Indivior Pharmaceuticals, Inc.

Good day and thank you for standing by. Welcome to the Indivio Pharmaceuticals Q1 2026 Financial Results Conference Call and Webcast. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you need to press star, one, one on your telephone keypad. You will then hear an automatic message advising your hand is raised. To withdraw a question, please press star, one, and one again. Please be advised that this conference is being recorded. I would now like to hand the conference over to our speaker today, Jason Thompson. Please go ahead.

Thanks, Nadia, and welcome to Indivia's first quarter 2026 results conference call. I'm joined today by Joe Schifoni, Chief Executive Officer, Pat Berry, Chief Commercial Officer, Ryan Preba, Chief Financial Officer, and Christian Heidbreder, our Chief Scientific Officer. 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 here on slide two of this presentation. We also may refer to non-GAAP measures, the reconciliations for which may also be found in the appendix of this presentation that is now posted on our website at endivere.com. I'll now turn the call over to Joe Schifoni, our CEO.

Thanks, Jason. Good morning, and thank you for joining us on today's call to review our first quarter results. I will begin with an overview of our performance and summarize our progress against Phase 2 Accelerate of the Indivior Action Agenda. Pat will discuss sublocate performance, Christian will provide an update on the pipeline, and Ryan will review the financials. In the first quarter, we made significant progress in phase two of the Indivier Action Agenda and executed key elements of our capital deployment strategy. Specifically in the quarter, we grew total net revenue 19% year over year to $317 million, primarily driven by strong U.S. sublocate performance. We grew total sublocate net revenue 32% year over year to $232 million, reflecting strong year-over-year dispense unit growth of 20%. The acceleration in sublocate dispense unit growth was driven by improved commercial execution and the early impact that our new consumer campaign, Move Forward in Recovery, is having on patient activation. Importantly, sublocate category share was stable in the quarter, and we had record new patient starts. We delivered adjusted EBITDA of $164 million, up 112% year over year, and margin improvement of 23 percentage points. We successfully executed our capital deployment strategy, improving our debt profile through the issuance of $500 million of convertible notes and return value to our shareholders by repurchasing $125 million of our shares at an average price of $31.45. Our strong first quarter performance and the underlying strength of sublocate across key metrics, along with a more favorable outlook for Suboxone, enabled us to meaningfully raise our 2026 financial guidance. I want to thank the Indivior team for their contributions to our progress against the Indivior Action Agenda. and for their commitment to making a positive difference in the lives of people living with opioid use disorder and the communities we serve. In Phase 2 Accelerate, we are focused on accelerating U.S. sublocate dispense unit growth in net revenue throughout 2026 and growing adjusted EBITDA and cash flow at an even faster rate. In the first quarter, we achieved a major milestone. Over 500,000 patients in the U.S. have been prescribed Sublicate since its launch in 2018. Nearly one quarter of those patients were added in the last five quarters, underscoring Sublicate's strong growth trajectory. Sublicate is the first and number one prescribed long-acting injectable for the treatment of moderate to severe opioid use disorder. It is the only monthly long-acting injectable with an indication for rapid initiation. Looking forward, we believe continuous improvement in commercial execution and our commitment to significant and sustained investment in our new direct-to-consumer campaign will accelerate U.S. sublocate dispense unit growth to the mid-teens in 2026 up from 7% in 2025. We now expect total sublocated net revenue to grow 13% year-over-year to $970 million at the midpoint of our guidance. As expected, our new operating model established in Phase 1 Generate Momentum of the Indivior Action Agenda is accelerating the growth of adjusted EBITDA and cash flow at a significantly faster rate than net revenue. We now expect to generate $640 million of adjusted EBITDA in 2026 at the midpoint of our guidance, up 50% versus the previous year, which equates to a 51% margin, up 16 percentage points versus 2025. Our increased cash flow and improved financial flexibility position us to strategically deploy capital to create value for our shareholders. With the completion of our debt refinancing, our capital deployment priorities are focused on opportunistically utilizing the remaining $270 million of our share repurchase program and evaluating commercial stage business development opportunities to enhance and diversify Indivior's growth profile. We are on track to enter phase three of the Indivior Action Agenda breakout in the second half of this year. Next, I want to briefly touch on the decisions we made on the INDV 6001 and 2000 programs. We do not intend to pursue phase three development of INDV 6001 and have amended our license agreement with Alar Pharmaceuticals. Pursuant to these amendments, Alar will regain development rights to the asset and commercialization rights outside of the U.S. Indivier will maintain commercial rights in the U.S. Regarding INDV 2000, it did not meet the primary endpoint in the phase two trial, and additional work is needed to further explore the initial signals we observed. We will not be progressing the program internally for opioid use disorder, and we will pursue external business development opportunities for this asset. Christian will provide more detail. I want to recognize and thank our R&D colleagues for leading with science and for the hard work they put into the 6001 and 2000 programs. Their efforts greatly advanced our understanding of these assets and their work was high quality and conducted with integrity. To conclude, we are encouraged by our progress so far in 2026. Our results strongly position us to achieve our financial and operational objectives in Phase 2 Accelerate and to enter Phase 3 Breakout in the second half of 2026. I'll now turn the call over to Pat.

