Good day, and thank you for standing by. Welcome to the Indivior PLC Q3 Results 2025 Webcast and Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host for today, Jason Thompson. Please go ahead.

Thanks, Sharon, and welcome to Indivior’s Third Quarter 2025 Earnings Conference Call. I'm joined today by Joe Ciaffoni, Chief Executive Officer; Patrick Barry, Chief Commercial Officer; and Ryan Preblick, Chief Financial Officer. We are also joined by Christian Heidbreder, our Chief Scientific Officer, who is also available for questions. Before we begin, I need to remind everyone on today's call that we may make forward-looking statements that are subject to risks and uncertainties and that actual results may differ materially. We list the factors that may cause our results to be materially different on Slide 2 of this presentation. We also may refer to non-GAAP measures, the reconciliations for which may also be found in the appendix to this presentation that is now posted on our website at indivior.com. I'll now turn the call over to Joe Ciaffoni, our CEO.

Thanks, Jason. Good morning, and thank you for joining our third quarter results call. I'll start with a brief overview of our performance in the quarter and detail the progress we are making against the Indivior Action Agenda. Pat will then discuss SUBLOCADE's performance and the progress we are making to improve SUBLOCADE commercial execution, and Ryan will discuss our third quarter financial performance and our raised full year 2025 guidance. We will then open the call for questions. We are encouraged by our strong financial performance and improved commercial execution in the U.S. We are making steady progress versus our priorities and Phase 1 generate momentum of the Indivior action agenda. We have taken several actions to simplify the organization and position Indivior for success moving forward. In the third quarter, we delivered strong 15% year-over-year growth in SUBLOCADE and benefited from continued price stability in SUBOXONE Film in the U.S. Total net revenue grew 2% year-over-year and adjusted EBITDA was up 14%. The momentum we have generated year-to-date is enabling us to raise our 2025 financial guidance. We now expect total net revenue in 2025 to be up versus 2024, driven by SUBLOCADE growth of 10% at the midpoint and assume SUBOXONE Film price stability for the remainder of the year. Adjusted EBITDA is now expected to grow 15% versus 2024 at the midpoint. I want to thank the Indivior team for their performance in the quarter and for their commitment to making a positive difference in the lives of people living with opioid use disorder in the communities that we serve. For the rest of the year, we are focused on completing Phase 1, Generate Momentum of the Indivior Action Agenda, and we will be ready to enter Phase II, Accelerate, on January 1, 2026. The Indivior…

Thank you, Joe. We are encouraged by our strong U.S. SUBLOCADE performance this quarter, which was driven by improved commercial execution. Our commercial team is dedicated to helping people living with OUD and have a strong belief in SUBLOCADE as the #1 prescribed long-acting injectable in the category. To strengthen commercial execution, we have been sharpening the field force's message delivery with higher utilization of SUBLOCADE's core promotional materials on every call to improve overall intent to prescribe. We also are continuing to focus on improving field force call productivity to enable better reach and frequency on treatment providers. Building on our position as the clear #1 LAI, we are reinforcing SUBLOCADE's treatment benefits with prescribers, including broadening HCP awareness of SUBLOCADE's label updates. These label updates include alternate sites of injection and rapid patient induction along with the ability to receive a second injection of SUBLOCADE at day 8. SUBLOCADE's rapid induction is a unique offering in the LAI category, and this clinical option for patients can help maximize the time at effective blood plasma concentration levels by accelerating the second 300-milligram dose. This option is strongly resonating with treatment providers. This improved commercial execution led to strong SUBLOCADE net revenue growth in third quarter. Unit dispense growth was solid at 8% versus prior year and 3% versus the second quarter. Total category share of LAIs and new patient share in the U.S. for SUBLOCADE remained relatively stable at approximately 75%. We also saw 11% year-over-year growth in the number of active SUBLOCADE prescribers and 11% growth in those prescribing for 5 or more patients. The number of SUBLOCADE patients over the trailing 12 months also grew 5% year-over-year. These results are important early indicators of our commercial execution. For the rest of the year, we remain focused on…

