Morgan Stanley Global Healthcare Conference. My name is Thibault Boutherin. I am part of the pharma equity research team based in London. Before we start, I just need to refer to some important disclosures. Please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. And if you have any questions, please reach out to your Morgan Stanley sales representative. So for this session, I am delighted to have with me Mark Crossley, CEO of Indivior, and thank you very much for joining us today. So we'll shortly start with the Q&A, but before that, Mark, do you want to maybe start with some introductory comments? Certainly, and I'll layer on some disclosures with forward-looking statements that are available on Indivior.com, if you could take a look there rather than run through them all here. For those of you who aren't as familiar with Indivior, you know, we've been pioneered to help people suffering from substance use disorder. And we've been in place for about 20 years. We operate in about 39 countries. About 80% of our revenue is in the U.S., which has been so disproportionately impacted by the opioid epidemic, with about 20% of our revenue offshore. Since I stepped into the CEO chair, we've laid out a very simple but effective strategy that we've been laser-focused on to drive growth and to help more patients, and it starts as simply as the first pillar is about driving our top asset, which is SUBLOCADE, which we think is a paradigm-shifting treatment for people with opioid use disorder. It's a once-monthly injectable with a very unique profile, and I'm sure Thibault has a question or two on that, and we can get into that in more detail. The second prong of our strategy is about diversification, and this is about starting to diversify outside of opioid use disorder, which is our primary revenue source. We have a long-acting franchise in schizophrenia with PERSERIS, which is a once-monthly risperidone asset. Then we recently bought Opiant Pharmaceuticals and have brought in a product called OPVEE, which is an overdose rescue. So you're starting to get beyond moderate to severe opioid use disorder treatment and starting across the full continuum of care into rescue also, so meeting patients where they need to be. The third prong of the strategy is to start to build out and advance our pipeline, and I think the advancing part is key because, for investors, if we're not able to advance the science and advance the assets and bring them to market, you don't get the value. And that we take that very seriously, and over the last few years, we've built up a good profile or good portfolio for substance use disorder from a cannabis use disorder asset, which is in Phase 2B, to an alcohol use disorder that we got through Opiant, which is also Phase 2, to a non-opioid opioid use disorder medication, which is in Phase 1b, and then some preclinical assets. So very excited about that part of the strategy. The fourth one, and one we take very seriously, is our operating model and how do we efficiently deploy capital? How do we manage our P&L? How do we match up our strategy, our structure, and our culture to deliver both medications to patients to help them, but also to deliver shareholder value, and we take that very seriously. As part of that, you know, we've just put out our second ESG report, and we're also working to resolve legacy legal matters that have been with the company for nearly a decade. We've recently settled both the states and the payers as part of an antitrust MDL, and we have the direct purchasers remaining, who we're in mediation with and have trial on October 30th. So really four key strategies for delivering value and helping patients that we've been working on for the past three years. So take that as an intro, Thibault, back to you. Yeah, thank you very much for the, for the introduction. So, obviously, let's focus on SUBLOCADE, which obviously is, you know, the key growth driver and one of the key focus for investors. So the the rollout of the drug continues to be very strong in the U.S., in particular. It's been very consistent. So could you give us some more insight into the key driver, drivers of the growth, the current focus on your of your sales force, in terms of continuing to driving penetration of this product in the U.S.? Maybe, maybe we'll start there. Yeah, I think for us, patients in treatment for opioid use disorder, you know, is advantageous for all stakeholders, both the patient themselves, their caregivers, people that are paying for the medication, you know. So having a once-monthly long-acting injectable, you know, is a major differentiation. And what we've focused our strategy on is within a channel called organized health systems. And for those that aren't familiar with what organized health systems are, you know, it really is comprised of three subgroups of customers. The first is large regional medical centers, and these are centers that have significant infrastructure to support the physician. Because of the unique product that is a controlled substance, specialty pharmaceutical product, there's a significant amount of administration required in both procuring the product, setting up delivery to match up with the patient, and, you know, keeping that product controlled on-site. And those big systems are able to do that much more efficiently than the small, independent sort of doctor's offices. So that's a big piece of where we are, and the majority of patients and majority of physicians are in these organized health systems, as those have consolidated through time over the last five to 10 years. The second prong of the strategy is government sort of payers, and the largest one out there is the Veterans Administration hospitals, and they're the single largest provider of treatment for opioid use disorder in the country. Just by nature of veterans, the experiences they have, unfortunately, they just have a higher instance of substance use disorder, including opioid use disorder, than the general population. And And the last arm, which we've continued to invest more behind, is the