9th Jul 2024 11:10
(Alliance News) - Indivior PLC shares tumbled on Tuesday as it warned on profit amid weaker sales of a key opioid treatment, as well as a charge relating to a schizophrenia drug.
Shares in the Richmond, Virginia-based specialty pharmaceuticals business tumbled 38% to 729.70 pence each in London late on Tuesday morning.
Indivior now expects 2024 net revenue between USD1.15 billion to USD1.22 billion, down from prior guidance of USD1.24 billion to USD1.33 billion.
Sales of Sublocade are seen between USD765 million to USD805 million, down from USD820 million from USD880 million.
Guidance for adjusted operating profit was lowered to between USD285 million to USD320 million from USD330 million from USD380 million before.
For the second quarter, net revenue is forecast between USD295 million to USD303 million, with Sublocade sales of USD188 million to USD196 million.
"Despite positive early performance trends at the start of the second quarter, Sublocade net revenue has continued to be impacted more than we expected by a combination of transitory factors, primarily the elimination of Covid emergency measures related to automatic Medicaid coverage renewals," Chief Executive Mark Crossley said.
Analysts at Stifel said competition is hurting Sublocade.
"The launch of Brixadi is clearly having a negative impact on the growth of Sublocade although management points to Medicaid disenrolment and low wholesaler inventory also impacting growth at present. Longer-term we continue to expect both Sublocade and Brixadi to be significant treatments for Opioid use disorder," Stifel said.
Brixadi is developed by Stockholm-listed Camurus AB. Camurus shares were 2.0% higher around midday there.
Indivior also said it will discontinue schizophrenia drug Perseris, and announced the settlement of a litigation which was scheduled to proceed to trial next week.
This is due to expected adverse impacts from increased payer management that crystallised in the second quarter, and which Indivior said is expected to make the product no longer "financially viable".
CEO Crossley said: "While we believe discontinuing Perseris is the right business decision, unfortunately it will impact our people and patients, and we will support them through this transition."
Indivior expects to take a USD65 million charge, of which around USD20 million is expected to be cash related to severance and termination of certain agreements. Around 130 jobs will be lost.
These charges will be taken in the second and third quarters, the company noted.
Indivior in late June confirmed that it had successfully transferred its primary listing to the Nasdaq Stock Market in the US.
AJ Bell analyst Russ Mould commented: "So much for heading across the Atlantic in search of a higher valuation.
"Weaker than expected sales of its opioid addiction treatment Sublocade, a decision to discontinue its Perseris schizophrenia medicine and settling a legal matter have created a tornado effect that has knocked profit expectations off track."
However, he added: "While the share price reaction implies serious problems, Indivior is no stranger to setbacks since being spun out of Reckitt 10 years ago."
Mould continued: "There have already been settlements linked to criminal and civil investigations in recent years which have caused turbulence to the business and its share price.
"Investors with a nervous disposition will have jumped ship a long time ago and it's the thicker-skinned individuals who've held on as they can see the longer-term prize."
By Eric Cunha, Alliance News news editor
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