Thanks, Pat. First, I'll discuss our third quarter financial performance, then our raised 2025 financial guidance and close on the financial impacts of our recent actions to simplify the organization. We are encouraged by our financial performance this quarter, which includes strong U.S. SUBLOCADE net revenue growth, stable SUBOXONE Film pricing and year-over-year adjusted EBITDA growth. We have taken meaningful steps to strengthen the business and are on track to achieve our financial commitments and complete Phase 1 of the Indivior Action Agenda, Generate Momentum. Looking at the third quarter results in more detail, starting with the top line. Total net revenue of $314 million, increased 2% versus the prior year as SUBLOCADE net revenue more than offset expected pricing pressure on SUBOXONE Film and the continued wind down of PERSERIS. Total SUBLOCADE net revenue of $219 million, increased 15% versus Q3 2024. Dispense volume growth year-over-year was solid at 8%. On a sequential basis, total SUBLOCADE net revenue increased 5%, reflecting a 3% increase in dispense volume versus Q2. Q3 SUBLOCADE net revenue included a gross to net benefit of $10 million as well as a stocking benefit of $4 million. Turning to SUBOXONE Film net revenue in Q3. We benefited from continued price stability in the U.S. Q3 net revenue included a gross to net benefit of $13 million. Total non-GAAP operating expenses were $145 million in the third quarter, down 3% versus the same quarter last year. Non-GAAP SG&A was unchanged versus the year ago quarter. Non-GAAP R&D expenses decreased 11% due to the reprioritization of pipeline activities and to benefits from the restructuring of the R&D and Medical Affairs organizations. Adjusted EBITDA was $120 million in the third quarter, up 14% versus the same quarter last year, driven by higher net revenue and lower operating expenses.…

Thanks, Ryan. In conclusion, we have made significant progress on Phase 1 of the Indivior Action Agenda, Generate Momentum. We delivered strong U.S. SUBLOCADE performance in the quarter. We improved our commercial execution, and we took several actions to simplify our organization. With our go-forward operating model in place, we are well positioned to finish 2025 with momentum and begin Phase 2 of the Indivior Action Agenda, Accelerate on January 1, 2026. On a final note, given the optimization of our Rest of World business, I would like to take a moment to recognize and thank our colleagues outside the U.S. who are potentially impacted by this decision and who have worked so hard to ensure patients have access to our medicines. Your contributions to our mission of making a positive difference in the lives of people living with opioid use disorder are important and greatly appreciated. We will now open the call for questions. Operator?

[Operator Instructions] And your first question today comes from the line of Dennis Ding from Jefferies.

Congrats on the quarter. I have 2 for you guys. So number one, the new $150 million OpEx cuts for 2026, can you please break down where this is coming from? How much of this was from the recent restructuring plans from your 8-K a few months ago, which I believe was all U.S. personnel? And how much of the OUS optimization is factored into this $150 million number? And then number two, when I look at SG&A as a percentage of revenue, it's around $515 million this year or 43% of revenue. But when I look at industry peers, it's around 25%. So to get to the peer average, that implies at least $215 million cut in SG&A alone. Can you comment philosophically where do you eventually see yourself relative to peers on SG&A spend? And if your goal is to get to peer average or perhaps even better than peers?

Dennis, thanks for the questions and for the congratulations. I'm going to have Ryan answer the first question, and then I'll take your second question.

Thanks for the question. Before I get to the $150 million, I just want to make it clear that the first priority we had was to make sure we put the right resourcing and investments behind [ Generate ] Momentum, behind SUBLOCADE. And then we went through the exercise of taking a look at the cost structure and the complexity in the business. And what you saw was the net result here of $150 million. And you can break it down into 4 categories. The largest category, almost half is tied to labor. We reduced our headcount by over 32%. The second component was the reduction of all the nonessential spend through the categories and the functions of the business. Then there was the discontinuation of the sales and marketing of OPVEE and then also the final decision to optimize the rest of the world.