criminal justice systems. And, you know, the nature of this disease is before patients are in treatment, they're actually breaking the law. You know, they're using medicines illicitly, or they're using illicit drugs to get high after - you know, it's usually initially seeking euphoria, but then they become physically addicted and end up in a cycle where they're needing more and more medication to fulfill their physical addiction, you know, 'cause that's what it ends up being, rather than chasing the high. And so 65% of our patients end up coming in contact with the criminal justice system, which is just unprecedented. So we see that as a great place to initiate treatment, and the way we think about it is patients—when you talk to a patient, they talk about this moment that they have when they want to seek treatment, and usually it disrupts their life, puts part of their family at risk, something like that. Well, going to prison, where they sacrifice their entire life, is one of those moments, and what we're seeing is these prison systems are trying to stop the revolving door, trying to stop the people falling out of treatment when they come out of jail, and so they're starting to treat patients while they're incarcerated. And so we see that as a huge opportunity. All of those are driving the growth we have. You know, when you look at where we are in 2023, super proud of the team. We just took up guidance on SUBLOCADE by $30 million for this year, to over $600 million at the midpoint. We had 57% growth at the half year, and the guidance indicates about 50% growth on the full year. So real great momentum behind the strategy, and the team's executing exceptionally well. That's, that's interesting. And one of the interesting kind of new aspects of your strategy was the deal that you had with Albertsons, so the food and drug retailer, allowing potentially the administration of SUBLOCADE in Albertsons pharmacy across the U.S. So if you could just come back on the key features of this agreement and how it could help you to address key bottleneck for SUBLOCADE. Sure, Thibault. I think one of the unique parts about opioid use disorder treatment with buprenorphine is it's one of the few areas for physicians that had a separate certification process that was put in place back in 2003, when all people could kind of envision was oral medications. What they did was they mandated special training for medically assisted treatment because it doesn't happen in med school very often, and they gave patient limits for how many patients you could treat. They did that to try and make it a responsible treatment because they were prescribing a controlled substance. Even though buprenorphine, you know, is a very safe medication, it has a ceiling effect on its high, and it has a, you know, a respiratory floor, so it's tough to go into respiratory depression, and it's on the WHO essential medications, they felt this was essential for making certain doctors are educated and appropriate treatment. Now, when you look at long-actings, what that did, unfortunately, as you went forward in that launch, it artificially held back the expansion of the product. Part of why we were in organized health systems is these independent physicians couldn't handle the administrative burden of the prior auths, getting the patients there, getting the medications there, storing a controlled substance on-site, in line with local, state, federal rules, and complying with the REMS that the product has, that we partnered with the FDA in putting in place. So what this does, as the administration, in a way of trying to break down barriers and normalize treatment, they eliminated DATA 2000, which was that law back in 2002, to normalize this so that the medication could be prescribed by any physician. Now, the other thing that happened is it could also be administered by any site that has, you know, a physician with a DEA waiver. So that opened up a whole opportunity for these independent physicians who don't want to store the medication, to be able to see the patient, write a script, and send them to what we would call an alternate site of care. And that's where Albertsons came in. You know, they are... We're very thoughtful about how they could help in the opioid use disorder epidemic, what role they could serve, and they really wanted to be able to administer SUBLOCADE to help people with treatment. So they were the first partner that we signed up. They're the second-largest grocery chain in the U.S. They typically have these medical facilities at the front end of their store, and now a physician, an independent physician, can prescribe the medication and send them to a front end of an Albertsons to get the medication injected. So it opens up, you know, the full spectrum of physicians that are prescribing buprenorphine medically assisted treatment and another avenue to bring more patients in. So it's a great thing. We'll continue to look for additional providers moving forward to be able to get a nationwide sort of network for patients and open up that opportunity even broader. That's a very exciting development. And, I mean, one thing that, you know, we are watching as well on, on the market is the potential—I mean, the emergence of, of new competition coming in. And Braeburn is going to launch a direct competitor to SUBLOCADE in the U.S., which is called Brixadi, probably actually this month. So it has some different, different characteristics from SUBLOCADE, the weekly administration dosage is a bit different. So just if you could tell us how you expect the market to shape, you know, going forward between you and your first competitor, and what are the key factors that could allow you to maintain your leadership on this market? Yeah, and listen, they're in the market now. I think their product became available last week, and so it is now, you know, rather than one long-acting, there are two. What I would say is, if I go back to the opening statement, there's a huge unmet need in this disease space. There's over 10 million people that abuse opioids. Only three