Good day and thank you for standing by. Welcome to the Indivior Plc Full Year Results 2022 Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today, Jason Thompson. Please go ahead.

Thanks, Sharon and good morning, everyone. Before we begin, I need to remind everyone that on today's call we may make forward-looking statements that are subject to risks and uncertainties. Actual results may differ materially and we will list these factors on Slide 2. We also may refer to non-GAAP measures, the reconciliations for which may be found in the appendix to this presentation posted on our website at indivior.com. I'll now turn the call over to our CEO, Mark Crossley.

Thank you, Jason. Good morning and good afternoon, everyone. Thanks for joining us. I'm Mark Crossley, CEO of Indivior. With me today to discuss our results and progress are Ryan Preblick, our Chief Financial Officer; and Dr. Christian Heidbreder, our Chief Scientific Officer. For today's call, I'll provide an overview of our strategic progress, after which Christian will review our research and development priorities and then Ryan will conclude our formal remarks by detailing our financial performance and the full year 2023 guidance we published in our press release. We'll then move on to Q&A. Turning to Slide 5. Starting with our performance in 2022, I'm pleased to report that Indivior made excellent progress against our strategic priorities. At the heart of everything we do is our vision that millions of people across the globe suffering from substance use disorders and serious mental illness have access to evidence-based medical treatments to change their lives. Driven by this unwavering focus on patients, the team have delivered strong financial results. Our full year 2022 net revenue grew 14% to $901 million, powered by strong double-digit growth in our long-acting injectables, SUBLOCADE and PERSERIS. I'm particularly proud that SUBLOCADE our once-monthly buprenorphine for the treatment of moderate-to-severe opioid use disorder, became Indivior's largest selling medicine in 2022. This speaks to the transformational nature of this important medicine. And as you heard at our Capital Markets Day in December, we believe we're only just getting started in realizing its full potential. Staying with our financial results, we delivered adjusted operating income growth of 13% to $212 million. Given the step-up in growth and R&D investments in the year, this was solid performance and comfortably ahead of our expectations as we enter the year. Touching briefly on our fiscal year 2023 guidance, we expect to…

Thank you, Mark and good morning, good afternoon, everyone. Our contribution to SUBLOCADE's success are focused and we'll continue to focus on breaking barriers to treatment access by creating a new evidence through 5 strategic pillars. First, we are pursuing long-term collaboration studies to understand the long-term outcomes of SUBLOCADE treatment, it's differentiation versus current standard of care and the journey towards recovery. Second, externally sponsored studies are supporting recent areas of interest, including high-risk opioid overdose, criminal justice system, rapid initiation in different treatment settings, comorbidities and the long-term efficacy and safety. Third, we have initiated a broad range of real-world evidence studies with the work streams along 3 themes as disparity, including social determinants of health, recovery and the harm reduction. Fourth, we initiated Phase IV studies, aiming at addressing knowledge gaps in the areas of SUBLOCADE rapid induction, patient subpopulations that may benefit from the 300-milligram maintenance dose, alternate injection sites, long-term recovery outcomes, treatment cessation guidance, impacts of SUBLOCADE treatment in the emergency department environment and comparative effectiveness with other medications for the treatment of opioid use disorder. We also launched a platform for data integration sharing with the scientific and medical community. Fifth, we continue to listen to patients' voice to identify and foster adoption of best addiction medicine practices in a range of clinical settings. On the next slide, you can see a few examples of peer-reviewed publications in the fourth quarter of 2022. This included a characterization of individual subgroups of recovery from opioid use disorder following treatment with SUBLOCADE and how these subgroups related to different recovery trajectories. The second example is a very complex concentration response analysis to confirm the buprenorphine plasma concentrations driving mu-opioid receptor occupancy in the brain that are necessary to maximize buprenorphine efficacy in patients. The third…

