Indivior Pharmaceuticals, Inc.

Good day and thank you for standing by. Welcome to the Indivio plc full year results 2024. At this time all participants are in a listen only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session you'll need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question please press star 1 1 again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your host for today's call, Jason Thompson, Head of Investor Relations. Please go ahead.

Thanks, Sarah. Before we begin, I need to remind everyone that on today's call, we may make forward-looking statements that are subject to risks and uncertainties, and that actual results may differ materially. We list the factors that may cause our results to be materially different on slide two of our presentation. These statements are based on current information and beliefs, and we disclaim any obligation to update them except where required by law. We also may refer to non-GAAP measures, the reconciliations for which may also be found in the appendix of our presentation that is now posted on our website at endivier.com. I'll now turn the call over to Mark Crossley, our CEO.

Thank you, Jason, and good morning and good afternoon, everyone. Thanks for joining us. Joining me today on the call are Ryan Preblek, our Chief Financial Officer, Richard Simkin, our Chief Commercial Officer, and Dr. Christian Heidbreder, our Chief Scientific Officer. I'll quickly highlight our results, touch on guidance, and review our progress against strategic priorities. Then Richard will provide updates on the commercial strategies for our major products, focusing on our efforts behind Sublocate. After that, Ryan will detail the financials and our full year 2025 outlook, and Christian's available if we have any pipeline related questions. Looking at our results, I'm pleased we finished 2024 with positive momentum. We delivered a fourth quarter performance that put our full year results above our latest guidance and our primary growth engine sublocate ended the year with 20% net revenue growth overall. We recognize that 2024 was a difficult period for the company and our investors. As we previously highlighted, the performance of Sublocate in 2024 was impacted by transitory items, together with competition in the U.S. long-acting injectable category. Furthermore, we took the decision mid-year to discontinue our schizophrenia treatment, Purseris, on profitability grounds. The result was that we were unable to deliver against our original expectations for 2024. Faced with this challenging backdrop, we took decisive actions in the back half of the year to fortify our position and support our long-term profitable growth ambitions. We narrowed our commercial and R&D pipeline focus to growing our long-standing leadership role in opioid use disorder. In addition, we implemented cost reductions of over $100 million on an annual basis. Together, these actions will provide us with the fuel to both reinvest behind Sublocade and our two opioid use disorder phase two pipeline assets, while also delivering more than $50 million of savings to the bottom line. Regarding the commercial investments we're making behind Sublicate, we believe this is the right time to accelerate awareness of this important treatment among patients and HCPs, especially given the pending label updates that we expect will improve Sublicate's competitive positioning through enhanced HCP and patient experience. Let me touch briefly on these proposed label changes, which, as a reminder, covered rapid induction and alternate sites of injection on the body. We are confident in the strength of the data we provided, and the FDA informed us that there were no outstanding items for us to address. Consequently, we're optimistic the FDA will approve the label changes for Sublocade in the coming weeks. In a moment, Richard will share some details on our commercial strategy to increase awareness of sublocate and medically assisted treatment more broadly. On top of our initiatives to streamline and refocus our business, another important development was a series of steps we took to further de-risk Indivior through ongoing resolution of certain legacy litigation. We understand that these matters have created volatility in the past, but through our legal strategy, I believe we have put Indivior on much sounder footing. Overall, I'm confident the actions that I've highlighted have placed Indivier in a stronger position to drive long-term profitable growth and shareholder value. In the near term, however, we expect a transition year for Suboxone Film and Sublocade in 2025. Notably, after five years of exceeding generic erosion analogs, net revenue from Suboxone Film is expected to decline sharply in 2025 due to intensified competitive generic pricing activity in the U.S., along with the potential for a fifth GINAC entrant. As a reminder, we do not promote suboxone film in the U.S. For sublocate, we anticipate relatively unchanged net revenue at the midpoint of our guidance as competitive dynamics and near-term justice system funding