million of those have been diagnosed with moderate to severe opioid use disorder, and at any one point in time, there's only about 1.2 million that are in treatment So there is less than 20% of the population that have used opioids that are actually in treatment for this. So there's huge opportunity for growth, for expansion in the market, for normalizing treatment and taking that 20% to be 70% of people in treatment. So that's the first thing, is there's plenty of opportunity to drive treatment, and with that opportunity for multiple stakeholders in a long-acting environment. Now, what I'm very proud of is what we've built for SUBLOCADE and the paradigm shift in treatment that we developed starting back in 2008, when we bought QLT and merged Atrigel and buprenorphine into what became SUBLOCADE. Because it has a very unique profile that we just don't see any other long-actings getting to. And first of all, when you inject SUBLOCADE into a patient, within four-eight hours, they're at therapeutic levels, which you just don't see with most long-acting injectable products. And then that therapeutic level is maintained the entire 28-day cycle. So that's just a unique, a flat roof profile, where most LAIs are almost like an A-frame roof and often require either on-top orals, booster dosages to maintain people's therapeutic levels. I think the second part of why we're so proud about our profile is the therapeutic levels that we provide the entire month long. And we don't-- we just don't see any other long-acting that at our maintenance dose of 300, 300, 100 ongoing, we get to be between 2-3 nanograms per ml, which is very sciencey. You know, for my Chief Scientific Officer, it's great for me. I think about it as receptor occupancy. So if the brain has 70%-80% of their mu receptors occupied, when the drugs of abuse come in, there's nowhere for them to adhere, and so the patient doesn't get high when they use on top, and they're protected because of the receptor occupancy, and it disrupts cravings and withdrawals, which are the things that drive addiction. So with that dose at 2-3 nanograms per ml, with our maintenance dose of 300 between 5-6 nanograms per ml, and we're doing a study requested by the FDA with regards to the appropriate patient population for that, potentially high injection users or high-powered synthetic users. You know, we think we've got a profile that we just don't see other competitors can match. That's very clear. And, and thinking about the longer-term outlook, so obviously you have a very, very strong growth on SUBLOCADE. Investors are getting very comfortable with the, the target you put out for this drug of $1.5 billion. And so, you know, as, as you kind of build these revenues, and obviously it's representing a large share of, of your, of your revenues, how should we think about, you know, the long term and what could potentially... How, how durable is this franchise, basically? So if you could give us your view on the IP situation, the potential for generics at some point down the road, and maybe, you know, potential additional branded competition, for SUBLOCADE. No, understand completely. First of all, we, we do have a competitor, and again, the market is so large, there's room. I think when I-- when I think about the actual IP that we have, we have a very robust, about 12 patents, that are protecting the novelty of our invention from about 2031 to 2038. And I think that provides a layer of protection for shareholders, you know, for the invention that Christian and his team have put together that is SUBLOCADE, this very unique profile that we don't see other people matching. So I think that's, that's one piece of protection. I think the other piece of protection, and you see this playing out amongst long-acting injectables, is when you have these 28-day injectables, to do an accelerated pathway and match PK for the full month, it's a challenging sort of barrier, I would say, for competitors to do to get their accelerated pathway with the FDA. So I think that's another, is the corporate knowledge and being able to match that platform, that is just a-- it's a functional barrier of drug development. So there's two sort of areas there, good patent estate, 12 patents, 2031-2038, as well as just being able to match that on an accelerated pathway. That's clear. So before we spend a little bit more time on the business and the rest of the portfolio, let's talk a little bit about the antitrust litigation that you mentioned in your comments. So as you said, you know, you already settled with the states, you settled with the indirect payers, you have obviously the litigation is ongoing with direct purchaser. So just if you could give us an update on the status of this, you know, anything you can tell us on the mediation process with the direct purchaser? So how should the investors think about this with the upcoming trial with direct purchasers coming in? Yeah, it's... Thibault, you can, I think, understand it's an ongoing sort of exercise, the mediation before the court. So there's very little I can say, but I'll provide maybe just a bit of context. I think, you know, so we're happy that we brought some certainty with the end payers, and the states with those resolutions that happened earlier this year. I think those are important first steps. We do have the third class, which is the direct purchasers, outstanding. We have a provision, which is our best estimate, that we put in place again at the half year of GBP 157.5 million, and have continued to engage in a two-pronged strategy moving forward. The first is our primary strategy, which is to stay in mediation and to find certainty at the right value to bring this to resolution ahead of trial, and we think that's in the interest of both our stakeholders, but also the direct purchasers. And then the second is to prepare for trial, because, you know, we are approaching October thirtieth, and we need to be ready and prepared to go to trial to defend ourselves. That's clear. If you do manage to settle with the direct purchasers, can you just talk