Indivior Pharmaceuticals Inc (INDV) Q1 2026 Earnings Report, Transcript and Summary

Good day, and thank you for standing by. Welcome to the Indivior Pharmaceuticals Q1 2026 Financial Results Conference Call and Webcast. [Operator Instructions] Please be advised that this conference is being recorded. I would now like to hand the conference over to our first speaker today, Jason Thompson. Please go ahead.

Thanks, Nadia, and welcome to Indivior's First Quarter 2026 Results Conference Call. I'm joined today by Joe Ciaffoni, Chief Executive Officer; Pat Barry, Chief Commercial Officer; Ryan Preblick, Chief Financial Officer; and Christian Heidbreder, our Chief Scientific Officer. 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, and that actual results may differ materially. We list the factors that may cause our results to be materially different here 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 of 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 us on today's call to review our first quarter results. I will begin with an overview of our performance and summarize our progress against Phase II - Accelerate of the Indivior Action Agenda. Pat will discuss SUBLOCADE performance, Christian will provide an update on the pipeline, and Ryan will review the financials. In the first quarter, we made significant progress in Phase II of the Indivior Action Agenda and executed key elements of our capital deployment strategy. Specifically in the quarter, we grew total net revenue 19% year-over-year to $317 million, primarily driven by strong U.S. SUBLOCADE performance. We grew total SUBLOCADE net revenue 32% year-over-year to $232 million, reflecting strong year-over-year dispense unit growth of 20%. The acceleration in SUBLOCADE dispense unit growth was driven by improved commercial execution and the early impact that our new consumer campaign, Move Forward in Recovery, is having on patient activation. Importantly, SUBLOCADE category share was stable in the quarter, and we had record new patient starts. We delivered adjusted EBITDA of $164 million, up 112% year-over-year, and margin improvement of 23 percentage points. We successfully executed our capital deployment strategy, improving our debt profile through the issuance of $500 million of convertible notes and returned value to our shareholders by repurchasing $125 million of our shares at an average price of $31.45. Our strong first quarter performance and the underlying strength of SUBLOCADE across key metrics, along with a more favorable outlook for SUBOXONE, enabled us to meaningfully raise our 2026 financial guidance. I want to thank the Indivior team for their contributions to our progress against the Indivior Action Agenda and for their commitment to making a positive difference in the lives of people living with opioid use disorder and the communities we serve. In Phase II - Accelerate, we are focused on accelerating U.S. SUBLOCADE dispense unit growth and net revenue throughout 2026 and growing adjusted EBITDA and cash flow at an even faster rate. In the first quarter, we achieved a major milestone. Over 500,000 patients in the U.S. have been prescribed SUBLOCADE since its launch in 2018. Nearly 1/4 of those patients were added in the last 5 quarters, underscoring SUBLOCADE's strong growth trajectory. SUBLOCADE is the first and #1 prescribed long-acting injectable for the treatment of moderate-to-severe opioid use disorder. It is the only monthly long-acting injectable with an indication for rapid initiation. Looking forward, we believe continuous improvement in commercial execution and our commitment to significant and sustained investment in our new direct-to-consumer campaign will accelerate U.S. SUBLOCADE dispense unit growth to the mid-teens in 2026, up from 7% in 2025. We now expect total SUBLOCADE net revenue to grow 13% year-over-year to $970 million at the midpoint of our guidance. As expected, our new operating model established in Phase I - Generate Momentum of the Indivior Action Agenda is accelerating the growth of adjusted EBITDA and cash flow at a significantly faster rate than net revenue. We now expect to generate $640 million of adjusted EBITDA in 2026 at the midpoint of our guidance, up 50% versus the previous year, which equates to a 51% margin, up 16 percentage points versus 2025. Our increased cash flow and improved financial flexibility position us to strategically deploy capital to create value for our shareholders. With the completion of our debt refinancing, our capital deployment priorities are focused on opportunistically utilizing the remaining $270 million of our share repurchase program and evaluating commercial stage business development opportunities to enhance and diversify Indivior's growth profile. We are on track to enter Phase III of the Indivior Action Agenda - Breakout in the second half of this year. Next, I want to briefly touch on the decisions we made on the INDV-6001 and INDV-2000 programs. We do not intend to pursue Phase III development of INDV-6001 and have amended our license agreement with Alar Pharmaceuticals. Pursuant to these amendments, Alar will regain development rights to the asset and commercialization rights outside of the U.S. Indivior will maintain commercial rights in the U.S. Regarding INDV-2000, it did not meet the primary endpoint in the Phase II trial, and additional work is needed to further explore the initial signals we observed. We will not be progressing the program internally for opioid use disorder, and we will pursue external business development opportunities for this asset. Christian will provide more detail. I want to recognize and thank our R&D colleagues for leading with science and for the hard work they put into the INDV-6001 and INDV-2000 programs. Their efforts greatly advanced our understanding of these assets and their work was high quality and conducted with integrity. To conclude, we are encouraged by our progress so far in 2026. Our results strongly position us to achieve our financial and operational objectives in Phase II - Accelerate and to enter Phase III - Breakout in the second half of 2026. I'll now turn the call over to Pat.

