Indivior : Announces Q1 2021 Financial Results

April 29, 2021

Q1 2021 Results Announced; FY 2021 Guidance Reiterated.

Quarter to March 31	2021	2020
	$m	$m
Net Revenue	180	153
Operating Profit/(Loss)	57	(189)
Net Income/(Loss)	80	(163)
EPS/(LPS) (cents per share)	11	(22)
Adjusted Operating Profit*	51	3
Adjusted Net Income/(Loss)*	38	(3)
Adjusted EPS* (cents per share)	5	‐

*Adjusted (Adj.) basis excludes the impact of exceptional items as referenced in Notes 3 and 4.

Comment by Mark Crossley, CEO of Indivior PLC

"We have seen an encouraging start in FY 2021 with growth in net revenue, operating profit and cash from execution against our strategic priorities. Despite the ongoing impacts of COVID‐19, SUBLOCADE® (buprenorphine extended‐release) injection achieved solid net revenue growth both on a sequential and year‐ over‐year basis, and we expanded our Organized Health Systems (OHS) platform to build the foundation for future growth. Looking ahead, we are seeing healthcare restrictions in the US begin to ease from the rapid pace of COVID‐19 vaccinations, which supports our expectation of increased in‐person interactions with healthcare practitioners in the second half of the year. As such, we are reiterating our FY 2021 base case guidance."

Q1 2021 Financial Highlights

• Net revenue (NR) of $180m (+18% vs. Q1 2020) primarily benefited from higher NR from SUBLOCADE, continued growth in the buprenorphine medication‐assisted (BMAT) market and relative market share stability in the US for SUBOXONE® (buprenorphine and naloxone) Film.
• Reported operating profit of $57m (Q1 2020 op. loss: $189m). Excluding exceptional benefits of $6m, adjusted
  operating profit was $51m (adj. Q1 2020: $3m). The increase over the prior period reflects higher NR and lower SG&A expense principally related to the direct‐to‐consumer (DTC) advertising campaign for SUBLOCADE in Q1 2020 and lower legal costs primarily due to resolving the Department of Justice (DOJ) matter.
• Reported net income was $80m which includes an exceptional tax benefit of $36m recognized in relation to development credits for SUBLOCADE. Adjusted net income of $38m (Q1 2020 adj. net loss: $3m), primarily reflecting higher operating profit as described above.
• Cash of $945m at the end of Q1 2021 (+$87m vs. FY 2020). Net cash of $711m (+$88m vs. FY 2020). The higher cash balance primarily reflects the timing of government rebate payables related to SUBOXONE Film and $26m of cash collateral returned by a surety bond holder.

Q1 2021 Operating Highlights

• SUBLOCADE NR of $43m (+48% vs. Q1 2020 and +10% vs. Q4 2020); strong growth in the OHS channel, new US patient enrollments increasing and favorable trade spend accrual updates. Q1 2021 US dispenses approx. 35,700 units (+51% vs. Q1 2020 and +11% vs. Q4 2020).
• PERSERIS® (risperidone) extended‐release injection NR of $3m (unchanged vs. Q1 2020 and ‐25% vs. Q4 2020).
• SUBOXONE® Film share averaged 20% in Q1 2021 (Q1 2020: 22%) and exited Q1 2021 at 20% (Q1 2020: 22%).

Reiterating FY 2021 Guidance

FY 2021 guidance issued by Indivior on February 18, 2021 is unchanged.

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U.S. Opioid Use Disorder (OUD) Market Update

In Q1 2021, growth of the U.S. buprenorphine medication‐assisted treatment (BMAT) market was 6%. The moderation in the growth rate versus 2020 reflects the high base period for comparison in the year‐ago quarter, when the BMAT market grew in the low‐ to mid‐teens as a result of COVID‐19‐related demand and the implementation of new federal and state government actions to facilitate access to medication‐assisted treatment (MAT) for OUD patients.

The Group continues to expect long‐term U.S. market growth to be sustained in the high single‐digit to low double‐digit percentage range due to increased overall public awareness of the opioid epidemic and approved treatments, together with regulatory and legislative actions that have expanded OUD treatment funding and treatment capacity. The number of physicians, nurse practitioners and physician assistants who have received a waiver to administer MAT and those able to treat up to the permitted level of 275 patients continued to grow in Q1 2021. As a result, there is increasing patient access to BMAT. Indivior supports efforts to encourage more eligible healthcare practitioners (HCPs) to provide BMAT, and the Group continues to resource its compliance capabilities for the growing number of BMAT prescribers and patients.