Thanks, Joe. Our commercial teams are executing well against Phase 2 of the Indivier Action Agenda, Accelerate. This acceleration is being driven by our commercial execution initiatives and our consumer activation investments. notably our successful DTC campaign, Move Forward in Recovery. We achieved record new patient starts in the first quarter of approximately 31,800, a year-over-year increase of 29%. This brought our total U.S. subacute patients treated over the last 12 months to 191,600 at the end of the first quarter. Dispense unit growth in the first quarter was up 20% versus the prior year, reflecting acceleration in U.S. sublocate versus 2025. Total category share of LAIs in the U.S. for sublocate remained stable at 76%. We continued our track record of growing the number of sublocate prescribers, which is an important leading indicator for overall LAI category and sublocate growth. We exited the first quarter with a record number of active sublocate prescribers, and those treating five or more patients. Total active Sublocate prescribers grew 19% year-over-year, and HCPs treating five or more patients grew 20% year-over-year. While we are encouraged by the progress in U.S. Sublocate, we see continued opportunity to drive further acceleration through our commercial improvement, consumer activation, and public policy initiatives. First, Sublocate is the only monthly long-acting injectable with an indication for rapid initiation on day one and a second dosing as early as day eight. Our focus on delivering the second dose as early as day eight is driving increased adoption. Providers' recognition of Sublocate's differentiated label continues to grow, particularly as synthetic opioids remain prevalent in the US. Approximately 9% of new patients are receiving the accelerated second dose and 23% of active HCPs have begun prescribing a second dose in line with the expanded Sublocade label. Second, our commercial channel productivity initiative is generating results. We executed five enhanced service agreements with key specialty pharmacies and have started to see steady improvement in commercial dispense yields. Third, consumer activation remains strong. We continue to invest behind Sublocade through our DTC campaign, Move Forward in Recovery. Patient engagement stayed elevated throughout the quarter, with more than 1,200 new CRM enrollments each month, bringing total engaged consumers to over 8,300 since launch. Paid search volumes remain above pre-campaign levels, with category-leading share of voice across core search terms. Additionally, over 30,000 people searched for a Sublocade provider with the Find a Sublocade Treatment Provider tool on the Sublocade website in the first quarter. To close, we are encouraged by our start to 2026. We believe that our improved commercial execution focused on sharpened message delivery with higher utilization of Sublocate's core promotional materials on every call, along with our efforts directed at improving specialty pharmacy performance and consumer activation, are having impact on new patient starts, mix, and acceleration in Sublocate dispense units. We are confident that as we continue to get better, Supplicate will do better, and that we are on track to achieve our RAISE 2026 guidance for Supplicate. I will now turn the call over to Christian.