And Dennis, with regards to your second question, we did not approach Phase 1 of the Action Agenda, Generate Momentum from a perspective of targets. What we were focused on is doing what is in the best interest of Indivior creating value for our shareholders. We believe that starts with maximizing the SUBLOCADE opportunity in the U.S. And then what we did from there is we removed what we believe are all nonessential costs from the organization. My commitment as we go forward is we will continue to ensure that we are only investing in activities that are essential to us maximizing SUBLOCADE in the U.S. and also maximizing the opportunity for our portfolio in Canada and Australia. So it's really not about targets. It's about what's right and in the best interest of Indivior and the value we can create for our shareholders.

Your next question comes from the line of David Amsellem from Piper Sandler.

This is [ Alex ] on for David. First one for me is you've talked about gaining traction in commercial patients who, as we know, are more profitable. Can you speak about that opportunity and also how you are balancing that with the core Medicaid population that comprises the majority of the business currently? And then second question is, can you help us contextualize R&D spend going forward given all the organizational changes?

Sure. Thanks for the questions. I'll have Pat take the first one, and Ryan can take the second.

Yes. No, I appreciate the question on the commercial channel. And to your point, we want all channels to grow. We want Medicaid and commercial to grow, and we're certainly taking on the big effort of driving commercial volume. And so it starts with improved commercial execution around messaging and making sure that our customers understand the broad coverage that we have and the fact that those commercial patients, in most cases, 95% of the time, will have a 0 out-of-pocket. And then it continues with the important work of our -- working with our specialty pharmacy channel to make that as an efficient channel as Medicaid. And so we're starting that work, and we do anticipate that, that -- while that will take some time, that we will see impact as we get into 2026. But the fact is that the commercial channel is growing. And certainly, Medicaid is going to be the predominant channel for us, but we think commercial is a strong opportunity for us as well.

Ryan?

Yes. And on the R&D spend, what you're seeing there is the consolidation and streamlining of the R&D and the medical team cost consolidations and the complexity there. But as it stands right now, we are focused on the Phase II assets and progressing them through 2025 and looking forward to the readouts in 2026. But to be very clear, if they are ready to proceed into Phase III, we do have the capabilities to make that happen.

Your next question comes from the line of Chase Knickerbocker from Craig-Hallum.

Congrats on a great quarter here. Maybe just first on SUBLOCADE. Guidance implies a very strong Q4. Can you just speak to if we're starting to see a meaningful increase in willingness to prescribe from those label updates, kind of anything there? And then just second on that, on the LAI market generally, I mean, clearly back to substantial growth. Do you think we're now clearly kind of seeing the benefits of 2 voices out there driving market growth? Or just kind of give us an update on kind of your thoughts on the market there as it's apparent, it's very, very strong in the third quarter.

Yes. So Chase, thanks for the questions. With regards to SUBLOCADE, what I believe we're seeing is the cumulative effect of improved commercial execution right now as we're getting better, we're doing better. We're also seeing the impact of the label changes as awareness rises playing through in the marketplace, along with significant investments we've made in commercial throughout the year. As it pertains to LAI penetration, what I would emphasize there is we believe and have learned we're the player that has the expertise and the resources to make the investment to create the awareness and drive the education around the category, and that's exactly what it is that we're committed to do. And I want to be clear, as we transition to 2026 with our broad DTC campaign, we are going to be investing beyond what it is that our models suggest that we should because we are committed to maximizing the potential of SUBLOCADE in the U.S.

And just with the strength that we're seeing, I mean, I know we're -- it's probably too early of a question, but certainly, it seems like we should be thinking about SUBLOCADE next year as maintaining kind of double-digit year-over-year growth as your guidance even implies for 2025 now. So just any thoughts you'd be willing to share there, Joe? And then just second, on capital allocation. EBITDA guide was impressive. Can you just speak to how you're thinking about capital allocation now that your balance sheet is going to be strengthening meaningfully?

