Good day, and thank you for standing by. Welcome to Indivior’s Q3 Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there'll be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Mark Crossley, Chief Executive Officer. Please go ahead.

Thank you, Sarah. Good morning, and good afternoon, everyone, and thanks for joining us. With me today to discuss our third quarter results are Ryan Preblick, our Chief Financial Officer; and Dr. Christian Heidbreder, our Chief Scientific Officer. For today's call, I'll provide an overview of the strategic progress, after which Ryan will detail our financial performance and our 2022 guidance, and then we'll move on to Q&A. Turning to Slide 3. I'm going to assume that everyone has read the forward-looking statements. Turning to Slide 4. In the third quarter, we continue to see strong year-over-year and sequential growth in SUBLOCADE. This important treatment reached the new milestone in the quarter crossing the 100 million mark for the first-time in the third quarter to deliver $x108 million in net revenue. SUBLOCADE's strong performance was the main driver of our top and bottom line growth in the period. As in the past several quarters, this performance was driven by the growing presence in the Organized Health Systems channel. We're very pleased with the progress of PERSERIS in the quarter with net revenue up 14% sequentially and 60% versus last year. Importantly, we saw an encouraging uptick in unit volume and net revenue contribution from the new sales territories where we've expanded our presence. Based on our performance year-to-date, together with the progress we're making against our strategic priorities, we're confident we will deliver a strong finish to the year. We've now narrowed our fiscal year 2022 guidance for SUBLOCADE to the higher end of our previously communicated range and we've increased our expectations for total net revenue and adjusted operating profit for the group. Ryan will provide a little more detail in a moment. Clearly, the macro environment remains challenging with the geopolitical climate as well as decelerating economic growth…

Thanks, Mark and good morning, and good afternoon to everyone. I'm pleased to report another good quarter of financial execution and business momentum. We delivered excellent top line growth driven by the strong performance of SUBLOCADE. Our adjusted operating profit also increased versus the prior year, reflecting results from the growth investments we made to support this successes of SUBLOCADE and PERSERIS. We also maintained our disciplined approach to capital allocation, balancing reinvestment in the business with shareholder returns as we progress with the share buyback program we announced in April. We once again exited the quarter with over $1 billion in gross cash and investments, providing us tremendous flexibility. I'll now provide some more detail on the performance drivers in the quarter and discuss our outlook for the remainder of the year. Starting with top line, total net revenue growth was up 24% versus the year ago quarter and by 27% at constant and exchange rates. For year-to-date results, total net revenue grew 16% versus the same period last year and by 18% at constant exchange rate. The increase in total net revenues throughout 2022 was mainly a function of strong SUBLOCADE growth in the U.S., but we also continue to see growing contributions from PERSERIS and some SUBLOCADE in markets outside the U.S. By geography, total U.S. net revenue grew by 32% versus the prior year quarter. Net revenue for the rest of the world returned to growth this quarter and was up 9% year-over-year excluding unfavorable FX impact. SUBLOCADE net revenue outside of the U.S. grew 75% year-over-year to $7 million continuing to help offset the ongoing pressure from generic competition in the legacy tablet business. While the rest of the world net revenue result continues to be impacted by the strong U.S. dollar, relative to other…

Thank you, Ryan. Once again, I'm extremely pleased with the team's execution against our strategic priorities. Our go-to-market strategy on SUBLOCADE is working and 75% of our growth is coming from that channel and our current midpoint of fiscal year guidance is marking just over 40% progress towards the $1 billion in sales. We continue towards adding an additional U.S. listing next year and are extremely excited for our Capital Markets Day in New York in December, where we'll provide more detail on our roadmap to delivering sustainable shareholder value. With that, I'll turn the call over to Sarah to manage questions and answers.

Thank you. [Operator Instructions] We'll now take our first question. This is from the line of Thibault Boutherin from Morgan Stanley. Please go ahead.

