Good day, and thank you for standing by. Welcome to the Indivior PLC Q1 2025 earnings call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during this session, you will need to press star one one on your telephone. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today, Jason Thompson. Please go ahead.

Thanks, Heidi, and good morning and good afternoon, everyone. Before we begin, I need to remind everyone that on today's call, we may make forward-looking statements that are subject to risks and uncertainties. Actual results may differ materially. We list the factors that may cause our results to be materially different on slide two of this presentation. We also may refer to non-GAAP measures, the reconciliations for which may also be found in the appendix to the presentation that is now posted on our website at Indivior.com. I'll now turn the call over to Mark Crossley, our CEO. Thanks, Jason. Good morning, good afternoon, everyone. Thanks for joining us on this call.

To discuss our financial and business performance during the first quarter of 2025. I'll start with a brief overview of the quarter, before handing it over to Ryan, our Chief Financial Officer, to discuss the financials. We'll then conclude with a Q&A session, during which we'll be joined by Christian Heidbreder, our Chief Scientific Officer. Turning to slide four. Overall results in the first quarter were in line with our expectations and consistent with our full-year 2025 outlook. Total net revenue in the quarter declined by 6% year on year. Results primarily reflect intensified competition from the generic film providers that resulted in lower Suboxone film pricing as well as the discontinuation of PERSERIS. This total net revenue performance was in line with our full-year net revenue outlook as was a modest 2% year-over-year decline in SUBLOCADE revenue in the quarter. As expected, SUBLOCADE net revenue performance in the quarter was primarily impacted by near-term justice system funding challenges. These impacts were partially offset by net revenue growth for SUBLOCADE in the organized health system channel. We ended the first quarter having treated approximately 170,700 patients in the prior twelve-month period in the U.S., which is a 14% increase year over year. Looking at patient dynamics, our analysis indicates that the US LAI category is continuing to stabilize with SUBLOCADE maintaining expected share. Setting aside the justice system, SUBLOCADE's new patient share averaged over 70% in the quarter, and has been stable for three quarters. Furthermore, our cohort analysis indicates that SUBLOCADE share among experienced dual prescribers has remained stable at approximately 65%. Our belief is that this stabilization of share reflects SUBLOCADE's unique product profile. Looking ahead, we continue to expect SUBLOCADE net revenue performance to improve in the second half of the year from the commercial investments we're…

Thanks, Mark, and good morning and good afternoon to everyone. Overall, as Mark mentioned, this quarter's financial performance aligned with our expectations we communicated in late February. Looking at the first quarter results in more detail, starting with the top line, total net revenue of $266 million declined 6% versus the year-ago quarter, driven by the expected competitive pressure in Suboxone film and our decision to discontinue PERSERIS last July. By geography, total US net revenue in the first quarter declined by 8%, versus the year-ago quarter driven by these same dynamics. Rest of world was up 3% on a reported and 1% on a constant currency basis. The rest of the world Q1 of last year was negatively impacted by shipment timing, as we had mentioned last year. Overall, SUBLOCADE's performance in Q1 was in line with our expectations. Total SUBLOCADE net revenue declined 2% in the first quarter, versus the same year-ago quarter. We continue to see good growth from SUBLOCADE outside the US net revenue up 8% to $13 million. SUBLOCADE's US performance reflected solid dispense volume growth in the OHS channel, that was partially offset by near-term funding challenges among certain justice system accounts that resulted in significantly lower dispense volume from this channel. Lower pricing from higher rebating activity and unfavorable channel mix resulted in modestly lower net revenue year over year. On a sequential basis, SUBLOCADE's US net revenue declined 9%, reflecting a 6% decline in dispense volume, coupled with destocking in the quarter. This performance coupled with our updated cohort and new patient share data reinforced the midpoint of our full-year guidance for SUBLOCADE net revenue of $725 million to $755 million, which we are confirming today. Opti net revenue was immaterial in the first quarter, as we continue to roll out trialing…

Thank you, Ryan. So in summary, we delivered a first quarter performance that was in line with our planning assumptions and puts us on track to deliver on our 2025 commitments. With that, I'll open up the call to Q&A.

Thank you. And wait for your name to be announced. To withdraw your question, please press 11 again. We will take our first question. And the first question comes from the line of Karl Burns from Northland Capital Markets. Please go ahead. Your line is open.

Thanks for the question, and congratulations on the quarter. I'm wondering if there are any proposals regarding Medicaid funding that might change your outlook. Thanks.

