Yahoo Finance Indivior (INDV) Down on Dropping Schizophrenia Drug, Cuts '24 View
Shares of Indivior plc INDV were down almost 34% on Tuesday after it lowered its financial outlook for the full year 2024 and also announced plans to discontinue sales of its schizophrenia drug Perseris.
This downward revision in guidance by Indivior reflects adverse sales conditions for its top-selling medication, Sublocade, which is approved for treating opioid use disorder. The opioid drug is currently facing patient treatment disruptions resulting from ongoing Medicaid disenrollments.
Management expects to generate between $765 million and $805 million from Sublocade sales compared with the previous guidance of $820-$880 million. For the quarter ended June 2024, management expects the drug’s sales to be between $188 million and $196 million.
INDV also decided to discontinue the sales and marketing of Perseris due to adverse impacts from increased payor management in the category in which the drug participates. Based on its analysis, management concluded that this decision was in the best interest of the company’s shareholders since the schizophrenia drug is ‘no longer financially viable’ to market. As a result of this decision, the company will also reduce its headcount by nearly 130 employees.
Wall Street was not impressed with these decisions, which have forced management to downgrade its financial guidance for the full year. Indivior now expects to generate total revenues in the range of $1.150-$1.215 billion, down from the previous guidance of $1.24-$1.30 billion. It also lowered the adjusted operating profit forecast to between $285 million to $320 million from $330 million-$380 million.
For second-quarter 2024, the company expects to record total revenues between $295-$303 million.
Year to date, Indivior’s shares have lost 33.3% compared with the industry’s 7.4% fall.
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Despite the reduced guidance for Sublocade, management remains confident in the long-term sales performance of the drug. It expects to achieve blockbuster status for the drug by the end of next year.
Alongside the above decisions, Indivior also announced a settlement with multiple plaintiffs, including Health Care Service Corp. and Molina Healthcare, to resolve an antitrust lawsuit before its trial gets underway next week.
Per the settlement terms, management will pay $85 million in cash to settle the litigation. This amount will be funded by Indivior’s current cash balance.
Zacks Rank & Key Picks
Indivior currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the overall healthcare sector include Arcutis Biotherapeutics ARQT, Compugen CGEN and Heron Therapeutics HRTX, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 60 days, estimates for Arcutis Biotherapeutics’ 2024 loss per share have narrowed from $2.22 to $1.60. During the same period, the loss estimates per share for 2025 have narrowed from $1.37 to $1.14. Year to date, shares of Arcutis have surged 210.2%.
Earnings of Arcutis Biotherapeutics beat estimates in three of the last four quarters while missing the mark on one occasion. Arcutis delivered a four-quarter average earnings surprise of 14.93%.
In the past 60 days, estimates for Compugen’s 2024 earnings per sharehave risen from 2 cents to 5 cents. During the same period, loss estimates per share for 2025 have improved from 27 cents to 11 cents. Year to date, CGEN’s shares have lost 11.1%.
Earnings of Compugen beat estimates in three of the last four quarters while missing the mark on one occasion. CGEN delivered a four-quarter average earnings surprise of 5.79%.
In the past 60 days, estimates for Heron Therapeutics’ 2024 loss per sharehave narrowed from 24 cents to 10 cents. During the same period, estimates for 2025 have improved from a loss of 8 cents to earnings of 1 cent. Year to date, HRTX’s shares have appreciated 72.7%.
Earnings of Heron Therapeutics beat estimates in three of the last four quarters while missing the mark on one occasion. HRTX delivered a four-quarter average earnings surprise of 30.33%.
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