Ladies and gentlemen, thank you for standing by, and welcome to the Indivior PLC Full Year Results 2020 Conference call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] I must advise that this conference is being recorded today, Thursday 18, February 2021. I would now like to hand the conference over to first speaker today, Mark Crossley. Thank you. Please go ahead.

Good morning, and good afternoon, everyone. Thank you for joining us to discuss our 2020 results and outlook. I'm joined by Ryan Preblick, our Chief Financial Officer; Christian Heidbreder, our Chief Scientific Officer; and by Jon Wasserman [ph] our Interim External Chief Legal Officer. We'll take the forward-looking statements as read and move to the agenda for today's discussion. I'll start with an overview of the 2020 results and then detail our strategy for which our number one priority is realizing the full potential of SUBLOCADE on behalf of patients and stakeholders. Christian will then highlight R&D accomplishments and the progress we're making with our early stage assets, Ryan will then review the results in detail and cover the drivers of our fiscal year 2021 guidance. Then of course we'll open it up for Q&A. Turning to Slide 5, I'm not going to spend a lot of time here since we preannounced our results in mid January, but our overall fiscal year 2020 performance was very solid, especially considering the challenges the team had to confront with the COVID-19 pandemic. Some highlights from my perspective. We saw continued adoption of SUBLOCADE resulting in net revenue growth of over 80% in what continued to be a difficult promotional environment. Additionally, we generated positive adjusted net income and our ending cash balance was strong. The strategic alignment actions that we announced at the end of Q3 2020, and that we have since completed, have fully aligned our structure with our strategy and positioned the Group for sustained success. The major actions with this alignment have one, accelerated our SUBLOCADE growth strategy with increased investment behind organized health systems; two, pivoted our R&D organization from a traditional pharmaceutical R&D model to more of a connect and develop biotech-like model, focused on early stage…

Thank you very much Mark, and good morning, good afternoon, everyone. We will now give you a high level of data of some of our R&D activities in 2020. And first, if you walk through Slide 19, you can see some of our peer reviewed publications summarizing four main research teams that generated new evidence in support of SUBLOCADE. First, we confirmed the long-term safety and efficacy of SUBLOCADE after 12 months of treatment. Second, we showed that participants receiving SUBLOCADE over a 12-month period reported better health, higher medication satisfaction, increased employment and decreased healthcare resource utilization compared to placebo. Remember that placebo here was psychosocial, counseling only. These findings also show that patient-centered outcomes that can be measured easily may help clinicians assess their patient's improvement. So again, a lot of focus on patient reported outcomes, which as you probably know, are scrutinized by regulatory agencies around the world, the FDA in particular. Third, we released our one year data points from our RECOVER study. You may remember that RECOVER is a two-year real world observational study looking at long-term recovery in a cohort of people with moderate-to-severe OUD disorder, who are used to participate in two of our Phase III clinical trials of SUBLOCADE. In this study, in particular, we showed that 75% of participants who were previously treated with SUBLOCADE for 12 months, self reported sustained opioid abstinence for the first full year of the RECOVER study versus only 24% of participants who were treated for up to two months only. So this data clearly suggests that long-term treatment, including counseling may positively assist patients in focusing on their recovery including discontinuation of illicit opioid use, improvement in health and lifestyle, and reengagement with family, friends, and community. Fourth, we completed our fentanyl study. As you…