The Group's focus is to continue to expand access to SUBLOCADE amongst OHS and core HCPs, in order to ensure availability of this potentially important treatment option to the estimated 1 million+ patients per month who are prescribed BMAT by HCPs.

Financial Performance in Q1 2021

Total net revenue in Q1 2021 increased 18% to $180m (Q1 2020: $153m) at actual exchange rates and by 14% at constant FX.

U.S. net revenue increased 25% to $131m (Q1 2020: $105m). Growth in the overall U.S. BMAT market was in‐ line with Group expectations discussed above ("U.S. Market Update"). Underlying market growth, together with SUBLOCADE net revenue growth of 38% to $40m (Q1 2020: $29m), relative stability in SUBOXONE Film share (avg. Q1 2021: 20% vs. avg. Q1 2020: 22%) and favorable trade spend accrual updates drove the net revenue increase. PERSERIS net revenue was flat year‐on‐year at $3m (Q1 2020: $3m).

Rest of World net revenue increased 2% at actual exchange rates to $49m (Q1 2020: $48m) and ‐8% at constant FX. ROW SUBLOCADE net revenue contributed $3m in the Q1 2021 period. This benefit along with favourable foreign currency translation was partially offset by continued austerity measures and generic competition in Western European markets.

Gross margin as reported was 82% (Q1 2020: 85%). On an adjusted basis, excluding $7m of exceptional costs related to inventory provisions due to the adverse impact of COVID‐19, Q1 2020 gross margin was 90%. The expected gross margin decline on a reported and adjusted basis reflects unfavourable product mix due to the continued market share resilience of SUBOXONE film, which is less profitable due to the high proportion of revenue now coming from government channels.

SG&A expenses as reported were $82m (Q1 2020: $309m). Q1 2021 SG&A expenses included an exceptional $5m release of DOJ related matters provisions and a benefit of $1m related to the out‐licensing of nasal naloxone patents. Q1 2020 SG&A included exceptional costs of $185m. The exceptional costs comprised $183m related to the Department of Justice (DOJ) matter and $2m for restructuring‐related lease impairments.

On an adjusted basis, Q1 2021 SG&A expenses decreased 29% to $88m (Q1 2020: $124m). The decrease reflects lower marketing expenses, mainly resulting from the Q1 2020 U.S. DTC television advertising campaign for SUBLOCADE, as well as a decline in legal expenses following the resolution with the DOJ in 2020. The year‐ago period benefitted from Executive Committee members forgoing any bonus payment associated with the Group's Annual Incentive Bonus Plan (AIP).

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R&D expenses were $9m (Q1 2020: $10m). Both periods primarily reflect R&D activities as part of the completed strategic alignment to principally support SUBLOCADE Health Economics and Outcomes Research (HEOR) and post‐marketing study commitments for SUBLOCADE and PERSERIS, as well as lower than expected investments for supply‐related projects.

Operating profit as reported was $57m (Q1 2020 op. loss: $189m). Exceptional benefits of $6m are included in the current period. Exceptional costs of $192m were included in the Q1 2020 results.

On an adjusted basis, Q1 2021 operating profit was $51m versus $3m in Q1 2020. The increase primarily reflects higher net revenue along with the decrease in operating expenses (principally SG&A) related to the promotional initiatives for SUBLOCADE (primarily the DTC campaign) in the prior‐year period and lower legal expenses following the DOJ resolution in 2020.

Net finance expense in the quarter was $4m (Q1 2020 net finance expense: $2m). The net expense primarily reflects lower interest income on the Group's cash balance due to lower short‐term interest rates versus the year‐ago period and additional interest expense associated with legal provisions/liabilities.

Tax benefit in the quarter was $27m at a rate of ‐51% (Q1 2020 tax benefit: $28m, 15%). On an adjusted basis, excluding a $36m tax exceptional benefit for the approval of prior year orphan drug credits, Q1 2021 tax expense was $9m at a rate of 19% (Q1 2020 a non‐meaningful rate excluding $32m of tax benefits on exceptional costs).

Net income was $80m (Q1 2020 net loss: $163m), and $38m on an adjusted basis excluding the $42m after‐tax

impact from exceptional items (Q1 2020 adj. net loss: $3m). Q1 2020 adjusted net loss excludes $160m after‐tax impact from exceptional items.

