Indivior Pharmaceuticals Inc Aktie

Good day, and welcome to the conference call and webcast to discuss the merger of Supernus Pharmaceuticals and Indivior Pharmaceuticals. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker, Peter Vozzo, Investor Relations representative for Supernus Pharmaceuticals. Please go ahead.

Good morning, everyone, and thank you for joining us to discuss the proposed merger of Supernus Pharmaceuticals and Indivior Pharmaceuticals. A press release announcing the proposed merger was issued earlier this morning. Additionally, this morning, both companies separately reported financial results for the 3- and 6-month periods ending June 30, 2026. As a result of the transaction announcement, Supernus and Indivior are hosting this joint conference call in lieu of their previously scheduled second quarter 2026 earnings calls. Note that today's conference call will focus on the transaction.

Before we begin, I'd like to remind everyone that today's discussion regarding Supernus and Indivior includes forward-looking statements, including expectations regarding the proposed transaction. These statements are subject to risks and uncertainties, and we encourage you to review the related SEC filings for more detail. For the benefit of those of you who may be listening to the replay, this call is being held and recorded on August 3, 2026. Since then, the company may have made additional announcements related to the topics discussed.

Now let's turn to Slide 4. I'm joined on the call today by Jack Khattar, President and Chief Executive Officer of Supernus; Joe Ciaffoni, Chief Executive Officer of Indivior; and Tim Dec, Chief Financial Officer of Supernus. Ryan Preblick, Chief Financial Officer of Indivior, is also available for Q&A.

I will now turn the call over to Jack Khattar, President and Chief Executive Officer of Supernus.

Thank you, Peter. Good morning, everyone, and thanks for taking the time to join us on today's call. Let's start with the big picture on Slide 5. This transaction creates a CNS leader through the combination of 2 highly complementary businesses. The combined commercial portfolios will total 11 medicines with key growth products anticipated to grow well into the 2030s.

The merger provides for 4 key commercial therapeutic areas in addiction, ADHD, depression and Parkinson's disease. It also accelerates profitability and cash flow generation with expected annual cost synergies of $125 million, which we expect to realize within the first 12 months following the merger. Our respective teams have spent a great deal of time together identifying and validating these synergies. These synergies are primarily general and administrative redundancies and operational efficiencies that should materialize after the 2 companies come together.

The merger also gives us a strong balance sheet, which enhances our flexibility to pursue future business development and other growth opportunities. Put simply, this combination creates a CNS leader with a diversified portfolio of commercial products, a differentiated and innovative CNS pipeline and significant financial resources to accelerate growth opportunities.

I would now like to turn it over to Joe Ciaffoni, who will provide his perspective on the transaction. But before I do that, I'll take a moment to recognize the dedicated employees of both Supernus and Indivior whose commitment and focus have made today's milestone possible. Joe?

Thanks, Jack, and good morning, everyone. I'm excited to be here with the Supernus team to announce the creation of a new leading diversified CNS biopharmaceutical company with significant scale. Bringing our 2 organizations together is intended to deliver greater value to the patients, health care communities and shareholders we serve. We are excited by the potential of combining our 2 complementary organizations. And importantly, we have a shared vision of improving the lives of people living with CNS and behavioral health diseases.

For Indivior shareholders, our execution against the Indivior Action Agenda has dramatically strengthened the company by accelerating top line growth through strong commercial execution and sustained investment in SUBLOCADE and accelerated the bottom line at an even faster rate by focusing and simplifying the organization. We are pleased that Indivior shareholders will have the opportunity to participate in the upside we see from this combination under Jack's leadership.

The combined company creates a leading CNS-focused biopharmaceutical company that generates over $2 billion in net revenue, comprised of meaningfully differentiated and durable commercial growth drivers, along with an innovative pipeline. We expect the combined company to realize significant cost synergy, which will create meaningful value for shareholders.

As a merger of equals, we are able to preserve balance sheet strength that strongly positions the new company to execute on business development opportunities at a level that neither company could contemplate today on their own. I am optimistic about the future of Supernus, and I am confident that this combination will mark a new phase of growth and value creation. Upon closing of the transaction, all 3 phases of the Indivior Action Agenda will have been successfully completed.

In closing, I want to thank the Indivior team for their contributions to our progress and most importantly, for their commitment to making a positive difference in the lives of people living with opioid use disorder in the communities we serve. Supernus' strength gives us an even greater ability to make a positive difference moving forward.

I'll now turn the call back over to Jack.

Thanks, Joe. So let me provide some further detail. Let's turn to Slide 6. We have structured this merger as an all-stock, tax-free merger of equals, which we believe capitalizes on the strengths of both companies and presents the best value creation opportunities for both sets of shareholders.

Under the terms of the agreement, Supernus shareholders would receive 1.5401 shares of Indivior common stock for each share of Supernus they own. In addition, prior to closing, Indivior will declare a dividend of $1 billion in the aggregate to pre-closing Indivior stockholders. Taking the cash distribution and exchange ratio together, we expect Indivior shareholders to own approximately 56.5% of the combined company at closing, with Supernus shareholders owning the remaining approximately 43.5% on a fully diluted basis.

Our combined Board will include 4 directors from Supernus, including myself, and 4 directors from Indivior, including Tony Kingsley, who will serve as Non-Executive Chairman. Following the close, I will serve as Chief Executive Officer of the combined company with the support of an expanded current Supernus management team.

The combined company will keep the Supernus name and will be headquartered in Rockville, Maryland. We expect the transaction to close in the fourth quarter of 2026, subject to the approval of both companies' shareholders and certain regulatory approvals and customary closing conditions.

Turning now to Slide 7. Here, we lay out what that combined portfolio will look like. As of June 30, 2026, on a trailing 12-month basis, the combined company had approximately $2.2 billion of pro forma net revenue across 4 key therapeutic areas. Indivior brings the leading treatment for opioid use disorder, SUBLOCADE, buprenorphine extended-release injection and Suboxone sublingual film also for opioid use disorder.

By revenue contribution, SUBLOCADE will be the largest single contributor at approximately 44% of pro forma combined net revenue. Rounding out the portfolio are Supernus neurology and psychiatry products anchored by its 4 growth products, Qelbree for ADHD, Zurzuvae for postpartum depression and GOCOVRI on ONAPGO for Parkinson's disease.

Slide 8 speaks to why now. Both organizations are combining from a position of strength and demonstrated progress. Supernus' strategic focus has been expanding its portfolio through growth of its current commercial products, business development and advancement of its mid- to late-stage CNS pipeline of novel assets, and as such, has developed a successful track record of acquiring and integrating businesses.

Against that focus, Supernus has strengthened its presence in neuropsychiatry through the acquisition of Sage Therapeutics in 2025, secured FDA approval and launched ONAPGO for Parkinson's disease and is generating significant free cash flow. Indivior's strategic focus has been implementing its 3-phase action agenda to grow SUBLOCADE, simplify the business and strengthen its financial position. It has become a leader in developing and commercializing treatments to help people achieve long-term recovery from opioid use disorder.

Indivior has accelerated SUBLOCADE growth through improved commercial execution and its direct-to-consumer campaign, simplified the business to reduce operating expenses and generated significant operating leverage. Together, we believe the combined organization is well prepared to drive the next phase of value creation.

Before I hand it to Tim, let me touch on our pipeline on Slide 9. We remain very excited about the innovation and differentiation of our product candidates in development and the opportunity to deliver sustained innovation and growth into the future. The combined company will continue to invest in R&D, completing the development of Supernus' current product candidates, replenishing the pipeline with innovating product candidates from our discovery programs and external collaborations.

With that, let me turn it over to Tim to walk through more of the financial details.

Thank you, Jack, and good morning, everyone. Slide 10 lays out our pro forma key financial metrics for the combined company. For Supernus on a trailing 12-month basis as of June 30, 2026, total net revenue was $830 million and adjusted EBITDA was $150 million, which is an adjusted EBITDA margin of approximately 18%. As of June 30, 2026, Supernus had cash of approximately $372 million and no debt. For Indivior, the corresponding figures for net revenue, adjusted EBITDA and adjusted EBITDA margin were $1.3 billion, $613 million and 46%. As of June 30, 2026, net debt was $251 million and net leverage was approximately 0.4x.

On a combined basis for the 12 months ended June 30, 2026, pro forma net revenue was approximately $2.2 billion, with pro forma adjusted EBITDA of $888 million and a margin of approximately 41%, net debt of $878 million and a net leverage ratio of approximately 1x.

Note, the pro forma adjusted EBITDA figures include the impact of expected cost synergies of $125 million. As we mentioned earlier this morning, Supernus and Indivior reported their respective financial results for the 3- and 6-month periods ending June 30, 2026.

With that, let me hand the call back to Jack.

Thank you, Tim. Let me bring this all together on Slide 11 because I think it's the clearest summary of why we're doing this. This transaction enhances and diversifies our growth profile. It gives us a differentiated portfolio with key growth products expected to grow well into the 2030s. It also establishes us in 4 key commercial therapeutic areas in addiction, ADHD, depression and Parkinson's disease. And it also provides increased scale and significant cost synergies. It gives us meaningfully greater flexibility and capacity to pursue growth initiatives, both organic and through business development opportunities that neither Indivior nor Supernus could contemplate on their own today.

Turning now to Slide 12. Taken together, we see this as a value-creating transaction for shareholders of both companies to accelerate profitability and cash flow generation and provide the combined company greater financial flexibility and capacity to pursue growth opportunities. We see that flexibility supporting 3 key priorities: First, driving growth in our combined commercial portfolio, including continued investment behind the combined company's growth products, SUBLOCADE, Qelbree, Zurzuvae, GOCOVRI and ONAPGO; second, advancing our novel and innovative pipeline of product candidates; and third, pursuing future business development and other growth opportunities.

With that, I will now turn it over for a question-and-answer period.

[Operator Instructions] And our first question will come from the line of Andrew Tsai with Jefferies.

Congratulations on the merger. So for the -- it looks like the transaction you said helps you guys do BD deals in the future that neither company could contemplate by yourself. So can you talk about what kind of firepower we're talking about and what kind of indication areas that companies jointly might be interested in now?

And then secondly, what do you foresee the peak sales of SUBLOCADE to be? And why should it fundamentally outperform competitors in the space? And then maybe just on top of that, the consensus EBITDA estimates on the Indivior side, it seems like a material step-up in 2027. So how comfortable are you guys with that directionally speaking?

Andrew, thanks for the questions. I'll start with the first one and then Joe can step in on the SUBLOCADE questions. Regarding business development, our strategy will continue to be very focused and disciplined as we've always done over the years. Clearly, CNS is our mainstay, and that's what we continue to focus on from a therapeutic area. We've been always open to considering other areas. Of course, women's health is another vertical that we have, and these are the 2 areas we'll continue to focus on in general.

As far as the capacity, as Tim walked you through the pro forma, and this is more on the pro forma basis, you'll see that the adjusted EBITDA is very, very healthy. And in general, our philosophy, we don't try to overleverage from a business perspective and taking on a lot of debt. So we're very comfortable typically with the 2.5x, maybe 3x adjusted EBITDA from a multiple perspective. And as I always say, I mean, it always depends on the quality of the assets that you're bringing to the table and the cash flows that are coming with that acquisition. A little bit more sustainability of cash flows, healthier, higher quality of cash flows, maybe you can go on the higher upper end of the multiple clearly. But that's really the guideline that we will continue to pursue as we move forward after the closing.

And Andrew, with regards to SUBLOCADE, I appreciate the question. I would emphasize SUBLOCADE is the first. It's the #1 prescribed and it's a meaningfully differentiated long-acting injectable. Importantly, I believe we're just beginning to scratch the surface of SUBLOCADE's potential. Now as a matter of policy at Indivior, we give no peak sales guidance. But what I would emphasize is we believe the runway for SUBLOCADE is durable. We believe the product will continue to grow.

If you look at this quarter, every fundamental metric in support of SUBLOCADE is trending in a strong direction. And I would close with in the quarter, we had record new patient starts. We've seen stable market share at 76%, which has now been about 6 or 7 quarters where we see share stabilizing there. And the most important thing that we're focused on because there's such opportunity is driving long-acting injectable utilization. And so there's a long runway in front of it.

And our next question will come from the line of Glen Santangelo with Barclays.

Jack, I just had a couple of quick ones here. I was curious, could you guys give us the pro forma total shares outstanding and maybe pro forma debt and cash for the combined company? I think that would be helpful as we start to think about our models.

And then, secondly, while the expense synergies obviously seem like they make sense given the combination, you talked a fair amount about the enhanced growth profile of the company. And I was curious, since you're not detailing any sort of revenue synergies, I was kind of curious, could you talk about why you think this will enhance the growth profile? I mean, can you leverage the 2 commercial sales forces that you have in place? And any enhancements you think the combination will create on the R&D side? Any sort of comments there would be helpful.

Yes, sure. Let me start first with the second part of the question, and then Tim can jump in on the other side. As far as the expenses, synergies and so forth. Now if you look historically, we've made several acquisitions. And obviously, we've been able to integrate them very well. And this is not going to be any difference. So this merger will certainly take advantage of certain redundancies that the 2 organizations naturally bring together. There are natural redundancies that will result in the $125 million cost synergies that we talked about.

Now clearly, there is more as after we close and we look into the operation, we will, of course, focus on those because we are always driving for efficiency in the operations across all the groups. As far as revenue and growth profile, so what do we mean by enhancing the growth profile? Basically, what you have with the combination, you have now 5 or you will have 5 growth products across different therapeutic areas. All growth products have been supported very well by the separate companies, of course. But when you have much deeper and larger financial resources, you can continue to reexamine the portfolio, the growth potential of these products and try to maximize the potential of these products.

So these will be the opportunities that we will look for to be able to enhance the growth profile in general. But then enhancing the growth profile of the total company could also mean -- that means we'll bring other products from the outside. And given the expanded capacity that I mentioned in my previous remarks, the flexibility that we would have from a financial perspective, that will give us tremendous firepower that otherwise we don't have. And that would allow us to bring even more products into the portfolio and enhance the growth of the total company in general. And that is really what is so unique about this combination.

It's that firepower and the powerful advantages that it brings to the table, which, again, you'll hear us say that many times that otherwise, each of us separately won't be able to do. And it's really giving our shareholders combined a great opportunity to benefit from a profile that probably doesn't exist today in this space. If you look at the CNS space, I'll guarantee you there are not too many companies with a profile like the one we just gave you from a pro forma perspective, and that is a huge opportunity for people to participate with the upside of such a combined company.

Yes. And Glen, you had asked about the number of shares outstanding post deal. With the exchange ratio for the Supernus shares at 1.54, the aggregate number of shares will be about 215 million.

And can we get the total cash and debt numbers pro forma?

So on the financial slide, our pro forma EBITDA is roughly $888 million. We're not going to provide any guidance going forward other than the pro forma number. And our net debt number is $878 million.

One moment for our next question. And that will come from the line of David Amsellem with Piper Sandler.

So a couple for me. Jack, I wanted to come back to your comments on more business development flexibility. So you have a history of doing primarily commercial stage transactions. And just given where the organization will be, the combined organization, I wanted to get a sense from you regarding your appetite for late-stage assets, earlier development stage assets and further rounding out the pipeline? And how aggressive will you be given that you have additional firepower? So that's number one.

And then number two, maybe more of a question for Joe is how you're thinking about the exclusivity runway for SUBLOCADE. So this is going to be the combined organization biggest selling product or should be. So the question is, given its profile, can you talk to barriers for potential generics in addition to just the IP? In other words, complexities, just given that it's an LAI product, I think that would be helpful in terms of teasing out what your assumptions are for the runway for that product.

Yes. David, I'll take the first question and Joe can jump in on the second one. As far as our priorities from a BD perspective, you're absolutely right. We've been prioritizing, of course, commercial stage assets to continue to diversify our revenue base. And clearly, this merger will do that, and we'll do that in a great amazing way because it really gives us not just diversification, but also gives us the scale. And the scale is going to be the factor that will allow us together with the financial resources on the R&D side to continue to invest in our current pipeline with the 2 assets that are mid- to late-stage accelerate some of them if we can.

If we can, obviously, we will look into all that, but also continue to add to the pipeline. And that's what I tried to say when I said replenish our pipeline assets, add to the pipeline. Now adding the priority will be and will continue to be mid- to late stage. We do have a fairly significant discovery efforts at Supernus, which we used to have before the Sage acquisition, and then we augmented our capabilities with the platforms that came from Sage. And at the right moment, we will be disclosing at some point the fruits of those programs and the kind of molecules that we're working on and so forth. So most likely, again, we will be -- continue to focus on the mid- to late-stage assets from a pipeline perspective.