Thank you for taking my questions. I have a couple on SUBLOCADE. First question, could you give us a rough idea of the market share of SUBLOCADE right now in terms of patients within the BMAT category? And second question, when you think of a different component of growth for SUBLOCADE going forward, from the top down perspective, there is an unfortunate increase in the pool of patients due to the acceleration of the pandemic. There is potentially the increase in the proportion of patients treated and then the market itself of SUBLOCADE. So just if you -- when you talk about the mid to high-single digit growth in the BMAT market. Could you just help us understand how much is just patient growth and how much is production increase in the treatment penetration? Thank you.

Thibault, thanks for that. I think on SUBLOCADE, there's such a tremendous unmet need here and I think it really combines kind of both of your questions. The first is the market share now is, we're still in such an early days of the launch of our organized health system strategy. Remember, we just pivoted to that two years ago with a reorganization to the ecosystem model. We've seen tremendous growth with double-digit quarter-over-quarter growth over the last nine quarters. And despite that, we still only have about a 3% patient share of the market. So it's early days. There's tremendous opportunity for this asset to continue to help patients in their journey towards recovery. The market side of this disease space is hugely unfortunate and really represents how the opioid epidemic has just continued to propagate here in the U.S. If you think about it, there are over 10 million people that have used opioids here in the U.S., over 3 million have been diagnosed with opioid use disorder and less than 20% of people are in treatment. So I think as you think about the growth of SUBLOCADE, the market will continue to grow and there's a huge ability for that to grow more patients entering in treatment even if the disease doesn't grow specifically because of that low treatment penetration of less than 20%. And then I think when you think about the market share of SUBLOCADE, absolutely, as we continue to bring this paradigm shifting treatment into the market, build more awareness, we expect growth to come through more patients utilizing it on their recovery journey. So we expect kind of growth on both sides of the market as well as SUBLOCADE awareness and penetration. Thanks, Thibault.

Thank you.

Thank you. We'll now take our next question. Please standby. It's from the line of James Vane-Tempest from Jefferies. Please go ahead.

Hi. Thanks for taking my questions. Two, if I can please? Firstly, just looking at the trend quarter-on-quarter growth for SUBLOCADE and looking into what I guess is the upper end of your guidance and that implies a pretty big step up in Q4. So I'm just kind of wondering if the businesses historically done plus or minus $10 million sequentially a quarter. What gives you the confidence potentially looking at full year? We could maybe double that on a Q4 basis to roughly $20 million? My second question is again just around market dynamics. I appreciate we've got to wait till probably next year to get guidance 2023. But when you look at sort of the momentum of growth that you're seeing, are there any sort of low hanging fruit, which you've kind of been able to get this year where we should expect slower growth next year, where given the market dynamics you've kind of laid out, is the level of growth you're seeing potentially sustained once we get into next year? Thank you.

Thanks for that, James. And listen, I think we are extremely pleased with regards to the continued strong quarter-over-quarter growth, perhaps a lot of confidence in the guidance range that we've given for the full year and carrying that momentum into Q4. So we expect to deliver on that guidance. When I start to think about the market dynamics, while we'll guide on 2023, in February, we will talk about at a Capital Markets Day a little bit more in-depth with regards to SUBLOCADE, the go-to-market model, the bipartisan nature of this disease space, which we expect all of those things coming together to continue to drive that growth moving forward. So it's those dynamics all combined that just continue to give us conviction behind the $1 billion plus of peak net revenue guidance we have for SUBLOCADE.

Thank you. If I can just give a -- ask a follow-up just on the first point. Could you please understand sort of confidence in meeting guidance. But is there anything which would suggest there could be a potential inflection in Q4 or kind of higher sequential growth in Q4? Just wondering if there's any potential new contracts coming up or anything like that which could suggest a larger sort of sequential Q4 improvement specifically?

James, I think it's just continued delivery on the operating model and there's normally some Q4 dynamics ahead of the year end and ahead of price increases that sometimes has modest impacts on stocking. But we have confidence in again in delivery on the yearly numbers that we've given.

Thank you.

Thank you. We'll now take our next question. Please standby. This is from the line of Max Herrmann from Stifel. Please go ahead.