Basic earnings per share was 11 cents and 5 cents on an adjusted basic basis (Q1 2020 basic loss per share of 22 cents and nil on an adjusted basis).

Balance Sheet & Cash Flow

Cash and cash equivalents at the end of Q1 2021 were $945m (FY 2020: $858m). Borrowings, net of issuance

costs, were $234m at the end of Q1 2021 (FY 2020: $235m). As a result, net cash stood at $711m at the end of

Q1 2021 (FY 2020: $623m).

Net working capital (inventory plus trade receivables and other assets, less trade and other payables) was negative $250m at the end of Q1 2021 versus negative $202m at the end of FY 2020. The $48m change in the period was primarily driven by $26m of cash collateral returned by a surety bond holder. Trade and other payables remained relatively unchanged primarily due sustained government rebate payables related to SUBOXONE Film.

Cash generated from operations in Q1 2021 was $95m (Q1 2020 cash used in operations: $141m), a change of $236m primarily due positive Q1 2021 operating profit, timing of government rebate payables related to SUBOXONE Film and $26m of cash collateral returned by a surety bond holder. Net cash inflow from operating activities was $89m in the quarter (Q1 2020 net cash outflow: $146m) reflecting the higher cash from operating activities and tax and interest payments in the quarter.

Q1 2021 cash inflow from investing activities was $1m (Q1 2020: nil) reflecting proceeds received from out‐ licensing of nasal naloxone patents.

Q1 2021 cash outflow from financing activities was $3m (Q1 2020: $2m), reflecting the principal portion of lease payments and the quarterly amortisation on the term loan facility. In Q1 2020 cash used in financing activities was partially offset by proceeds from issuance of shares to satisfy the vesting of options under an employee stock purchase plan.

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R&D / Pipeline Update

Indivior's quarterly R&D and pipeline update may be found at: http://www.indivior.com/research‐and‐development/.

Principal Risk Factors

The Group utilizes a formal process to identify, evaluate and manage significant risks. The Directors have reviewed the principal risks and uncertainties for the remainder of the 2021 financial year and do not consider there to be any changes from those reported within the 2020 Indivior PLC Annual Report. The principal risks and uncertainties affecting the Group's business activities are detailed on pages 38 to 45 of the 2020 Indivior PLC Annual Report. These include the following: business operations; product pipeline, regulatory and safety; commercialization; economic and financial; supply; legal and intellectual property; and compliance. Please click hereto access the report or go to www.indivior.com/annual‐reports/.

Exchange Rates

The average and period end exchange rates used for the translation of currencies into U.S. dollars that have most significant impact on the Group's results were:

	Q1 2021	Q1 2020
GB £ period end	1.3778	1.2460
GB £ average rate	1.3785	1.2820
€ Euro period end	1.1774	1.1143
€ Euro average	1.2069	1.1026

Webcast Details

There will be a webcast today (April 29, 2021) at 1:00 PM BST (8:00 am EDT) hosted by Mark Crossley, CEO. The details are below. All required materials are available on the Group's website at www.indivior.com.

Webcast link:	https://edge.media‐server.com/mmc/p/k5suipmj
Confirmation Code:			7968136
Participants, Local ‐ London, United Kingdom:		[phone]
Participants, Local ‐ New York, United States of America:	[phone]
For Further Information
Investor Enquiries	Jason Thompson	VP Investor Relations,	[phone]
		Indivior PLC	[e-mail]
Media Enquiries	Jonathan Sibun	Tulchan	[phone]
		Communications	[phone]
		US Media Inquiries
		[e-mail]
Corporate Website	www.indivior.com

This announcement does not constitute an offer to sell, or the solicitation of an offer to subscribe for or otherwise acquire or dispose of shares in the Group to any person in any jurisdiction to whom it is unlawful to make such offer or solicitation.

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Forward‐Looking Statements

This announcement contains certain statements that are forward‐looking. By their nature, forward‐looking statements involve risks and uncertainties as they relate to events or circumstances that may or may not occur in the future. Actual results may differ materially from those expressed or implied in such statements because they relate to future events. Forward‐looking statements include, among other things, statements regarding the Indivior Group's financial guidance for 2021 and its medium‐ and long‐term growth outlook, its operational goals, its product development pipeline and statements regarding ongoing litigation and other statements containing the words "subject to", "believe", "anticipate", "plan", "expect", "intend", "estimate", "project", "may", "will", "should", "would", "could", "can", the negatives thereof, variations thereon and similar expressions.