And David, as it pertains to SUBLOCADE, and I appreciate the question, we believe SUBLOCADE has a long durable runway in front of it and a very strong growth opportunity. From a manufacturing perspective, the only comment I'll make is a very complicated product to make as a sterile injectable -- sterile long-acting injectable in an aseptic manufacturing process.

To this point, there have been no Paragraph IVs. And I think in part, that's due to the complexity associated with manufacturing SUBLOCADE. We have 12 Orange Book-listed patents that go from 2031 out to 2038. And we also have applied for and are pursuing additional patents anchored most commonly to the new label that we received in February of 2025 that if granted, would take IP out to 2042 to 2044. So we're very confident in both the growth profile of SUBLOCADE and the durability of the runway.

One moment for our next question, and that will come from the line of Dennis Ding with Jefferies.

I have 2. So number one, talk about the $125 million in annual synergies and where exactly that's coming from? And from my experience from covering Indivior, that tells me the number is very conservative. So I'm wondering if we should expect Indivior's OUS business to be further site down as another source of upside on EBITDA. So that's question number one. And question number two is just I'm curious around your views around some of the competitive threats over the next few years, whether it's GLP-1s in OUD or perhaps even orexins into ADHD. And just any kind of comments on how to frame some of those readouts and the potential impact to the underlying business would be helpful.

Yes. I'll take first the question on synergies. As I mentioned earlier, naturally, when you have 2 organizations coming together, there will be natural redundancies across -- we mentioned the G&A space clearly. And these are about synergies that come out of the combination. Clearly, Joe and his team have done a remarkable job for the last 12 months or more doing extremely as far as simplifying the organization, as Joe mentioned, making the operation as efficient as possible. So the synergies we are talking about is in the area of where we combine the 2 organizations and create additional opportunities that don't exist when the 2 companies are separate. So hopefully, that's a little bit more helpful as to the kind of synergies.

I think the only thing I'll add is that we mentioned in our prepared remarks that we've been very active in acquiring and integrating companies. And when we set a number, we guarantee we'll get to that number, and we've done that in the past.

On competitive threats, I'll start, Dennis, as it pertains to SUBLOCADE. When we look at the horizon for SUBLOCADE, we see -- we don't see threats, we see opportunity. And one, you have an amazing unmet need. There's a small percentage of people with OUD who are being treated, and there's only 10% LAI penetration. And I would say it's actually unfortunate that we don't see other medications coming to the market because we think there are certainly room for innovation.

Interestingly, you raised GLP-1s. As you know, those studies are early on. They're certainly not a threat as there -- the studies are being done as an adjunctive treatment to buprenorphine. So we continue to believe buprenorphine will be a foundational treatment for people who are living with OUD for the long haul.

And I would add, I mean, regarding your portion on the orexin in ADHD, clearly, again, not too dissimilar from the GLP-1s on the OUD space. It's still early to tell. Until we see some real human data to show us that they do work or they don't work, we'll find out. But in general, again, looking at the ADHD category, and we've been at now for close to 30 years, actually, it's remarkable that it's been very limited to only very few molecules. So there is a huge room here for innovation, new molecules, new entrants into the marketplace. So we're very used to competition. We've done it so many times before.

Qelbree has done amazingly well in the past 5 years. Actually, it's been the fastest-growing brand in the category and one of the most successful launches, although we launched in the middle of COVID actually. So we welcome innovation. We welcome competition. It just makes us better and sharper and be able to even perform better. So that is yet to be seen and whether that's a nonstimulant, it's a stimulant, there's a lot of questions, of course, about bringing a whole new class into the category.

One moment for our next question, and that will come from the line of Kristen Kluska with Cantor Fitzgerald.

Congratulations on this announced merger. So from the SUBLOCADE side of things, I know unfortunately that this is a very large market. But I'm curious how the companies are thinking about synergies to have more patients seek these treatment options. I understand that there's still a lot of room on the table just in terms of patients that are seeking therapies. And then I'm also curious, while recognizing there are other -- that these are different indications, how the psychiatry and addiction use disorder verticals can kind of go hand-in-hand with the sales force, just given there are some similarities in doctors they see while, again, recognizing different indications here.

So Kristen, this is Joe. I'll start. With regards to SUBLOCADE, when you look at the OUD market, there are about 8 million, 9 million people who misuse opioids in the United States. There are 4 million or 5 million who are diagnosed with OUD, and there are 2 million who are being treated with buprenorphine. So I think the real key for SUBLOCADE and growth gets to, one, as we continue to get better with commercial execution, which we still have significant runway to improve, we have seen from Phase I of the Indivior action agenda generate momentum, SUBLOCADE do better.

The second thing and the biggest lever that we have pulled from an investment perspective is all around educating, driving awareness and encouraging people living with OUD to seek treatment. And if I were to say one thing that is really driving the results that you saw today in the quarter and the optimism for the future is there really hasn't been that level of education and awareness brought to the OUD community. And so that's a key lever that is one that I think will continue to drive patients to seek treatment for their OUD.

I would just add, I mean, I think part of your question also was as far as overlap from a physician audience or what have you. There is not really too much of an overlap between the 2 spaces. Yes, we are, of course, in psychiatry with the ADHD sales force. But SUBLOCADE will require a different attention, different audience clearly between the treatment clinics, the different health systems that deal and help these patients at a state level, federal level and so forth. So there are separate markets. There might be very, very slight overlap from psychiatry in general, but not really anything that we can see that could make a huge difference here.

So Supernus, moving forward at closing and forward, we will continue to have -- and we see ourselves having 4 different sales forces. Clearly, we have the ADHD sales force. We'll have the Parkinson's sales force, the OB/GYN sales force and the current sales force that continues and will continue to support SUBLOCADE.

One moment for our next question, that will come from the line of Chase Knickerbocker with Craig-Hallum.

Congrats on the announcement here. Maybe just another one on synergies. So you kind of mentioned $125 million was largely coming from G&A. Can you maybe just kind of discuss what additional synergies you could potentially harvest either within sales and marketing or potentially other kind of manufacturing consolidation rationalization? Just any sort of other kind of avenues for upside on the cost synergies is kind of when we're getting that?

Yes, sure. I mean I can't be too specific at this point. Again, I would emphasize the 2 areas that we mentioned, the redundancies that you typically expect in a merger like this, specifically on the G&A side. But I will really refer to what Tim mentioned. I mean, historically, if you look back at our track record when we look at acquisitions and so forth, the most important thing, first of all, is to make sure the business continues to be healthy. We continue to serve our patients. We continue to make sure the business continuity and the strength of the business.

But certainly, as we go through that and as time goes on, more or less, I can tell you, you can be assured that if there is an area that we can get synergies from, we will definitely do it because that's the mode of our operation of our philosophy in running companies is to run them efficiently and get out of them as much synergies as possible and continue to build for the future so that we can use our dollars, our capital allocation in the right places in the investment behind the brands and into further business development. So that I can assure you, but I can be a little bit more specific right now. As time goes on, potentially, we can be a little bit specific later.

One moment for our next question, and that will come from the line of Christian Glennie with Stifel.

I suppose the first one would be just circle back maybe on Joe from a sort of Indivior's perspective. Obviously, it was [ long ] was lining up sort of the Phase III and you would have considered a lot of things in that presumably and things about acquiring products, acquiring other businesses as, I guess, a stand-alone Indivior versus where you've ended up now in this merger situation. So just a bit more if I can push you on some of the things that you looked at, maybe why those were less attractive seemingly than this transaction.

And then secondly was just on SUBLOCADE, you talked about greater potential for further investment through the combination of the 2 companies. You've obviously spent quite a bit and got some impact from a DTC campaign. But just wondering if your sales force is sort of fully rightsized for that opportunity. We know that a competitor in your space around [indiscernible] talks about significant enhancements to their sales force recently, seemingly to claim they're on sort of a par with where you guys are at. But just wondering if that's something that the pure sort of sales force size is rightsized for the scale of the opportunity in SUBLOCADE.

Yes. So Christian, I appreciate the questions. First off, obviously, as we were moving into the breakout phase, we had a full scan of the landscape, thought through many different things. I can assure you from our perspective, this is the most compelling and best opportunity. And what's special about this is the fact that we had 2 companies that share values in terms of patient centricity that are complementary and that come into this from a position of strength. With such a focus on patient and shareholder value, we were able to accomplish what I would say is seldom done, which is a merger of equals, which preserves balance sheet strength.

Now if you look at the breakout phase for Indivior specifically, we had outlined 4 or 5 priorities and versus each one of those, this deal more than addresses the priority. So the first was we wanted to enhance and diversify our growth profile through the addition of commercial assets. The going-forward company will have 11 marketed products. It will have 5 growth drivers, 4 of which are durable into the 2030s. We said we wanted to introduce because there was nothing that we were interested in acquiring an OUD, the company to a new therapeutic area. The combined company will be in 4 therapeutic areas.

We said we always look for deals that would have meaningful cost synergies to create value for shareholders. This combination has over $125 million at least in cost synergies. And of course, as I already commented, the MOE preserves balance sheet strength. And then the final thing that we believe is that there is also the potential for multiple expansion that will take a value-creating deal to potentially an even higher level of value creation. So we couldn't be more excited about this opportunity, and we're certainly very optimistic about both day 1 performance of the combined company and the amazingly bright future that can be achieved at Supernus.

And I would add, I mean, likewise, on the Supernus side, we have been very active on the M&A space. And as you would expect, we have also looked at several numerous opportunities over the years. And we've been very impressed with what Indivior has been able to accomplish with Joe and his team, really get the company to where it is today and our team, of course, at Supernus to get Supernus as to what it is today that made this possible. I mean that is truly -- and that's back to the one of the slides we said, why now? Why doing it now? Because we view this as being the ideal time for 2 companies that have done so much, progressed so much or in a position of strength, getting together and creating a very powerful combination that otherwise would not exist. So we're extremely obviously excited about this combination.

And then, Christian, to your SUBLOCADE question, and I'm going to talk a bit about both organizations from this perspective. What I'm really excited about under Jack's leadership is when you look at his track record as a CEO and the deals that he has done, he has maximized top line value and achieved cost synergies. When you look at Indivior, I think often people focus too much on the cost synergy versus the fact that we were able to generate momentum, accelerate SUBLOCADE to a level that nobody was anticipating.

So it is about the top line. And then yes, we simplified the organization and improved our cash flow generation. So I'm very confident as the combined company moves forward, that the acceleration of SUBLOCADE will continue under Jack's leadership. And as he's commented on multiple times, the goal from a commercial perspective is to have minimal to no disruption and to let the train continue to roll.

One moment for our next question. That will come from the line of Chi Fong with Bank of America.

I just want to follow up on the business development. As you think about potential opportunity with mid- to late-stage assets, are there certain CNS subcategory or indication areas you would be most interested in looking at? Would it be an area where either Supernus or Indivior already has a presence in? Or would the company look into white spaces where neither [indiscernible] are currently operating in yet?

Yes. Naturally, we will want to build on the commercial pillars, the 4 key commercial areas that we've talked about, right, ADHD, addiction, depression, Parkinson's disease. But also beyond that, I mean, we are very agnostic to psychiatry and neurology in general. And even if it bleeds into women's health, we talked about women's health as well in the past when we did the Sage acquisition. We have a great sales force and infrastructure there that we would want to also build in and add more efficiencies to that infrastructure as we move forward. But to your question specifically as far as CNS per se, I mean, we are agnostic on the psychiatry, neurology side.

We can handle all kind of products, even products in CNS that are rare diseases because as you guys know, we do have the infrastructure also to work with rare diseases as well. So at the end of the day, we will scan the landscape as we always do, and we already have done it many, many times, and we will focus on those assets that clearly are going to take us into the 2040 and 2050 and beyond as far as quality assets, innovative assets and assets that have tremendous longevity as we move forward.

[Operator Instructions] Our next question will come from the line of Annabel Samimy with Stifel.

Congratulations on the merger. Very interesting. I'm hoping that maybe you can talk a little bit more about the broader class for opioid use disorder. The oral market seems to be a good leading indicator for the long-acting injectables. So how should we think about the broader class growth there and maybe the bottlenecks for continued usage or increased usage? And then for the LAI class, specifically for SUBLOCADE to grow beyond the 10% penetration, you mentioned education, but is there any kind of payer pushback or government pushback, physician reluctance or patient reluctance? Anything where you can, I guess, find further opportunity to drive penetration of LAI into the broader class?

So Annabel, I appreciate the question. First off, when you think about the market, the BMAT market, the orals are the feeder to long-acting injectables. So there are very few patients that ever first start on a long-acting injectable. One of the things that is interesting is we have made significant and sustained investments in our consumer. We're actually seeing a pickup in the growth rate of the oral market, which we view as a positive because as a leader that has been committed to this space for over 25 years, our first consideration is trying to ensure appropriate patients that are contemplating recovery get treated.

As it pertains to long-acting injectables and SUBLOCADE specifically, there are no bottlenecks that we see. So patients have access. We have broad availability over 85%, both within commercial and Medicaid. The one thing that is different about a long-acting injectable is the patient that considers an LAI is often more serious, maybe has experienced more ups and down in their treatment journey, and they're now ready to take the step to a sustained long-acting treatment.

And then the final thing, which gets to my comment of we're just scratching the surface. If you think about SUBLOCADE, which has been on the market for 8 years, we did research prior to deciding to make the huge investment in consumer that we did for the #1 prescribed market-leading product, the prompted awareness amongst buprenorphine users, either on buprenorphine oral or recently was only 15%. In our most recent research we did, that is now up to 50%.

And so the point there is the notion of educating, driving awareness and encouraging patients who are struggling with OUD to seek treatment. We're just scratching the surface, and you're seeing the pickup in both the growth rate of the oral market, certainly SUBLOCADE, and you're seeing long-acting injectable penetration continue to increase, and we believe that will be the case with sustained investment and improved commercial execution.

Fantastic. And if I can just ask a quick follow-up. On operating synergies, you cited the little over 40% for the pro forma. Do you expect expansion of that? Or is that -- should that be a steady go-forward number that we think about?

Yes. I mean, typically, the synergies, Annabel, are the first year you get the most benefit out of the synergies. Of course, as we move forward and continue to move forward, we would like to always improve. We would like to always do better. But I can't make any forward-looking statements at this point as far as '27 or any other years. But I can assure you, as you have followed us for a long time now, we will definitely look for areas, as I mentioned earlier, any areas to continue to improve from an operating leverage perspective, we will definitely do that, certainly.

I'm showing no further questions in the queue at this time. I would now like to turn the call over to Mr. Jack Khattar for any closing remarks.

Thank you. We are very excited about our future as a combined company and the value it will create. We look forward to continuing to engage with all of you as we progress toward closing the transaction. In the meantime, both Supernus and Indivior will continue to operate as 2 separate and independent companies. We're grateful to both teams for the work that got us to this point and are even more energized about the work ahead. Thank you for joining us on the call this morning, and we look forward to updating you on our progress.

This concludes today's program. Thank you all for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Indivior Pharmaceuticals Q1 2026 Financial Results Conference Call and Webcast. [Operator Instructions] Please be advised that this conference is being recorded.

I would now like to hand the conference over to our first speaker today, Jason Thompson. Please go ahead.

Thanks, Nadia, and welcome to Indivior's First Quarter 2026 Results Conference Call. I'm joined today by Joe Ciaffoni, Chief Executive Officer; Pat Barry, Chief Commercial Officer; Ryan Preblick, Chief Financial Officer; and Christian Heidbreder, our Chief Scientific Officer. 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, and that actual results may differ materially. We list the factors that may cause our results to be materially different here on Slide 2 of this presentation. We also may refer to non-GAAP measures, the reconciliations for which may also be found in the appendix of this presentation that is now posted on our website at indivior.com.

I'll now turn the call over to Joe Ciaffoni, our CEO.

Thanks, Jason. Good morning, and thank you for joining us on today's call to review our first quarter results. I will begin with an overview of our performance and summarize our progress against Phase II - Accelerate of the Indivior Action Agenda. Pat will discuss SUBLOCADE performance, Christian will provide an update on the pipeline, and Ryan will review the financials.