Thanks, Joe. Our commercial teams are executing well against Phase II of the Indivior Action Agenda - Accelerate. This acceleration is being driven by our commercial execution initiatives and our consumer activation investments, notably our successful DTC campaign, Move Forward in Recovery. We achieved record new patient starts in the first quarter of approximately 31,800, a year-over-year increase of 29%. This brought our total U.S. SUBLOCADE patients treated over the last 12 months to 191,600 at the end of the first quarter. Dispense unit growth in the first quarter was up 20% versus the prior year, reflecting acceleration in U.S. SUBLOCADE versus 2025. Total category share of LAIs in the U.S. for SUBLOCADE remained stable at 76%. We continued our track record of growing the number of SUBLOCADE prescribers, which is an important leading indicator for overall LAI category and SUBLOCADE growth. We exited the first quarter with a record number of active SUBLOCADE prescribers, and those treating 5 or more patients. Total active SUBLOCADE prescribers grew 19% year-over-year, and HCPs treating 5 or more patients grew 20% year-over-year. While we are encouraged by the progress in U.S. SUBLOCADE, we see continued opportunity to drive further acceleration through our commercial improvement, consumer activation, and public policy initiatives. First, SUBLOCADE is the only monthly long-acting injectable with an indication for rapid initiation on day 1 and a second dosing as early as day 8. Our focus on delivering the second dose as early as day 8 is driving increased adoption. Providers' recognition of SUBLOCADE's differentiated label continues to grow, particularly as synthetic opioids remain prevalent in the U.S. Approximately 9% of new patients are receiving the accelerated second dose and 23% of active HCPs have begun prescribing a second dose in line with the expanded SUBLOCADE label. Second, our commercial channel productivity initiative is generating results. We executed 5 enhanced service agreements with key specialty pharmacies and have started to see steady improvement in commercial dispense yields. Third, consumer activation remains strong. We continue to invest behind SUBLOCADE through our DTC campaign, Move Forward in Recovery. Patient engagement stayed elevated throughout the quarter, with more than 1,200 new CRM enrollments each month, bringing total engaged consumers to over 8,300 since launch. Paid search volumes remain above pre-campaign levels, with category-leading share of voice across core search terms. Additionally, over 30,000 people searched for a SUBLOCADE provider with the Find a SUBLOCADE Treatment Provider tool on the SUBLOCADE website in the first quarter. To close, we are encouraged by our start to 2026. We believe that our improved commercial execution focused on sharpened message delivery with higher utilization of SUBLOCADE's core promotional materials on every call, along with our efforts directed at improving specialty pharmacy performance and consumer activation, are having impact on new patient starts, mix, and acceleration in SUBLOCADE dispense units. We are confident that as we continue to get better, SUBLOCADE will do better, and that we are on track to achieve our raised 2026 guidance for SUBLOCADE. I will now turn the call over to Christian.