Yes. So with regards to SUBLOCADE in 2026, we'll hold on commenting on that until we give our financial guidance for 2026 in January. What I would say is we are encouraged that all the indicators in support of SUBLOCADE are pointing in the right direction. As it pertains to capital allocation, we're going to ask people to be patient. We want the opportunity to finish Phase I of the Indivior Action Agenda, along with our internal planning process to ensure we have a clear line of sight to the top line and the cash that we will be generating. Obviously, we'll have a lot of optionality as we go forward.

Your next question comes from the line of Christian Glennie from Stifel.

First one, maybe on some more around the sort of drivers here potentially on SUBLOCADE as it relates to some topics maybe we haven't touched a bit on for a while, particularly things like the -- whether there's any benefit you're seeing on average duration of use for patients, but then also the ultimate conversion of prescription into an actual dispense prescription. So anything to add there initially on that in terms of other drivers that could drive some growth?

Okay. Christian, thanks for the question. I'm going to ask Pat to take that one.

Yes. No, on dispense growth, we're seeing really positive indicators. We saw an 8% dispense growth year-over-year and a sequential growth that was solid off of a strong quarter. We're also pleased by the fact that some of the drivers behind that is we're increasing our prescriber base as well as increasing those from -- that are committed to writing [ 5 ] plus, which is a good indicator of solid prescribing and adoption. And so those are the indicators that we're really, really focused on. And we do believe that enhanced label is a differentiator in the marketplace because we're the only long-acting injectable monthly that has that rapid induction, and that's resonating very well with customers.

And sorry, anything on the average duration that patients are on SUBLOCADE?

Yes. So Christian, with regards to -- and that comes through the work we'll be doing through our specialty distribution in terms of conversion of patients to starts, and how long they continue on treatment. That's a work stream we kicked off. We're digging deeply into, and we'll comment more on that in 2026, but we expect those efforts to start to have impact in 2026. And that's one of the areas of which we believe will help accelerate SUBLOCADE dispense unit growth as we move forward.

And then my second one will be around just a clarification on the OpEx guide for '26 in terms of the savings certainly. Does that imply that effectively rest of world is streamlined and as it will be by the 1st of January, effectively of '26? And then just to clarify on the R&D part, does that -- does the guidance assume that those Phase II assets progress into Phase III, for example, with the cost of that? Or is that something that may subsequently need an update?

Yes. So I'll ask Ryan to take the first question. I'll take the second.

Yes. So regarding the budget for next year, where we said we will not spend more than $450 million. That includes everything. That includes our go-forward model in the U.S. and in the Rest of the World business.

Okay. And from an R&D perspective, with the changes that we've made, we've preserved the capability if we're fortunate enough to have programs to advance when the data reads out to be able to do so, and that would not result in an additional increase to OpEx in 2026.

Your next question comes from the line of Brandon Folkes from H.C. Wainwright.

Congratulations on a very good quarter. Maybe just following on from an earlier question. So as we look ahead to 2026 and the potential to move into Phase III, what do you need to see from the SUBLOCADE business to move into that phase? Are you expecting the enhanced commercial focus to be running at full speed at that stage? And alternatively, how do you see the sort of long-term path to peak sales in SUBLOCADE or peak penetration in the LAI market? And then along those lines, thinking again of Phase III, sort of what are you thinking about in terms of that breakout phase in terms of assets you would go after? Are these adjacencies that may not distract from the SUBLOCADE efforts? Just any color on that would be helpful.

Yes. So Brandon, thank you for the congratulations and certainly appreciate the questions. First off, I want to emphasize, we are head down in Phase I, generate momentum and looking to finish off the year and be positioned to start Phase II accelerate on January 1. The second thing I want to emphasize, we've been clear, we have to earn our way to Phase III. And that starts with internally the confidence that we have the capabilities to take on more. And then, of course, externally, that we have the credibility to do so. So we're not focused to Phase III at this point. We're focused around executing what we're setting out to do. I think to your question directly, when we transition to Phase II, the answer will be, one, the assessment of the internal capabilities, which will be aligned to the results that we're delivering relative to the guidance that we're giving. From a -- what we would be looking at, what I would be comfortable saying now if we earn our way to it, will be commercial stage assets that have the potential to enhance our growth profile and to diversify our revenue. And I'll let Pat comment on long-acting injectable penetration and what it is that we're doing to drive that.