Thanks for that, Karl. Listen. Similar to the tariffs and things that are going on there, this is an evolving sort of situation that continues to kind of day to day. So we're keeping a close eye on it. I think one of the positives we see is this continues to be a bipartisan issue. And when you look at the health agenda for the administration, one of the top six is both rescue and treatment for opioid use disorder. So we see a strong signal from the administration with their affinity for helping with the opioid epidemic.

Got it. Great. Thank you.

We will take our next question. Your next question comes from the line of David Amsellem from Piper Sandler. Please go ahead. Your line is open.

Thanks. So I guess, a couple for me. Number one is, can you talk about when you think you'll start to see a return to growth for SUBLOCADE? And I guess where I'm going with this is how are you thinking about the competitive landscape stabilization in terms of the mix, between your competitor and SUBLOCADE in terms of new starts? How are you thinking about an eventual return to growth or just a better foot in the criminal justice system, which you cited as being an important driver? And then sort of with new leadership coming in, when are we going to start to get a better flavor for what you might do differently regarding your commercial strategy? I know there's a lot there, but I wanted to hit all the high notes. Thank you.

No. There is a lot to unpack there, David. Let me start with your second question first because I think it's the easiest. Listen. I won't speak for Joe at all with regards to his initial impressions. What I will say is he has been active in his onboarding, and assuming things get shareholder approval at the AGM, he will come in immediately as CEO, and I'll leave him to speak about his impressions and his near-term actions. As it goes to the growth of SUBLOCADE, I think the guidance has been pretty clear with regards to, you know, we have this initial impact that really started right from the beginning of the first quarter with regards to the CGS funding issues, which has disproportionately impacted that. We talked about about a 30% impact. We see with our marketing initiatives, with our label enhancements, which, you know, enhance both the HCP and the patient experience, you know, we see growth on organized health system accelerating through the year as those new initiatives take hold. So very excited about that moving forward, and that's further reinforced by what we're continuing to see in the dynamics in the disease space. And, David, you talked about new patient share. You know, we've seen new patient share stabilize over the last three quarters. Seventy-two percent for SUBLOCADE in March, seventy-one percent in Q4, seventy-two percent in Q1. So very, very stabilized with regards to that. We're seeing the new cohorts or the experience dual prescribing cohorts, you know, which are remaining stable at 65, 35, you know, for SUBLOCADE. So we're seeing a very stable environment where the disease space is adjusted to the two players with SUBLOCADE as a clear leader in a heavily dominated synthetic opioid choice of an abuse substance. So that, for us, is very positive. We do expect that there are a number of providers that have not tried, you know, the competitive product yet. Expect that trial to continue through the year. So, you know, at that point, we'd expect the market to be stabilized out based on the two players and to be a little bit more, you know, status quo in '26 and beyond where you really are totally focused on category growth, getting more people into long-acting injectables and on their road to recovery.

K. Appreciate it. Thank you.

Thank you, David.

We will take our next question. Your next question comes from the line of Christian Glennie from Stifel. Please go ahead. Your line is open.

Yep. Good morning, guys. Thanks for the first one then, please, just to touch on CGS dynamic. And then expectations for the rest of the year. It showed an accelerating decline in that as you guided. Versus sort of the previous quarters. But does this sort of set then a new base for that business that when you talk about sequential potential growth, stabilization, for SUBLOCADE overall, that it could also be the same scenario in the CGS part of the market. And is and then related to that, is there anything that sort of particularly changes the dynamic in terms of funding in this part of the market that you can see or something that sort of improves the funding as we step through the rest of this year? On the CGS? Thanks.

