Indivior PLC

Indivior PLC (LON: INDV) is a North Chesterfield, USA-headquartered speciality pharmaceutical company which focuses on opioid addiction treatment drugs and has over 20 years of experience. The company was formed in 2014 after Reckitt Benckiser separated its speciality pharmaceuticals segment into an independent company, which focused on developing, manufacturing, and selling prescription drugs used for the treatment of opioid dependence. Primary products of the company are Subutex and its Naloxone-combined preparation Suboxone, and the core geographical segments are the United States and Rest of World.

On 13^th February 2020, the company will release its FY2019 results.

Recent News
On 10^th December 2019, the company announced a collaboration with Virginia Tech for extending the Remission from Chronic Opioid Use-Studying Environmental and Socio-Economic Factors on Recovery (RECOVER) Study.

Financial Highlights (for the third quarter of 2019)

(Trading Update, Company Fillings, LSE)

In Q3 2019, total net revenue decreased by 19% at actual exchange rates(-18% at constant exchange rates) to $199 million (Q3 2018: $245 million) and total net revenue YTD 2019 decreased 15% to $652 million (YTD 2018: $768 million) at actual exchange rates (-14% at constant exchange rates).

YTD 2019 gross margin was 85%(YTD 2018: 88%) and 83% in Q3 2019 (Q3 2018: 86%), while on an adjusted basis (ex.-exceptional), YTD 2019 SG&A expenses declined by 27% to $271 million (Adj. YTD 2018: $371 million). Reflecting lower net revenue, Q3 2019 operating profit as reported and on an adjusted basis was $57 million, 20% lower compared to the prior year and YTD 2019 operating profit as reported was $220 million, 19% lower compared to the prior year. Q3 2019 net income stood at $48 million. YTD 2019 net income was $189 million (YTD 2018: $251 million).

Share Price Performance

Daily Chart as at January-15-20, before the market closed (Source: Thomson Reuters)

On 15th January 2020, Indivior PLC shares were trading at GBX 34.71 at the time of writing before the market close (at 1:01 PM GMT), down by 2.39% against the previous day closing price. Stock's 52 weeks High and Low are GBX 128.75/GBX 20.98. The company's stock beta stood at 0.70, reflecting the lower volatility as compared to the benchmark index.

The shares of the company have delivered a negative return of around 19.48 per cent in the last six months. On a year to date basis, the company’s stock has given investors approximately 11 per cent of a negative return.

Conclusion
The company assume that this Indivior-Virginia Tech study, which will vigorously involve patients in their true-world environment, will contribute to  improved knowledge of how patients are competent to follow the life changes they aspire to attain.
Due to the poor performance from Suboxone Film, as it lost market share to generic competitors, the company reported a sharp decline in revenue and profit on a reported basis in the latest quarter. In April, the US Department of Justice indicted the company on a range of charges for fraudulent marketing of its treatment for people addicted to opioids, and while the company contested the charges and hailed its strong defences, the company is expected to face downside pressure until updates are provided in the near future.

Also, the group reported that it is witnessing challenging trading conditions. From the technical point of view, the stock is trading well below its crucial long-term support level of the 200-day simple moving average, which would be acting as a key resistance level for the stock.

Based on the headwinds faced by the group, we have given a "WATCH" recommendation at the closing price of GBX 35.56 (as on 14 January 2020), while we look for any upcoming catalysts in the near term.

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