Thank you, Pat. I will now provide an update on our R&D pipeline starting with INDV 6001. 6001 delivered meaningful scientific and regulatory progress during the year, achieving its principal Phase II objectives, including supportive safety profile, predictable pharmacokinetics consistent with modeling, and constructive engagement with the FDA. As part of our portfolio review, we evaluated 6001 in the context of the evolving long-acting injectable buprenorphine landscape. In our review, Sublocade is the only once-monthly long-acting injectable buprenorphine with a rapid initiation pathway in the approved label. continues to set the clinical and commercial standard in this category. Sublocate's ability to achieve and maintain differentiated plasma concentrations without a complex induction regimen represents an important benchmark for future products. While IND6001 successfully demonstrated extended dosing intervals, including exploration of dosing up to three months, further analysis identified challenges. Specifically, achieving clinically meaningful plasma concentration profiles, particularly in a treatment environment shaped by high potency synthetic opioids, was anticipated to require a more complex induction protocol relative to sublocated established approach, introducing additional development and implementation considerations. In addition, a comprehensive review of lead stage development and commercialization factors highlighted some remaining challenges, including one, manufacturing scalability, and two, limited anticipated clinical and commercial differentiation in the payer and prescriber landscape, and the resulting impact on pricing and reimbursement dynamics. As a result, we have decided not to advance INDV 6000 1 and 2 Phase 3 clinical development and have amended our license agreement with ALR Pharmaceuticals. Pursuant to these amendments, ALR will regain development rights to the asset and commercialization rights outside of the U.S. INDIVIU will maintain commercial rights in the U.S. Turning to INDV 2000. In a Phase II proof-of-concept study, our selective orexin-1 receptor antagonist under evaluation as a novel non-opioid treatment for opioid use disorder did not meet the pre-specified primary endpoint of no treatment failure over 12 weeks when evaluated across the full dose range, 100, 200, and 400 milligrams versus placebo. Interpretation of the overall dose response was confounded by unanticipated underperformance at the 400 milligram dose and a higher than anticipated placebo response. While this phase two study does not support advancing INDV2000 internally in opioid use disorder, we are encouraged by the broader body of data that emerged from the trial, importantly, Prospectively planned sensitivity analysis, together with converging supportive findings, identified a credible and biologically coherent signal at the 200 milligram dose. At that dose, we observed a higher abstinence rates over time versus placebo across cocaine and broader polysubstance use, including cocaine, methamphetamine, amphetamine, benzodiazepine, and opioid in combination. While these findings are exploratory, they are directionally consistent with the underlying OREXIN-1 mechanism and its potential role in cure-driven drug seeking, stress reactivity, and relapse vulnerability. We also saw supportive directional improvements in anxiety symptoms as well as exploratory functional MRI findings that aligned with the clinical observations and further supported the biological activity of IMDb2000. Taken together, these results strengthen our confidence that the molecule is engaging relevant relapse-related pathways. Importantly, INDV2000 demonstrated a favorable safety and tolerability profile with no major drug-related safety signal identified. So, while we do not plan to pursue development internally in opioid use disorder, we believe these findings support continued evaluation of 200 milligrams as the lead dose and position INDV2000 as a credible business development opportunity while we continue to strengthen the data package through additional analysis, including exposure response work and further evaluation of supportive clinical and mechanistic findings. These decisions are expected to have a significant impact on the R&D organization. However, it does not reflect the quality of the underlying science of the team's execution, we are grateful for the rigor, dedication, and high-quality work of our R&D team whose efforts advanced these programs and generated valuable scientific and regulatory insights that will inform future innovation. I will now turn the call over to Ryan.