In the first quarter, we made significant progress in Phase II of the Indivior Action Agenda and executed key elements of our capital deployment strategy. Specifically in the quarter, we grew total net revenue 19% year-over-year to $317 million, primarily driven by strong U.S. SUBLOCADE performance. We grew total SUBLOCADE net revenue 32% year-over-year to $232 million, reflecting strong year-over-year dispense unit growth of 20%. The acceleration in SUBLOCADE dispense unit growth was driven by improved commercial execution and the early impact that our new consumer campaign, Move Forward in Recovery, is having on patient activation. Importantly, SUBLOCADE category share was stable in the quarter, and we had record new patient starts. We delivered adjusted EBITDA of $164 million, up 112% year-over-year, and margin improvement of 23 percentage points.

We successfully executed our capital deployment strategy, improving our debt profile through the issuance of $500 million of convertible notes and returned value to our shareholders by repurchasing $125 million of our shares at an average price of $31.45. Our strong first quarter performance and the underlying strength of SUBLOCADE across key metrics, along with a more favorable outlook for SUBOXONE, enabled us to meaningfully raise our 2026 financial guidance. I want to thank the Indivior team for their contributions to our progress against the Indivior Action Agenda and for their commitment to making a positive difference in the lives of people living with opioid use disorder and the communities we serve.

In Phase II - Accelerate, we are focused on accelerating U.S. SUBLOCADE dispense unit growth and net revenue throughout 2026 and growing adjusted EBITDA and cash flow at an even faster rate. In the first quarter, we achieved a major milestone. Over 500,000 patients in the U.S. have been prescribed SUBLOCADE since its launch in 2018. Nearly 1/4 of those patients were added in the last 5 quarters, underscoring SUBLOCADE's strong growth trajectory. SUBLOCADE is the first and #1 prescribed long-acting injectable for the treatment of moderate-to-severe opioid use disorder. It is the only monthly long-acting injectable with an indication for rapid initiation.

Looking forward, we believe continuous improvement in commercial execution and our commitment to significant and sustained investment in our new direct-to-consumer campaign will accelerate U.S. SUBLOCADE dispense unit growth to the mid-teens in 2026, up from 7% in 2025. We now expect total SUBLOCADE net revenue to grow 13% year-over-year to $970 million at the midpoint of our guidance. As expected, our new operating model established in Phase I - Generate Momentum of the Indivior Action Agenda is accelerating the growth of adjusted EBITDA and cash flow at a significantly faster rate than net revenue. We now expect to generate $640 million of adjusted EBITDA in 2026 at the midpoint of our guidance, up 50% versus the previous year, which equates to a 51% margin, up 16 percentage points versus 2025. Our increased cash flow and improved financial flexibility position us to strategically deploy capital to create value for our shareholders.

With the completion of our debt refinancing, our capital deployment priorities are focused on opportunistically utilizing the remaining $270 million of our share repurchase program and evaluating commercial stage business development opportunities to enhance and diversify Indivior's growth profile. We are on track to enter Phase III of the Indivior Action Agenda - Breakout in the second half of this year.

Next, I want to briefly touch on the decisions we made on the INDV-6001 and INDV-2000 programs. We do not intend to pursue Phase III development of INDV-6001 and have amended our license agreement with Alar Pharmaceuticals. Pursuant to these amendments, Alar will regain development rights to the asset and commercialization rights outside of the U.S. Indivior will maintain commercial rights in the U.S. Regarding INDV-2000, it did not meet the primary endpoint in the Phase II trial, and additional work is needed to further explore the initial signals we observed. We will not be progressing the program internally for opioid use disorder, and we will pursue external business development opportunities for this asset. Christian will provide more detail.

I want to recognize and thank our R&D colleagues for leading with science and for the hard work they put into the INDV-6001 and INDV-2000 programs. Their efforts greatly advanced our understanding of these assets and their work was high quality and conducted with integrity. To conclude, we are encouraged by our progress so far in 2026. Our results strongly position us to achieve our financial and operational objectives in Phase II - Accelerate and to enter Phase III - Breakout in the second half of 2026.

I'll now turn the call over to Pat.

Thanks, Joe. Our commercial teams are executing well against Phase II of the Indivior Action Agenda - Accelerate. This acceleration is being driven by our commercial execution initiatives and our consumer activation investments, notably our successful DTC campaign, Move Forward in Recovery. We achieved record new patient starts in the first quarter of approximately 31,800, a year-over-year increase of 29%. This brought our total U.S. SUBLOCADE patients treated over the last 12 months to 191,600 at the end of the first quarter. Dispense unit growth in the first quarter was up 20% versus the prior year, reflecting acceleration in U.S. SUBLOCADE versus 2025. Total category share of LAIs in the U.S. for SUBLOCADE remained stable at 76%.

We continued our track record of growing the number of SUBLOCADE prescribers, which is an important leading indicator for overall LAI category and SUBLOCADE growth. We exited the first quarter with a record number of active SUBLOCADE prescribers, and those treating 5 or more patients. Total active SUBLOCADE prescribers grew 19% year-over-year, and HCPs treating 5 or more patients grew 20% year-over-year. While we are encouraged by the progress in U.S. SUBLOCADE, we see continued opportunity to drive further acceleration through our commercial improvement, consumer activation, and public policy initiatives.

First, SUBLOCADE is the only monthly long-acting injectable with an indication for rapid initiation on day 1 and a second dosing as early as day 8. Our focus on delivering the second dose as early as day 8 is driving increased adoption. Providers' recognition of SUBLOCADE's differentiated label continues to grow, particularly as synthetic opioids remain prevalent in the U.S. Approximately 9% of new patients are receiving the accelerated second dose and 23% of active HCPs have begun prescribing a second dose in line with the expanded SUBLOCADE label.

Second, our commercial channel productivity initiative is generating results. We executed 5 enhanced service agreements with key specialty pharmacies and have started to see steady improvement in commercial dispense yields.

Third, consumer activation remains strong. We continue to invest behind SUBLOCADE through our DTC campaign, Move Forward in Recovery. Patient engagement stayed elevated throughout the quarter, with more than 1,200 new CRM enrollments each month, bringing total engaged consumers to over 8,300 since launch. Paid search volumes remain above pre-campaign levels, with category-leading share of voice across core search terms. Additionally, over 30,000 people searched for a SUBLOCADE provider with the Find a SUBLOCADE Treatment Provider tool on the SUBLOCADE website in the first quarter.

To close, we are encouraged by our start to 2026. We believe that our improved commercial execution focused on sharpened message delivery with higher utilization of SUBLOCADE's core promotional materials on every call, along with our efforts directed at improving specialty pharmacy performance and consumer activation, are having impact on new patient starts, mix, and acceleration in SUBLOCADE dispense units. We are confident that as we continue to get better, SUBLOCADE will do better, and that we are on track to achieve our raised 2026 guidance for SUBLOCADE.

I will now turn the call over to Christian.

Thank you, Pat. I will now provide an update on our R&D pipeline, starting with INDV-6001. INDV-6001 delivered meaningful scientific and regulatory progress during the year, achieving its principal Phase II objectives, including a supportive safety profile, predictable pharmacokinetics consistent with modeling, and constructive engagement with the FDA. As part of our portfolio review, we evaluated INDV-6001 in the context of the evolving long-acting injectable buprenorphine landscape. In our view, SUBLOCADE is the only once-monthly long-acting injectable buprenorphine with a rapid initiation pathway in the approved label, continues to set the clinical and commercial standard in this category.

SUBLOCADE's ability to achieve and maintain differentiated plasma concentrations without a complex induction regimen represents an important benchmark for future products. While INDV-6001 successfully demonstrated extended dosing intervals, including exploration of dosing up to three months, further analysis identified challenges, specifically achieving clinically meaningful plasma concentration profiles, particularly in a treatment environment shaped by high potency synthetic opioids, was anticipated to require a more complex induction protocol relative to SUBLOCADE's established approach, introducing additional development and implementation considerations.

In addition, a comprehensive review of late-stage development and commercialization factors highlighted some remaining challenges, including: one, manufacturing scalability; and two, limited anticipated clinical and commercial differentiation in the payer and prescriber landscape, and the resulting impact on pricing and reimbursement dynamics. As a result, we have decided not to advance INDV-6001 into Phase III clinical development and have amended our license agreement with Alar Pharmaceuticals. Pursuant to these amendments, Alar will regain development rights to the asset and commercialization rights outside of the U.S. Indivior will maintain commercial rights in the U.S.

Turning to INDV-2000. In a Phase II proof-of-concept study, our selective orexin-1 receptor antagonist under evaluation as a novel nonopioid treatment for opioid use disorder did not meet the prespecified primary endpoint of no treatment failure over 12 weeks when evaluated across the full dose range, 100, 200, and 400 milligram versus placebo. Interpretation of the overall dose response was confounded by unanticipated underperformance at the 400 milligram dose and a higher-than-anticipated placebo response. While this Phase II study does not support advancing INDV-2000 internally in opioid use disorder, we are encouraged by the broader body of data that emerged from the trial. Importantly, prospectively planned sensitivity analysis, together with converging supportive findings, identified a credible and biologically coherent signal at the 200 milligram dose.

At that dose, we observed a higher abstinence rates over time versus placebo across cocaine and broader polysubstance use, including cocaine, methamphetamine, amphetamine, benzodiazepine, and opioid in combination. While these findings are exploratory, they are directionally consistent with the underlying orexin-1 mechanism and its potential role in cue-driven drug seeking, stress reactivity, and relapse vulnerability. We also saw supportive directional improvements in anxiety symptoms as well as exploratory functional MRI findings that aligned with the clinical observations and further supported the biological activity of INDV-2000. Taken together, these results strengthen our confidence that the molecule is engaging relevant relapse-related pathways.

Importantly, INDV-2000 demonstrated a favorable safety and tolerability profile with no major drug-related safety signal identified. So while we do not plan to pursue development internally in opioid use disorder, we believe these findings support continued evaluation of 200 milligrams as the lead dose and position INDV-2000 as a credible business development opportunity while we continue to strengthen the data package through additional analysis, including exposure response work and further evaluation of supportive clinical and mechanistic findings. These decisions are expected to have a significant impact on the R&D organization. However, it does not reflect the quality of the underlying science or the team's execution. We are grateful for the rigor, dedication, and high-quality work of our R&D team, whose efforts advanced these programs and generated valuable scientific and regulatory insights that will inform future innovation.

I will now turn the call over to Ryan.

Thanks, Christian. We are encouraged by our overall financial performance this quarter, which includes strong year-over-year total SUBLOCADE net revenue growth and even stronger adjusted EBITDA growth.

Looking at our results in more detail, starting with the top line. Total net revenue of $317 million for the first quarter increased 19% versus the prior year period. The increase was driven by strong SUBLOCADE net revenue growth in the U.S. Total SUBLOCADE net revenue of $232 million for the quarter increased 32% versus the prior year period. U.S. SUBLOCADE net revenue increased 33% versus the prior year to $218 million. Q1 net revenue growth was primarily driven by dispense unit volume growth of 20% and favorable price/mix. The first quarter included a gross-to-net benefit of $14 million.

Turning to SUBOXONE Film net revenue. In the first quarter, we benefited from continued generic price stability in the U.S., moderated share decline, and favorable gross-to-net adjustments. As we said in February, we expect gross-to-net adjustments to serve as a headwind in 2026 for both SUBLOCADE and SUBOXONE. Total non-GAAP operating expenses were $116 million for the first quarter, down 21% versus the prior year. The decrease was primarily driven by reductions in headcount, the restructuring of the R&D and medical affairs organizations, and footprint consolidations as part of Phase I of the Indivior Action Agenda -- Generate Momentum. Looking at the bottom line, we generated record adjusted EBITDA of $164 million, an increase of 112% year-over-year, representing margin improvement of 23 percentage points.

Our strong first quarter results and performance trends year-to-date led us to raise our 2026 financial guidance. We now expect total net revenue in the range of $1.215 billion to $1.285 billion, an increase of 1% compared to 2025 at the midpoint of our guidance range. This is primarily driven by stronger SUBLOCADE net revenue, which we now expect to be in the range of $950 million to $990 million, up 13% year-over-year at the midpoint. The increase in SUBLOCADE guidance reflects an improved outlook from an acceleration in dispense units based on strong trends year-to-date and favorable mix related to our progress on increasing commercial dispense yields.

Our total net revenue guidance also reflects higher U.S. SUBOXONE Film net revenue based on year-to-date results, where we saw stable pricing and moderation in share decline. Our outlook for operating expenses remains unchanged at $430 million to $450 million. We now expect adjusted EBITDA for 2026 to be in the range of $620 million to $660 million, a year-over-year increase of 50% at the midpoint. This would represent an improvement of 16 percentage points in our adjusted EBITDA margin to 51% compared to 2025. We ended the quarter with gross cash and investments of $201 million, and we are projecting forward leverage of 0.8x based on the midpoint of our 2026 adjusted EBITDA guidance. In 2026, we expect to generate approximately $340 million in cash flow from operations, enabling us to strategically deploy capital. Our capital deployment priorities include managing our debt, returning value to shareholders through opportunistic share repurchases, and evaluating business development opportunities as we earn our way to Phase III of the Indivior Action Agenda - Breakout.

In the first quarter, we managed our debt by completing an upsized $500 million senior convertible notes offering due in 2031. Most of the proceeds were used to repay the remaining $333 million balance on the previous term loan. This both increases our financial flexibility and significantly reduces our interest rate to 0.625% from 9.5%. We also returned capital to our shareholders through opportunistic share repurchases in the first quarter. We repurchased 4 million shares at an average price of $31.45 for a total of $125 million. We have $275 million remaining on the $400 million program through mid-2027. In total, over the past 5 years, we have bought back $525 million of our shares at an average price of $16.74. As we earn our way to Phase III - Breakout, we will evaluate business development opportunities, specifically focused on commercial stage assets that have the potential to enhance and diversify our growth profile.

I'll now turn the call back to Joe for concluding remarks.

Thanks, Ryan. The first quarter reflects our significant progress against Phase II of the Indivior Action Agenda - Accelerate. We delivered strong top and bottom line growth driven by SUBLOCADE's performance in the U.S. and leverage from our simplified operating model, enabling us to meaningfully raise our 2026 financial guidance. We also executed on our capital deployment strategy by successfully managing our debt and opportunistically utilizing our share repurchase program. We are on track to accelerate SUBLOCADE throughout 2026 and adjusted EBITDA and cash flow at an even faster rate as we earn our way to Phase III of the Indivior Action - Breakout in the second half of 2026.

We will now open the call for questions. Operator?

[Operator Instructions] And now we're going to take our first question, and it comes from the line of David Amsellem, Piper Sandler.

So I have a few. First, on the gross margins, there's some improvement here. And with the manufacturing transition, should we take that to mean that you could see manufacturing at even better gross margins going forward? So help us just understand how to think about gross margins going forward. That's number one. Number two, business development and M&A, I know, Joe, you've talked about a beachhead in another therapeutic category. I was wondering if you could elaborate on that and what therapeutic categories, broadly speaking, are of interest. And then lastly, on the accelerated second dosing, can you talk about how getting patients to receive that accelerated second dose is correlated with this overall persistence and how important that is? And if you had color on that earlier in your prepared remarks, sorry, I missed that. But would love to get your thoughts on how that accelerated second dose plays a role in patient persistence.

Thanks, David. We'll let Ryan kick it off with the gross margins.

Hey, David. Good morning. Thanks for the question. So for the gross margins, I would still guide you to the full mid-80% guide. Q1 did benefit from a couple of things. One, we had the prior year releases; and two, we had positive manufacturing variances built in there as well. And then in regards to the plant, the primary focus on the manufacturing facility is to secure product security. So again, I would guide you to the mid-80s for margins for the year.

Okay. And Pat, on the accelerated second dose?

Yes. Thank you for the question, David. On the accelerated second dose, that's an important differentiator for us because we are the only LAI with that accelerated second dose. The benefit there is, is that you're achieving peak plasma levels early, as early as day 8. And so that's an important component to be able to get the patient doing well in the very early treatment. And so peak plasma levels is particularly important in the era of synthetic opioids. And so if they're doing better early and they're stabilized early, we believe that over time, that could help with persistency. But that's certainly something we'll continue to look at.

And then from a BD perspective, David, as we earn our way to the breakout phase, which we believe we're on track to do in the second half of this year, we're I would say, therapeutically agnostic, although there are certainly areas we don't think we would go into, for example, like oncology, and we're more focused on the fundamentals of what we would acquire. So we are focused on commercial stage only. We're looking for assets that have greater than $200 million peak sales potential. We think that's relevant relative to the size of our revenue base as we seek to enhance and diversify our growth profile. Differentiated assets are important from our perspective, both from a patient value perspective and importantly, from a reimbursement perspective, which we think is critical to commercial success.