Various factors may cause differences between Indivior's expectations and actual results, including, among others (including those described in the risk factors described in the most recent Indivior PLC Annual Report and in subsequent releases): factors affecting sales of Indivior Group's products and financial position; the outcome of research and development activities; decisions by regulatory authorities regarding the Indivior Group's drug applications or authorizations; the speed with which regulatory authorizations, pricing approvals and product launches may be achieved, if at all; the outcome of post‐approval clinical trials; competitive developments; difficulties or delays in manufacturing and in the supply chain; disruptions in or failure of information technology systems; the impact of existing and future legislation and regulatory provisions on product exclusivity; trends toward managed care and healthcare cost containment; legislation or regulatory action affecting pharmaceutical product pricing, reimbursement or access; challenges in the commercial execution; claims and concerns that may arise regarding the safety or efficacy of the Indivior Group's products and product candidates; risks related to legal proceedings, including compliance with the Group's agreements with the U.S. Department of Justice and with the Office of Inspector General of the Department of Health and Human Services, noncompliance with which could result in potential exclusion from U.S. Federal health care programs; the ongoing investigative and antitrust litigation matters; the opioid multi‐ district litigation; the Indivior Group's ability to protect its patents and other intellectual property; the outcome of patent infringement litigation relating to Indivior Group's products, including the ongoing ANDA lawsuits; changes in governmental laws and regulations; issues related to the outsourcing of certain operational and staff functions to third parties; risks related to the evolving COVID‐19 pandemic and the potential impact of COVID‐19 on the Indivior Group's operations and financial condition, which cannot be predicted with confidence; uncertainties related to general economic, political, business, industry, regulatory and market conditions; and the impact of acquisitions, divestitures, restructurings, internal reorganizations, product recalls and withdrawals and other unusual items.

Consequently, forward‐looking statements speak only as of the date that they are made and should be regarded solely as our current plans, estimates and beliefs. You should not place undue reliance on forward‐looking statements. We cannot guarantee future results, events, levels of activity, performance, or achievements. Except as required by law, we do not undertake and specifically decline any obligation to update, republish or revise forward‐looking statements to reflect future events or circumstances or to reflect the occurrences of unanticipated events.

SUBOXONE® (BUPRENORPHINE AND NALOXONE) SUBLINGUAL FILM (CIII)

Indication

SUBOXONE (buprenorphine and naloxone) Sublingual Film (CIII) is a prescription medicine indicated for treatment of opioid dependence and should be used as part of a complete treatment plan to include counseling and psychosocial support.

Treatment should be initiated under the direction of healthcare providers qualified under the Drug Addiction Treatment Act. Important Safety Information

Do not take SUBOXONE Film if you are allergic to buprenorphine or naloxone as serious negative effects, including anaphylactic shock, have been reported. SUBOXONE Film can be abused in a manner similar to other opioids, legal or illicit.

SUBOXONE Film contains buprenorphine, an opioid that can cause physical dependence with chronic use. Physical dependence is not the same as addiction. Your healthcare provider can tell you more about the difference between physical dependence and drug addiction. Do not stop taking SUBOXONE Film suddenly without talking to your healthcare provider. You could become sick with uncomfortable withdrawal symptoms because your body has become used to this medicine.

SUBOXONE Film can cause serious life‐threatening breathing problems, overdose and death, particularly when taken by the intravenous (IV) route in combination with benzodiazepines or other medications that act on the nervous system (i.e., sedatives, tranquilizers, or alcohol). It is extremely dangerous to take nonprescribed benzodiazepines or other medications that act on the nervous system while taking SUBOXONE Film.

You should not drink alcohol while taking SUBOXONE Film, as this can lead to loss of consciousness or even death. Death has been reported in those who are not opioid dependent.

Your healthcare provider may monitor liver function before and during treatment.

SUBOXONE Film is not recommended in patients with severe hepatic impairment and may not be appropriate for patients with moderate hepatic impairment. However, SUBOXONE Film may be used with caution for maintenance treatment in patients with moderate hepatic impairment who have initiated treatment on a buprenorphine product without naloxone.

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