Thank you, Pat. I will now provide an update on our R&D pipeline, starting with INDV-6001. INDV-6001 delivered meaningful scientific and regulatory progress during the year, achieving its principal Phase II objectives, including a supportive safety profile, predictable pharmacokinetics consistent with modeling, and constructive engagement with the FDA. As part of our portfolio review, we evaluated INDV-6001 in the context of the evolving long-acting injectable buprenorphine landscape. In our view, SUBLOCADE is the only once-monthly long-acting injectable buprenorphine with a rapid initiation pathway in the approved label, continues to set the clinical and commercial standard in this category. SUBLOCADE's ability to achieve and maintain differentiated plasma concentrations without a complex induction regimen represents an important benchmark for future products. While INDV-6001 successfully demonstrated extended dosing intervals, including exploration of dosing up to three months, further analysis identified challenges, specifically achieving clinically meaningful plasma concentration profiles, particularly in a treatment environment shaped by high potency synthetic opioids, was anticipated to require a more complex induction protocol relative to SUBLOCADE's established approach, introducing additional development and implementation considerations. In addition, a comprehensive review of late-stage development and commercialization factors highlighted some remaining challenges, including: one, manufacturing scalability; and two, limited anticipated clinical and commercial differentiation in the payer and prescriber landscape, and the resulting impact on pricing and reimbursement dynamics. As a result, we have decided not to advance INDV-6001 into Phase III clinical development and have amended our license agreement with Alar Pharmaceuticals. Pursuant to these amendments, Alar will regain development rights to the asset and commercialization rights outside of the U.S. Indivior will maintain commercial rights in the U.S. Turning to INDV-2000. In a Phase II proof-of-concept study, our selective orexin-1 receptor antagonist under evaluation as a novel nonopioid treatment for opioid use disorder did not meet the prespecified primary endpoint of no treatment failure over 12 weeks when evaluated across the full dose range, 100, 200, and 400 milligram versus placebo. Interpretation of the overall dose response was confounded by unanticipated underperformance at the 400 milligram dose and a higher-than-anticipated placebo response. While this Phase II study does not support advancing INDV-2000 internally in opioid use disorder, we are encouraged by the broader body of data that emerged from the trial. Importantly, prospectively planned sensitivity analysis, together with converging supportive findings, identified a credible and biologically coherent signal at the 200 milligram dose. At that dose, we observed a higher abstinence rates over time versus placebo across cocaine and broader polysubstance use, including cocaine, methamphetamine, amphetamine, benzodiazepine, and opioid in combination. While these findings are exploratory, they are directionally consistent with the underlying orexin-1 mechanism and its potential role in cue-driven drug seeking, stress reactivity, and relapse vulnerability. We also saw supportive directional improvements in anxiety symptoms as well as exploratory functional MRI findings that aligned with the clinical observations and further supported the biological activity of INDV-2000. Taken together, these results strengthen our confidence that the molecule is engaging relevant relapse-related pathways. Importantly, INDV-2000 demonstrated a favorable safety and tolerability profile with no major drug-related safety signal identified. So while we do not plan to pursue development internally in opioid use disorder, we believe these findings support continued evaluation of 200 milligrams as the lead dose and position INDV-2000 as a credible business development opportunity while we continue to strengthen the data package through additional analysis, including exposure response work and further evaluation of supportive clinical and mechanistic findings. These decisions are expected to have a significant impact on the R&D organization. However, it does not reflect the quality of the underlying science or the team's execution. We are grateful for the rigor, dedication, and high-quality work of our R&D team, whose efforts advanced these programs and generated valuable scientific and regulatory insights that will inform future innovation. I will now turn the call over to Ryan.