Yes. Thanks, Joe. Look, right now, we are the market leader, and we've more than stabilized share at 75%. But the fact is, is that the overall LAI category still sits at 8%. And so our focus is going to be on continuing to improve our commercial execution. As we get better, the business will get better. We do believe that our effectiveness will drive LAI category. And we also are placing a big bet on direct-to-consumer. As the category leader, we want to drive education of those OUD patients and drive traffic into our treaters' offices. And we're investing in that way in a sustained way to do just that. Certainly not going to call a peak penetration rate, but I might direct you to other analogs, whether it be the HIV market or the schizophrenia market, where the LAIs have achieved 20% to 25% peak penetration. We're a long way off from that, but that's what's encouraging for us. When we get better, we have a big opportunity to capitalize on.

And Brandon, one other thing I would add, we've also -- Vanessa Procter has joined our organization, and we believe that it's important that the work that we do in advocating for these patients, inclusive of public policy will be key in ensuring access and ultimately increasing long-acting injectable penetration. So that along with the consumer are really where we're going to put our efforts to drive LAI penetration.

Great. And a follow-up, if I may, and I think this may be for Ryan, bit of minutia, but just cash flow from operations in the quarter, are there [ one-timer ] there just sort of the spend on the cost reduction and the Medicaid rebate that you called out in 2Q? Anything else? And then maybe just any color on cash conversion in 2026? And then also on that $450 million OpEx spend, is that a cash basis or an adjusted accounting figure, which may include some noncash figures? Sorry about the minutia, but I just want to get this right, and that's all for me.

Ryan?

Yes. So starting with the 2025 cash, the $200 million is primarily driven by the underlying business, the strong demand that got us up and generate $200 million. But that was offset, as you can imagine, by some CapEx and some debt payments. So that's the walk in regards to 2025. In regards to 2026, that $450 million is our adjusted operating expense budget in terms of expense that will hit our P&L for next year.

Your next question comes from the line of Thibault Boutherin from Morgan Stanley.

Just maybe a quick question on SUBLOCADE in the quarter, and I apologize if it's been touched on and I missed it, but if you could give more details on the gross to net in the quarter for SUBLOCADE. Given the guidance for the year, I assume there is no risk of reversal, but could that be a sort of bigger base when you think about growth for next year? And then the second question, just on SUBOXONE. I know it's not the focus, but just if you could touch a bit on your visibility now that we've seen pricing being a bit stable for more time. The erosion seems to be stable as well. So just how you think about it in your building block when thinking about the outlook for the organization going forward?

Thank you for the questions, Thibault. I'll take SUBOXONE and then hand the SUBLOCADE gross to net question off to Ryan. So, look, what I'll comment on SUBOXONE is limited to 2025, which is we are at a point in the year where in our raised guidance, we are not assuming any additional price erosion. So that's different than what we've previously said. We're assuming price stability. We've also seen a relatively slow decline from a share perspective. In terms of 2026, I'm going to hold until we have a full picture of the evolution of the payer landscape and those dynamics. So we'll -- that certainly, from a revenue perspective, will be incorporated into the guidance that we give in 2026. And then Ryan on SUBLOCADE.

Yes. So in regards to the Q3 net revenue, to give you a little color, we booked the $219 million, which was up 15% versus last year, driven primarily by the dispense. Within that number, you saw the result of our normal quarterly balance sheet review of our accruals. There was a gross to net release of $10 million in there, and then there was also some stocking in terms of shipment phasing. So that's the $4 million. So a total of $14 million of benefit in the quarter.

I will now hand the call back to Joe for closing remarks.

Thank you, operator, and thank you to everyone for joining the call today. We look forward to updating you on our progress as we execute the Indivior Action Agenda. Have a great day.

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