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Indivior still confident in blockbuster potential of next-gen opioid addiction treatment

Sublocade is seen as a long-term replacement for Suboxone, which is losing market share to generic competition, resulting in Indivior’s net revenue falling in 2018

heroin addict
Suboxone’s market share dipped from 57% to 53% last year

Indivior PLC (LON:INDV) is still confident that its next-generation opioid treatment has the potential to generate billions of dollars of sales in the future.

Sublocade is a once-monthly injection that Indivior hopes will take over from Suboxone – the company’s star asset which is facing severe competition from generic rivals.

It was launched last year but has so far failed to live up to the initial hype, with doctors reluctant to prescribe it due to what Indivior called “friction in the new distribution and reimbursement model”.

READ: Indivior falls again as US court ruling clears way for generic launch

The injection had originally been expected to deliver sales of around US$100mln in 2018, but it halved this figure in July before lowering it once again in November.

Indivior confirmed on Thursday that Sublocade brought in just US$12mln last year, although the Slough-based company does expect that to jump to between US$50-70mln this time around.

That leaves it well behind where it would have been expected to be at this stage, but Indivior bosses remain convinced that its status as a future blockbuster and potentially business-saving drug remains intact.

“The group is making good progress [with] the key performance indicators that it believes will drive accelerated net revenue growth for SUBLOCADE in pursuit of its US$1bn-plus peak net revenue goal,” read Thursday’s results statement.

Revenues fall but costs cuts boost bottom line

Eventually, Indivior wants Sublocade, and its recently-approved schizophrenia treatment, Perseris, to replace the falling sales of Suboxone – an under-the-tongue film.

Generic versions of Suboxone are expected to be launched ‘at-risk’ next week, something which chief executive Shaun Thaxter has warned will lead to a “rapid and material loss of market share”.

One generic drug maker, Indian giant Dr Reddy’s, was able to sell its copycat drug for just a matter of hours last summer, but that was long enough to take a sizeable chunk of Suboxone’s would-be sales.

That loss of market share meant Indivior’s net revenue fell 8% to US$1.01bn in 2018, while costs cuts allowed adjusted net income to come in broadly flat at US$272mln.

Guidance on hold pending generic launches

“2018 brought a series of market challenges which resulted in Indivior delivering lower net revenue and only slightly higher adjusted net income compared to the prior year,” said CEO Thaxter.

“As we enter 2019, we assume we face the imminent "at-risk" launch of generic rivals to SUBOXONE Film in the U.S. We have prudently prepared for this event, planning and taking the required actions to help ensure we can deliver on our strategic priorities despite the near-term top-line pressures that generic competition to SUBOXONE Film will bring.”

Indivior was dealt a blow earlier this week after a US appeals court ruling cleared the way for launches of two generic Suboxone competitors as early as Tuesday (19 February).

Investors would have hoped that the firm would be able to quantify the expected damage from those rivals, but given the various “uncertainties”, the company is not providing any guidance at this stage.

“Indivior intends to provide FY 2019 Group net revenue and net income guidance once the total U.S. buprenorphine/naloxone sublingual film market dynamics are clearer, which is anticipated to be at its Q1 2019 results release scheduled for May 2, 2019,” read the statement.

In early afternoon trading, Indivior shares in London were up 1.7% at 110.35p.

 -- Updates share price --

Quick facts: Indivior PLC

Price: 115.3 GBX

LSE:INDV
Market: LSE
Market Cap: £845.88 m
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