15th Oct 2019 10:28
(Alliance News) - Pharmaceutical company Indivior PLC on Tuesday boosted its full-year guidance for a second time following growth in market share of its opioid addiction medication Suboxone, but warned on the impact of newly passed legislation in the US.
2019 revenue is now expected to be in the range of USD750 million to USD790 million after already having boosted revenue guidance in July to between USD670 million and USD720 million.
Last year, Indivior reported revenue of USD1.01 billion, so the company is forecasting a decline of between 21% to 25%.
Net income guidance, before exceptional items and the effects of foreign exchange, was hiked to between USD160 million to USD190 million. This would represent a year-on-year fall of between 31% to 42% after posting net income of USD275 million last year.
Indivior previously predicted 2019 net income of between USD80 million and USD130 million.
The medication Suboxone, which is a strip placed under the tongue, grew in market share, Indivior said. The company also operates the Sublocade injection brand, which also fights opioid addiction, and Perseris, an injectable medication to treat schizophrenia.
The new income guidance also factors in the hit from the Continuing Appropriations Act 2020 and Health Extenders Act of 2019, US legislation which came into effect earlier in October.
Indivior said: "The legislation, which came into effect on October 1, 2019, includes changes to the methodology for calculating the average manufacturer price for branded drugs that now prohibits including authorised generics in average manufacturer price calculations, but does not affect the group's authorized generic offering as the 'best price' for calculating mandatory rebates.
"As a consequence of this change, rebating in US government channels is increased. Based on the current business dynamics and material discounting already provided to US government accounts and managed Medicaid entities, this legislative change results in negative gross profit on Suboxone Film in the majority of US government channels."
In order to mitigate the impact of the legislation, Indivior said it has given notice to pharmaceutical product manufacturer and distributor Sandoz Inc to cease production of its authorised generic version of Suboxone.
Indivior explained: "This action will mitigate the 'best price' implications used in calculating mandatory government rebates, which was set by Indivior's authorised generic. With three other generic buprenorphine/naloxone sublingual film products available, Indivior does not expect this decision to affect patient choice of branded or generic buprenorphine/naloxone sublingual film."
Chief Executive Shaun Thaxter said: "We are raising 2019 guidance to reflect continued stronger-than-expected market share performance of Suboxone Film. We cannot be certain how long this benefit will last and hence we continue to prudently manage the additional cash flow this is providing us to help transition our business towards our novel depot technologies, Sublocade and Perseris.
"Our decision to discontinue production of the authorised generic buprenorphine/naloxone sublingual film in light of the newly passed legislation was not taken lightly. This action is, however, necessary for Indivior to meet its obligations to its stakeholders and to continue our relentless focus on combating the opioid crisis with Sublocade."
Shares in the company were 8.5% higher at 53.60 pence each in London on Tuesday morning.
By Eric Cunha; [email protected]
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