Thanks, Christian. We are encouraged by our overall financial performance this quarter. which includes strong year-over-year total sublocated net revenue growth and even stronger adjusted EBITDA growth. Looking at our results in more detail, starting with the top line, total net revenue of $317 million for the first quarter increased 19% versus the prior year period. The increase was driven by strong sublocated net revenue growth in the U.S. Total sublocated net revenue of $232 million for the quarter increased 32% versus the prior year period. U.S. sublocated net revenue increased 33% versus the prior year to $218 million. Q1 net revenue growth was primarily driven by dispensed unit volume growth of 20% and favorable price mix. The first quarter included a gross to net benefit of $14 million. Turning to Suboxone film net revenue, in the first quarter, we benefited from continued generic price stability in the U.S., moderated share decline, and favorable gross to net adjustments. As we said in February, we expect gross to net adjustments to serve as a headwind in 2026 for both sublocate and suboxone. Total non-GAAP operating expenses were $116 million for the first quarter, down 21% versus the prior year. The decrease was primarily driven by reductions in headcount, the restructuring of the R&D and medical affairs organizations, and footprint consolidations as part of phase one of the Endeavor Action Agenda generate momentum. Looking at the bottom line, we generated record adjusted EBITDA of 164 million, an increase of 112% year over year, representing margin improvement of 23 percentage points. Our strong first quarter results and performance trends year to date led us to raise our 2026 financial guidance. We now expect total net revenue in the range of 1.215 to 1.285 billion, an increase of 1% compared to 2025 at the midpoint of our guidance range. This is primarily driven by stronger sublocated net revenue, which we now expect to be in the range of 950 to 990 million, up 13% year-over-year at the midpoint. The increase in sublocate guidance reflects an improved outlook from an acceleration in dispense units based on strong trends year-to-date and favorable mix related to our progress on increasing commercial dispense yields. Our total net revenue guidance also reflects higher U.S. suboxone fill net revenue based on year-to-date results, where we saw stable pricing and moderation in share declines. Our outlook for operating expenses remains unchanged at $430 to $450 million. We now expect adjusted EBITDA for 2026 to be in the range of $620 to $660 million, a year-over-year increase of 50% at the midpoint. This would represent an improvement of 16 percentage points in our adjusted EBITDA margin to 51% compared to 2025. We ended the quarter with gross cash investments of 201 million, and we are projecting forward leverage of 0.8 times based on the midpoint of our 2026 adjusted EBITDA guidance. In 2026, we expect to generate approximately 340 million in cash flow from operations, enabling us to strategically deploy capital. Our capital deployment priorities include managing our debt, returning value to shareholders through opportunistic share repurchases, and evaluating business development opportunities as we earn our way to phase three of the Indivia Action Agenda breakout. In the first quarter, we managed our debt by completing an upsized $500 million senior convertible notes offering due in 2031. Most of the proceeds were used to repay the remaining $333 million balance on the previous term loan. This both increases our financial flexibility and significantly reduces our interest rate to .625% from 9.5%. We also returned capital to our shareholders through opportunistic share repurchases in the first quarter. We repurchased 4 million shares at an average price of $31.45 for a total of 125 million. We have 275 million remaining on the $400 million program. through mid-2027. In total, over the past five years, we have bought back $525 million of our shares at an average price of $16.74. As we earn our way to phase three breakout, we will evaluate business development opportunities specifically focused on commercial stage assets that have the potential to enhance and diversify our growth profile. I'll now turn the call back to Joe for concluding remarks.

Thanks, Ryan. The first quarter reflects our significant progress against phase two of the Indivier Action Agenda, Accelerate. We delivered strong top and bottom line growth driven by Sublocate's performance in the U.S. and leverage from our simplified operating model, enabling us to meaningfully raise our 2026 financial guidance. We also executed on our capital deployment strategy by successfully managing our debt and opportunistically utilizing our share repurchase program. We are on track to accelerate sublocate throughout 2026 and adjusted EBITDA and cash flow at an even faster rate as we earn our way to phase three of the Indivier Action Agenda breakout in the second half of 2026. We will now open the call for questions. Operator?

Thank you so much, dear participants. As a reminder, if you wish to ask a question, please press star 11 on your telephone keypad and wait for your name to be announced. To withdraw a question, please press star 11 again. This will take a few moments. And now we're going to take our first question. And it comes from the line of David Amsalem, Piper Sandler. Your line is open. Please ask your question.

Thanks. So I have a few. First, on the gross margins, there's some improvement here. And with the manufacturing transition, should we take that to mean that you could see manufacturing at even better gross margins going forward? So help us just understand how to think about gross margins going forward. That's number one. Number two, business development and M&A – I know, Joe, you've talked about a beachhead in another therapeutic category. I was wondering if you could elaborate on that and what therapeutic categories, broadly speaking, are of interest. And then lastly, on the accelerated second dosing, can you talk about how getting patients to receive that accelerated second dose is correlated with this overall uh, persistence, um, and how important that is. And if you had color on that earlier in your prepared remarks, sorry, I missed that, but love to get your thoughts on, um, how that accelerated second dose plays a role in patient persistence. Thanks.