No. Christian, thanks for holding me accountable on that question from David because I specifically address criminal justice. You know, we did see the budget hit. You know, right from the start in Q1, you know, and most of that has hit and will and a little bit more pull through in Q2. So we expect growth, you know, in criminal justice. You know, through on a quarter-over-quarter basis through the balance of the year as we add new systems, you know, and bring on new accounts. With regards to the overall funding environment, really, there's you know, we think these are short-term implications. Albeit it can be a bit lumpy with regards to account-to-account implications as they come, but you've got really three interventions that can happen you know, as justice systems move forward to get more funding. The first is they can ask to move budgets from operations over to their pharma. Right? And so, you know, they save on daily dosing, and they can shift that over, you know, to the pharma side. So that's one place they can do that. Obviously a much longer burn because many of these are government accounts and their budget cycles are quite long. The second is they can apply for, you know, abatement funds and grants you know, to help fund, and those are also longer cycle. The abatement funds are starting to work their way through the system bit so they can get those. And for me, most importantly, the last development is the Medicaid eleven fifteen waivers. What we're seeing here is we have 19 states that have had approval for these waivers. For me, it's a really strong sort of voice from the states with regards to their desire to fund and help patients you know, that are that get into recovery, while they're in the justice system. And we know 60% of our patients are in the justice system. And interestingly, in the 19 states that have received approval that still have to operationalize, which we expect to start in 2026, over 60% of the LAI category sort of volume is covered in those 19 states. So you've got a really concentrated sort of sort of space there in those 19. And then we know we've got another nine states that have applied for eleven fifteen waivers that still have to seek approval. So, you know, you could end up you know, very soon in a spot where almost 30 states have those eleven fifteen waivers, are working to operationalize and relieving some of that budget pressure moving forward. So hope that's helpful, perspective on the CGS, Christian.

Yep. Thank you. No. That's helpful. And then just to clarify on the Q1, whether there's any notable impact as it relates to pricing and or destocking for SUBLOCADE. In the first quarter?

Yeah. Hi, Kristen. Good morning. No. Really, it was a fairly quiet quarter. There was some destock in Q1 in the mid-single digits. So that reversed out the stocking that we saw in the fourth quarter. But overall, beyond that, pricing was quiet.

Okay. Thank you. And then maybe just one final thing. I mean, are you obviously, you've got the sort of fifty minutes of you've got the new label. You've got this, you know, fifty minutes to deploy in terms of marketing, market awareness, and marketing. What, you know, what should be the expectations around or how do you assess what, you know, what what the success looks like as a result of that marketing campaign and the new label? I mean, just to get a better sense for you know, how far you're into that. Obviously, label was fairly recently done. I don't know how aggressively you've pushed the button on that $50 million budget. Just a better understanding of how things might play out as it relates to some of these sort of potential things that may be more in your favor on the competitive front?

Yeah. Thanks for that question, Christian. And it is a major initiative. You know? I mean, listen. With only two in ten patients in treatment, you know, at any point in time for opioid use disorder and only, you know, a million eight getting treatment over a twelve-month period, and then even worse, only seven to eight percent of those getting an LAI. There's a tremendous opportunity here for awareness and pull through of long-acting and specifically SUBLOCADE, which is why we think the label enhancement for rapid induction alternate sites of injection, and for an incremental dose, a second dose on day eight to accelerate the journey to therapeutic levels. Combined with the HCP and patient marketing, you know, is gonna help us achieve our guidance where we do have, you know, increased growth throughout the back half of the year because it takes time for those initiatives to take place. I think the good thing is we are seeing some leading indicators regards to digital impressions and brand searches. Which are indicating that the campaign is impactful. But what's really gonna be how we measure this is gonna be net revenue moving forward and growth of the long-acting category. And SUBLOCADE specifically.

Okay. Thank you.

Thank you, Christian.

Thank you. We will take our next question. And your next question comes from the line of Chase Knickerbocker from Craig Hallum. Please go ahead. Your line is open.

Good morning. Thanks for the questions. Maybe just to start on Suboxone. So you guys lost 40 basis points of share, you know, only sequentially. And it certainly seems even with that kind of mid-single-digit million benefit that pricing held up certainly better than we had expected. Can you kind of walk us through what your guidance assumes from here? Obviously, no change to that guidance. But should we be thinking about additional pricing pressure from here? Or is all the kind of incremental decline from here based on the entrance of a fifth generic? Thanks. Brian?

Hey, Chase. Good morning. So, no, just to remind everyone, what happened here in a film environment. With the fourth generic coming in the marketplace, late 2023, the fourth player, engine has really started to drive price decay in the market, especially at the end of the year 2024. They dropped their price close to 15%. So what you're seeing so far Q1 played out as expected. We did take a price reduction to ensure strong, formulary position. But we are projecting in our guidance that that price erosion will continue even with the four generics in the marketplace. And if Teva does launch, that could factor in at some level, but at this point, with the four in there and the way they're operating, our assumption is the price will continue. And then the balance of the year-over-year net revenue decline is due to the share assumptions. Right? Typically, on a year-over-year basis, we lose about three share points. So, that's factored in as well.