challenges are expected to largely offset strong underlying long-acting injectable category growth and good growth in our organized health systems accounts. In view of the expected reduction in film net revenue and profit, our 2025 guidance assumes a decline in total net revenue and adjusted operating profit versus 2024. Drilling down a little deeper into our outlook for Sublocade, we see two counteracting vectors in 2025. Our traditional base OHS business is expected to grow in the high single to low double-digit range. This reflects a few factors, including overall LAI category growth, benefits from our past and current commercial investments to drive increased awareness, and improvement in our competitive position, assuming the pending label updates. It also assumes that the market adjusts to two LAI competitors towards a steady state share split that is continuing to track with our cohort intelligence, indicating an approximately 65-35 share split, favoring sublocate amongst experienced dual LAI prescribers. We expect that this outlook in the base business to be largely offset by challenges in the justice channel due to funding gaps that are persisting into 2025, as well as difficult choices a few larger justice system accounts are having to make to treat more patients with constrained funding in the near term, resulting in long-acting injectables losing position. Richard will have more detail on our justice strategy, but I would simply emphasize that this near-term justice system dynamic in no way diminishes the long-term upside we see, and we expect growth again in 2026. We will not, however, allow this near-term imperative transition to take our attention away from the main driver of our business and shareholder value. By focusing our efforts on opioid use disorder and growing the LAI category and emphasizing Sublicate's differentiated profile, we continue to expect to achieve Sublocade's peak net revenue goal of greater than $1.5 billion. Turning quickly to our report card on strategic priorities, which are now set against our narrowed focus, particularly as regards to R&D. Beginning with Sublocade, we continue to see solid growth in the number of patients we're able to help in the past year. At the end of 2024, we had approximately 171,000 patients. a 25% increase compared to the end of 2023. Recall, reaching our peak net revenue goal contemplates treating approximately 270,000 patients, so continued good growth in 2024. And, as I previously mentioned, our progress in helping patients delivered another overall solid net revenue performance for Sublicate in 2024, growing 20% year over year, despite the recent challenges. In terms of diversification, our efforts are focused on Otvi in the U.S. and on driving net revenue of our new products, Sublocate and Suboxone Film, in the rest of the world. We made good progress in both areas. Richard will provide more detail on Otvi in a moment, but we exited 2024 with 170 experience programs up and running with continued positive anecdotal feedback and growing potential for adoption. Meanwhile, new products increased to more than 50% of the rest of world net revenue, mainly driven by Sublocade. In terms of pipeline and R&D, our focus is narrowed to our two assets for the treatment of opioid use disorder. The phase two studies for both have been committed to and funded, and development activities are on track with last patient, last visits for both studies expected in the fourth quarter this year. On our last strategic priority, I'm pleased that we again made great strides in creating greater certainty for all our stakeholders. The two major items in 2024 were continuing to reduce enterprise risk with the settlements of certain legacy litigation and increase financial flexibility with a new debt facility totaling $400 million. More specifically on the completed legal settlements, we have now fully resolved the antitrust matters with the agreement we reached with the remaining parties in this legacy matter. I'm also pleased to confirm that in 2024, we continued our unwavering commitment and strong record of meeting our mandated integrity and compliance commitments. We're well on track to complete our obligations under the CIA this year. Finally, I want to highlight our capital allocation priorities during this transition period. In 2025, we expect to generate positive underlying cash flows from operations and to maintain a strong cash position. We do, however, need to be mindful of potential significant unwind of payables related to Suboxone film if share erodes at a rapid pace. As such, our near-term capital allocation focuses on reinvesting in Sublocade, completing the two clinical Phase II studies, and maintaining our overall financial flexibility. As we move through this in the near-term period, the Board, in partnership with management, will continue to actively review capital allocation But at this time, we are neither considering business development nor a return of capital to shareholders. With that, I'll now hand it over to Richard to provide a commercial overview.