And then the final thing I would highlight, because I think it's one of the real strong parts of the Indivior story, is that with SUBLOCADE, we have a durable growth driver. And so the third thing that will be important in anything we acquire is that those assets also have runway. From there, post-integration of an acquisition, we then would be looking to identify individual products that could leverage the new commercial infrastructure that we have in place.

Now we're going to take our next question, and it comes from the line of Chase Knickerbocker from Craig-Hallum.

Congrats on another nice quarter here. Maybe just first for Ryan. There's been some continued gross-to-net benefit on a year-over-year basis. Maybe just focusing on SUBLOCADE. Can you just give us a sense for how you -- can you characterize that gross-to-net benefit a little bit more and then give us a sense for how you expect it to kind of roll off through the year?

Yes, Chase, good morning. Thanks for the question. Yes, in Q1, we did book $14 million of a prior year release as we continue to true up our accruals. But as we mentioned earlier, in totality, we still expect the prior year releases to serve as a headwind for the balance of 2026. And the plan is to continue to provide you an update each quarter.

Could you just maybe give us a sense for the cadence of that headwind through the year? And if there's any benefit you expect in Q2 as well? And then just a second from me, guys, maybe just taking a step back for Joe. If you look at INDV-6001 here, again, maybe just taking a step back, with the potential for Brixadi generics before SUBLOCADE LOE, how do you see this market, I guess, developing? And how are you thinking about franchise expansion and life cycle management as you think about your long-acting buprenorphine franchise, and just how you see the market developing, Joe?

Sure. Chase, so at this point, there will be adjustments for the balance of the year. I don't know the phasing at this point, but I will continue to tell you, in the aggregate, the prior year releases will serve as a headwind in 2026.

And Chase, with regards to your question around the evolution of the marketplace, look, we're very confident in SUBLOCADE's differentiated profile. Importantly, when you look at SUBLOCADE, the 300 milligram dose continues to grow. It's now 63% of overall SUBLOCADE utilization. So we're very confident that SUBLOCADE has a durable growth profile, and it's an asset that we're committed to for the long term. As it pertains to further opportunity within this space, we're obviously always looking and are aware of what's out there. There's nothing candidly that we're interested in that we don't have. And to the degree that Alar is successful in the development and manufacturing of INDV-6001 to a level that meets what we believe would make it commercially viable, we retain 100% of the commercial rights to that asset in the U.S. So we certainly wish them well in their pursuit.

Now we're going to take our next question, and the question comes from the line of Dennis Ding from Jefferies.

Congrats on a very good quarter. So if I can ask on Lilly's brenipatide, they sound fairly excited about it and its potential in substance use disorders, and they started Phase II in OUD on a background of buprenorphine, which I'm assuming is SUBOXONE. But I'm curious how you're thinking about the design of that study, the read out in 2028. And importantly, if that impacts durability of SUBLOCADE's growth through the long term, which I'm assuming goes off patent in the 2035 to 2038 time frame.

So Dennis, before I hand it off to Christian to comment, the one thing I want to emphasize is we very strongly believe that SUBLOCADE has a long and durable runway in front of it with 12 Orange Book-listed patents that go from 2031 to 2038. We also are in the process of trying to pull through additional patent applications that have the potential to extend out to 2044 to 2046.

And Christian, any comments?

Yes, certainly. So there are several trials that are currently ongoing using GLP-1 for substance use disorder. The one that you mentioned in opioid use disorder, this is actually as an add-on therapy to transmucosal buprenorphine. There are a couple of other trials in alcohol use disorder. I must say that so far, the evidence has been primarily anecdotal. So it's the first time that there will be more formal clinical trials, and we shall see what the outcome is. But please do remember that these trials so far for opioid use disorder have been designed as add-on therapy to buprenorphine.

And if I can ask a follow-up on DTC. So the campaign is, obviously driving increased category growth, which we're seeing in the numbers. But I'm also surprised that SUBLOCADE's share continues to be generally stable. So my question is, do you expect to pick up incremental share this year as DTC continues? And if there's any leading indicators that you can disclose around initial share capture?

Yes. So Dennis, I'll take that one. I appreciate the question. As we've been clear, our focus is on net revenue, new patient starts, and driving long-acting injectable market growth. We're very proud of the fact that share is stable at 76%. Whether it goes up a little bit, down a little bit in terms of the overall performance of SUBLOCADE, both in this year and as we go forward, in our view, is really not material. It's more about just the competitiveness within the space.

So we're very confident in our commercial team. We're very confident in the differentiated profile that SUBLOCADE brings to the market as the first and #1 prescribed long-acting injectable.

Now we're going to take our next question, and the question comes from the line of Christian Glennie from Stifel.

Just starting then, I guess, on the outlook for SUBLOCADE and particularly on the dispense growth. So you did 20% in the first quarter, but the guidance for the full year seems to be still around the mid-teens level. So just trying to understand initially around that. Is it just a prudence thing? Or is there some reason why that dispense growth might imply a slowdown through the rest of the year? That's my first question.

Yes. So Christian, thanks for the question. Remember, in the first quarter of 2025, that serves as a really low bar from a comparable perspective. So what we're confident in is on a full-year basis that we're going to be able to achieve mid-teen dispense unit growth, which is double what it is that we achieved in 2025. Importantly, and what I would focus you to, is the 13% increase in revenue, which is driven by the strong dispense unit growth, but also now the favorable outlook that we have in terms of mix. And what I mean by that is the percent that commercial will account for versus what we planned. And realize even incremental movement on a brand of this size, one point improvement of commercial mix relative to what we had planned is worth about $8 million. And that's certainly a key driver of the positive outlook that we have moving forward. And we've put a lot of effort, which is a real tribute to Pat and his team, Susan Neff, who heads up trade and our work with specialty pharmacy in trying to improve the dispense yield, in particular, with the SPs that skew to commercial.

Second would be just any comment around the overall growth in LAI category overall and the share of LAI as a percentage of the overall buprenorphine market?

Yes, thanks for the question. We saw really nice growth, slightly above 20% -- approaching 23% on LAI category. So we feel like our efforts from a direct-to-consumer perspective are fueling that. And again, we continue to maintain that category share dominance at plus 76%.

And Christian, the only thing that I would add, and I think it's another interesting thing that gets to the impact that we believe the consumer campaign is having, in the first quarter, the oral buprenorphine market grew significantly relative to the rate it had consistently been growing. And the reason that's important is the start point of long-acting injectable patients are predominantly people that transition from a transmucosal buprenorphine. So from a big picture, as a company that has a long-term commitment to this space that, first and foremost, is focused on patients getting treatment to improve the outcome and their recovery journey, we're very encouraged by that. And that also is a positive over time, in our view, to long-acting injectable utilization.

Sorry, just on the percentage -- the rough percentage share of LAIs overall as a percentage of orals.

Yes, we're right at about 8.5% from an overall LAI category share perspective. Sorry, I missed on that.

No worries. And then, sorry, finally, just on guidance on OpEx, unchanged there, but at the same time, not progressing the 2 Phase II assets. I think previously you had implied that the guidance assumed those roll on. So just trying to understand on OpEx and whether there's something I'm missing there, why potentially the OpEx wouldn't be a bit lower given you implied a bit of restructuring of R&D and the impact that, that would have.

Yes, so I'll take that one. I appreciate the question. Look, we're focused and have been clear on making every possible investment to maximize the SUBLOCADE opportunity in the U.S. market. The way to think of our guidance in 2026 is as we derive savings from the restructuring in R&D and as we continue to relentlessly focus on making sure we're only investing in things that are essential, if there are opportunities for us to invest in SUBLOCADE that would have impact this year or in 2027, we would make those investments and come in at the high end of the guidance range to the degree that there aren't areas for us to invest those resources, we would let them drop to the bottom line. The other point I want to emphasize is as you think about the exciting phase we're in of the acceleration of SUBLOCADE, we're also leveraging, not growing, our cost structure on a going-forward basis. So when you think about it moving forward, you should expect to see us staying under that $450 million level, which will result in additional margin improvement.

Now we're going to take our next question, and the question comes from the line of Brandon Folkes from H.C. Wainwright.

Congrats on the quarter. Maybe just following up on business development. Can you just talk about the size of the transaction you would consider? Sharing your criteria earlier around minimum peak sales, that sets one end of the range. But just trying to think about how large of a transaction you feel comfortable with. Can you just talk about where you feel comfortable taking leverage up to? And then along the same lines, you talked about a commercial asset, but would you also consider a commercial-ready asset or company which also has a pipeline. Can you just talk about your willingness to bring in or minimize development risk altogether here in business development?

Thanks, Brandon. I'll let Ryan take the first question, and I'll take the second.

Yes, thanks for the question. So when it comes to the amount of leverage that we would feel comfortable with, with our strong balance sheet, we would be okay going up to 3x, but that is assuming that we are going after a commercial stage asset.

And then, Brandon, when you think about our focus from an M&A perspective, we're clearly focused on commercial stage. We want to enhance and diversify the growth profile of the company. We are not anti-pipeline. In fact, we believe the financial strength of the company would enable us -- if we acquire a company that has pipeline that we believe is worth investing in, we would be positioned to do so. But that is not the primary focus as we're assessing opportunities. And then when we ultimately get to Phase III - Breakout and start to try to action around them.

Thank you. Dear speakers, there are no further questions for today. I would now like to hand the conference over to your speaker, Joe Ciaffoni, for any closing remarks.

Thank you, operator. And thank you to everyone for joining the call today. We look forward to updating you on our progress as we execute the Indivior Action Agenda. Have a great day.

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

Good morning, everyone. I am joined today by Joe Ciaffoni, Chief Executive Officer; Pat Barry, Chief Commercial Officer; and Ryan Preblick, Chief Financial Officer. We're also joined by Christian Heidbreder, our Chief Scientific Officer.

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 and that actual results may differ materially. We list the factors that may cause our results to be materially different here on Slide 2 of this presentation. We also may refer to non-GAAP measures, the reconciliations for which may also be found in the appendix to this presentation that is now posted on our website at indivior.com.

I'll now turn the call over to Joe Ciaffoni, our CEO.

Thanks, Jason, and good morning, and thank you for joining us on today's call to review our fourth quarter and full year 2025 results. I will begin with an overview of our business performance in 2025 and summarize our progress against the Indivior Action agenda. Pat will then provide a commercial update and discuss our priorities for SUBLOCADE. Finally, Ryan will review our financial performance, 2026 guidance and then detail our capital deployment strategy. 2025 was a transition year for the company. Last July, we rolled out the Indivior Action agenda to maximize the potential of our business, make a positive difference in the lives of people living with opioid use disorder and to create value for our shareholders. We've made significant progress, including successfully completing Phase I Generate Momentum and delivering against our financial commitments for 2025.

Specifically, we improved our commercial execution and generated momentum for SUBLOCADE, delivering record net revenue in 2025 of $856 million, a 13% increase versus 2024 and total net revenue of $1.24 billion, representing a 4% increase compared to the prior year. We took several actions to simplify our organization and establish Indivior's go-forward operating model. Operating expenses will not exceed $450 million in 2026. We grew adjusted EBITDA 20% year-over-year to $428 million in 2025, along with notable margin improvement. We launched a new direct-to-consumer campaign, Move Forward in Recovery on October 1, 2025, to drive awareness of SUBLOCADE among people living with opioid use disorder. Although early, we are encouraged by the engagement we are seeing and all key leading indicators are trending ahead of expectations.

Finally, we strengthened our financial profile, including paying the outstanding $295 million obligation related to the legacy DOJ matter, thereby eliminating a significant future liability for our company. I want to thank the Indivior team for their contributions to our progress against the Indivior action agenda and their unwavering dedication to people living with opioid use disorder in the communities we serve. Our strong financial performance and the momentum we generated in 2025 position us to accelerate in 2026. Our confidence in the business is reinforced by our new $400 million share repurchase program authorized by our Board that we announced this morning.

With Phase 1 of the Indivior Action agenda completed and our go-forward operating model firmly established, we are now executing on Phase II of the Indivior Action agenda, Accelerate. During this phase, we expect to accelerate SUBLOCADE dispense unit growth and net revenue throughout 2026 and immediately grow adjusted EBITDA and cash flow at a faster rate. SUBLOCADE is the first and #1 prescribed long-acting injectable for the treatment of moderate to severe opioid use disorder. It is the only monthly long-acting injectable with an indication for rapid initiation and has been prescribed to over 475,000 people. We believe that SUBLOCADE is a durable growth driver with 12 Orange Book-listed patents that range from 2031 to 2038.

We are committed to investing at sustained levels to maximize the potential of SUBLOCADE and grow the long-acting injectable market. Although, we are making progress, we believe long-acting injectables remain underutilized. We expect our laser focus on improving commercial execution, our sustained investments in patient education and activation and efforts to advance state and federal policies that support greater treatment access will drive the acceleration of SUBLOCADE. I am encouraged by the trends we are seeing across all key metrics thus far in the first quarter.

In 2026, we expect to deliver SUBLOCADE dispense unit growth in the mid-teens, an acceleration compared to the 7% dispense unit growth we achieved in 2025. This will result in SUBLOCADE net revenue growth of 8% at the midpoint of our guidance range. The leverage generated by our go-forward operating model will immediately accelerate adjusted EBITDA and cash flow at a faster rate. We expect to generate 30% adjusted EBITDA growth in 2026, representing a 13 percentage point improvement in our adjusted EBITDA margin compared to 2025, and we expect to generate approximately $300 million in cash flow from operations. Our increased cash flow and strong financial position will enable us to strategically deploy capital to create value for our shareholders.

Our capital deployment priorities are threefold: manage our debt, opportunistically deploy our newly authorized $400 million share repurchase program and evaluate potential business development opportunities to acquire the next commercial stage growth drivers as we earn our way to Phase III of the Indivior Action agenda breakout. We are encouraged by, but not satisfied with the progress we made in 2025. The actions we took and the foundation we established strongly position us to achieve our financial and operational objectives in Phase II accelerate in 2026.

I'll now turn the call over to Pat.

Thanks, Joe, and good morning, everyone. As part of Phase I of the Indivior action agenda, Generate Momentum, we have been focused on improving commercial execution for SUBLOCADE. Our commercial team is dedicated to helping people living with OUD, and they have a strong belief in SUBLOCADE as the first and #1 prescribed long-acting injectable in the category. We have made progress on our commercial execution initiatives, which are reflected in our fourth quarter and full year results.

In the fourth quarter, we delivered strong dispense unit growth of 12% versus the prior year and 6% versus the third quarter. New patient starts in the fourth quarter were up 25% year-over-year. And over the course of the last 10 weeks of the year, weekly new patient starts achieved all-time highs on 3 separate occasions. Total category share of LAIs and new patient share in the U.S. for SUBLOCADE continue to stabilize in the mid-70s. We exited 2025 with a record number of active SUBLOCADE prescribers, including those treating 5 or more patients. In the fourth quarter, both total active SUBLOCADE prescribers and prescribers treating 5 or more patients grew 14% year-over-year and approximately 6% sequentially. We believe this progress represents a combination of the fundamental strength of SUBLOCADE, along with our improving commercial execution.

We are encouraged by the momentum we generated exiting 2025 and are well positioned to accelerate in 2026. We remain focused on continuous improvement in commercial execution to accelerate SUBLOCADE prescribing volume for the benefit of people living with OUD. Our efforts are centered on driving excellence in field force messaging, improving commercial channel productivity, growing patient activation and new starts and unlocking treatment access through proactive engagement with policy leaders. We have seen improvements across each of these areas. Our field force messaging acumen that is focused on SUBLOCADE's differentiated label is driving growth in the number of physicians utilizing the accelerated second dose.

Approximately 7% of new patients received the accelerated second dose and 17% of active HCPs prescribed a second dose in line with the expanded SUBLOCADE label. On commercial dispense yield productivity, we remain in the early stages of improving yields towards our noncommercial channel average of approximately 80%. We are seeing steady progress with our targeted commercial specialty pharmacies and expect steady yield improvement as we move through 2026. In addition to these commercial improvement initiatives, we are investing to expand patient awareness and engagement. Last October, we launched our direct-to-consumer campaign, Move Forward in Recovery, which is designed to emotionally and authentically connect with people living with OUD and drive awareness of SUBLOCADE as a treatment option for those struggling with moderate to severe opioid addiction.