I think just beyond doubt on this, Chase, I think a lot of folks are having Teva be the driver of the price decline. And what we saw through last year was there's continuing pricing pressure through the year, accelerated in the fourth quarter. So with the four players today, there's pricing pressure in the market, and we built that into our guidance that that would continue.

Has there been further pricing pressure since that price action that you guys took in Q1? Has there been additional declines? Or is that pricing now consistent at least so far through Q2?

What happens typically and we look past or look back in a couple years, Q1 tends to be a little quiet as the contracts get stabilized across all the players. And then we typically see the pricing activity pick up between Q2 and Q4 again.

Got it. Thanks. And then, maybe just last for me. You know, obviously, you know, over a year since the Opie launch at this point, you just kind of walk investors through what we should be watching as kind of the clearing events for this starting to be a material asset for you guys? I mean, obviously, kind of knocking down state by state, but there's a number of states that you know, do have standing orders. And so can you just kind of walk us through what you see as the clearing event to make up the kind of the assets that you, you know, thought it was going to be?

Yeah. Thanks for that, Chase. Listen. Not much has changed since we discussed this at the fiscal year-end results. You know, we thought we'd be further along at this point, given the significantly differentiated profile and the fact the only rescue medication specifically recognized in the label for effectiveness against synthetic opioids like fentanyl. You know, as we talked at the year, though, harm reduction voice has been louder and stronger. And the sphere precipitated withdrawal, you know, is only gonna be alleviated when we get real-world evidence. So, you know, 2025 into 2026, the major focus is on creating that bolus of real-world evidence. So that we can use that, you know, to put forward potential impacts of precipitated withdrawal. You know, in the meantime, we'll continue to engage with state and local policymakers, you know, key medical personnel, you know, to deliver on continued uptick in our experience program where we have over 70 municipalities that have taken on. In addition, you know, we continue to be proud of that partnership with BARDA. You know, they've made two one hundred thousand unit orders. We expect another one in 2025, and, obviously, we have that ten-year contract of over a hundred million dollars. So this year is really it's an evidence generation sort of year. Of which we can step forward, and that's what's implied in the guidance we gave. At fiscal year-end.

Thanks, Mark.

Thank you, Chase.

Thank you. We will take our next question. Your next question comes from the line of Thibault Boutherin from Morgan Stanley. Please go ahead. Your line is open.

Yes. Thank you very much. I got a few. So maybe in town. But starting just with SUBLOCADE, and mix. If you could just clarify because I think the release is talking about sort of price mix impact in Q1. I think you mentioned sort of CGS being lower in the mix and as well as for the rebate. But as I think you just said, Q1 was more quiet in terms of pricing. So just trying to kind of clarify here if you if we can start here.

Ryan, would you like to talk about the price mix?

I would say it's just an it the base volumes, you know, were strong in terms of the dispenses, but, what we did have to call out some pricing mix as you're referencing. And when we lost some of the CGS business, which was quite profitable, that does impact our mix at some level. And then as we progress on our journey with SUBLOCADE, the state Medicaid mix grows as a percentage of our business as well. So that's what you're seeing in there. And then as I mentioned earlier, Q1 did include some destocking. After there was some stocking in Q4 of last year.

So I think price across different channels is relatively stable. And what you're seeing is more mix across the different channels. And that's what's causing your, you know, if you're doing a per a units by per revenue, that's what's causing that deviation. Primarily, Thibault.

Okay. Thank you for the clarification. And then I just want to come back on the CJ situation and just understand what's happening here because if we sort of back out everything, you know, it looks like sort of $100 million coming from CJS in 2024. Sort of January, maybe 01/1525. I think the comments for this year suggest sort of back to 100. And I understand there is a funding challenge headwind in '25, but how, you know, how in the first place were you able to grow so much in '24? And what has structurally changed, you know, since then that that expanded sort of, you know, coming back to 2023 levels? Yeah. Just trying to understand the dynamic and what has changed in the budget or funding or whatever that explains the start of, you know, step forward and step back.

No. It's a fair question. And just to rewind the clock back to the fiscal year-end results, what's happened is there's a handful of accounts, very large accounts, that were unable to increase their budgets in the short term. You know, to be able to treat all patients and had to make a choice of do I move to orals and treat all my patients with buprenorphine treatment? Or do I do long-acting for a subset based on what's there? And they shifted over to orals because they wanted to be able to say they could treat all their patients suffering from opioid use disorder. For clarity, they're not moving to the competition. They're just moving to orals in the short term while they try and work through their budget issues, which we think, you know, in the short to medium term through the abatement funds, through potential in the next budget cycle, reallocation of funds from operations to pharma, and through the eleven fifteen waivers, we think that will eventually, you know, be alleviated. But that was the main impetus that drove, you know, drove the drop in our fiscal year guidance of about 30% that Ryan spoke to, you know, in February.