Okay. Thanks, David. Uh, we'll let Ryan kick it off with the gross margins.

Hey, David, good morning. Thanks for the question. Um, so for the gross margins, I would still guide you to the, uh, full, uh, mid 80 guide, Q1 did benefit from a couple of things. One, we had the prior year releases, and two, we had positive manufacturing variances built in there as well. And then in regards to the plant, the primary focus on the manufacturing facility is to secure product security. So again, I would guide you to the mid-80s for margins for the year.

Okay. And Pat, on the accelerated second dose? Yeah, thank you for the question, David. On the accelerated second dose, that's an important differentiator for us because With the only LAI with that accelerated second dose, the benefit there is that you're achieving peak plasma levels early, as early as day eight. And so that's an important component to be able to get the patient doing well in the very early of treatment. And so peak plasma levels is particularly important. in the era of synthetic opioids. And so if they're doing better early and they're stabilized early, we believe that over time that could help with persistency. But that's certainly something we'll continue to look at.

Okay. And then from a BD perspective, David, as we earn our way to the breakout phase, which we believe we're on track to do in the second half of this year, We're, I would say, therapeutically agnostic, although there are certainly areas we don't think we would go into, for example, like oncology, and we're more focused on the fundamentals of what we would acquire. So we are focused commercial stage only. We're looking for assets that have greater than 200 million peak sales potential. We think that's relevant relative to the size of our revenue base as we seek to enhance and diversify our growth profile differentiated assets are important from our perspective both from a patient value perspective and importantly from a reimbursement perspective which we think is critical to commercial success and then the final thing I would highlight because I think it's one of the real strong parts of the end of your story is that with sublocate we have a durable growth driver And so the third thing that will be important in anything we acquire is that those assets also have runway. From there, post integration of an acquisition, we then would be looking to identify individual products that could leverage the new commercial infrastructure that we have in place.

Okay. Helpful. Thanks.

All right. Thank you, David.

Thank you. Now we're going to take our next question. And it comes from the line of Chase Knickerbocker from Craig Hallam. Your line is open. Please ask a question.

Good morning. Thanks for taking the questions, and congrats on another nice quarter here. Maybe just first for Ryan, there's been some continued gross-to-net benefit on a year-over-year basis, and maybe just focusing on sublocated. Can you just give us a sense for how you kind of characterize that gross to net benefit a little bit more and then give us a sense for how you expect it to kind of roll off through the year? Thanks.

Yeah, Chase, good morning. Thanks for the question. Yes, in Q1, we did book $14 million of a prior year release as we continue to true up our accruals. But as we mentioned earlier, in totality, we still expect the prior year releases to serve as a headwind for the balance of 2026. And the plan is to continue to provide you an update each quarter.

Could you just maybe give us a sense for kind of the cadence of kind of that headwind through the year and if there's any kind of benefit you expect in Q2 as well? And then just second from me, guys, maybe just taking a step back for Joe, if you look at kind of 6001 here, Again, maybe just taking a step back, with the potential for Brixati generics before Sublocate LOE, how do you see this market, I guess, developing, and how are you thinking about franchise expansion and kind of lifecycle management as you think about your long-acting buprenorphine franchise, and just kind of how you see the market kind of developing, Joe?

Sure. Brian? Chase, yeah, so at this point, there will be adjustments for the balance of the year. I don't know the phasing at this point, but I will continue to tell you in the aggregate, the prior year releases will serve as a headwind in 2026. Sure.

And Chase, with regards to your question around the evolution of the marketplace, look, we're very confident in Sublicade's differentiated profile. Importantly, when you look at Sublicade, the 300 milligram dose continues to grow. It's now 63%. of overall sublocate utilization. So we're very confident that sublocate has a durable growth profile and it's an asset that we're committed to for the long term. As it pertains to further opportunity within this space, we're obviously always looking and are aware of what's out there. There's nothing candidly that we're interested in that we don't have. And to the degree that ALAR is successful in the development and manufacturing of 6001 to a level that meets what we believe would make it commercially viable, we retain 100% of the commercial rights to that asset in the U.S. So we certainly wish them well in their pursuit.