Thanks, Christian and good morning and good afternoon to everyone. Our financial performance for Q4 and full year 2022 was solid and our full year underlying results were within expectations. I will quickly touch on some highlights for Q4 and full year 2022 but will spend most of the time on our outlook for 2023 and our assumptions. Performance highlights for the full year include total net revenue growth of 14% to 209 -- excuse me, $901 million, driven by a 67% increase in SUBLOCADE net revenue to $408 million and adjusted operating income growth of 13% to $212 million. U.S. net revenue increased 21% to $731 million and represented 81% of the group's total net revenue in full year 2022. Our improvement in adjusted operating income included approximately $46 million of incremental growth investments reflected in the step-up in adjusted sales and marketing and R&D expenses from full year 2021 to full year 2022. We also exited the year with close to $1 billion in gross cash and investments. Looking at our financial performance in more detail, starting with the top line. Total SUBLOCADE reached net revenue of $118 million in Q4, increasing 57% versus the prior year and 9% versus the prior quarter. U.S. SUBLOCADE net revenue also grew 9% versus the prior quarter, while dispenses grew 11%. The difference between dispenses and net revenue reflects trade spend accrual updates related to a slightly higher-than-expected mix of Medicaid business. As I look forward, the leading indicators for SUBLOCADE in 2023 are off to a good start and align with the full year 2023 guidance I will share in a moment. Moving to PERSERIS. Full year 2022 and Q4 net revenue of 28 and $8 million, respectively, increased by 65% and 60% versus the comparable year ago periods. Growth…

Thank you, Ryan. In summary, the team have delivered strong financial and operating results in fiscal year 2022 with significant progress against each of our strategic priorities. Our 2023 financial guidance indicates strong top line growth and positive operating leverage in 2023 despite expected revenue loss of our heritage film product due to a fourth generic and continued high inflationary pressures. We move towards potential close of the Opiant deal as well as a U.S. listing this spring to enhance Indivior's visibility to investors in its largest market. With that, I'll hand back to Sharon to open up for questions and answers.

Thank you. [Operator Instructions] And your first question comes from the line of Thibault Boutherin from Morgan Stanley. Please go ahead, your line open.

Yes, hello. Thank you for taking my questions. And I'm sorry but I will have to start with the antitrust litigation because, unfortunately, this is what investors have been focusing, I think, this morning. And I think they are seeking reassurance that this is a one-off that can depend behind and look forward on a clean basis. So I guess my first question is, can you confirm that the number of plaintiffs in the MDL has been locked up by now. So there is no chance of seeing additional plaintiffs joining the MDL. I think that's the case but if you can have a confirmation. Second question, you mentioned as well a separate distinct litigation in early stage that you [indiscernible]. The claims are similar to the MDL. And if I understand correctly, during your mediation for the MDL, you also talked with some plaintiffs that may be involved in the cost of case. So if you could elaborate a bit on the overlap between these 2 litigations and maybe the opportunity for a settlement that could address both? And then third question, still related to the litigation. Is the MDL results in the settlement? Kind of explain what is preventing additional groups of plaintiffs to engage in new litigations on similar claims? Thank you.

Thanks for those questions, Thibault. I really appreciate it. And I think in our disclosures, we've provided is detailed a possible disclosure as we can with regards to these legacy litigation issues. I think the recent activity that's occurred in these matters that are before the court. Our overriding goal is providing certainty for stakeholders at the right value and I think we have a strong track record with the management team. I think as you speak to the plaintiffs in the MDL, obviously, there are end payers, private payers and -- end payers, private payer and the state AGs. And there are a couple of carve-outs as you said, as you mentioned, that are outside of that group that are with related activities that would have to be contemplated but are at earlier stages. So, those are not included in the current mediation as of this time.

Thank you. And okay, that's clear. So just to come back on the settlement, if the supplement between now and the trial, then there is no mechanism that prevents additional plaintiffs from potentially trying to set up a notification on similar claims. Just trying to understand basically how we can get reassurance after a settlement that is behind us?

Yes. We don't have any visibility to -- to additional claims other than the ones that are in the disclosure, Thibault and those are the ones that we're actively trying to resolve and bring certainty to shareholders and clearly at the right value for shareholders for that certainty.

Okay, that's very clear. Thank you very much.

Thank you.

Thank you. We will now go to our next question. And your next question comes from the line of Jim Vane-Tempest from Jefferies. Please go ahead, your line is open.