Thank you, Christian. Good morning and good afternoon. We had a good quarter, which capped off a solid year. We entered 2021 in a position of strength to continue to execute our strategy. Turning to Slide 24, as Mark noted, we are pleased with our full year 2020 results, given the highly challenging backdrop the pandemic presented. We recognized the potential impact on our business early and took decisive actions, ensuring we could maintain supply of our treatments, invest to advance our leadership in U.S. addiction, and deliver on our compliance and governmental commitments. As a result of our successful execution in 2020, we have the financial flexibility, cost structure, and a focused strategy to drive long-term shareholder value. I'll briefly touch on our results for the quarter and year before providing our outlook for 2021 and outlining our capital allocation priorities. As expected, our results for the quarter and year were in line with the prelim financial information we shared in mid January. Starting with the top line full year 2020, total net Revenue was $647 million. The expected decline versus the prior year of 18% mainly reflects SUBOXONE share loss, and the discontinuation of the AGx program in 2019. The decline was partially offset by strong net revenue progression of SUBLOCADE to $130 million, which represents an 81% increase versus full year 2019. We are pleased that in the face of COVID-19 SUBLOCADE continues to show solid sequential growth in the back half of 2020. Capping off the year with net revenue of $39 million in Q4, representing an 18% increase versus Q3. You should note that Q4 net revenue benefited from some year-end trade stocking. However, if you look at baseline dispensed volumes, SUBLOCADE was still ahead 14% sequentially, which underscores the commercial organization's commitment to the…

Thank you, Ryan. I'd like to reiterate my excitement at being CEO and my commitment to lead Indivior to future success. We've de-risked the franchise. We look forward to focusing on strong execution in 2021. We have the right product, the right strategy and a structure which is fully aligned. The team has now a clear opportunity to demonstrate success and value creation with its number one strategic priority SUBLOCADE. Execution is the sole focus for 2021. Now I'd like to open it up to Q&A please.

[Operator Instructions] And your first question comes from the line of Max Herrmann from Stifel. Your line is open. Please ask your question.

Great. Thanks for taking my questions. Three if I may. Firstly, just in terms of the guidance, and what's implicit in terms of market share for SUBOXONE film in the U.S. at the end of 2021 and maybe you we've you talked about 21%, 22% share at the end of 2020. Where do you see that in that guidance, coming out at the end of 2021? Secondly, just in terms of the $1 billion target, I think you talk about half the market, potentially moving or being available to buprenorphine used through the OHS networks, how does that impact the potential peak sales expectations? And then finally just in terms of litigation, obviously, great to see the Reckitt Benckiser dispute cleared up, and obviously the DoJ, I wonder whether you could outline a bit more are there any other risks that you see in terms of litigations that are still ongoing, just an update perhaps with Dr. Reddy's, as well with the patent litigation? Thank you.

Good afternoon, Max. Good to get your questions. I'll start with the SUBLOCADE and the litigation, and then hand over to Ryan with regards to the film. As it relates to the $1 billion and our confidence with regards to that and the assumptions, I think the first thing is you can see the strategy working. We're continuing to expand the access to over 200 organized health systems. Enrollments are now broadly in line with pre-COVID levels and organized health systems continue to account for the majority of our growth. We've seen strong quarter-over-quarter growth Q3 over Q2, Q4 over Q3 and expecting the easing of the headwinds on COVID. When you look at the share assumptions, the strong market growth that's occurring in the business, with low double-digit, high single digit, and then you look at the support of the normalization of the disease space, and with the support from Congress and the funding, we expect that to continue. And as we continue to penetrate the organized health systems, the share expectations, of getting to kind of mid single to high single digit shares to get to the $1 billion seem quite attainable. So that's kind of our views on that on that billion dollar target. As it pertains to the litigation, I think you're right Max, we are excited to have the two major overhangs behind us with regards to the DoJ resolution, as well as, the RB resolution. The balance of the litigation that's out there is a bit more normal, with regards to a pharma company our size, and we continue to focus on the resolution of those. We have strong defenses in them and we'll look to continue to progress on those. You specifically mentioned some of the ANDA work and I know, some of the procedural items on that continue to progress as we move forward. With that, I'll hand over to Ryan as it relates to the guidance implications in film share.

Good morning. So, as we said in the past, with the four generics out there, there is nothing structurally in a market that would prevent the branded film to continue to erode in line with the analogues. And just as a reminder, we have not promoted it since 2018 and we'll continue not to as part of the DoJ agreement we made last year. In regards to your question about the sharing or phasing, we plan on relatively flat share in Q1, which at this point is about 20.5, modest share erosion in Q2 and then starting in the second half is where our plan assumption is in line with analogues for the balance of 2021 into 2022. So that would be the color that I can give to you at this point on the film share.