Understood. Thank you.

Got it.

Thank you. Now we're going to take our next question. And the question comes to the line of Dennis Ding from Jefferies. Your line is open. Please ask your question.

Hi. Good morning. Thanks for taking our questions and congrats on a very good quarter. So if I can ask on Lilly's bernipotide. I mean they sound fairly excited about it and its potential in substance use disorders and they started phase two in OUD. on a background of buprenorphine, which I'm assuming is the toxin. But I'm curious how you're thinking about the design of that study, the readout in 2028. And importantly, if that impacts durability of supplicated growth through the long term, which I'm assuming goes off patent in the 2035 to 2038 timeframe. Thank you.

Okay. So Dennis, before I hand it off to Christian to comment, the one thing I want to emphasize is we very strongly believe that Sublocate has a long and durable runway in front of it with 12 orange book listed patents that go from 2031 to 2038. We also are in the process of trying to pull through additional patent applications that have the potential to extend out to 2044 to 2046. And Christian, any comments?

Yes, certainly. So there are several trials that are currently ongoing using GLP-1 for substance use disorder. The one that you mentioned in opioid use disorder, this is actually as an add-on therapy to transmucosal buprenorphine. There are a couple of other trials in alcohol use disorder. I must say that so far the evidence has been primarily anecdotal, so it's the first time that there will be more formal clinical trials, and we shall see what the outcome is. But please do remember that these trials so far for opioid use disorder have been designed as add-on therapy to buprenorphine.

Perfect. Thanks. And if I can ask a follow-up on DTC. I mean, the campaign is, you know, obviously driving increased category growth, which, you know, we're seeing in the numbers. But I'm also surprised that sublocated share continues to be generally stable. So, my question is, do you expect to pick up incremental share this year as DTC continues? And if there's any sort of leading indicators we can disclose around initial share capture? Thanks.

Yeah. So, Dennis, I'll take that one. I appreciate the question. As we've been clear, our focus is on net revenue, new patient starts, and driving long-acting injectable market growth. We're very proud of the fact that SHARE is stable at 76%. Whether it goes up a little bit, down a little bit, in terms of the overall performance of Sublocate both in this year and as we go forward, in our view, is really not material. It's more about just the competitiveness within the space. So we're very confident in our commercial team. We're very confident in the differentiated profile that Sublocade brings to the market as the first and number one prescribed long-acting injectable.

Perfect. Thanks so much.

You got it.

Thank you. Now we're going to take our next question. And the question comes from Christian Glennie from Stifel. Your line is open. Please ask your question.

Yeah. Thanks, guys. Thanks for taking the questions. Just starting then, I guess, on the outlook for Sublicade, particularly on the dispense growth. So you did 20% in the first quarter, but the guidance for the full year seems to be still around the mid-teens level. So just trying to understand initially around that. Is it just a prudent thing, or is there some reason why that dispense growth might, implied, slow down through the rest of the year? That's my first question. Thanks.

Yeah. So, Christian, thanks for the question. Remember, in the first quarter of 2025, that serves as a really low bar from a comparable perspective. So what we're confident in is on a full-year basis, that we're going to be able to achieve mid-teen dispense unit growth, which is double what it is that we achieved in 2025. Importantly, and what I would focus you to, is the 13% increase in revenue, which is driven by the strong dispense unit growth, but also now the favorable outlook that we have in terms of mix. And what I mean by that is the percent that commercial will account for versus what we planned. and realize even incremental movement on a brand of this size, you know, one point improvement of commercial mix relative to what we had planned is worth about $8 million. And that's certainly a key driver of the positive outlook that we have moving forward. And we've put a lot of effort, which is a real tribute to Pat and his team, Susan Neff, who heads up trade and our work with specialty pharmacy and trying to improve the spend shield in particular with the SPs that skew to commercial.