Hi. Thanks for taking my questions and congratulations on another strong quarter. A number of questions, if I may. Firstly, just trying to understand a little bit on the gross margin. I appreciate that SUBOXONE in the Medicare and Medicaid channel into low gross margin, but I was expecting given the strength of SUBLOCADE and the high gross margin nature of that product that you might have seen a bit of improvement. So just trying to understand that, holding the status of the first question and follow-up with the others.

Okay. I'm going to go ahead and ask Ryan to take you through kind of the gross margin expectations.

Yeah. So that's a fair question. And we were in line with where we expected the gross margin to play out for the quarter and we certainly do expect as SUBLOCADE becomes a larger contributor of the business for the margins to expand. It's just right now you're still seeing the impact of the large contribution coming from the less profitable film. And on the back end of that, we are seeing some cost pressures as well due to inflation. But net-net, we're right in a position where we thought we'd be at this point.

Great. And then just a couple of more finance questions and then focusing on SUBLOCADE. So just I wonder in terms of the tax situation for 2023, have you got an idea there? I know you don't want to give guidance for the full year, but I just wondered on the tax situation that seems to be picking up in the Group? And what the likely potential benefits are from the patent box on SUBLOCADE on the tax side? And then just on SUBLOCADE itself, a couple of questions. One is, kind of bit more color on your OHS experience. So obviously appreciate the dispensing benefits within the large hospital, which may be the center of that OHS. But I wonder how the trickle down into the clinics that operate within the OHS, how you found your experience with SUBLOCADE in those networks? And finally just on SUBLOCADE ex-U.S. Could you update us on the launches? I know you obviously launched in Canada, Australia and Israel. I know you were planning to launch over the coming months the European territories now. Wonder whether we had an update on that? Thank you.

Okay. So, Max, I think I'll start with the SUBLOCADE and then hand over to Ryan to give a little bit of color on tax without guiding in 2023, which of course, as you mentioned, we will do in February. The color on the Organized Health System, I think, remains as we've been talking. We've gotten access at the parent level. And now it's about depth. It's about opening up these children accounts within the parents, now that the parents have authorized this controlled substance specialty pharmacy sort of product in. And that sell in cycle that acquisition sort of model is not as long as the parents that we talked about, which was 9 to 15 months, but it's actually probably more sort of quarters and not months. So that takes time. But what that does is it starts to open up more doctors and more patients. And as we've talked about before, the majority of doctors and patients that treat opioid use disorder are in these Organized Health Systems, so we're getting deeper access. And as I mentioned in my script, what we're seeing as we follow cohorts is, we're getting deeper adoption through time with people that have started to prescribe the medication. So a very positive experience, but it certainly isn't a faucet that when something's open, you get to max prescription, there is an acquisition process on those children Organized Health Systems. Outside the U.S., we are in Canada, Australia and Israel, as you mentioned. We continue to work and we had a country level with regards to reimbursement and launch plans, still expecting here in the balance of the year to go to launch in the Nordics and looking towards Germany and other markets in Europe in 2023 and we'll be able to provide a lot more color on that in February. Ryan, would you like to handle the tax question?

Yeah. So on the tax situation, certainly the first point I would highlight is, it's been relatively stable over the last two or three years. Our tax rate is mainly dependent on the mix of business or tax locale in regards to where we're generating the net revenue. But that's something that we certainly monitor closely and plan accordingly. And the patent box benefit that you did mention certainly factors into our strategy as we go into every year. And one of the things we pride ourselves on is definitely keeping a loop in regards to what's going on with the tax changes both here in the U.S. and the U.K. So those are all the factors that we will build into our tax plan as we get into next year.

If you don't mind a follow-up question just to try and understand how the OHS systems are working within the clinics. I understand that obviously when you first launched, there was some challenges with getting opioid use disorder positions to hold inventory and/or to prescribe given they may have been in sort of like general psychiatry clinics. When you go to the hospital, you obviously have the pharmacy unit there and that makes life easier for dispensing with us through a specialty [Technical Difficulty] I wonder when you get into the clinics within those OHS's, is that still the case or are they then starting to come across that more challenging dispensing issue that you had early on in the launch?