Thanks, Christian. We are encouraged by our overall financial performance this quarter, which includes strong year-over-year total SUBLOCADE net revenue growth and even stronger adjusted EBITDA growth. Looking at our results in more detail, starting with the top line. Total net revenue of $317 million for the first quarter increased 19% versus the prior year period. The increase was driven by strong SUBLOCADE net revenue growth in the U.S. Total SUBLOCADE net revenue of $232 million for the quarter increased 32% versus the prior year period. U.S. SUBLOCADE net revenue increased 33% versus the prior year to $218 million. Q1 net revenue growth was primarily driven by dispense unit volume growth of 20% and favorable price/mix. The first quarter included a gross-to-net benefit of $14 million. Turning to SUBOXONE Film net revenue. In the first quarter, we benefited from continued generic price stability in the U.S., moderated share decline, and favorable gross-to-net adjustments. As we said in February, we expect gross-to-net adjustments to serve as a headwind in 2026 for both SUBLOCADE and SUBOXONE. Total non-GAAP operating expenses were $116 million for the first quarter, down 21% versus the prior year. The decrease was primarily driven by reductions in headcount, the restructuring of the R&D and medical affairs organizations, and footprint consolidations as part of Phase I of the Indivior Action Agenda -- Generate Momentum. Looking at the bottom line, we generated record adjusted EBITDA of $164 million, an increase of 112% year-over-year, representing margin improvement of 23 percentage points. Our strong first quarter results and performance trends year-to-date led us to raise our 2026 financial guidance. We now expect total net revenue in the range of $1.215 billion to $1.285 billion, an increase of 1% compared to 2025 at the midpoint of our guidance range. This is primarily driven by stronger SUBLOCADE net revenue, which we now expect to be in the range of $950 million to $990 million, up 13% year-over-year at the midpoint. The increase in SUBLOCADE guidance reflects an improved outlook from an acceleration in dispense units based on strong trends year-to-date and favorable mix related to our progress on increasing commercial dispense yields. Our total net revenue guidance also reflects higher U.S. SUBOXONE Film net revenue based on year-to-date results, where we saw stable pricing and moderation in share decline. Our outlook for operating expenses remains unchanged at $430 million to $450 million. We now expect adjusted EBITDA for 2026 to be in the range of $620 million to $660 million, a year-over-year increase of 50% at the midpoint. This would represent an improvement of 16 percentage points in our adjusted EBITDA margin to 51% compared to 2025. We ended the quarter with gross cash and investments of $201 million, and we are projecting forward leverage of 0.8x based on the midpoint of our 2026 adjusted EBITDA guidance. In 2026, we expect to generate approximately $340 million in cash flow from operations, enabling us to strategically deploy capital. Our capital deployment priorities include managing our debt, returning value to shareholders through opportunistic share repurchases, and evaluating business development opportunities as we earn our way to Phase III of the Indivior Action Agenda - Breakout. In the first quarter, we managed our debt by completing an upsized $500 million senior convertible notes offering due in 2031. Most of the proceeds were used to repay the remaining $333 million balance on the previous term loan. This both increases our financial flexibility and significantly reduces our interest rate to 0.625% from 9.5%. We also returned capital to our shareholders through opportunistic share repurchases in the first quarter. We repurchased 4 million shares at an average price of $31.45 for a total of $125 million. We have $275 million remaining on the $400 million program through mid-2027. In total, over the past 5 years, we have bought back $525 million of our shares at an average price of $16.74. As we earn our way to Phase III - Breakout, we will evaluate business development opportunities, specifically focused on commercial stage assets that have the potential to enhance and diversify our growth profile. I'll now turn the call back to Joe for concluding remarks.

Thanks, Ryan. The first quarter reflects our significant progress against Phase II of the Indivior Action Agenda - Accelerate. We delivered strong top and bottom line growth driven by SUBLOCADE's performance in the U.S. and leverage from our simplified operating model, enabling us to meaningfully raise our 2026 financial guidance. We also executed on our capital deployment strategy by successfully managing our debt and opportunistically utilizing our share repurchase program. We are on track to accelerate SUBLOCADE throughout 2026 and adjusted EBITDA and cash flow at an even faster rate as we earn our way to Phase III of the Indivior Action - Breakout in the second half of 2026. We will now open the call for questions. Operator?