Recall this campaign has an omnichannel approach, including national television, digital and social media and in-office point-of-care materials, along with a newly designed SUBLOCADE patient website. We are seeing early indicators of success following the launch of the campaign. For example, prompted awareness among patients has increased versus the first quarter of 2025. Branded online search volume increased 60% in the fourth quarter compared to the months immediately prior to the launch of the campaign, driving high-quality engagement on the SUBLOCADE website, including a 70% increase in usage of the find to SUBLOCADE treatment provider tool.

We also saw an average of around 1,400 new CRM enrollments per month in the fourth quarter versus around 60 per month immediately prior to the new campaign, reflecting meaningful intent-driven patient action. We are also actively pursuing opportunities to expand patient access through our proactive public policy initiatives. For example, in several states, long-acting injectables are only available under a medical benefit. This creates logistical complexity, upfront cost and administrative burden for providers. Expanding coverage under a pharmacy benefit would reduce these barriers, lower financial risk and improve provider adoption.

In parallel, we are engaging on bundled payment structures to help ensure that long-acting injectables are appropriately recognized, whether through potential carve-outs or a more accurate reflection in overall payment levels. This would strengthen the financial viability of treating people with OUD. Taken together, our improving commercial execution, patient activation efforts and policy initiatives are laying the foundation for SUBLOCADE acceleration and give us confidence in our ability to deliver mid-teens dispensed unit growth in 2026.

I will now turn the call over to Ryan.

Thanks, Pat, and good morning. First, I'll highlight our fourth quarter and full year financial performance, followed by a review of our 2026 guidance and close on our capital deployment strategy. We delivered on our financial commitments in 2025. We grew total SUBLOCADE net revenue by 13% and adjusted EBITDA by 20% year-over-year, and we simplified the organization while strengthening our financial profile. We are well positioned to execute on Phase II of the Indivior Action agenda, Accelerate. Looking at our results in more detail, starting with the top line. Total net revenue of $358 million for the fourth quarter and approximately $1.24 billion for the full year increased 20% and 4%, respectively, versus the prior year periods. The increase for both periods was driven by strong SUBLOCADE net revenue growth. Total SUBLOCADE net revenue of $252 million for the quarter and $856 million for the year increased 30% and 13%, respectively, versus the prior year periods. For the fourth quarter, SUBLOCADE dispense volume grew 12% year-over-year and 6% versus the prior quarter. For the full year, SUBLOCADE dispense volume grew 7%.

Gross to net benefits also contributed to the increase in SUBLOCADE net revenue for both periods. The fourth quarter included a gross to net benefit of approximately $19 million and $10 million due to an increase in trade inventory of approximately 2 days. The full year included a gross to net benefit of approximately $49 million. Turning to SUBOXONE Film net revenue. In the fourth quarter and full year, we benefited from continued generic price stability in the U.S. Fourth quarter SUBOXONE Film net revenue included a gross to net benefit of $23 million and the full year included a gross to net benefit of $55 million.

Total non-GAAP operating expenses were $164 million for the fourth quarter and $622 million for the full year, down 8% and 5%, respectively, versus the same year ago periods. Non-GAAP SG&A expenses were $148 million for the fourth quarter and $545 million for the full year, down 2% and 1%, respectively, versus the prior year periods. The decreases in both periods were driven by reductions in headcount and footprint consolidations across the organization, partially offset by increased selling and marketing investments behind U.S. SUBLOCADE.

Non-GAAP R&D expenses were $17 million for the fourth quarter and $80 million for the full year, down 36% and 22% year-over-year, respectively. The decreases in both periods were driven by the reprioritization of pipeline activities and the restructuring of the R&D and medical affairs organizations. Charges related to the simplification actions we took as part of Phase I of the Indivior Action agenda were $55 million in the fourth quarter and $120 million in 2025. These charges include severance costs, write-offs for leases, inventory, equipment and intangibles as well as other termination payments and consulting costs. The related cash costs were approximately $28 million in 2025.

Looking at the bottom line, we generated record adjusted EBITDA for the fourth quarter and full year. Adjusted EBITDA for the fourth quarter increased 91% year-over-year to $142 million. For the full year, adjusted EBITDA grew 20% to $428 million with margin improvement of 500 basis points. We are reaffirming our 2026 financial guidance, which reflects the go-forward operating model we established by completing Phase I of the Indivior Action Agenda. We expect total net revenue in the range of $1.125 billion to $1.195 billion. The modest decline in net revenue at the midpoint versus 2025 is mainly due to the expected U.S. SUBOXONE Film pressure, lower net revenue from the rest of the world due to the optimization we conducted last year and the continued runoff of PERSERIS.

We expect total SUBLOCADE net revenue in the range of $905 million to $945 million, representing growth of 8% at the midpoint versus 2025. We expect to accelerate U.S. SUBLOCADE dispense unit growth to the mid-teens in 2026 from 7% in 2025. By leveraging our new operating model that we've established as part of Phase I of the Indivior Action agenda to Generate Momentum, we expect non-GAAP operating expenses in the range of $430 million to $450 million. We expect adjusted EBITDA in the range of $535 million to $575 million, which at the midpoint is an increase of 30% versus 2025 and would represent 13 percentage points of margin expansion to 48%.

With the successful completion of Phase I of the Indivior Action Agenda, Generate Momentum, we have strengthened our financial profile and will continue to improve upon this foundation as we execute on Phase II, Accelerate. We ended the year with gross cash and investments of $222 million, even after concluding the legacy DOJ matter by paying the outstanding obligation of $295 million. Excluding the impacts from settlement and restructuring payments, underlying cash flow from operations was over $200 million in 2025. We ended the year with net leverage below 1x.

In 2026, we expect to generate over $300 million in cash flow from operations, enabling us to strategically deploy capital to create long-term value for our shareholders. Our capital deployment priorities include managing our debt, returning value to shareholders through opportunistic share repurchases and evaluating business development opportunities as we earn our way to Phase III of the Indivior Action Agenda breakout.

Today, we announced that our Board authorized a new share repurchase program of up to $400 million with a term up to 18 months. We plan to utilize this program opportunistically to return value to our shareholders. And as we earn our way to Phase III breakout, we will evaluate business development opportunities, specifically focused on commercial stage assets that have the potential to enhance and diversify our growth profile. Our financial strength provides us with capital deployment optionality. We are committed to taking a disciplined approach.

I'll now turn the call back over to Joe for concluding remarks.

Thanks, Ryan. 2025 was a year of significant progress against the Indivior Action Agenda. We sharpened our focus on our highest growth opportunity, U.S. SUBLOCADE, established our go-forward operating model and strengthened our financial profile. We are now executing Phase II of the Indivior Action agenda, Accelerate, in which we expect to accelerate SUBLOCADE throughout 2026 and immediately accelerate adjusted EBITDA and cash flow at a faster rate. With the establishment of our capital deployment strategy, we are focused on creating long-term value for our shareholders as we work towards becoming a leading diversified specialty pharmaceutical company committed to making a positive difference in the lives of people through the commercialization of differentiated medicines.

We will now open the call for questions. Operator?

[Operator Instructions] And the questions come from the line of David Amsellem from Piper Sandler.

So just a couple here. Joe, I wanted to get your thoughts, just taking a step back on where you think penetration of LAI buprenorphine modalities ultimately could go to? Or what you think would be a reasonable way to think about peak penetration of the category in the OUD space?

And then secondly, how should we think about share versus your competitor? Obviously, the goal is growing volumes here, and that's been the focus. But there's a lot of, I think, investor focus on your share, even though the pie, so to speak, continues to grow. So I'm wondering if you can give us some thoughts on share? That would be helpful.

And then lastly, you mentioned capital deployment in your prepared remarks. I wanted to get some more detailed thoughts on business development. What kind of therapeutic adjacencies or other therapeutic areas are you looking at? My assumption is that you're looking at commercial stage assets, but wanted to get more details on your thought process regarding this debt?

Great. Thanks, David. So look, I appreciate your questions. First off, with regards to LAI penetration, we're now embarking upon 9%. So we have to confront the reality of where we are, and we believe there is significant opportunity to continue to grow LAI penetration. We believe that long-acting injectables are underutilized. I'm not going to get into peak penetration projections. However, I will share with you some analogs and data we look at that will give a sense of what is possible.

So if you look at categories like schizophrenia, as an example, from a long-acting injectable perspective, you would see penetration at 30%. I can assure you we have a lot of market research here at Indivior that would support LAI penetration in the range of 20% to 30%. My final comment on LAI penetration is we are committed as the long-standing leader in the space to doing everything that we can to educate and activate consumers with regards to the important role that long-acting injectables can play.

As it pertains to your question on share, what I would emphasize on share, and you're correct, our focus is really, first and foremost, about driving the market. From a share perspective, we have seen over many quarters, our market share stabilizing in the mid-70%. I would emphasize that we're the only entity in the world that has perfect data on the vast majority of the market, and we've been applying a consistent methodology. Importantly, what we are most focused on is new patient share, which has been very strong as has the absolute number of new patients. We're pretty routinely now achieving all-time highs in new patient starts.

And then to your final question on capital deployment, look, there's nothing -- our start point is there are no commercial assets in the space of opioid use disorder that we believe are there that would enhance our portfolio. Once we made that determination, we'll be establishing a new strategic beachhead in a new therapeutic area. I won't say we're agnostic. There are certainly some areas we wouldn't go into like cancer gene therapy. But what we're focused on are business fundamentals. So we're looking at commercial stage only. We're looking for assets that have peak sales potential of greater than $200 million.

It's important to us that the products have a long runway. One of the strengths of the Indivior story is we have a great growth driver with a durable runway in SUBLOCADE. So we want to acquire assets that have runway that goes towards the mid- to end of 2030 at a minimum. And then, of course, we want differentiated assets. We're not interested in being an aggregator of commoditized brands. We feel that's important from a patient value perspective, but also when you look at it from a reimbursement perspective, we believe to get the coverage necessary to be successful commercially that you have to have meaningfully differentiated products.

We are now going to proceed with our next question. And the questions come from the line of Chase Knickerbocker from Craig-Hallum.

Congrats on the results here. Maybe just first digging in a little bit more to guide. Can you just kind of delineate what your guidance assumes from an LAI market growth perspective in '26? And then to ask, I think it's a question just a little bit differently on the share, what does it assume for share in 2026? Just kind of zooming in on the guide specifically, Joe?

Yes. Chase, thanks for the question. On the SUBLOCADE guide, I'm not going to get into an LAI penetration assumption. We're assuming mid-teens SUBLOCADE growth, which is a significant step-up from where it is that SUBLOCADE was in 2025. And I will comment on a market share perspective. We do expect to see continued stabilization of SUBLOCADE market share.

And just as we wrap up 2025, like you had mentioned, you guys kind of have perfect data. Can you just kind of update us on what LAI market growth was in 2025? And then my last question, Joe, is just a little bit more -- I'd appreciate some more thoughts on kind of buyback versus M&A is just kind of where they are on the priority list. Is this something where you'll kind of be opportunistic on M&A? And in the meantime, you guys will be fairly aggressive on the buyback as far as that being kind of the primary capital allocation after you service your debt, of course?

Okay. Thanks, Chase. I'll let Pat take the first question and let Ryan comment on the second.

Yes. In LAI category growth for Q4, we were approaching 18%. And so again, really strong category growth.

So when it comes to capital allocation, due to our financial strength and the strong cash flow from the business, we have options here. And it's not about or it's about and. And if you start with the debt, right now, we do have expensive debt. But as part of our normal cadence, it is something that we are looking at, and it is something that we will take care of in the near future.

If you look at the share repurchase, there is another option we have to deliver value to our shareholders. We authorized the $400 million program to be ready to be prepared to buy back shares and be opportunistic. That decision will be made in the context of what else is going on in the business at that point in regards to the debt conversation, BD, making sure we have the right capacity for investments behind SUBLOCADE. So -- and then also, we need to evaluate if there's still a gap between the share price and what we believe the value of the company is.

And then finally, when it gets to the business development, we're still earning our way to Phase III, the breakout, where, as Joe just said, we're going to look at BD, including buying commercial assets. So overall, we are definitely focused on driving shareholder value.

We are now going to proceed with our next question. And the questions come from the line of Dennis Ding from Jefferies.

I have 2. So number one, what are your thoughts on the overall Medicaid funding landscape and the potential impact on SUBLOCADE from less funding in 2027? And how confident are you around maintaining that mid-teens unit growth in the U.S. in 2027 and after? And then number two, on SG&A, I'm just curious about the shape of SG&A in 2026, given it was $148 million in Q4? And if you can comment on how much you are spending on DTC in '26? And at what point would you reevaluate that DTC spend in terms of growing or shrinking that?

Yes. Dennis, thanks for the question. First off, with regards to DTC, we're not going to get into how much we're spending for competitive reasons. What I will assure you is we're making every investment in support of it, and we're actually overinvesting beyond what our models would suggest that we should. We're also committed to investing behind DC at those levels for a multiyear period because at the end of the day, the most important thing that we can do is educate and drive long-acting injectable penetration.

As it pertains to Medicaid, I'm not going to get into. We're just starting 2026, what we think growth would look like in 2027. What I can tell you is, one, we advocate for and are hopeful from a humanistic perspective that everybody who should be supported by Medicaid is supported. We believe that overall, if you look at the various legislation, it's generally supportive and we view that as a bipartisan support to helping people with substance use and opioid use disorder.

And then the final point I would make at 8%, 9% long-acting injectable penetration, there is so much opportunity for growth with SUBLOCADE across the board, inclusive of Medicaid, it will not be impacted whether Medicaid population is plus or minus a certain percentage. And then I'll give Ryan the opportunity to comment on SG&A.

In regards to the step-up in Q4, that was simply us taking advantage of our DTC campaign tested really well, and we had the opportunity to start it early. So that's the expense you're seeing in Q4. And around phasing for 2026, our quarters are relatively flat. You may see some skew to the first 3 quarters just due to the campaign we have in place.

And the questions come from the line of Christian Glennie from Stifel.

First one would be on the SUBLOCADE and the guide. Just so I guess, to understand it properly, obviously, you had meaningful gross to net benefit. So is the idea that we adjust for that, take that off in terms of the base -- the underlying, I guess, base for SUBLOCADE that gets you -- if you're doing mid-teens that gets you to the sort of the range that you guided to as in -- I'm trying to compare the 8% net revenue guide versus your mid-teens guidance in dispense growth.

Sure. Thanks for the question, Christian. So look, in 2025, gross to net served as a tailwind. In 2026, gross to net will serve as a headwind to the business. So the key component of the guide is the following. We're going to grow and accelerate dispense unit growth to the mid-teens, and we're assuming that we're going to continue to see a stabilization of market share.

Okay. And then on the -- I guess, just funny enough, if we going back to the Capital Markets Day 2022, you talked about an exit rate to $1 billion exit rate by the end of '25. You've actually gone and actually done that. So I guess, any observations about the potential to breach that $1 billion number?

Yes. So look, I appreciate the question. We're not going to get into any peak sales projections, any forward-looking when we're going to hit certain thresholds. What we're focused on is delivering on the financial commitments that we made to everyone for 2026. And the final comment I would make there is we are very confident with SUBLOCADE that we have a durable growth driver. And I think we're just scratching the surface on the potential of this asset, both from a business perspective, but candidly, more importantly, in the potential it has to make a difference in a positive way in the lives of people living with opioid use disorder and the communities that we serve.

And my final one, if I can, maybe just to clarify a previous comment around new assets, and you talked about being well served, obviously, in OUD. But in terms of -- and it seems to apply other therapeutic areas, but would that include other addiction areas? Or is it outside addiction?

Yes. So look, I appreciate the question. First thing I want to emphasize, we're head down in Phase II Accelerate, and we've been clear we need to earn our way to Phase III breakout. I would not have an expectation that anything we do from an acquisition perspective would be focused on opioid use disorder or substance use disorder. So I would think of different therapeutic areas than that. But I would bring you back to the business fundamentals that will really drive what it is that we're looking to achieve, commercial stage peak sales potential greater than $200 million, a long and durable runway in front of it and a differentiated asset that would deliver both patient value and enable us to get the reimbursement we feel is necessary to be successful commercially.

We are now going to proceed with our next question. And the questions come from the line of Brandon Folkes from H.C. Wainwright.

Maybe just a quick one for me. Can you just talk about how the contribution from the criminal justice system opportunity in your 2026 SUBLOCADE guidance?

Yes. Thanks, Brandon. I'm going to give that one to Pat.