No, it's a great clarification question, Max. And I think you're right. At the big regional sort of parent centers, they obviously have pharmacies on-site. They've got all the things to manage. And when you go out to the more satellite sort of children campuses, you still have the back office that helps with billings. They help with scheduling. They help with all these things. And then it can vary a bit within the various units. Some of them have pharmacies on-site, some of them are smaller and maybe don't. And so it can vary children to children with regards to those. Now what we know is, is the experience from the network of specialty pharmacies and specialty distributors that we put together is extremely strong, the days to getting medication, the prior auth and the yield that comes through that, we've built a network is extremely efficient, but there will always be for smaller clinics that don't have pharmacies on-site, there will always be a bit of friction just associated with the specialty product and that's just a nature of this sort of drug. But when you're in the organized health system predominantly, a lot of the friction points are removed and what we see are people adopt sooner and adopt deeper with more patients per HCP than you see in other areas. So we're excited. It is still very early days in these Organized Health Systems. Again, we're only two years into this. We've only got a 3% patient share. And so we look forward to continuing to partner with those Organized Health Systems moving forward.

Right. Thanks very much, Mark. Thank you.

Thank you, Max.

Thank you. [Operator Instructions] We'll now take our next question. This is from the line of Paul Cuddon from Numis. Please go ahead.

Hey, guys. Thank you. I have three questions, please. Just focusing on the depth for prescribing, I mean, do you think sustaining double-digit sequential growth that is possible into kind of 2023 quarter-on-quarter? Secondly, I mean, any stocking issues for the rest of the world business or do we think that started to turn? And then sort of just a final question on sort of cash and the prevailing interest rate environment?

Certainly, Paul. I'll handle the first two if that's okay. I think you're talking about depth of HCP's prescribing. Listen, I can tell you, I continue to expect there to be both additional new prescribers and additional depth. How that translates into the guidance for 2023? I think that's a great question. When we get together in February with the fiscal year end results and give our formal guidance for next year. But you can tell we have very strong momentum with regards to how we're moving forward. I think as you look to the rest of world and I think what you're getting to is, is obviously the underlying non-FX sort of growth this year is quite -- this quarter is quite strong. Is there someone off sort of items, I think there's always a little bit of fluctuation quarter-to-quarter. And I think here, we have to look towards our medium term sort of guidance where we expect this to return to growth. There are heavy generic presence in the Heritage business, significant austerity measures that many governments imply on this in these markets. And what we look to is in the medium term to return this business to growth. So I think quarter-to-quarter, there will be some fluctuations. Maybe what I'll do is hand over to Ryan to answer the questions you had with regards to cash and prevailing interest rate.

Yeah. So again, quite happy with the cash position we have. What it does, it gives us a lot of flexibility and optionality to make quick business decisions as we move forward. Cash at this point as the environment is quite dynamic in the markets, it's something that gives us some protection that we feel good about. And in regards to the debt facility, again that's just another way for us to keep the optionality open, provide maximum capacity. So we feel good where we are between our cash position and our debt facility going through these uncertain times.

Okay. Thank you. And with regards to the success that you're having with kind of PERSERIS now with the national field force. I mean, do you think that you'll always be committed a substance use disorder or do you see potential to deploy some of that capital into kind of more adjacent clinical indications?

Yeah. It's a good question, Paul. And I think one with regards to capital allocation that we continue to get, and I think we just remain incredibly consistent on how we think about capital allocation for Indivior and the first priority is to reinvest in SUBLOCADE to achieve the $1 billion plus And then after that, the board and management sit back and think about how do we create value for shareholders. And in the short term, you've seen we've done a couple of returns of capital via buybacks. We're in the midst of our second $100 million buyback and then we think about business development. Obviously, items in addiction are the highest priority, but we continue to look with regards to those opportunities on a value sort of basis for shareholders.

Super. Thanks very much.

Thank you, Paul.

Thank you. I'd now like to hand back to the speakers for closing remarks.

Thank you, Sarah and my thanks to everyone for their time today and continued support of the Indivior team. Look forward to seeing everyone in New York City on December 7. Thank you.

Thank you. This concludes the meeting and you may now disconnect.