[Operator Instructions] And now we're going to take our first question, and it comes from the line of David Amsellem, Piper Sandler.

So I have a few. First, on the gross margins, there's some improvement here. And with the manufacturing transition, should we take that to mean that you could see manufacturing at even better gross margins going forward? So help us just understand how to think about gross margins going forward. That's number one. Number two, business development and M&A, I know, Joe, you've talked about a beachhead in another therapeutic category. I was wondering if you could elaborate on that and what therapeutic categories, broadly speaking, are of interest. And then lastly, on the accelerated second dosing, can you talk about how getting patients to receive that accelerated second dose is correlated with this overall persistence and how important that is? And if you had color on that earlier in your prepared remarks, sorry, I missed that. But would love to get your thoughts on how that accelerated second dose plays a role in patient persistence.

Thanks, David. We'll let Ryan kick it off with the gross margins.

Hey, David. Good morning. Thanks for the question. So for the gross margins, I would still guide you to the full mid-80% guide. Q1 did benefit from a couple of things. One, we had the prior year releases; and two, we had positive manufacturing variances built in there as well. And then in regards to the plant, the primary focus on the manufacturing facility is to secure product security. So again, I would guide you to the mid-80s for margins for the year.

Okay. And Pat, on the accelerated second dose?

Yes. Thank you for the question, David. On the accelerated second dose, that's an important differentiator for us because we are the only LAI with that accelerated second dose. The benefit there is, is that you're achieving peak plasma levels early, as early as day 8. And so that's an important component to be able to get the patient doing well in the very early treatment. And so peak plasma levels is particularly important in the era of synthetic opioids. And so if they're doing better early and they're stabilized early, we believe that over time, that could help with persistency. But that's certainly something we'll continue to look at.

And then from a BD perspective, David, as we earn our way to the breakout phase, which we believe we're on track to do in the second half of this year, we're I would say, therapeutically agnostic, although there are certainly areas we don't think we would go into, for example, like oncology, and we're more focused on the fundamentals of what we would acquire. So we are focused on commercial stage only. We're looking for assets that have greater than $200 million peak sales potential. We think that's relevant relative to the size of our revenue base as we seek to enhance and diversify our growth profile. Differentiated assets are important from our perspective, both from a patient value perspective and importantly, from a reimbursement perspective, which we think is critical to commercial success. And then the final thing I would highlight, because I think it's one of the real strong parts of the Indivior story, is that with SUBLOCADE, we have a durable growth driver. And so the third thing that will be important in anything we acquire is that those assets also have runway. From there, post-integration of an acquisition, we then would be looking to identify individual products that could leverage the new commercial infrastructure that we have in place.

Now we're going to take our next question, and it comes from the line of Chase Knickerbocker from Craig-Hallum.

Congrats on another nice quarter here. Maybe just first for Ryan. There's been some continued gross-to-net benefit on a year-over-year basis. Maybe just focusing on SUBLOCADE. Can you just give us a sense for how you -- can you characterize that gross-to-net benefit a little bit more and then give us a sense for how you expect it to kind of roll off through the year?

Yes, Chase, good morning. Thanks for the question. Yes, in Q1, we did book $14 million of a prior year release as we continue to true up our accruals. But as we mentioned earlier, in totality, we still expect the prior year releases to serve as a headwind for the balance of 2026. And the plan is to continue to provide you an update each quarter.

Could you just maybe give us a sense for the cadence of that headwind through the year? And if there's any benefit you expect in Q2 as well? And then just a second from me, guys, maybe just taking a step back for Joe. If you look at INDV-6001 here, again, maybe just taking a step back, with the potential for Brixadi generics before SUBLOCADE LOE, how do you see this market, I guess, developing? And how are you thinking about franchise expansion and life cycle management as you think about your long-acting buprenorphine franchise, and just how you see the market developing, Joe?

Sure. Chase, so at this point, there will be adjustments for the balance of the year. I don't know the phasing at this point, but I will continue to tell you, in the aggregate, the prior year releases will serve as a headwind in 2026.

