1st Nov 2018 11:53
LONDON (Alliance News) - Indivior PLC on Thursday said revenue fell in the third quarter of the year due to a temporary loss of market share for its Suboxone film product in the US, but is on track to meet its guidance.
Shares in the pharmaceutical company were down 2.3% at 184.08 pence on Thursday.
Net revenue fell in the quarter to USD245 million from GBP275 million following the release of a generic competitor to its Suboxone film opiate addiction product by Dr Reddy's Laboratories Ltd. A preliminary injunction request against this generic product was granted in mid-July and Suboxone's market share has recovered since then.
Rapid growth in Medicaid, the US's government-backed health insurance programme for low income adults, pregnant women, the elderly, and people with disabilities, also hurt Indivior's revenue, as this channel is the most price sensitive in the US.
For the three months ended September 30, the FTSE 250-listed pharma company posted a pretax profit of USD68 million, up 26% from USD54 million the year before.
This was a result of selling, general, and administrative expenses which fell to USD123 million from USD162 million.
Year-to-date pretax profit, however, was lower, down 6.2% at GBP257 million from GBP274 million. Year to-date revenue was likewise reduced to USD768 million from USD828 million.
In late October, Indivior downgraded its annual earnings guidance for 2018, citing tougher market conditions.
The drug marker remains on track for this revised guidance, which predicts net revenue of between USD990 million and USD1.02 billion, and net income in the USD230 million to USD255 million range. Both of these figures exclude exceptional items and are at a constant exchange rate.
The net revenue guidance assumes that no further Suboxone competitors are released and that the injunction against Dr Reddy is upheld, with Suboxone revenue between USD8 million and USD10 million.
Revenue guidance also assumes intensified competitive pressure in its Rest of World market due to healthcare austerity measures in Europe, although this is to be partially offset by continued Australian growth, and also assumed immaterial net revenue from its schizophrenia drug Perseris.
The net income guidance assumes all of these as well as pre-tax savings of USD55 million, continued investments to drive its other opiate addiction product Sublocade, as well as of Perseris.
A mid-teens effective tax rate from the recently changed US tax law, alongside its existing tax position, is also assumed within net income guidance.
"Following a set of new market challenges in [the third quarter], triggered by [Dr Reddy's] 'at-risk' launch and further erosion in generic tablet pricing, Indivior has moved swiftly to streamline the organization in a way that preserves our ability to continue executing against our strategy of global leadership in the treatment of addiction and its co-occurrences," said Indivior Chief Executive Shaun Thaxter.
"Our primary strategic focus is to accelerate the performance of Sublocade towards its long-term potential, which we remain confident will exceed USD1 billion in annual net revenues in a large and growing market," Thaxter added.
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