Thanks. That's helpful. Second would be just any comment around the overall growth in LAI category overall and the share of LAI as a percentage of the overall buprenorphine market. Thanks.

Yeah, thanks for the question. We saw really nice growth, slightly above 20, approaching 23% on LAI categories. So we feel like our efforts from a direct-to-consumer perspective are fueling that. And again, we continue to maintain that category share dominance at plus 76%.

And Christian, the only thing that I would add, and I think it's another interesting thing that gets to the impact of that we believe the consumer campaign is having. In the first quarter, the oral buprenorphine market grew significantly relative to the rate it had consistently been growing. And the reason that's important is the start point of long-acting injectable patients are predominantly people that transition from a transmucosal buprenorphine. So from a big picture, as a company that has a long-term commitment to this space that first and foremost is focused on patients getting treatment to improve the outcome and their recovery journey. We're very encouraged by that, and that also is a positive over time in our view to long-acting injectable utilization.

Thanks. Sorry, just on the percentage, the rough percentage share of LAIs overall as a percentage of orals.

Yeah, we're right at about 8.5% from an overall LAI category share perspective. Sorry, I missed on that.

Okay, thank you. Thanks. No worries. And then, sorry, finally, just on guidance on OPEX, unchanged there, but at the same time not progressing the Phase 2 assets. I think previously you had implied that the guidance assumed those would roll on. So just trying to understand on OPEX and whether there's something I'm missing there, why potentially the OPEX wouldn't be a bit lower given you implied a bit of restructuring of R&D and the impact that that would have. Thanks.

Yeah, so I'll take that one. I appreciate the question. Look, we're focused and have been clear on making every possible investment to maximize the sublocate opportunity in the U.S. market. The way to think of our guidance in 2026 is as we derive savings from the restructuring in R&D and as we continue to relentlessly focus on making sure we're only investing in things that are essential, if there are opportunities for us to invest in sublocate that would have impact this year or in 2027, we would make those investments and come in at the high end of the guidance range to the degree that there aren't areas for us to invest those resources, we would let them drop to the bottom line. The other point I want to emphasize is as you think about the exciting phase we're in of the acceleration of sublocate, we're also leveraging not growing our cost structure on a going forward basis. So when you think about it moving forward, you should expect to see us staying under that $450 million level. which will result in additional margin improvement.

That's great. Thanks, guys.

You got it.

Thank you. Now we're going to take our next question. And the question comes to the line of Brandon Foulkes from HC Wainwright. Your line is open. Please ask your question.

Hi. Thanks for taking my questions, and congrats on the quarter. Thank you. Maybe just following up on business development, Can you just talk about the size of the transaction you would consider? Hearing your criteria earlier around minimum peak sales, that sets one end of the range. But just trying to think about how large of a transaction you feel comfortable with. Can you just talk about where you feel comfortable taking leverage up to? And then along the same lines, you talked about a commercial asset, but would you also consider a commercial-ready asset or company which also has a pipeline. Can you just talk about your willingness to bring in or minimize development risk altogether here in business development? Thank you.

Thanks, Brandon. I'll let Ryan take the first question, and I'll take the second.

Yeah, thanks for the question. So when it comes to the amount of leverage that we would feel comfortable with, with our strong balance sheet, we would be okay going up to three times, but that is assuming that we are going after a commercial stage asset.

Okay. And then Brandon, when you think about our focus from an M&A perspective, we're clearly focused on commercial stage. We want to enhance and diversify the growth profile of the company. We are not anti-pipeline. In fact, we believe the financial strength of the company would enable us of if we acquire a company that has pipeline, that we believe is worth investing in, we would be positioned to do so. But that is not the primary focus as we're assessing opportunities. And then when we ultimately get to phase three breakout and start to try to action around them.

Great. Thanks very much. And congrats again on the quarter. You got it. Thank you.

Thank you. Dear speakers, there are no further questions for today. I would like to hand the conference over to your speaker, Joe Schifoni, for any closing remarks.

Thank you, operator, and thank you to everyone for joining the call today. We look forward to updating you on our progress as we execute the Indivia Action Agenda. Have a great day.

This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.