a little bit and tell us how meaningful are the potential remaining litigation at the state level? Not the multi-district litigation we talked about until now, but the kind of state-level litigation. Yeah. And then, just for full clarity, there's a couple carve-outs of the end payers who we resolved for $30 million that have gone and carved out into different court systems, and I think that's what you're referring to. Yeah. And so, you know, they're a subset of the entire class that decided not to be there, but to take theirs to other court systems. Those are in much earlier stage. Mm-hmm. You know, so it's there, there is no provision, there is no, no, nothing on the books with regards to that, 'cause it's earlier in there. But there are also statute of limitation arguments, which are gonna happen later this year in the court because of the time in which those were filed. And then there's the reference back to the original kind of end payer sort of settlement as kind of references. That's clear. Let's spend a little bit of time on OPVEE. So this is a new product you acquired through Opiant. So you acquired Opiant earlier this year. You're planning to launch this new drug for opioid overdose around the end of this year. So if you could come back on your strategy for this asset. So right now, I think what's dominating the market in terms of addressing opioid overdose is Narcan, which, you know, is dominating the public interest channel. You have generics, it's available over the counter, it's a you know big brand in the U.S. So how do you plan to come on to this market with OPVEE? Yeah, and we're really excited about having OPVEE and getting very close to launch. We talked about launching in the fourth quarter. And part of why we're so excited, part of why we went out and bought Opiant and merged them in with our business is, we think there's a huge unmet need out there right now. And if you think about where the opioid epidemic has kind of moved to over the last five-seven years, that rescue devices have been in the market, it's gone from more of oxy and heroin to now synthetic opioid overdoses and like fentanyl. And fentanyl is, you know, 50-100 times more powerful than heroin. And so when you look at the medications that are there, you know, new alternatives, we think, could really change the landscape. What Opiant did and why we brought it in is it's nalmefene rather than naloxone. And nalmefene itself is a very fast-acting mechanism on the mu receptor. And when you're trying to revive someone from respiratory depression, every second matters, and you want a very fast mechanism of action. It also has a very strong affinity to the mu receptor, which we believe when you're dealing with high, high-powered synthetic opioids that are fighting for that receptor occupancy, we think that's a very important facet. The other is it's also long-acting. And if you think about, you know, the duration of fentanyl, its half-life is about seven-eight hours, and nalmefene is about 11 hours. So when you think about dosing someone with this, they often self-dose and then feel fine and walk away. Well, if you don't use a medication whose half-life is longer than the drug, they could end up relapsing within the period and going back into respiratory depression if your original molecule has a shorter half-life. So we think this mechanism is great and very appropriate. Now, the predominant amount of volume, Thibault, in this, is in these public interest sort of markets. These are first responders, these are, you know, public interest groups that are donating product from community centers and things like that. So this is kind of a non-traditional market. And one of the things Roger Crystal did as CEO of Opiant was he said: "Listen, I need someone experienced in operating in this market." And he went out and got, you know, Matt Ruth, who was the guy who launched Narcan. Very familiar with the market, very familiar with the public interest group, and so he's on the team leading this business unit and leading the launch of this in this public interest group, 'cause it's much less physician-driven and much more, you know, buyer-driven and need-driven. So we're excited to launch this to help across this full continuum of care, moving from a company, moderate to severe opioid use disorder, now we're helping people with rescue, helping people stay alive. That's very clear. Let's talk a little bit about your overall franchise, SUBOXONE. So, you know, it's a franchise that you've had for a long time, that is today slowly eroding in the U.S. due to generic competition and, you know, the natural kind of pricing cycle that you see in this situation. But this franchise has been quite resilient, actually, over time. And we are still waiting for potential for generic entering the market from Apotex. They had approval from the FDA more than a year ago; we still haven't seen them. So just, you know, I think your current guidance for this year implies that they could enter the market in the fourth quarter. So, you know, do you have any additional visibility here? How should we think about this franchise for the remainder of this year, for next year? Just, uh... No, it's a great question, and it's one a lot of folks ask, and you just don't have visibility when you're dealing with generic sort of players, right? And this is a private generic player. You know, they're a year past approval, and you would expect them to launch as soon as they can. So we plan our business that way, as if they're gonna be launching, you know, kind of within three months. So for us, it's not a question of if, it's a question of when, and we plan our business on the shortest sort of duration. And then if it exceeds it, I think it's great for shareholders, it's a bit more cash. Now, I would just draw the attention of Teva, who's been held out, from an IP standpoint. That window closes in April 2024, so you'll have the potential of a fourth and a fifth entrant kind of over the next, what is that? About six months now, that's there. So there's a couple entrants that could