The competitive threats that worried investors - and this magazine - when Reckitt Benckiser (RB.) let its pharma subsidiary Indivior (INDV) off the leash have not disappeared. The group's main product, Suboxone Film, which is used to help opioid users beat addiction, is still expected to come under significant pricing pressure in the US as sales of the treatment lose out to cheaper generic copies. But the first half proved a period of relative respite, with Suboxone's market share proving remarkably resilient and no acceleration of pricing pressure.
True, net income fell 10 per cent year on year due to market share losses in the second half of 2014 and higher rebates. But Suboxone clung onto a market share of 59 per cent during the first half - marginally ahead of the figure reported for the end of 2014. What's more, the US market for buprenorphine products - of which Suboxone is one - actually grew as Obama's Affordable Care Act boosted volumes.
This has prompted Indivior's bosses to upgrade their full-year revenue guidance: sales are now expected to fall in the range of $935m-$965m (previously $850m-$880m). Chief executive Shaun Thaxter reckons further upgrades are possible once third-quarter results hit the market in November, too.
Analysts at Citi expect pre-tax profit of $351m this year, giving EPS of 35ȼ, compared with $561m and 56ȼ in 2014.
| INDIVIOR (INDV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 269p | MARKET VALUE: | £1.93bn | |
| TOUCH: | 268-269p | 12-MONTH HIGH: | 271p | LOW: 115p |
| DIVIDEND YIELD: | 0.8% | PE RATIO: | 10 | |
| NET ASSET VALUE: | * | NET DEBT: | $220m | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 574.0 | 327.0 | 32.0 | nil |
| 2015 | 517.0 | 199.0 | 20.0 | 3.2 |
| % change | -10 | -39 | -38 | - |
Ex-div: 17 Sep Payment: 23 Oct *Negative shareholders' funds £1=$1.56 | ||||
