Indivior hikes guidance as it holds off generic attack in solid first half
Although half-year sales and earnings declined at Indivior, the speciality pharmaceuticals business demerged from Reckitt Benckiser, they were generally in line with the market forecasts and were followed by improved guidance for the full year.
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A 10% fall in net sales to $517m came from lower market share versus the prior year and higher rebates from gaining access to the US formulary of approved medicines.
Higher operating costs as a standalone public company were the main reason for the 26% decline in operating profits to $115m, with net income down 39% to $66m and earnings per share also down 39% to $0.09.
Strong cashflow generation led to a half-year net debt position of $220m, down from $428m at the end of December, with the board declaring an interim dividend of $0.032 per share.
Indivior's main product, heroin addiction drug Suboxone, held up impressively in the face of competition from generic drugs, with its market share of 59% marginally ahead of the end of the last year.
Volumes grew at double-digit rates, helped by the US Affordable Care Act has driven growth, as well as the treatment market having grown stateside as many new doctors become certified.
Guidance for the full year was raised to $185-$210m of net income at constant exchange rates, up from a range of $130-$155m previously, on revenue guidance lifted to $935m-$965m from $850m-$880m.
"Our performance this year to date has exceeded our plan, which anticipated a more challenging market environment beginning in the second quarter" said chief executive Shaun Thaxter.
"US generic tablet pricing has not yet disrupted our market share whilst branded competitors had very limited impact although, as in the second half of last year, we continued to offer tactical rebates in connection with formulary access for Suboxone Film."
Pipeline developments of further treatments for addiction were on track in line with the company’s expectations. It also put out a separate statement to reveal that its nasal naloxone (opioid overdose rescue medication) was submitted to FDA for approval in May, and was recently accepted and granted a priority review.
Analysts at Jeffries said the strong performance was ahead of its expectations.
Citi said the numbers were in line, but added that Suboxone's continued strong performance in the US "underlines the company’s ability to defend its brand against generic and branded competitors".
"The key drivers of valuation, in our view, are litigation on Suboxone film starting in November 2015 and clinical results on buprenorphine line extensions."