be coming, you know, in the short, short term. That's true. That's clear. Capital allocation now. So if you could come back, you know, on your priorities here in terms of, you know, between organic investments, business development, returning cash to shareholders. And also if you could touch on how the ongoing litigation and, you know, obviously potential settlement payments, how could this have any impact on your thinking about capital allocation? Yeah, good question. For us, we're just like our strategy, we're very simplistic in our capital allocation. The first priority of this is to drive the franchise. We think there's huge value in, in ensuring that SUBLOCADE continues its growth trajectory and helps more patients. So that's priority number one, is to fuel the base business. Then when we look at priority number two, it's about meeting our existing sort of obligations and financial flexibility moving forward. And then if there's excess cash after that, you know, we look to either business development or potential shareholder returns. In the short term, we're focused on priorities one, priority two, and, you know, we'll continue to assess that, you know, on an active basis, kind of moving forward, if there is excess cash. Very, very well. I just want to step back for kind of big-picture question. If you could articulate your strategy in the mid- and long-term, because you have the rollout today of SUBLOCADE, it's seeing good growth, you are diversifying your base revenues ex-US, you added a new product to your portfolio. So how should we think about the shape of growth, you know, in the long term? And what are your plans to make this growth, you know, sustainable in the kind of long-term timeframe? So kind of transformation from where you are today to how you see yourself, you know, maybe end of this decade and thinking further as a company. Yeah, no. Thibault, I mean, we shared last December at our Capital Markets Day, kind of a midterm view of the company. And what we committed to the shareholders that we would have double-digit CAGR growth over the next five years, and that's gonna be a combination of SUBLOCADE, PERSERIS, OPVEE, you know, with regards to... and film potentially in the rest of the world, driving that growth. We committed to margin expansion during that time off of that growth, so investing, you know, at a pace that's slower, obviously, than the growth. Primarily targeted sort of investments, if we were to, in targeted investment in sales, you know, if there are opportunities to accelerate growth or enhance growth, and then in the R&D pipeline, as we look to expand that portfolio and bring in more substance use disorder assets. That's what we've committed to. We see that all equating to, you know, top line growth, margin expansion. We just haven't committed to how much margin expansion, you know, over that five-year period. Which is what everyone wants to know, but yeah, come to the question. That would take away the need for you to come, so. When we think about, you know, business development, as you mentioned a little bit, so you did, you did Opiant, and, and probably you're, you're, you know, going through the integration and preparing to launch. And when we, we think about the next step in terms of, of business development, you know, what are your priorities in terms of deal size, asset maturity? Are you looking exclusively to the, you know, substance abuse space, or could you potentially expand to other neurology assets or even beyond, beyond neurology? Yeah, no, it's a, it's a great question. I think the way we think about it is, as, as probably the one player in addiction that has commercial assets, we've got a pipeline, we're really on that pioneering side. Those are where we're gonna focus kind of our time, and we showed that with the partnership with Aelis. We showed that with something a bit more material by buying Opiant, to be able to help patients across the continuum of care. So as we move forward, and probably not in the short term, but as we look to 2024 and 2025, that's where we'll focus, you know, our investments, is in these- is in substance use disorders and, and some comorbidities, looking across that continuum of care. You know, and what you can see is even schizophrenia falls within that continuum of care. 60% of people with schizophrenia have a substance use disorder. So as you look to that whole patient, you know, you've, you've got a bit of range there, but we're gonna really focus on the core substance use disorder in the short term. Well, in the last minute or so that we have left, I just want you to highlight maybe one pipeline asset that you're very excited about and that you're really looking forward to progress through development stage and potentially bring to market. Yeah, it's hard to do because I think Christian has put together, along with our business development team, a really robust pipeline. Let's just go with the latest stage asset, which is the partnership with Aelis that we have together, which is for cannabis use disorder. It's a phase IIb asset that we expect to read out by the half year next year, and then, if successful, we'll go into phase III. When we look at the use of cannabis in the U.S. with the ever medicalization, legalization, what you see is a market that's about $30 billion that's supposed to expand to well over $60 billion, you know, over the next five years. So it's huge growth. The cannabis we're using has advanced through time. It's high THC. It comes in a lot of very concentrated sort of delivery mechanisms, from gummies to tinctures, and these are much more addictive, you know, from a DSM standpoint. You're finding people where cannabis is disrupting their life, disrupting their drive to have a normal life. They can't stop using cannabis, and they need something to help them. That's the void we're looking to fill if we're able to have this successfully through its development. I definitely look forward to it, and so thank you for your time. We are coming to the end of the session, so thank you for joining us on this-