Yes. No, I appreciate the question, Brandon. We see the criminal justice segment as a strong opportunity for us. We see it as a rebased business. And from there, we believe we can grow. Also, SUBLOCADE is a differentiated asset, only monthly with long-acting injectable monthly with the rapid induction and you have prescribers that are familiar and comfortable with it. So in that context, we do believe it can contribute to the growth that we're guiding to on mid-teens. But obviously, we're looking at the broader opportunity, while CJS is a part of it. We're looking at the opportunity as the category leader to continue to fuel and grow the overall LAI category.

We are now going to proceed with our next question. And the questions come from the line of Thibault Boutherin from Morgan Stanley.

And thank you for the clarification on SUBLOCADE guidance between the 15% and 8%. There's also another element, it's small, but SUBLOCADE ex U.S., how should we think about that line of revenues given the organization changes you've made. So should we expect this to stabilize? Could it decline next year? Just if you could help us on that.

And then just on R&D, obviously, you're going to have 2 Phase III go-no-go decision in the next few weeks. And how should we think about the impact of the different scenarios on your OpEx guidance if you take 0, 1 or 2 asset to Phase III?

Sure. I'll let Ryan take the first question, and then Christian and I will split the second.

So on SUBLOCADE and rest of the world, it's going to be relatively flat year-over-year. We will see growth in Australia and Canada, but we will lose some of the volume coming out of the Nordics.

Okay. And then with regards to R&D, I'll let Christian comment on the programs and timing of the Phase II readouts. What I would tell you is our budget for 2026 contemplates if we have the opportunity to advance those programs that is built into the operating budget that we're working towards. Christian?

Yes. So based on what Joe just said, the 2 Phase II trials were completed at the end of the fourth quarter last year. We are now going through the traditional process of data cleaning, data closeout and statistical programming. This will be followed by a database lock by the end of the first quarter this year with the final tables, figures and listings available in the second quarter of this year for preparation of top line results on both assets.

Now I must add that in addition for INDV-6001, in addition to the Phase II data, the decision to proceed to late-stage clinical development, that is the Phase III hinges on 3 additional factors. First, the manufacturing feasibility and the availability of the drug product for the actual Phase III. Second, we are currently running a payer validated differentiation and evidence that is going to be required for coverage based on the target product profile research; and then three, the impact of that research on the clinical Phase III trial design, if indeed this is what the business decides to do.

Good day, and thank you for standing by. Welcome to the Indivior PLC Q3 Results 2025 Webcast and Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your host for today, Jason Thompson. Please go ahead.

Thanks, Sharon, and welcome to Indivior's Third Quarter 2025 Earnings Conference Call. I'm joined today by Joe Ciaffoni, Chief Executive Officer; Patrick Barry, Chief Commercial Officer; and Ryan Preblick, Chief Financial Officer. We are also joined by Christian Heidbreder, our Chief Scientific Officer, who is also available for questions.

Before we begin, I need to remind everyone on today's call that we may make forward-looking statements that are subject to risks and uncertainties and that actual results may differ materially. We list the factors that may cause our results to be materially different on Slide 2 of this presentation.

We also may refer to non-GAAP measures, the reconciliations for which may also be found in the appendix to this presentation that is now posted on our website at indivior.com.

I'll now turn the call over to Joe Ciaffoni, our CEO.

Thanks, Jason. Good morning, and thank you for joining our third quarter results call. I'll start with a brief overview of our performance in the quarter and detail the progress we are making against the Indivior Action Agenda. Pat will then discuss SUBLOCADE's performance and the progress we are making to improve SUBLOCADE commercial execution, and Ryan will discuss our third quarter financial performance and our raised full year 2025 guidance. We will then open the call for questions.

We are encouraged by our strong financial performance and improved commercial execution in the U.S. We are making steady progress versus our priorities and Phase 1 generate momentum of the Indivior action agenda. We have taken several actions to simplify the organization and position Indivior for success moving forward.

In the third quarter, we delivered strong 15% year-over-year growth in SUBLOCADE and benefited from continued price stability in SUBOXONE Film in the U.S. Total net revenue grew 2% year-over-year and adjusted EBITDA was up 14%. The momentum we have generated year-to-date is enabling us to raise our 2025 financial guidance. We now expect total net revenue in 2025 to be up versus 2024, driven by SUBLOCADE growth of 10% at the midpoint and assume SUBOXONE Film price stability for the remainder of the year. Adjusted EBITDA is now expected to grow 15% versus 2024 at the midpoint.

I want to thank the Indivior team for their performance in the quarter and for their commitment to making a positive difference in the lives of people living with opioid use disorder in the communities that we serve. For the rest of the year, we are focused on completing Phase 1, Generate Momentum of the Indivior Action Agenda, and we will be ready to enter Phase II, Accelerate, on January 1, 2026.

The Indivior Action Agenda is a 3-phased multiyear operational road map intended to maximize the potential of our business and make a positive difference in the lives of people living with opioid use disorder while creating value for our shareholders. We are making steady progress in Phase 1, Generate Momentum versus our key priorities that include growing SUBLOCADE in the U.S. the remainder of the year by improving commercial execution, taking actions to simplify the organization, eliminating all nonessential activities and establishing our go-forward operating model and determining the actions and investments necessary to accelerate long-acting injectable penetration in the U.S. BMAT category and to accelerate SUBLOCADE net revenue growth in 2026 and beyond.

For our top priority, growing SUBLOCADE in the U.S., improved commercial execution was the primary driver of solid dispense unit growth. Pat will discuss our commercial progress in more detail. We also took several actions to simplify the organization, improve commercial productivity for SUBLOCADE and strengthen our financial positions. These actions are expected to result in an annual reduction of operating expenses of at least $150 million as compared to 2025. Our 2026 operating budget will not exceed $450 million.

To focus and simplify the organization in Phase 1, Generate Momentum, we have completed the London Stock Exchange cancellation with Indivior now trading exclusively on the NASDAQ. We consolidated our operating footprint. We restructured our R&D and medical affairs organizations while preserving key capabilities. We announced our intention to pursue a change in domicile from the U.K. to the U.S. We discontinued the sales and marketing efforts in support of OPVEE. We will continue to distribute product upon request and meet all required contractual and regulatory obligations, and we are optimizing our Rest of World business to focus on Australia, Canada, France and Germany, which generates 77% of forecasted Rest of World net revenue and 94% of forecasted adjusted EBITDA while further reducing organizational complexity.

With these actions, we have established our go-forward operating model that we anticipate will generate immediate accretion to the bottom line and improved cash generation as we enter Phase II, Accelerate of the Indivior Action Agenda on January 1, 2026. We plan to provide full year 2026 financial guidance in early January. Also, as part of Phase 1, we are determining actions and investments necessary to accelerate SUBLOCADE growth in the U.S. Included in this is our new direct-to-consumer campaign, which launched on October 1. In Phase II, Accelerate, we will be focused on accelerating U.S. SUBLOCADE growth throughout the year, and we expect to immediately accelerate profitability and cash generation at a faster rate in 2026. I am encouraged by the steady progress that we are making in Phase I, Generate Momentum of the Indivior action agenda. I am confident that we will finish 2025 with momentum, and we are well positioned to enter Phase II, Accelerate, on January 1, 2026.

I will now turn the call over to Pat.

Thank you, Joe. We are encouraged by our strong U.S. SUBLOCADE performance this quarter, which was driven by improved commercial execution. Our commercial team is dedicated to helping people living with OUD and have a strong belief in SUBLOCADE as the #1 prescribed long-acting injectable in the category. To strengthen commercial execution, we have been sharpening the field force's message delivery with higher utilization of SUBLOCADE's core promotional materials on every call to improve overall intent to prescribe. We also are continuing to focus on improving field force call productivity to enable better reach and frequency on treatment providers.

Building on our position as the clear #1 LAI, we are reinforcing SUBLOCADE's treatment benefits with prescribers, including broadening HCP awareness of SUBLOCADE's label updates. These label updates include alternate sites of injection and rapid patient induction along with the ability to receive a second injection of SUBLOCADE at day 8. SUBLOCADE's rapid induction is a unique offering in the LAI category, and this clinical option for patients can help maximize the time at effective blood plasma concentration levels by accelerating the second 300-milligram dose. This option is strongly resonating with treatment providers.

This improved commercial execution led to strong SUBLOCADE net revenue growth in third quarter. Unit dispense growth was solid at 8% versus prior year and 3% versus the second quarter. Total category share of LAIs and new patient share in the U.S. for SUBLOCADE remained relatively stable at approximately 75%. We also saw 11% year-over-year growth in the number of active SUBLOCADE prescribers and 11% growth in those prescribing for 5 or more patients. The number of SUBLOCADE patients over the trailing 12 months also grew 5% year-over-year. These results are important early indicators of our commercial execution.

For the rest of the year, we remain focused on executing Phase 1 of the Indivior Action Agenda for SUBLOCADE. This includes continuous improvement in commercial execution to generate prescribing momentum for the benefit of patients and identifying investments to accelerate LAI penetration in the U.S. to deliver sustained SUBLOCADE net revenue growth in 2026 and beyond. As part of the investments we are making to accelerate the growth of SUBLOCADE, we rolled out a brand-new direct-to-consumer campaign.

On October 1, we launched our new campaign, Move Forward in Recovery, which is designed to emotionally and authentically connect with patients and drive awareness of SUBLOCADE as a treatment option for patients struggling with moderate to severe opioid addiction. Grounded in patient insights and shaped by research and lived experiences from patients and caregivers, its objective is to connect with patients by celebrating the everyday moments of recovery progress. Through emotionally rich visuals and a deeply personal narrative, it highlights the potential for growth, transformation and the motivation to move forward for oneself, family and community.

Importantly, the campaign addresses the stigma surrounding opioid use disorder by portraying the humanity and dignity of people in recovery, shifting the narrative toward hope and possibility. This campaign is being deployed with sustained investment levels through an omnichannel approach, including national television, digital and social media and in-office and point-of-care materials, along with a newly designed patient website. We're pleased to have our new campaign in the marketplace that is raising awareness and educating patients on the hope and possibility of recovery. While I'm pleased with our progress, we have several opportunities to drive further growth in U.S. SUBLOCADE. I'm confident that we will finish 2025 with momentum and accelerate U.S. SUBLOCADE growth in 2026 and beyond.

I will now turn the call over to Ryan.

Thanks, Pat. First, I'll discuss our third quarter financial performance, then our raised 2025 financial guidance and close on the financial impacts of our recent actions to simplify the organization. We are encouraged by our financial performance this quarter, which includes strong U.S. SUBLOCADE net revenue growth, stable SUBOXONE Film pricing and year-over-year adjusted EBITDA growth. We have taken meaningful steps to strengthen the business and are on track to achieve our financial commitments and complete Phase 1 of the Indivior Action Agenda, Generate Momentum.

Looking at the third quarter results in more detail, starting with the top line. Total net revenue of $314 million, increased 2% versus the prior year as SUBLOCADE net revenue more than offset expected pricing pressure on SUBOXONE Film and the continued wind down of PERSERIS. Total SUBLOCADE net revenue of $219 million, increased 15% versus Q3 2024. Dispense volume growth year-over-year was solid at 8%. On a sequential basis, total SUBLOCADE net revenue increased 5%, reflecting a 3% increase in dispense volume versus Q2. Q3 SUBLOCADE net revenue included a gross to net benefit of $10 million as well as a stocking benefit of $4 million.

Turning to SUBOXONE Film net revenue in Q3. We benefited from continued price stability in the U.S. Q3 net revenue included a gross to net benefit of $13 million. Total non-GAAP operating expenses were $145 million in the third quarter, down 3% versus the same quarter last year. Non-GAAP SG&A was unchanged versus the year ago quarter. Non-GAAP R&D expenses decreased 11% due to the reprioritization of pipeline activities and to benefits from the restructuring of the R&D and Medical Affairs organizations. Adjusted EBITDA was $120 million in the third quarter, up 14% versus the same quarter last year, driven by higher net revenue and lower operating expenses.

Touching on the balance sheet. We ended the third quarter with gross cash and investments of $473 million, up from $347 million at year-end. The increase in cash year-to-date was driven by approximately $200 million of cash flow from operations. Based on our solid performance year-to-date, we are raising our 2025 financial guidance. Our total net revenue guidance range is increasing to $1.18 billion to $1.22 billion. This raised guidance reflects better-than-expected year-to-date performance of SUBLOCADE and stability in U.S. SUBOXONE Film pricing. We now expect total net revenue in 2025 to be up versus 2024 at the midpoint. For SUBLOCADE, we are raising our full year 2025 net revenue guidance to the range of $825 million to $845 million. This represents year-over-year growth of 10% at the midpoint. We continue to see improving fundamentals for SUBLOCADE and expect to see growth on a demand basis for the remainder of this year.

We are maintaining our gross margin guidance in the low to mid-80% range and expect to come in at the high end of our non-GAAP operating expense guidance of $585 million to $600 million. While our total non-GAAP operating expense guidance range is unchanged, we now expect SG&A between $510 million to $520 million, reflecting increased investment behind U.S. SUBLOCADE and expect R&D between $75 million to $80 million, reflecting the restructuring of our R&D and Medical Affairs organizations. We are raising our full year 2025 adjusted EBITDA guidance to $400 million to $420 million, which is an increase of 15% versus 2024 at the midpoint.

Turning to our actions to simplify the organization as part of Phase 1 of the Indivior Action Agenda, we made several strategic decisions that position us to realize at least $150 million in annual operating expense savings off the top end of our 2025 non-GAAP operating expense guidance range starting in 2026. These actions reduce operational complexity, increased our focus on growing SUBLOCADE in the U.S. and strengthen our financial position. All the actions taken as part of Phase 1 of the Indivior Action Agenda have resulted in non-GAAP charges of $65 million to date. These charges include severance costs, real estate consolidations, write-offs for inventory, equipment and intangibles as well as other termination payments and consulting costs. The related cash impact is expected to be $40 million and will largely be paid out in the third and fourth quarters of this year.

We are on track to deliver Phase 1, Generate Momentum and achieve our revised 2025 financial guidance. We are in a strong financial position as we enter Phase 2 of the Indivior Action Agenda, Accelerate, beginning in 2026, during which we expect to drop significant dollars to the bottom line and accelerate cash flow generation. We plan to announce our 2026 financial guidance in early January.

I'll turn the call back over to Joe for concluding remarks.

Thanks, Ryan. In conclusion, we have made significant progress on Phase 1 of the Indivior Action Agenda, Generate Momentum. We delivered strong U.S. SUBLOCADE performance in the quarter. We improved our commercial execution, and we took several actions to simplify our organization. With our go-forward operating model in place, we are well positioned to finish 2025 with momentum and begin Phase 2 of the Indivior Action Agenda, Accelerate on January 1, 2026.

On a final note, given the optimization of our Rest of World business, I would like to take a moment to recognize and thank our colleagues outside the U.S. who are potentially impacted by this decision and who have worked so hard to ensure patients have access to our medicines. Your contributions to our mission of making a positive difference in the lives of people living with opioid use disorder are important and greatly appreciated.

We will now open the call for questions. Operator?

[Operator Instructions] And your first question today comes from the line of Dennis Ding from Jefferies.

Congrats on the quarter. I have 2 for you guys. So number one, the new $150 million OpEx cuts for 2026, can you please break down where this is coming from? How much of this was from the recent restructuring plans from your 8-K a few months ago, which I believe was all U.S. personnel? And how much of the OUS optimization is factored into this $150 million number?

And then number 2, when I look at SG&A as a percentage of revenue, it's around $515 million this year or 43% of revenue. But when I look at industry peers, it's around 25%. So to get to the peer average, that implies at least $215 million cut in SG&A alone. Can you comment philosophically where do you eventually see yourself relative to peers on SG&A spend? And if your goal is to get to peer average or perhaps even better than peers?

Dennis, thanks for the questions and for the congratulations. I'm going to have Ryan answer the first question, and then I'll take your second question.

Thanks for the question. Before I get to the $150 million, I just want to make it clear that the first priority we had was to make sure we put the right resourcing and investments behind generating momentum, behind SUBLOCADE. And then we went through the exercise of taking a look at the cost structure and the complexity in the business. And what you saw was the net result here of $150 million. And you can break it down into 4 categories. The largest category, almost half is tied to labor. We reduced our head count by over 32%. The second component was the reduction of all the nonessential spend through the categories and the functions of the business. Then there was the discontinuation of the sales and marketing of OPVEE and then also the final decision to optimize the rest of the world.

And Dennis, with regards to your second question, we did not approach Phase 1 of the Action Agenda, Generate Momentum from a perspective of targets. What we were focused on is doing what is in the best interest of Indivior creating value for our shareholders. We believe that starts with maximizing the SUBLOCADE opportunity in the U.S. And then what we did from there is we removed what we believe are all nonessential costs from the organization.