Great. Thanks very much.

Thank you, Max.

And your next question comes from the line of Harry Sephton from Jefferies. Your line is open. Please ask your question.

Brilliant, and thanks for taking my questions and thanks for the presentation. I'll start on SUBLOCADE. So thanks for the detail around the addressable OHS market. And you said that you're currently in around 200 of those out of round 500 potential target. Can you maybe give us an indication as to what you're anticipating for the quarterly growth in adding new OHS organic, new systems each quarter? And then also, could you give us a rough idea of you've shown the increased penetration within those channels, but do you have an idea of your relative share of OUD patients using SUBLOCADEs within the organized health systems that you're currently in? That would be a great place to start. Thanks.

Thanks, Harry. Yes, and we are quite proud of the fact that that over the first two years of our pivot to the organized health that we're in, in those 200, and marching towards the 500. And importantly, those are the parent organizations, and which many what we call children organizations under those, that also get opened up and give us broader access to HCPs. With the COVID overlay in the year, we've increased investment and continue to try and open up incremental, organized health systems moving forward, both the parents and the children. We've not communicated a goal on that externally, but expect sort of similar growth in the year ahead to what we've experienced in the past. With regards to the penetration on a share basis, I think within organized health systems, you don't have the same level of granularity of data that you do when you utilize a specialty pharmacy to deliver to our heritage sort of doctors offices, and so the share becomes a bit murkier on that. And so, we think that the revenue is the best sort of indication and KPI with regards to our progress. And you can see that continuing to grow exiting the year at 38%, of the overall SUBLOCADE revenue.

Okay, and maybe just to quickly touch on the specialty pharmacy distribution, since you mentioned it. Do you have any potential future models where you might look to roll out SUBLOCADE for example, through the regular pharmacy network, and maybe utilize some of the sites that those pharmacies have onsite to inject patients or is there currently limitations within the SUBLOCADE REMS program that could potentially restrict that being a future possibility?

Yes, that's a great question, Harry and I think it's one we hinted at in the Q3 results, that these alternate injection facilities, which is what you're kind of hinting at, in the -- whether it's a pharmacy network or potentially other sort of clinic environments, where we're in schizophrenia for example, patients are able to go there and get their injections if their primary provider don't want to do injections. The tough part on that one right now is the way the laws are written, is that sort of model is not allowed. And so we're working within the government to try and talk to them about that, about that being a barrier to access to treatment, but we won't be able to really explore that unless there is a law or regulation change within the new administration.

Do you have a rough estimate of when we could maybe hear any news on potentially looking or the current administration, I know that they stopped some plans coming through from the previous administration, but when they might announce the new regulations coming through that could potentially expand care, is there any timing on that?

I don't have visibility of that Harry. I know those are actively being managed. I know, President Biden was one of the original kind of authors of Data 2000, so you have strong administrative support. And we look forward to partnering with them to help continue to normalize the disease space, break down barriers and increase access to treatment moving forward.

Brilliant and that's very helpful. Maybe just touching on the financials, I saw in the fourth quarter you're underlying administration costs are around $60 million, which compared to about $40 million in the base quarter. I guess, that's quite a significant step up, just curious what the bridge there is? And then maybe also tying into that, for your OpEx guidance going into this year, does that embed any potential digital marketing activities to SUBLOCADE going into the back half of the year? Or yes, that that would be helpful if we can get some thoughts on that.

So I'll start with the second and then hand it over to Ryan for the first. I mean, we have some base levels of digital marketing that we have search engine marketing awareness with regards to SUBLOCADE, because we no longer promote the film that are always ongoing. If you are inferring DTC program, that's a bit more robust with television and things of that nature, that effort is still not considered in any of the guidance, as we continue to see the impacts of the pandemic, bringing that and resurfacing that when patients don't have quite the same access to their HCPs into the organized health systems. It's now it's kind of not the time to think about that, but that's something we'll reassess as we move forward and assess the market. So with that, I'll go ahead and hand over to Ryan, with regards to the admin expenses in Q4.