And Chase, with regards to your question around the evolution of the marketplace, look, we're very confident in SUBLOCADE's differentiated profile. Importantly, when you look at SUBLOCADE, the 300 milligram dose continues to grow. It's now 63% of overall SUBLOCADE utilization. So we're very confident that SUBLOCADE has a durable growth profile, and it's an asset that we're committed to for the long term. As it pertains to further opportunity within this space, we're obviously always looking and are aware of what's out there. There's nothing candidly that we're interested in that we don't have. And to the degree that Alar is successful in the development and manufacturing of INDV-6001 to a level that meets what we believe would make it commercially viable, we retain 100% of the commercial rights to that asset in the U.S. So we certainly wish them well in their pursuit.

Now we're going to take our next question, and the question comes from the line of Dennis Ding from Jefferies.

Congrats on a very good quarter. So if I can ask on Lilly's brenipatide, they sound fairly excited about it and its potential in substance use disorders, and they started Phase II in OUD on a background of buprenorphine, which I'm assuming is SUBOXONE. But I'm curious how you're thinking about the design of that study, the read out in 2028. And importantly, if that impacts durability of SUBLOCADE's growth through the long term, which I'm assuming goes off patent in the 2035 to 2038 time frame.

So Dennis, before I hand it off to Christian to comment, the one thing I want to emphasize is we very strongly believe that SUBLOCADE has a long and durable runway in front of it with 12 Orange Book-listed patents that go from 2031 to 2038. We also are in the process of trying to pull through additional patent applications that have the potential to extend out to 2044 to 2046. And Christian, any comments?

Yes, certainly. So there are several trials that are currently ongoing using GLP-1 for substance use disorder. The one that you mentioned in opioid use disorder, this is actually as an add-on therapy to transmucosal buprenorphine. There are a couple of other trials in alcohol use disorder. I must say that so far, the evidence has been primarily anecdotal. So it's the first time that there will be more formal clinical trials, and we shall see what the outcome is. But please do remember that these trials so far for opioid use disorder have been designed as add-on therapy to buprenorphine.

And if I can ask a follow-up on DTC. So the campaign is, obviously driving increased category growth, which we're seeing in the numbers. But I'm also surprised that SUBLOCADE's share continues to be generally stable. So my question is, do you expect to pick up incremental share this year as DTC continues? And if there's any leading indicators that you can disclose around initial share capture?

Yes. So Dennis, I'll take that one. I appreciate the question. As we've been clear, our focus is on net revenue, new patient starts, and driving long-acting injectable market growth. We're very proud of the fact that share is stable at 76%. Whether it goes up a little bit, down a little bit in terms of the overall performance of SUBLOCADE, both in this year and as we go forward, in our view, is really not material. It's more about just the competitiveness within the space. So we're very confident in our commercial team. We're very confident in the differentiated profile that SUBLOCADE brings to the market as the first and #1 prescribed long-acting injectable.

Now we're going to take our next question, and the question comes from the line of Christian Glennie from Stifel.

Just starting then, I guess, on the outlook for SUBLOCADE and particularly on the dispense growth. So you did 20% in the first quarter, but the guidance for the full year seems to be still around the mid-teens level. So just trying to understand initially around that. Is it just a prudence thing? Or is there some reason why that dispense growth might imply a slowdown through the rest of the year? That's my first question.

Yes. So Christian, thanks for the question. Remember, in the first quarter of 2025, that serves as a really low bar from a comparable perspective. So what we're confident in is on a full-year basis that we're going to be able to achieve mid-teen dispense unit growth, which is double what it is that we achieved in 2025. Importantly, and what I would focus you to, is the 13% increase in revenue, which is driven by the strong dispense unit growth, but also now the favorable outlook that we have in terms of mix. And what I mean by that is the percent that commercial will account for versus what we planned. And realize even incremental movement on a brand of this size, one point improvement of commercial mix relative to what we had planned is worth about $8 million. And that's certainly a key driver of the positive outlook that we have moving forward. And we've put a lot of effort, which is a real tribute to Pat and his team, Susan Neff, who heads up trade and our work with specialty pharmacy in trying to improve the dispense yield, in particular, with the SPs that skew to commercial.