Yes, hi. Thanks for taking my questions. A couple of financial ones, please. If you can just help us think through the phasing of R&D spending for this year, you obviously had sort of about 40% of your budget in Q4. Can we expect the same level of phasing in 2023? And my second question is just around cash flow. I noticed that there was quite a significant payables outflow. Just wondering if there's anything specific there you can help us understand in terms of those dynamics? And then, my third question is the Q4 gross margin was a little lower, I think some people were anticipating. Is there anything on rebates or mix or inflation we should be aware of there? And is that the kind of level we should expect for 2023? Thank you.

Thanks for the questions, James. I'm going to go ahead and hand over to Ryan and I think he can address all 3 of those from the phasing of the R&D to the cash flow and then the Q4 gross margin.

Good morning. So on the R&D phasing, I tend not to provide timing in regards to the spend quarter-by-quarter. But what I would tell you is it's more of the progression of those large studies that we put in place at the back half of 2022, that was just being referenced by Christian. So we have that rolling into next year. We have the continued pipeline work being done on the Phase 2 assets as well as the build-out of the second manufacturing site. So at this point, it's more of just continuous progress from 2022. In regards to the accounts payable unwind, if you recall at the beginning of 2022, unfortunately, some of our accounts payables did not get out in time at the end of 2021, so we had to carry over a large quantum of payables that got released immediately at the beginning of Q1. So that is a nonrecurring event. It was just due to the timing of some payments getting out at the end of 2021. And then, in regards to gross margin, I think that's just the reflection of films still having a substantial amount of the business in Q4. It did have a Medicaid mix true-up in there that doesn't help the margin at this point. And you're also seeing some inflation catch up in Q4 as well. But as you look forward, we did project that as SUBLOCADE continues to grow its presence in this portfolio, that our gross margins as well as our op margins that we do predict to become healthier.

Thank you. And just one follow-up, if I can. And that is, I guess, looking at what you delivered for SUBLOCADE in Q4 comparing to how the script growth looks, I think there was some in the market that thought, perhaps Q4 would have been more towards the upper end of your guidance. So is there any sort of dislocation between what the data is telling us and how the numbers are coming in? And any clarity on that would be helpful as well. Thanks.

Thanks, James. And on SUBLOCADE, listen, I think we're very proud of the execution of the results, $408 million, 67% growth year-over-year. Quarter-to-quarter, you sometimes can see some results that fluctuate based on one-off items. And Ryan, in his comments mentioned that there was a Medicaid mix catch-up due to accelerated growth in the government channel. And if you look at the underlying dispenses in Q4, those were still at 11% growth. So we take that results. And as we look to the 2023 guidance, it's another strong year of net revenue growth, puts us on track towards our peak net revenue goal. So I have all the confidence in the 2023 guidance.

Thank you. [Operator Instructions] We will now go to the next question. And your next question comes from the line of Christian Glennie from Stifel. Please go ahead, your line open.

Hi, good afternoon, guys. I hope you can hear me all right. First question, please. Just to come back on the provision, the $290 million. Release mentioned it could be higher or lower. Our understanding was that $290 million was pretty much the full claim or the entire claim. So just wondering what is the scenario in which you could actually be higher than the $290 million, please?

Thanks, Christian and then we could hear you loud and clear. Listen, we've updated our Q4 fiscal year-end with the current facts of the case based on where we are and that's resulted in a provision of $290 million. That provision is our best estimate. It's in line with IFRS and has been audited by our external auditors. But because it's in early stages, we have to say could be materially different. It could be lower, it could be higher just because we're in the early stages of those mediations. And again, we want to make certain we bring certainty at the right value for shareholders.

Sorry, just to pull off -- it's not as if there's -- the plaintiffs have actually requested more in compensation than the $290 million?

Christian, as you can imagine, this is ongoing mediation. It's before the court. I can't get into the details of the facts and the actual status of these things. This is the best estimate of management. And as I said, in line with IFRS and it's been before the auditors. So I can't -- I just can't get into more detail because it's ongoing before the court.

Thank you. I appreciate that. Sorry it's worth pushing but I understand the situation. Second question then relates to the new legislation signed in by Biden on the removal of the wave -- of the waivers and so forth and the extended ability for places to store product to 45 days from 15 days. Just wondering in terms of your guidance on things like SUBLOCADE for this year, how much of it is reflected on the current uptake in the market? Or could there be upside if you see any real kind of inflection from release of some of the prior restrictions around -- restrictions around prescriptions of buprenorphine? Thank you.