So in Q4, the increase from Q3 to Q4 was driven primarily by higher R&D expenses, because we did mention in Q3, unfortunately, tied to COVID we weren't able to scale up completely all of our R&D projects, the trials. So now in Q4, we're able to get some of those going again. So that's one of the increases, as well as we took the opportunity to do some digital work in Q4 to set us up for a strong 2021 start, but I would like to call out as I did in my script, there were some supply projects that we did have planned in 2020, that due to COVID we couldn't get some of the personnel out, some of those expenses will move into 2021 and those are built into my guidance, our guidance.

Great, and that's very helpful. That's all from me. Thanks.

Thank you, Harry.

And your last question comes from the line of Paul Cuddon from Numis. Your line is open. Please ask your question.

Hi there guys, thank you very much for taking my call. So questions, the first question is on your SUBLOCADE dose assumption from your 180,000 patients. I mean, that would sort of imply around five or six doses per patient per year and I wonder how that compares to what you're seeing now from a number of doses and dose retention? Secondly, could you just help me with SUBOXONE film underlying Q3 to Q4 performance, stripping out the accruals in mind to so the rebate impact in '19 and accruals in 2020? And I'll have a question after that as well, but perhaps those two first. Thank you.

Sure, Paul, and I'll start with the SUBLOCADE, and then I'll hand it over to Ryan, on the underlying film growth, because there are some items in the base period and stuff that have some explanations. I think when it comes to the retention and treatment on, I think you're right, it kind of infers this five months or so of treatment, that's about what we're experiencing, if you look at the average retention data that's out in the market. Now, I think Christian, I referred to and Christian spoke to, our RECOVER study, which shows that, on SUBLOCADE, patient's ability to maintain recovery and abstinence is enhanced considerably when they stay in treatment for 12 months. So we're continuing to share that sort of evidence base, whether doctors should take that and start to advise patients with regards to the benefits of that which could potentially impact length of treatment, it could be beneficial moving forward, but in our planning assumptions we've kept with kind of current experience. Ryan, could you talk to some of the underlying dynamics with regards to the film in Q3 versus Q4?

Yes, so, I'll break that down into two pieces. The sequential growth that we saw in film from Q3 to Q4 was primarily tied to trade stocking that occurred in Q4, as well as, as we mentioned in the scripts, during the year we made some accrual assumptions on channel mix, those are trued up in Q4 as well. So those are the two drivers of why Q4 of this year was higher versus Q3. And then when you look at the comparative of Q4 this year versus last year, we get the benefit, because last year when we still had the AGx, the federally mandated rebate at that point was almost 100%. And so now that we have discontinued the AGx, the rebate went back to its normal level. And hence, you're seeing some favorability in Q4. But that's solely the reason, so it's not that it's higher volume in Q4 of this year versus last, it's simply tied to the UA [ph].

Okay, so I mean, should I therefore assume that Q4 underlying excess stocking was flat on Q3, or I just need sort of to know, flat up slightly down slightly?

I would say directionally, yes. Share didn’t change too much between Q3 and Q4. So on a normal basis, I would agree with that.

So which one, I gave you 3.

Well, the one that's relatively flat to our Q3.

Okay, thank you. And lastly, just a question, I mean you're very specific on not promoting SUBOXONE film, the restriction on the promotion of SUBOXONE film, is that just for Indivior or is that on the brand?

It is specifically with regards to our agreement with the Department of Justice, and it relates to clinical specialists and that activity within the U.S. So it's an Indivior and Department of Justice compliance agreement.

Okay. Thank you very much.

Thank you, Paul,

There are no further questions at this time, please continue.

With no more questions, I'd like to thank you for your continued support of Indivior and its team. We look forward to continued engagement in our one-to-one following this fiscal year and the earnings and then upcoming conferences, regarding our role as the leaders in addiction and the excited, exciting, excuse me growth thesis that we have ahead of us. Thanks very much, and have a great day.

And that does conclude our conference for today. Thank you for participating. You may all disconnect.