- SUBLOCADE Net Revenue Growth: 24% year-over-year increase.
- Provision for Opioid Litigation Settlement: $75 million.
- Share Repurchase Program: New $100 million buyback initiative.
- Active SUBLOCADE Dispensing HCPs: Increased to over 7,200 from approximately 6,700 at the end of fiscal year 2023.
- New CGS Facilities Activated: Approximately 120 new facilities in 2024, reaching over 700 total activated justice system accounts.
- SUBLOCADE Patients in Treatment: Grew 49% year-over-year to 160,400 at the end of Q2.
- SUBLOCADE Dispenses: 155,700, a 25% increase year-over-year and 5% sequentially.
- SUBLOCADE Injections at Alternate Sites: Increased 55% in Q2 compared to the previous quarter.
- Total Net Revenue: $299 million, reflecting 8% growth year-over-year.
- US Net Revenue Growth: 12% year-over-year.
- Rest of World Business: Down 10% year-over-year, 8% excluding FX.
- SUBLOCADE Net Revenue Outside US: Grew 30% year-over-year to $13 million in Q2.
- Adjusted Gross Margin: 84%, up slightly versus the prior year quarter.
- Adjusted SG&A Expenses: $144 million, a 15% increase year-over-year.
- R&D Expenses: $27 million, reflecting a decrease due to phasing of expenses.
- Adjusted Operating Income: $79 million, up 11% year-over-year.
- Adjusted Net Income: $60 million, a 7% increase year-over-year.
- Gross Cash and Investments: $405 million at the end of Q2.
- Full Year 2024 Net Revenue Guidance: $1.15 billion to $1.215 billion, representing 8% growth at the midpoint.
- SUBLOCADE Full Year 2024 Guidance: $765 million to $805 million, representing 25% growth at the midpoint.
- OPVEE Full Year 2024 Guidance: $9 million to $14 million.
- Adjusted Operating Income Guidance: $285 million to $320 million, implying 12% growth at the midpoint.
Release Date: July 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SUBLOCADE delivered a year-over-year net revenue growth of 24% in the second quarter.
- The Board has initiated a new $100 million share repurchase program, indicating confidence in long-term objectives.
- Increased commercial investments have led to significant increases in customer engagement and activation.
- SUBLOCADE patients in treatment grew 49% year-over-year to 160,400 by the end of the second quarter.
- The company completed its US primary listing, which is expected to increase awareness among the US investment community.
Negative Points
- A $75 million provision has been taken for an expected settlement for opioid litigation, impacting financials.
- The cessation of PERSERIS sales and marketing resulted in a charge of approximately $65 million.
- SUBLOCADE growth was impacted by transitory headwinds, including Medicaid disenrollment and lower stocking levels.
- Net revenue guidance for OPVEE was recalibrated to $9 million to $14 million due to a slower than anticipated ramp.
- The rest of the world business was down 10%, impacted by shipment timing and elevated stocking in the comparable period last year.
Q & A Highlights
Q: Can you talk about what percent of new starts you're getting versus the competitor, Brixadi, and how you're thinking about the mix between SUBLOCADE and Brixadi as we move through the second half of the year and into '25? Also, does your guidance for SUBLOCADE contemplate competitive headwinds related to Brixadi?
A: Four out of five new patients are choosing SUBLOCADE, indicating strong patient preference. The guidance for SUBLOCADE includes all current market factors, including competitive pressures and transitory issues. The lower stocking levels are seen as a one-time reset due to streamlined order patterns by larger networks.
Q: Can you elaborate on the success in alternate sites of care and the impact of Medicaid disenrollments?
A: The alternate sites of care have grown to over 1,200 locations across 22 states with five partners, showing a 55% increase in injections. The Medicaid disenrollments have impacted retention curves, contributing to a $30 million reduction in SUBLOCADE revenue. Despite this, SUBLOCADE is still expected to grow over 25% year-over-year.
Q: Can you clarify the preliminary settlement for opioid litigation and its impact on the remaining cases?
A: The settlement is with municipalities and tribal nations, covering about two-thirds of the 400 cases. The remaining cases are primarily private plaintiffs, which are in the early stages and are being evaluated. The company expects fulsome participation from municipalities in the settlement.
Q: What should we look for in the upcoming AEF0117 data for cannabis use disorder, and what are the next steps?
A: The top-line results are expected in September. Following this, an end-of-Phase 2 meeting with the FDA will be organized to discuss the data and Phase 3 study design. The decision to exercise the option on the asset will be made in the first quarter of next year based on these discussions and market research.
Q: Are you seeing any new clients coming on board due to increased competition in long-acting injectables for opioid use disorder?
A: The increased share of voice for long-acting injectables is expected to drive market growth. The company continues to see strong growth in active prescribers, now over 7,000, indicating early days in market penetration with only a 6% penetration of LAIs.
Q: What are the technical constraints for the new $100 million share buyback program?
A: The plan is to wrap up the current program and start the new one immediately, aiming to complete it within six months. The main constraint is the rule that halts purchases if the share price is 5% above the five-day average.
Q: Can you explain the impact of the average number of dispenses per patient and its relation to Medicaid disruptions?
A: The average number of dispenses per patient has been affected by faster turnover due to Medicaid disenrollments. The expectation is that retention curves will shift back to normal as these transitory issues ease.
Q: What are the next steps for the longer-acting product INDV-2000 after showing two nanograms per milliliter in 90 days?
A: The next step is to organize a multiple-dose pharmacokinetics study to understand the product's properties better. This will inform a meeting with the FDA before embarking on pivotal Phase 3 trials.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
