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Indivior slides into the red

Profits were hit by revenue decline and a combination of legal and promotional costs
July 31, 2020

Indivior’s (INDV) half-year results might have seemed something of an afterthought, following the game-changing news on 24 July that it had finally reached a settlement with America’s Justice Department (DoJ).  

IC TIP: Hold at 138.5p

Indeed, the pharma group revealed just days prior to the release of its financial statements that it had agreed to resolve criminal charges and civil complaints in the US relating to the marketing of opioid addiction treatment Suboxone Film. It pleaded guilty to one count of making a false statement in relation to healthcare matters in 2012, and will pay out $600m (£457m) over seven years. This update lifted Indivior’s shares to highs of over 160p – a far cry from the 80p mark around which they had languished earlier in the summer. The deal is subject to judicial approval.

That said, numbers for the six months to June reflected a 42 per cent net revenue decline in the US – with market share for Suboxone Film averaging 22 per cent, versus 38 per cent in the first half of 2019. The group also reported an operating loss of $165m from profits of $163m, reflecting the knock to the top line, as well as legal expenses and promotional costs.

Indivior was not spared the effects of Covid-19, either. The pandemic drove a sharp reduction in patient enrolments in mid-March for the group’s Sublocade and Perseris injections, but enrolments in the second quarter were “stable” against first-quarter exit rates.

Numis expects adjusted EPS of 1.4¢ in 2020, rising to 6.1¢ the following year. 

INDIVIOR (INDV)   
ORD PRICE:138.5pMARKET VALUE:£1.01bn
TOUCH:138-138.9p12-MONTH HIGH:165pLOW: 33p
DIVIDEND YIELD:nilPE RATIO:na
NET ASSET VALUE:7.9¢*NET CASH:$671m
Half-year to 30 JunTurnover ($m)Pre-tax profit ($m)Earnings per share (¢)Dividend per share (¢)
201945416619.0nil
2020303-171-20.0nil
% change-33---
Ex-div:na   
Payment:na   

*Includes intangible assets of $63m, or 8.6¢ a share

£1 = $1.31