All You Need To Know About The Specialty Drug Maker - INDIVIOR PLC (INDV)

  • Feb 18, 2019 GMT
  • Team Kalkine
All You Need To Know About The Specialty Drug Maker - INDIVIOR PLC (INDV)

Overview 

Indivior PLC (Ticker Symbol: INDV) is a specialty pharmaceutical company, with headquarters in North Chesterfield, Virginia, USA. In 1994, the company incorporated as the Buprenorphine division of Reckitt Benckiser, focusing on manufacturing of an opioid used to treat opioid addiction, acute pain, and chronic pain. In December 2014, the parent company spun made its specialty pharmaceuticals segment into an independent company, Indivior, which was subsequently, in February 2015, listed on the London Stock Exchange. The company has operations in approximately 40 countries and is a constituent of the FTSE 250 Index.

Howard Pien holds the responsibilities of the Chairman of the Board. The current Chief Executive Officer is Shaun Thaxter; he has a global experience of more than 25 years working in specialty pharmaceutical industry. Mark Crossley is Chief Financial Officer of the company, with experience of working in diverse roles. He had served as the Chief Strategy Officer before being appointed as Chief Financial Officer in February 2017.

Products and Geographical Segments

The company’s business operations include developing, manufacturing, and selling prescription drugs as used for the treatment of opioid dependence. The company has complete dominance in addiction treatment with over 20 years of rich experience.

The two core geographical segments are the United States and the Rest of the World. Significant sales come from the United States. Primary products of the company are Subutex and its Naloxone-combined preparation Suboxone, with other products including RBP-6000 in ATRIGEL, RBP-7000 risperidone monthly depot, Arbaclofen placarbil for alcohol use disorder (AUD).

Key Financial Metrics - FY 2018 (data in $ mn)

key financial(Source: Company Fillings)

Financial Highlights (FY 2018)

  • Adjusted net revenue for the financial year 2018 decreased by 8% to $1,005 million, against $1,093 million in FY 2017.
  • The growth in the US market was depressed due to market share loss of SUBOXONE.
  • In FY 2018, gross profit decreased by 11% to $877 million as compared to FY 2017 reported data which was $989 million.
  • During the financial year 2018, operating margin dipped by 400 basis points to 33 per cent as compared to 37 per cent reported in FY 2017.
  • EBITDA decreased by 16 per cent to $348 million in FY 2018, against $416 million in FY 2017.
  • Adjusted net income surged by 1 per cent to $272 million in 2018, from $270 million a year ago.
  • Cash and Cash Equivalents balance improved in FY 2018 by $61 million to $924 million, against $863 million reported in FY 2017.

Key Ratios

 

(Source: Thomson Reuters)

Ratios Commentary

  • The profitability margins as reported by the company in the year 2018, are significantly higher than the industry median.
  • The company’s liquidity position is quite sound as both quick and current ratio metrics has been gradually increasing from the last two years and now surpassed industry median too.

Share Price Performance

(Source: London Stock Exchange)

Share Price Commentary

On 15th February 2019, INDIVIOR share closed at GBp 113.35, up by 5.44 per cent as compared to the previous day. Stock's 52 weeks High and Low is GBp 504.60/GBp 75.48. At the closing price, the stock was trading 77.54 per cent lower than its 52w High and 50.17 per cent higher than its 52w low. On the valuation front, the stock was trading at a trailing twelve months PE multiple of 4.9x. The company stock beta was 1.53, reflecting significantly higher volatility as compared to the benchmark index. Total outstanding market capitalization was around £826.06 million.

Recent Developments

  • On 14th February 2019, the company declared its financial year 2018 results.
  • The company recently lost twenty-five per cent of its value when US court decided not to rehear a case regarding blacking of a rival which makes a generic alternative to one of its drugs, Indivior now plans to take the case to the US Supreme Court.
  • The company entered into a definitive agreement on 4th February 2019, relating to divesting its key rights associated with the Sai Bo Song™ tablet in China to Zhejiang Pukang Biotechnology Co. The total consideration amounted to $122.5 million.

Risks Assessment and Growth Prospects

  • In the financial year 2019, the company expects Sublocade’s net revenue to be in the range of $50 million to $70 million and operating expenses in between $440 million to $460 million.
  • In 2019, the company faces the immediate risk and uncertainties regarding the change in USA market dynamics with the development of SUBOXONE® Film and Generic alternatives.
  • The company faces significant risks from generic manufacturers looking to launch products before the expiry of existing patents.
  • Loss of intellectual property due to rulings of courts and regulators can negatively impact revenues and financial condition.

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