My commitment as we go forward is we will continue to ensure that we are only investing in activities that are essential to us maximizing SUBLOCADE in the U.S. and also maximizing the opportunity for our portfolio in Canada and Australia. So it's really not about targets. It's about what's right and in the best interest of Indivior and the value we can create for our shareholders.

Your next question comes from the line of David Amsellem from Piper Sandler.

This is [ Alex ] on for David. First one for me is you've talked about gaining traction in commercial patients who, as we know, are more profitable. Can you speak about that opportunity and also how you are balancing that with the core Medicaid population that comprises the majority of the business currently?

And then second question is, can you help us contextualize R&D spend going forward given all the organizational changes?

Sure. Thanks for the questions. I'll have Pat take the first one, and Ryan can take the second.

Yes. No, I appreciate the question on the commercial channel. And to your point, we want all channels to grow. We want Medicaid and commercial to grow, and we're certainly taking on the big effort of driving commercial volume. And so it starts with improved commercial execution around messaging and making sure that our customers understand the broad coverage that we have and the fact that those commercial patients, in most cases, 95% of the time, will have a 0 out-of-pocket. And then it continues with the important work of our -- working with our specialty pharmacy channel to make that as an efficient channel as Medicaid.

And so we're starting that work, and we do anticipate that, that -- while that will take some time, that we will see impact as we get into 2026. But the fact is that the commercial channel is growing. And certainly, Medicaid is going to be the predominant channel for us, but we think commercial is a strong opportunity for us as well.

Ryan?

Yes. And on the R&D spend, what you're seeing there is the consolidation and streamlining of the R&D and the medical team cost consolidations and the complexity there. But as it stands right now, we are focused on the Phase II assets and progressing them through 2025 and looking forward to the readouts in 2026. But to be very clear, if they are ready to proceed into Phase III, we do have the capabilities to make that happen.

Your next question comes from the line of Chase Knickerbocker from Craig-Hallum.

Congrats on a great quarter here. Maybe just first on SUBLOCADE. Guidance implies a very strong Q4. Can you just speak to if we're starting to see a meaningful increase in willingness to prescribe from those label updates, kind of anything there? And then just second on that, on the LAI market generally, I mean, clearly back to substantial growth. Do you think we're now clearly kind of seeing the benefits of 2 voices out there driving market growth? Or just kind of give us an update on kind of your thoughts on the market there as it's apparent, it's very, very strong in the third quarter.

Yes. So Chase, thanks for the questions. With regards to SUBLOCADE, what I believe we're seeing is the cumulative effect of improved commercial execution right now as we're getting better, we're doing better. We're also seeing the impact of the label changes as awareness rises playing through in the marketplace, along with significant investments we've made in commercial throughout the year.

As it pertains to LAI penetration, what I would emphasize there is we believe and have learned we're the player that has the expertise and the resources to make the investment to create the awareness and drive the education around the category, and that's exactly what it is that we're committed to do.

And I want to be clear, as we transition to 2026 with our broad DTC campaign, we are going to be investing beyond what it is that our models suggest that we should because we are committed to maximizing the potential of SUBLOCADE in the U.S.

And just with the strength that we're seeing, I mean, I know we're -- it's probably too early of a question, but certainly, it seems like we should be thinking about SUBLOCADE next year as maintaining kind of double-digit year-over-year growth as your guidance even implies for 2025 now. So just any thoughts you'd be willing to share there, Joe?

And then just second, on capital allocation. EBITDA guide was impressive. Can you just speak to how you're thinking about capital allocation now that your balance sheet is going to be strengthening meaningfully?

Yes. So with regards to SUBLOCADE in 2026, we'll hold on commenting on that until we give our financial guidance for 2026 in January. What I would say is we are encouraged that all the indicators in support of SUBLOCADE are pointing in the right direction. As it pertains to capital allocation, we're going to ask people to be patient. We want the opportunity to finish Phase I of the Indivior Action Agenda, along with our internal planning process to ensure we have a clear line of sight to the top line and the cash that we will be generating. Obviously, we'll have a lot of optionality as we go forward.

Your next question comes from the line of Christian Glennie from Stifel.

First one, maybe on some more around the sort of drivers here potentially on SUBLOCADE as it relates to some topics maybe we haven't touched a bit on for a while, particularly things like the -- whether there's any benefit you're seeing on average duration of use for patients, but then also the ultimate conversion of prescription into an actual dispense prescription. So anything to add there initially on that in terms of other drivers that could drive some growth?

Okay. Christian, thanks for the question. I'm going to ask Pat to take that one.

Yes. No, on dispense growth, we're seeing really positive indicators. We saw an 8% dispense growth year-over-year and a sequential growth that was solid off of a strong quarter. We're also pleased by the fact that some of the drivers behind that is we're increasing our prescriber base as well as increasing those from -- that are committed to writing 5 plus, which is a good indicator of solid prescribing and adoption. And so those are the indicators that we're really, really focused on. And we do believe that enhanced label is a differentiator in the marketplace because we're the only long-acting injectable monthly that has that rapid induction, and that's resonating very well with customers.

And sorry, anything on the average duration that patients are on SUBLOCADE?

Yes. So Christian, with regards to -- and that comes through the work we'll be doing through our specialty distribution in terms of conversion of patients to starts, and how long they continue on treatment. That's a work stream we kicked off. We're digging deeply into, and we'll comment more on that in 2026, but we expect those efforts to start to have impact in 2026. And that's one of the areas of which we believe will help accelerate SUBLOCADE dispense unit growth as we move forward.

And then my second one will be around just a clarification on the OpEx guide for '26 in terms of the savings certainly. Does that imply that effectively rest of world is streamlined and as it will be by the 1st of January, effectively of '26?

And then just to clarify on the R&D part, does that -- does the guidance assume that those Phase II assets progress into Phase III, for example, with the cost of that? Or is that something that may subsequently need an update?

Yes. So I'll ask Ryan to take the first question. I'll take the second.

Yes. So regarding the budget for next year, where we said we will not spend more than $450 million. That includes everything. That includes our go-forward model in the U.S. and in the Rest of the World business.

Okay. And from an R&D perspective, with the changes that we've made, we've preserved the capability if we're fortunate enough to have programs to advance when the data reads out to be able to do so, and that would not result in an additional increase to OpEx in 2026.

Your next question comes from the line of Brandon Folkes from H.C. Wainwright.

Congratulations on a very good quarter. Maybe just following on from an earlier question. So as we look ahead to 2026 and the potential to move into Phase III, what do you need to see from the SUBLOCADE business to move into that phase? Are you expecting the enhanced commercial focus to be running at full speed at that stage? And alternatively, how do you see the sort of long-term path to peak sales in SUBLOCADE or peak penetration in the LAI market? And then along those lines, thinking again of Phase III, sort of what are you thinking about in terms of that breakout phase in terms of assets you would go after? Are these adjacencies that may not distract from the SUBLOCADE efforts? Just any color on that would be helpful.

Yes. So Brandon, thank you for the congratulations and certainly appreciate the questions. First off, I want to emphasize, we are head down in Phase I, generate momentum and looking to finish off the year and be positioned to start Phase II accelerate on January 1.

The second thing I want to emphasize, we've been clear, we have to earn our way to Phase III. And that starts with internally the confidence that we have the capabilities to take on more. And then, of course, externally, that we have the credibility to do so. So we're not focused to Phase III at this point. We're focused around executing what we're setting out to do.

I think to your question directly, when we transition to Phase II, the answer will be, one, the assessment of the internal capabilities, which will be aligned to the results that we're delivering relative to the guidance that we're giving. From a -- what we would be looking at, what I would be comfortable saying now if we earn our way to it, will be commercial stage assets that have the potential to enhance our growth profile and to diversify our revenue.

And I'll let Pat comment on long-acting injectable penetration and what it is that we're doing to drive that.

Yes. Thanks, Joe. Look, right now, we are the market leader, and we've more than stabilized share at 75%. But the fact is, is that the overall LAI category still sits at 8%. And so our focus is going to be on continuing to improve our commercial execution. As we get better, the business will get better. We do believe that our effectiveness will drive LAI category. And we also are placing a big bet on direct-to-consumer. As the category leader, we want to drive education of those OUD patients and drive traffic into our treaters' offices. And we're investing in that way in a sustained way to do just that.

Certainly not going to call a peak penetration rate, but I might direct you to other analogs, whether it be the HIV market or the schizophrenia market, where the LAIs have achieved 20% to 25% peak penetration. We're a long way off from that, but that's what's encouraging for us. When we get better, we have a big opportunity to capitalize on.

And Brandon, one other thing I would add, we've also -- Vanessa Procter has joined our organization, and we believe that it's important that the work that we do in advocating for these patients, inclusive of public policy will be key in ensuring access and ultimately increasing long-acting injectable penetration. So that along with the consumer are really where we're going to put our efforts to drive LAI penetration.

Great. And a follow-up, if I may, and I think this may be for Ryan, bit of minutia, but just cash flow from operations in the quarter, are there one-timer there just sort of the spend on the cost reduction and the Medicaid rebate that you called out in 2Q? Anything else? And then maybe just any color on cash conversion in 2026? And then also on that $450 million OpEx spend, is that a cash basis or an adjusted accounting figure, which may include some noncash figures? Sorry about the minutia, but I just want to get this right, and that's all for me.

Ryan?

Yes. So starting with the 2025 cash, the $200 million is primarily driven by the underlying business, the strong demand that got us up and generate $200 million. But that was offset, as you can imagine, by some CapEx and some debt payments. So that's the walk in regards to 2025. In regards to 2026, that $450 million is our adjusted operating expense budget in terms of expense that will hit our P&L for next year.

Your next question comes from the line of Thibault Boutherin from Morgan Stanley.

Just maybe a quick question on SUBLOCADE in the quarter, and I apologize if it's been touched on and I missed it, but if you could give more details on the gross to net in the quarter for SUBLOCADE. Given the guidance for the year, I assume there is no risk of reversal, but could that be a sort of bigger base when you think about growth for next year?

And then the second question, just on SUBOXONE. I know it's not the focus, but just if you could touch a bit on your visibility now that we've seen pricing being a bit stable for more time. The erosion seems to be stable as well. So just how you think about it in your building block when thinking about the outlook for the organization going forward?

Thank you for the questions, Thibault. I'll take SUBOXONE and then hand the SUBLOCADE gross to net question off to Ryan. So, look, what I'll comment on SUBOXONE is limited to 2025, which is we are at a point in the year where in our raised guidance, we are not assuming any additional price erosion. So that's different than what we've previously said. We're assuming price stability. We've also seen a relatively slow decline from a share perspective. In terms of 2026, I'm going to hold until we have a full picture of the evolution of the payer landscape and those dynamics. So we'll -- that certainly, from a revenue perspective, will be incorporated into the guidance that we give in 2026. And then Ryan on SUBLOCADE.

Yes. So in regards to the Q3 net revenue, to give you a little color, we booked the $219 million, which was up 15% versus last year, driven primarily by the dispense. Within that number, you saw the result of our normal quarterly balance sheet review of our accruals. There was a gross to net release of $10 million in there, and then there was also some stocking in terms of shipment phasing. So that's the $4 million. So a total of $14 million of benefit in the quarter.

I will now hand the call back to Joe for closing remarks.

Thank you, operator, and thank you to everyone for joining the call today. We look forward to updating you on our progress as we execute the Indivior Action Agenda. Have a great day.

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

I think we start. Good morning, everyone. Thank you for joining this session of the Morgan Stanley Global Healthcare Conference. I'm Thibault Boutherin, I co-head the European Pharm Equity Research team based in London.

Before we start, I would like to refer to some important disclosures, which can be found on the Morgan Stanley website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative.

So for this session, I am delighted to welcome Joe Ciaffoni, CEO of Indivior and Ryan Preblick, CFO of Indivior. So thank you very much for taking the time to join us today.

So we'll start with maybe some introductory remarks from you, and then we'll go on the Q&A.

Sure. Thank you, Thibault. And I want to thank you and the Morgan Stanley team for affording us the opportunity to participate in the conference. We're certainly excited to be here. We're excited to have the opportunity to talk about what's happening at Indivior.

I would start by saying in terms of our performance in 2025, we're certainly encouraged by what it is that we're seeing. We're not satisfied in any way by our performance, and we'll continue to focus on driving execution for the remainder of the year, but we believe we're well positioned to deliver on our 2025 financial guidance. There's a long road in our revised guidance. There's a long road in front of us and a lot of work to do, but we're very optimistic.

As it pertains to the work right now at Indivior, everyone's focused on executing the Indivior Action Agenda, which is our multiyear operational road map, which we believe will position the company first and foremost to make and maximize the potential of this portfolio to make a positive difference in the lives of people living with opioid-use disorder and to create value for our shareholders.

We are in Phase 1 of the Indivior Action Agenda, which is generate momentum. During this phase, we're trying to generate momentum in support of SUBLOCADE through stronger commercial execution, while concurrently making the determinations as it pertains to the investments that we will make to accelerate SUBLOCADE to accelerate long-acting injectable penetration on a going-forward basis.

We're also focused on simplifying the organization and ensuring on a going-forward basis that we are only investing in what are essential activities for the organization. I'm confident we'll be in a position to enter Phase II of our Action Agenda accelerate on January 1, 2026. And in the accelerate phase, we expect to see an acceleration of SUBLOCADE in particular, in the U.S. throughout 2026, but we do expect to see an immediate acceleration of the bottom line at a much higher rate right out of the gate.

So with that, I'll hand it back to you.

Okay. Amazing. So before we go into the business, maybe we can start with some topical question on U.S. policy. Maybe Ryan, if you can start maybe about tariffs. If you could remind us Indivior's exposure to potential U.S. tariff and pharma, your supply chain for SUBLOCADE, SUBOXONE in the U.S. and any other factors relevant to investors regarding tariff?

Yes. Right now, Indivior has a very low exposure to tariffs. Our film product and SUBLOCADE are both manufactured here in the U.S. As a percentage of cost of goods sold, we import a very low percentage, and it's primarily raw material, buprenorphine. And at this point, that's exempt from the tariffs coming over from the U.K. So net-net, as it stands right now, we're in a good position.

And maybe another question on Medicaid. If you could remind us the share of revenues from Medicaid in your U.S. sales for SUBLOCADE, SUBOXONE? And if we see an impact on the funding for Medicaid, how could that potentially impact the business?

So sure, when you look at SUBOXONE film and SUBLOCADE, the majority, so over half of the business comes from Medicaid with SUBLOCADE right now, it's about 65%. We feel that we're very well positioned overall when you look at what's happening from a government and policy perspective, starting with the administration's drug policy priorities, 3 of 6 of those align directly to the work that we're doing at Indivior. If you look at the bill that recently passed through the Congress, there's a lot of exemption being made for people with substance use opioid use disorder, for example, around work requirements.

So we're very confident that there's abundant opportunity to grow SUBLOCADE on a going-forward basis. We certainly advocate for and hope every person who is eligible and should receive Medicaid is able to do so. But at the end of the day, we're sitting at 7.8% long-acting injectable penetration, no matter where that nets out. there's abundant opportunity within Medicaid to grow SUBLOCADE as there is in the other portions of the business.

Amazing. Thank you very much. So turning on to the business. You've now been CEO for a few months. So maybe if we can start by your diagnostic of the organization. Where have you been surprised by the strength of the company? And where do you see much room for improvement?

So look, my diagnosis of the organization is, first and foremost, the work that the company does is so important. And it's relevant we're on the right side of the opioid epidemic. We're fortunate that we're a company that is generating significant revenue. We have a tremendous growth driver in SUBLOCADE, that's the first LAI, it's the #1 prescribed product. It has a durable runway and great coverage. We're a profitable company that's generating meaningful cash flow, and we have a strong balance sheet.

On that side of the ledger, probably the thing that surprised me most, prior to joining the company, I participated in 151 roundtable meetings. So I had the chance to hear the voice of every employee of Indivior. And what struck me is when I ask people, why do they work at Indivior for over 85% of our people, they've been personally impacted by substance use disorder, opioid-use disorder. And I believe that's really the special sauce of the organization. Our people are passionate. They're committed. They believe in what we're doing. And I think that's why the company has been so resilient.