Second would be just any comment around the overall growth in LAI category overall and the share of LAI as a percentage of the overall buprenorphine market?

Yes, thanks for the question. We saw really nice growth, slightly above 20% -- approaching 23% on LAI category. So we feel like our efforts from a direct-to-consumer perspective are fueling that. And again, we continue to maintain that category share dominance at plus 76%.

And Christian, the only thing that I would add, and I think it's another interesting thing that gets to the impact that we believe the consumer campaign is having, in the first quarter, the oral buprenorphine market grew significantly relative to the rate it had consistently been growing. And the reason that's important is the start point of long-acting injectable patients are predominantly people that transition from a transmucosal buprenorphine. So from a big picture, as a company that has a long-term commitment to this space that, first and foremost, is focused on patients getting treatment to improve the outcome and their recovery journey, we're very encouraged by that. And that also is a positive over time, in our view, to long-acting injectable utilization.

Sorry, just on the percentage -- the rough percentage share of LAIs overall as a percentage of orals.

Yes, we're right at about 8.5% from an overall LAI category share perspective. Sorry, I missed on that.

No worries. And then, sorry, finally, just on guidance on OpEx, unchanged there, but at the same time, not progressing the 2 Phase II assets. I think previously you had implied that the guidance assumed those roll on. So just trying to understand on OpEx and whether there's something I'm missing there, why potentially the OpEx wouldn't be a bit lower given you implied a bit of restructuring of R&D and the impact that, that would have.

Yes, so I'll take that one. I appreciate the question. Look, we're focused and have been clear on making every possible investment to maximize the SUBLOCADE opportunity in the U.S. market. The way to think of our guidance in 2026 is as we derive savings from the restructuring in R&D and as we continue to relentlessly focus on making sure we're only investing in things that are essential, if there are opportunities for us to invest in SUBLOCADE that would have impact this year or in 2027, we would make those investments and come in at the high end of the guidance range to the degree that there aren't areas for us to invest those resources, we would let them drop to the bottom line. The other point I want to emphasize is as you think about the exciting phase we're in of the acceleration of SUBLOCADE, we're also leveraging, not growing, our cost structure on a going-forward basis. So when you think about it moving forward, you should expect to see us staying under that $450 million level, which will result in additional margin improvement.

Now we're going to take our next question, and the question comes from the line of Brandon Folkes from H.C. Wainwright.

Congrats on the quarter. Maybe just following up on business development. Can you just talk about the size of the transaction you would consider? Sharing your criteria earlier around minimum peak sales, that sets one end of the range. But just trying to think about how large of a transaction you feel comfortable with. Can you just talk about where you feel comfortable taking leverage up to? And then along the same lines, you talked about a commercial asset, but would you also consider a commercial-ready asset or company which also has a pipeline. Can you just talk about your willingness to bring in or minimize development risk altogether here in business development?

Thanks, Brandon. I'll let Ryan take the first question, and I'll take the second.

Yes, thanks for the question. So when it comes to the amount of leverage that we would feel comfortable with, with our strong balance sheet, we would be okay going up to 3x, but that is assuming that we are going after a commercial stage asset.

And then, Brandon, when you think about our focus from an M&A perspective, we're clearly focused on commercial stage. We want to enhance and diversify the growth profile of the company. We are not anti-pipeline. In fact, we believe the financial strength of the company would enable us -- if we acquire a company that has pipeline that we believe is worth investing in, we would be positioned to do so. But that is not the primary focus as we're assessing opportunities. And then when we ultimately get to Phase III - Breakout and start to try to action around them.

Thank you. Dear speakers, there are no further questions for today. I would now like to hand the conference over to your speaker, Joe Ciaffoni, for any 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.

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