Yes. Thanks, Christian. And listen, in line with our statement that we made in December following the passage of the law, we're really supportive of the removal of Data 2000. I think it's a real step towards normalizing opioid use disorder treatment which is that it is highly stigmatized disease space and it also helps break down barriers to treatment. Now in the short term, we're not expecting an immediate or major impact in the market. If you recall, previously HCPs were allowed to prescribe buprenorphine for up to 30 patients without the waiver and the training and we didn't see a material uptick or change in habits. This said, we are actively assessing the opportunity of the law changes in normalizing the disease space by allowing use of things such as alternate sites of care and for administration of long-acting injectables -- for those of you who cover other disease spaces like schizophrenia, this is a common item where it enables a physician to prescribe the medication but have another DEA waivered physician to prescribe the medication. So for those smaller doctors’ offices and things of that. And so we'll be assessing that opportunity seeing where it's at. But obviously, there's an infrastructure build out on that, that limits the impact in the short term. So more to follow on that evolution.

Thank you. And then finally, if I can. I know the Opiantv deal hasn't gone through yet but any comment on a couple of things as it relates to 003, the likely move of Narcan to OTC, that the advisory committee overnight in favor of that shift, the potential impact of that as it relates to 003? And then just to clarify what you said on 003, assuming approval launch second half of the year or even into 2024, just to clarify what sort of -- what are the things you need to get in place in order to start rolling out that launch, why wouldn't be -- if it was '24, that would be a sort of 6-month preparation. Thank you.

Certainly. Certainly and listen. Applaud the expansion of all treatments to help patients that deal across the continuum of care. I mean, overdose is a horrible thing. And with naloxone and safety profile having that VOTC, we applaud that broad access to treatment. As it relates to OPNT003 which is nalmefene, we just don't see the real impact with regards to the launch on that. For us, this is a differentiated asset that has a quicker onset of action. We believe a quicker onset of action, a longer half-life, longer than fentanyl and a stronger sort of indication that we think is suited towards the synthetic opioids like fentanyl that are kind of ravaging the drug supply. And so we think in those first responders which is where the vast majority of the volume is flowing today, we think it is going to be a great opportunity for them to use that for treatment of those patients. So we just -- we don't see a major impact. As a result -- as it relates to the timing of the launch, listen, we'll get into this more once the acquisition is complete but we do anticipate a second half launch there in the majority of cases.

Okay, thank you. That's helpful.

Thanks, Christian.

Thank you. We'll now go to our next question. And the next question comes from the line of Thibault Boutherin from Morgan Stanley. Please go ahead, your line open.

Yes, thank you. Just a couple of follow-up questions on business. When we think about SUBLOCADE outside of the U.S., you have very understandably focused your investment until now in the U.S. So how should we think about the excess opportunity going forward? And how do you think about the balance of your commercial investments between U.S. and ex U.S. regions? That's my first question. And maybe second question, you mentioned additional contract manufacturing program for SUBLOCADE in the second half. How should we think in terms of the P&L impact for this? And I'll stop there.

So on the first one, Thibault, I think, with regards to the SUBLOCADE ex-U.S. and commercial investments, the go-to-market sort of channels in the rest of world are completely different than in the U.S. In the U.S., we've had to pivot, expand into our ecosystem model in these large organized health systems, whereas the embedded infrastructure and typically in the rest of world allows our current infrastructure to be scaled without tremendous incremental investment. So we don't see a ramp-up of investment as we go into those new countries. So from a contract manufacturing standpoint with regards to do we expect the P&L impact on a going basis, I think Ryan -- Ryan has built that in to both the guidance with regards to 2023 but also the medium-term sort of guidance that he's given on the gross margin where we expect that to continue to improve in the medium term.

Thank you.

You are welcome, Thibault. Thanks for the questions.

Thank you. I will now hand the call back to Mark Crossley.

Thanks, Sharon. And that officially closes our fiscal year 2022 results call. We appreciate the continued interest and support in Indivior and we look forward to seeing everyone in the near future. Thank you.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.