024
|
Q2
2023
|
H1
2024
|
H1
2023
|
For the three and six months ended June 30
|
$m
|
$m
|
$m
|
$m
|
Tax expense
|
28
|
(23)
|
12
|
(37)
|
Tax on exceptional items and other
adjustments
|
(44)
|
(1)
|
(45)
|
(3)
|
Exceptional tax items
|
-
|
8
|
-
|
8
|
Adjusted tax expense
|
(16)
|
(16)
|
(33)
|
(32)
|
We define adjusted effective tax
rate as adjusted tax expense divided by adjusted profit before
taxation.
Reconciliation of net income to adjusted net
income
|
Q2
2024
|
Q2
2023
|
H1
2024
|
H1
2023
|
For the three and six months ended June 30
|
$m
|
$m
|
$m
|
$m
|
Net income
|
(107)
|
39
|
(60)
|
83
|
Exceptional items and other
adjustments in cost of sales
|
44
|
2
|
47
|
2
|
Exceptional items and other
adjustments in selling, general and administrative
expenses
|
167
|
8
|
169
|
22
|
Tax on exceptional items and other
adjustments
|
(44)
|
(1)
|
(45)
|
(3)
|
Exceptional tax items
|
-
|
8
|
-
|
8
|
Adjusted net income
|
60
|
56
|
111
|
112
|
Adjusted diluted earnings per share
Management believes that diluted
earnings per share, adjusted for the impact of exceptional items
and other adjustments after the appropriate tax amount, may provide
meaningful information on underlying trends to shareholders in
respect of earnings per ordinary share. Weighted average shares
used in computing diluted earnings per share is included in Note 6.
A reconciliation of net income to adjusted net income is included
above.