On the other side of the diagnosis, Indivior is a relatively straightforward business. It's an unfathomably complex organization relative to the business opportunity. With that complexity, I think there's a lot of activity, much of which is nonessential. And on the biggest surprise, I guess, in terms of opportunities for improvement is just the level of commercial execution, in particular in the U.S. isn't at the level than it needs to be, but I can assure you that will become a hallmark of the organization. We will excel the commercial execution moving forward.

Okay. Great. And I just want to actually touch a bit on the organization. You mentioned that [RTD] complex when the mission of the business is straightforward. So what are concrete examples of the complexity? How are you planning to address them? And how will the go-forward operating model will differ structurally from what Indivior is today?

Yes. So look, if you start with what is the thing that creates the most value for patients that creates value for our shareholder, it's SUBLOCADE. And in particular, at SUBLOCADE in the U.S. market. So first and foremost, we are going to put a tremendous amount of effort and investment in support of SUBLOCADE, if anything, we may potentially overinvest in SUBLOCADE as we seek to accelerate the product and drive long-acting injectable penetration.

We've been pretty clear in terms of where we're focused in terms of simplifying the organization and taking nonessential spend out. So we've talked about a restructuring of our research and development organization that we're currently assessing all options as it pertains to most of world and OPVEE.

As an example, I can assure you, the only options that aren't in play is the status quo. And the net-net, we believe that we're fortunate to be in a position where we can make every investment, in fact, to overinvest in the support of SUBLOCADE and not or and drop meaningful dollars to the bottom line right out of the gate in 2026. And the other comment I would make, we are not dabbling around the fringe of this cost structure. We are hitting it head on. So the impact of that will be meaningful.

Okay. And if I sort of can push a little bit on quantifying. SG&A was 49% of sales in 2024. G&A within that was 27% of sales. So can you outline a bit the opportunity here? And in the midterm, what do you believe is an appropriate sort of ratio that we could see?

Yes. So we're not going to get into percentages and that sort of thing in response to your question. What I will say is the following. What we're looking at is meaningful. It will have an immediate impact in January of 2026. On our Q3 call, we will share with people where our head is at in terms of the amount of OpEx. So it will be a statement of we expect OpEx to be reduced by at least and then we're going to be issuing guidance in January and people will see the full extent of the OpEx that we're taking out.

But I would just emphasize, it is going to be significant. It will have day 1 impact. But the key is we're going to do that not by setting a target, but by ensuring we're making every investment in support of SUBLOCADE in eliminating nonessential activity.

That's very clear. And just a bit of, I would say, clarification on the timing. So should we expect that planning of the organization will happen in the second half and you establish sort of new cost base end of this year? Or could we see this being a multiyear process?

Yes. So we'll have our going-forward operating structure in place by the end of this year, and Ryan can comment on how to think about the impact and how it will flow through from a cost structure perspective.

That's clear. On ex U.S., you mentioned that you are reviewing this part of the organization. It was 15% of sales in 2024. So how do you think about ex U.S. operation in that context? And what alternative models could you adopt? Could you go to a distributor model? And do you know at this stage if it's fair or not to expect growth ex U.S. going forward?

Yes. Ryan, do you want to start on that one?

Yes. I would say when we look at the Rest of the world business, it does drive a large level of net revenue and some op income for the business. But it's just not at sale compared to where we are in the U.S. The focus is in the U.S. market. We have SUBLOCADE, we have film, and we have tablets still performing well over there. But it's a stable business, grows modestly year-over-year. But at this point, as Joe said, the status quo is not acceptable at this point. So we are looking at all options when it comes to rest of the world in terms of generating value out of that.

Okay. That's clear. And maybe if you can turn to SUBLOCADE and to the long-acting injectable market. Maybe if you can go back on some of the dynamics in the U.S. So you had really good growth in the second quarter. If you could come back on the dynamics behind this performance. Are you already seeing an impact from the label update you had in the U.S. recently? Or do we have -- could we still see more impact from this going forward?

Yes. So I think it's a culmination of factors that are starting to have impact. So we had the label updates from early in the year. The organization made significant investment from a marketing perspective, inclusive of consumer. And also, I think we started the process of improving our execution.

When you look at Phase 1 of our Action Agenda, which is generate momentum, that's really anchored to a belief that this year, by improving commercial execution, we should expect to continue to grow SUBLOCADE for the remainder of the year while we're thinking through what are the bigger investments that we can make to accelerate the product in the long-acting injectable market in 2026.

That's clear. And there were some market headwinds on the buprenorphine market and the long-acting injectable market through 2024. The Medicaid disenrollment was a headwind. There was some budget constraints in the criminal justice system. So where we in terms of these obstacles today? And what are the sort of key obstacles you're navigating right now in the U.S. market with SUBLOCADE?

Yes. So look, we're very fortunate. SUBLOCADE is poised and well positioned to grow. We're expanding the breadth of our prescribing base. We're improving the depth of prescribing. We have broad payer coverage. We have a differentiated asset. If you step back and think about SUBLOCADE, it's the first long-acting injectable, it's the #1 prescribed that's been used in over 350,000 patients.

We have 88% coverage in both Medicare and Medicaid. And so our focus is really on what we can control, which is our execution from a commercial perspective, which I really think to be candid, is the biggest opportunity for improvement that positions us for when we make these other investments to drive the market to ensure that SUBLOCADE really is the beneficiary.

That's clear. I have to mention competition, right? So Braeburn launched a competitor product called Brixadi. It had quite some success taking market share in the U.S. through 2024. Are there particular segments of the market where you feel they've been successful? How are you pushing back against them? And do you see currently a market share stabilization? And do you expect this to continue?

Yes. So look, to be candid, we spend all of our time. I spend all of my him focused on our execution in support of SUBLOCADE. I'll reiterate it again. We have the first LAI. We have the #1 prescribed long-acting injectable product. It is a differentiated product and that it's the only once-monthly that has rapid initiation in its label. So we're most confident in the market position of SUBLOCADE. We welcome anybody to the space. And we believe that additional voice will be beneficial to patients and will better inform physicians in the community. And so we're not worried about or concerned about any competitor coming to the space. We embrace that.

We've seen over multiple quarters now, share stabilization of SUBLOCADE in the mid-70%. And look when you look at any category, there are physicians that we would refer to as early adopters. In this case, these are buprenorphine proponents delivered in a long-acting injectable. And of course, they're going to trial a new product coming to the market.

So I congratulate the other product on their share, welcome them to the market, but our focus is really Indivior execution in support of SUBLOCADE and the biggest learning of 2024 is that we're the only company with the resources and that is equipped to drive long-acting penetration because I think the bigger challenge of '24 wasn't the impact on share, it was with a second entrant that the market didn't grow in line to expectations. And that's where we now know we're the ones that have to drive that and make those investments.

That's clear. And I want to follow up on the long-acting injectable penetration. And you said clearly that the priority to drive this penetration within the buprenorphine market going forward. Right now, I think you mentioned in the past, it's around 8% penetration within upon buprenorphine. How high do you think this penetration rate could go? It's realistic to think that 25% or even 30% of buprenorphine could be an injectable in the mid to long term?

Yes. So I'm not going to prognosticate on where it could go. I'm going to confront the reality of where it is, which is 8%, which is far too low. So we're going to be working very hard and stepping into this with the appropriate investments anchored in particular, to educating and activating the consumer. So that's most important. Not to dodge your question, I think you could look at a lot of analogs and data. If you want to look from a long-acting injectable perspective, if you look in the HIV schizophrenia market, I could show you research that we have internally that would suggest 20% to 30% long-acting injectable penetration is reasonable.

That makes sense. And as we think about the sort of barriers to overcome to drive that penetration, can you come back a little bit on what are some of these key barriers. Is it clinical inertia? Is it logistical hurdles around shipping the products and logistics around the product? Is it training injectors, patient preference, payer dynamics? So what are the sort of key obstacles to overcome to drive penetration?

Yes. It's kind of everything that you said. So look, first and foremost, you have to appreciate the complexity of somebody who is struggling with addiction. And there's a difference when you make a determination that in your recovery journey, that you're going to go to a monthly, long-acting injectable that's going to take away the rewarding effects of drug use, it's a difference in terms of your readiness which can impact product choices.

Some patients prefer the ability day-to-day to pick and choose what product they want to use. That's where education of the patient, the people who care about them trying to activate them and making sure they understand and are thinking through with their physicians, the pluses and minuses of long-acting injectable treatment is important. You have physicians that for many years have really supported and done well by patients using tablets than transmucosal film. So there's a change of behavior. That's a different approach to the product. This is a category that today is 92% generic. And so that's certainly something that we have to work through and make sure that we have broad access.

But importantly, and this gets to our execution, are able to educate physicians on a plan-by-plan basis of the availability of SUBLOCADE inclusive of how to navigate the specialty distribution. So it's a culmination of all of those things. What we can control is how we execute, educate and help people who are motivated to use SUBLOCADE to navigate those dynamics, and that's what we're focused on.

Okay. That's very clear. One aspect of the commercial strategy I want to mention in particular is you mentioned your ambition to grow the share of SUBLOCADE sales coming from the commercial channel by a position to Medicaid. If you could give us a bit more insight into how you can drive this additional penetration in that specific patient population?

Yes. So there's a saying in the commercial world, water flows to the path of least resistance. The reality is it is easier -- it's an easier process to get a patient on Medicaid SUBLOCADE. It is not a challenging process, though, to get that patient commercial. We just haven't had the organizational focus and set clear expectations with our people around execution.

So if there's 2 areas that really get to the blocking and tackling of execution where I know we can have impact, it's our commercial pull-through where we have 88% access that represents 60% of our covered lives, but only 25% of SUBLOCADE utilization.

Now SUBLOCADE will -- it will always be skewed to Medicaid, but not as dramatically as it is. So that's the delta that we're trying to impact the other area is how it is we educate and our confidence in helping physicians understand the specialty pharmacy distribution network along with when they're in a buy-and-bill situation.

Very clear. I want to come back a bit on the guidance for this year for SUBLOCADE. You raised the guidance in the second quarter, but after the good performance you had in the first half, it still appears quite conservative. So if you could maybe come back on why we should expect more limited sequential growth in the second half? Or is it just that you want to make sure that your guidance is conservative basically?

Yes. I would say, first, taking a step back, we had a solid Q2, record SUBLOCADE at $209 million. But what we did say is if you look at that performance on a demand basis, it was more like $194 million. And so our guidance does project growth in the second half versus the first half. So that's what we have built into the guidance for the balance of the year.

And I would add, our view is the guidance is reasonable. Ryan gave a strong depiction there of the SUBLOCADE dynamic. With regards to SUBOXONE film, we continue to have to assume that there's the potential for price erosion. I guess I'll knock on wood that we haven't seen that. And to the degree we don't see that for the remainder of the year, that would represent upside relative to the revised guidance, too.

Okay. That's clear. And just maybe to finish on SUBLOCADE. One channel of growth in the past has been the criminal justice system. Then we faced some funding issues relatively recently. So how should we think about this specific channel going forward? Is it still a key priority for you? And how can you reignite growth here in the criminal justice channel?

Yes. So criminal justice system remains an opportunity that we're committed to and focused on. In many respects, we think long-acting injectables are really fit for purpose within the criminal justice system. We think the business has now been rebased, and we're focused on growing it from here, and that gets to strong commercial execution. It also gets to the work that we do from a public policy, government affairs perspective because a lot of that is associated with funding. And so we're very fortunate. We announced in the middle of the summer that Venessa Procter who is an exceptional professional has joined the organization as our Executive Vice President of Corporate Affairs, and that's under her remit, and I'm very confident in the job that she'll do.

Okay. That's correct. And just wanted to turn a bit on SUBOXONE now. So you mentioned the upside risk on the short-term should pricing hold up a little bit more. Can you talk a little bit about your view on SUBOXONE in the long term? How do you expect the dynamics to evolve? Could there be a change in strategy in this product? Or is it pretty much the same as we've seen so far? Yes, maybe...

Yes. So I think SUBOXONE film is a very straightforward story for us. It's a very mature product that is in a category now that is genericized and we'll manage it the way you would any late in the life cycle product. When you think of the story of Indivior in terms of growth and going forward, it's really a SUBLOCADE and SUBLOCADE in the U.S. market story. And for now, SUBOXONE film continues to be a nice contributor to the portfolio.

That's clear. And one product I want to mention, and you touched on it, is Opiant. When Indivior acquired OPVEE, there was a whole organization coming with it. Can you comment on the level of integration of OPVEE within Indivior today? Is there room for simplification here, maybe starting here?

Yes. So what I would say with regards to OPVEE is, on the one hand, it really is a product that has a profile that one could easily be enamored by. It's a differentiated rescue medication, and that's the only one with synthetic opioids in its label. It works fast, it is potent and it is long lasting. That being said, to this point, the commercial uptake has been de minimis.

And we've been confronted with resistance that I don't think the organization anticipated. So where I'll leave it is OPVEE is something that we're thinking through how it is that we will handle that on a going-forward basis. What I can assure you is the status quo will not be one of those options.

And can we expect an update in the third quarter on Opiant, OPVEE?

Yes. So we expect when we have our Q3 call, if not sooner, that all of the organizational changes we've talked about will have been implemented, and we will end the year in our going-forward operating posture.

Okay. That's clear. And I just want to touch a bit on pipeline and R&D. You've narrowed the pipeline to now 2 Phase II assets, one ultra-long injectable version of buprenorphine and one nonopioid medicine for opioid-use disorder. So maybe if you could comment on your degree of confidence in the potential success of the Phase II, how committed you are in moving them to Phase III in case of success and how we should think about your long-term approach to R&D as well?

Yes. So the good news is I really don't have to opine too much because the Phase II studies will be fully enrolled by the end of the year. So they're fully funded and will be enrolled, and we're going to get data readouts in the first quarter or early second quarter of 2025. From there, if we're fortunate to have products or programs to advance the Phase III, we will maintain a development capability that will enable us to execute those Phase III programs.

When you think about Indivior moving forward, if we earn our way and we need to earn our way both in terms of our internal confidence capabilities along with external trust and credibility to Phase III, which we refer as the breakout phase of the Action Agenda where we would seek through acquisition to diversify and enhance the growth profile of the company, we will focus on commercial stage acquisitions.

Okay. That's great. That was actually my following question. So very clear commercial stage assets. What kind of assets would be a good fit with Indivior in terms of therapeutic areas where you could go? Are you fully focused on opioid disorder? Could we see acquisition addition more generally? Could it be broader neurology?

So look, right now, we're so far from that, and we're head down in execution beyond saying that it would be commercial stage that would be our focus. I don't want to comment too much because it could give an impression that we're out further ahead of where we actually are. I think what you just talked through would be a traditional logic flow. Obviously, if there's something that was OUD specific that leverage the capabilities and infrastructure that we have in place, that would be the ideal scenario and then you're moving into adjacent areas. But right now, we're 100% focused on the generate momentum phase of the Action Agenda and trying to position the company to move into Phase 2 accelerate on January 1, 2026.

That's clear. And if we take a step back and we look at capital allocation in general and maybe also in the shorter term, if you can sort of frame your prioritization between M&A, returning cash to shareholders and how we navigate through that in the next couple of years through the Action Agenda?

What I would say there is we're going to come back at the beginning of 2026 with a better sense of what our capital allocation priorities are. We want to take 2025 and really execute this project momentum exercise to the highest level. That will give us a better chance to really realize what our top line is looking like. It will give us a chance to really put the resources behind SUBLOCADE to build that momentum.

And also, as we work through this exercise of looking at our cost structure, the complexity, it will give us a chance to see what our bottom line looks like as well. So when you add all those up, by the end of '25, we'll have a better view of where we stand with those optionalities going into '26.

That's clear. Okay. So maybe one last question for you, Joe. You've delivered an earnings beat. You -- I mean, as a team, you raised guidance, you simplified the listing structure of the company. You announced the strategic plan and the market reacted very well to all of these initiatives. Share price has performed very well over the last few months. So do you still believe the stock is meaningfully undervalued from here? And what are the key areas of misunderstanding from the market?

Yes. So I appreciate the question. I do believe there continues to be a gap between the intrinsic value of the company and where it is that our shares are trading. I think that one, people get but maybe underestimate the durability and what a great growth driver SUBLOCADE is and the potential that it has on a going-forward basis.

And then the second thing to be very candid, is I think people are underestimating just how inflated the cost structure is and how we have the ability to make every investment, in fact, overinvest in support of SUBLOCADE and driving long-acting injectable penetration and then meaningfully change the view of the earnings potential and cash generation of this business.

That's very clear. We're getting close to the end of the time. So thank you very much for your time today and for joining us at the conference.

Thank you.

Thanks, Thibault.