You. And just a very last one, from me. You know, I think there was a topic around decoupling transcription from administration of SUBLOCADE and having partnership with specialty pharmacies, you know, to do the administration about it for the prescription, and that's something we haven't talked about in some time. So just wanted to know if, you know, what was the progress here, if it's maybe a bit slower than expected, if it's part of your growth expectations for H2. So just general data on that would be helpful.

Yeah. We continue to make progress on the alternate sites of care, which really have a couple vectors that they help that we've talked. One is the independent physicians, you know, that don't want to deal with the administrative sort of nature of having the product on and things like that. And the other is the digital sort of side of things where, you know, within a digital medium, they obviously need to be able to send the patient somewhere else. We now have about eight partners. The initial one was Albertsons. We built that up to eight. We're over, you know, at about 1,500 sites across the US. We continue to look for more, you know, foundational partners with large either regional or major national sort of scope to round out this. We want the to be as frictionless, you know, as a retail experience or as close to that as it can be. So we're continuing to work with those partners in discussing the opportunity to have these alternate sites of care moving forward.

Thank you very much.

Thank you, Thibault. Appreciate it.

Thank you. We will take our next question. Your next question comes from the line of Paul Cuddon from Deutsche. Please go ahead. Your line is open.

Yes. Thank you very much, and good morning, guys. I have two questions, please. Firstly, I know it's early, but I mean, you seen any impact on dual prescribing physicians with the kind of label change that sort of came earlier this year. And then secondly, on OpV, to what extent has Emergent Fire Solutions licensing of Cluxado kind of created an even stronger kind of market leader you're gonna find it increasingly challenged to get share from?

I'll start with the first one, Paul. Listen. I think the impact of the dual of the label on dual prescribers, I think it's just too early. We're getting some subjective feedback that it's very positive. You know, having the only once monthly that can induct immediately, you know, have being able to induct in all of the alternate sites, you know, where the competitor can't do that in the back of the arm. You know, and having this dose which accelerates getting to therapeutic levels in an area where you have synthetic opioids out there, where if a patient relapses, they could die, you know, from synthetic opioids. We've heard subjectively it's there, and people really like the label update and the enhanced there. With OpV, it's it and Emergent, it's an interesting one, you know, that they've licensed in, you know, this higher dose naloxone because it's counter to some of the harm reduction sort of things that say we want the lowest dose possible, you know, and the fact that, you know, the people that have the market-leading product there are getting a higher dose product. To me, it says higher dose products certainly have a role in this market. And for me, it just further reinforces OpV's role, you know, as we move forward. Now that will take real-world evidence to deal and have data to deal with precipitated withdrawal. But the move to me further enhances the need for OpV in this space.

Great. Superb. And so I just have one more. I mean, just focusing a little bit on your net cash position and the kind of looming litigation payments through to January 2027. I mean, how are you thinking about your cash generation capability with regard to those kind of looming litigation outflows?

Yes. Good question. Thanks. So certainly feel confident that, you know, as the business progresses, it's gonna generate strong cash flows year over year. We certainly do have to factor in these known obligations. There's the three of them. Right? There's the balance of the DOJ. That's spread, for the balance of the next two to three years. It and concluding in 02/1927. We settled a lot of the antitrust programs last year. So all that's remaining right now is $85 million for the opioid MDL that I mentioned. And then a small portion left of the Humana Centene when you look at it altogether, you know, some of those are in the on back end of it. And our growing business will generate strong cash moving forward.

Excellent. Thank you.

Thank you, Paul.

Thank you. This concludes today's question and answer session. I'll now hand the call back to Mark Crossley for closing remarks.

Thank you, Heidi. And before I close the call, I'd like to add my thanks for your continuing interest in Indivior, our mission to make meaningful recovery from addiction humanly possible. Is as critical as ever. I look forward to the next exciting chapter for the company under Joe's leadership. Have any follow-up questions, please reach out to Jason and the IR team. Thank you very much, and have a great day.

This concludes today's conference call. Thank you for participating. You may now disconnect.