Pharmaceutical company Indivior (INDV) was the biggest riser in the FTSE 250 on Friday morning with its shares gaining 10% to 115p as the firm lifted its profit guidance.
In an update ahead of its full-year results for 2020, Indivior said it now expects to deliver adjusted pre-tax income ahead of its previous expectations following higher revenue as its treatment for opioid dependency, Suboxone, continues to resist competition from generic competitors.
Revenue for 2020 is now expected to be in the range of $645 million to $650 million, compared with previous guidance of $595 million to $620 million.
Net revenue from new product Sublocade, an extended-release, injectable form of Suboxone, is expected to be between $128 million to $130 million, up from guidance of $120 million to $125 million, representing preliminary fourth quarter 2020 revenue growth of 12% to 18% versus the third quarter.
The lift on revenue guidance was also helped by the resilience of Suboxone film sales through the end of 2020 as well as benefits from modest stocking activity in the US in the fourth quarter, the company said.
ANALYST VIEW
Numis analyst Paul Cuddon said the strong performance for Sublocade would imply a ‘significant acceleration’ in Indivior’s Organised Health System channel, which the firm is now focusing on.
Factoring in the higher sales guidance and lower R&D costs and operating expenses - the firm has previously announced plans to reduce its operating expense base - Numis now forecasts $106 million in EBITDA for 2020, equating to a 65% upgrade on previous earnings forecasts, and also forecasts $195 million in sales for Sublocade in 2021, ‘which in a more normalised health services environment appears to us reasonable’.
The broker forecasts a growth in sales and a similar level of EBITDA for 2021, noting that scientific publications have raised concerns over the quality and safety of the generic competitors to Suboxone, ‘which we continue to believe will drive resilience of the trusted brand’.
Cuddon added, ‘We also note the opioid crisis in the US has been exacerbated by the pandemic/lockdowns, and continue to see Sublocade as an important treatment to expand care for patients suffering from addiction.’
