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Scopia could not resist the recent low SP to increase their holding to 15.1% ahead of 12th November Court rubber-stamp of deal with DoJ. Once that is out of the way INDV SP should continue to move North towards a price that reflects the true value of the company which will include (possible) take-over premium.
Comment by Mark Crossley, CEO of Indivior PLC
"In response to challenging market conditions brought about by the unprecedented COVID-19 pandemic and to help ensure we are positioned to outperform as conditions improve, we executed on three critical business priorities during the third quarter.
"First, despite continued pressure from limited access to health care providers our teams demonstrated resilience and agility to deliver a strong operating performance, including 90% year-on-year growth in SUBLOCADE® (buprenorphine extended-release) Injection through the first nine months of the year. Our continued progress across the business gives us sufficient visibility to reinstate guidance, including expected positive adjusted pre-tax income for FY 2020 (see "FY 2020 Guidance" on page 2).
"Second, we initiated a number of strategic alignment and cost actions in the quarter to enhance the Group's ability to drive long-term profitable growth. These actions will help us maximize the substantial patient opportunities we see in the U.S. for SUBLOCADE® in the Organized Health System (OHS) channel. They will also further focus R&D on real world evidence generation for SUBLOCADE® and PERSERIS® (risperidone) extended-release injection and on progressing our early stage addiction assets.
"Third, we continue to focus on maintaining our strong balance sheet. Our financial flexibility is allowing us to fuel the growth of our depot technologies despite the pressures of COVID-19 while also meeting our legal and compliance requirements.
"Our strong operational performance, decisive actions aligned to our strategic priorities along with our continued financial discipline give us confidence that when the COVID-19 pandemic begins to subside we will be well-positioned to deliver accelerated growth and realize our patient-focused vision."
Given the backdrop of final court approval for deal with DoJ to be heard on 12 November these are very good results. SUBLOCADE is performing strongly and the measured but upbeat tone (accelerated growth) in Crossley's comments augur well. There is a small reference to "progressing our early stage addiction assets." Once the deal with DoJ has been rubber-stamped by the Court we should get much more detailed information about these products.
Investor Relations advised a few weeks ago that the Court Hearing was on 20th October and was basically a "rubber stamp". I received the following advice last week from a US law firm: "generally the final approval hearings are just a final check that settlements are fair, reasonable and adequate and in this instance (ie INDV) the hearing should be a rubber stamp. Meaning that there can be an approval from the bench, on the same day, or the court may take a few days or weeks to write up a final approval opinion and Order. It will likely be resolved that day, and will almost certainly be resolved as is, although the official opinion and order may not be drafted for a few days or even a couple of weeks. But certainly not much longer than that." So Investor relations giving a date of 12th November for the Court's formal sign-off is entirely consistent with the case being heard tomorrow (20th October). What is important is that until the Court formally approves the deal that has already been agreed both INDV and any potential suitors will have been treading water. It will also have an impact on the investing decisions of IIs especially with respect to timing. This may well explain the drift on the SP over the last few weeks as the next main period of events & news effectively commences tomorrow.
US court meets tomorrow (20th October) to rubber-stamp INDV deal with DoJ. This is very significant. Although its a rubber-stamp exercise INDV has been constrained until the deal has officially been approved & any possible suitors would not wish to show their hand before the matter had finally been put to bed. Positive things should start happening after tomorrow and the 3rd quarter trading update is on the 29th October.
Some key events coming soon. Court hearing to rubber-stamp the deal with DoJ on 20th October followed by Q3 results on 29th October. Price drop probably IIs fine-tuning their position in advance of these events as should be a run-up in SP ahead of 20th October. I also speculatively believe (as previously expressed) that big pharma will be looking to acquire this market leader & the gloves are off once the court rubber-stamps the deal with DoJ on 20th October. This potential take-over activity will not be lost on major investors. As ever DYOR.
Very positive update today signalling a saving of between $60-70m & that 3rd quarter 2020 results (to be reported on 29th October) are in line with exception that SUBOXONE continues to out-perform. They also confirmed the following: "In addition, we are maintaining our core capabilities in addiction science to support drug discovery and development." It will be very interesting to find out what this market-leader in opioid addiction (& other addictions) treatment has in the new treatment pipeline once the DoJ deal has been rubber-stamped by the US court on 20th October given that 3rd quarter results update are 9 days later on 29th October.
The SP movement could be the market's growing awareness of the potential return of the USD 600 million settlement with the DoJ (see jgrabar post below -"Shareholders can seek DOJ fines returned from D&O policies to INDV.") This could be worth approx 65p per share.
Additionally, it could relate to potential take-over news whether speculative or actual. Given INDV's very low SP currently there is significant upside if this proves to be correct.
The US court's rubber-stamping of INDV's settlement with the DoJ is due on 20th October 2020, only about 4 weeks away. If (note speculative "If") large pharma is looking to swallow up INDV they will be actively engaged now. There will always be leaks of any approaches, meetings etc.
As ever DYOR.
INDV is market leader in a growth market & has a reputation for innovation. The true worth of the company has been shrouded by the DoJ saga which would serve to make the company cautious about product developments & the growth potential as it would only fan the flames for a higher settlement figure. Now that the DoJ settlement has been agreed the company is at liberty to be more open about what it can achieve. The opioid addiction treatment market is very competitive and this has eaten away at INDV's market share but the Trump policy of buying American will assist as will INDV's market leading credentials. I believe that the company will be on the radar of large pharma and that a take-out price well North of £3, perhaps £4, will be needed. I repeat again that I am speculating. However, recent events would suggest that INDV has to be a potential target for large pharma & at this rock-bottom SP who could blame them from being able to buy at what would be, even at £4 per share, relatively loose change for large pharma. Today's increase in SP (9% as I write) also suggests that others have woken up to the take-over potential & view Howard Pien's departure in a positive light. However, I stress DYOR.
Interesting to read Newtyn's modus operandi (taken from their website):" The Firm frequently seeks to capitalize on special opportunities that may arise from a corporate restructuring, bankruptcy or liquidation, proposed merger, acquisition or divestiture, or a new public offering." This together with Howard Pien's (Chairman) departure last week, Thaxter's (former CEO) recent demise & the very low SP gives further weight to the speculation (please note this word) that the company is ripe, & may already be in talks with a suitor(s), for a potential takeover. Please note that this is my speculation and (as ever) DYOR.
Interesting to read Newtyn's modus operandi. The following is taken from their website: " The Firm frequently seeks to capitalize on special opportunities that may arise from a corporate restructuring, bankruptcy or liquidation, proposed merger, acquisition or divestiture, or a new public offering." This coupled with Howard Pien's (Chairman) departure last week, Thaxter's (former CEO) demise & the very low SP adds further weight to the speculation (please note) that INDV is ripe for takeover & may be already in talks with a suitor(s). I repeat that this is my speculation at this juncture so (as always) DYOR.
New II in INDV takes 3.98% of company. Good time to buy now that DoJ settled and SP so low. I would expect more IIs to start taking positions in INDV now that DoJ uncertainty has been removed and with any possible takeover momentum in for free.
IMHO, DYOR
Love them or hate them, MF have a big following. This is a quote from their recent article (link below): "If this trend continues, I think it’s likely the Amigo share price can return to the level at which it started the year...The stock was changing hands at around 66p at the beginning of 2020."
Read the full article to get the overall view of the analyst but I agree that the SP should easily reach and surpass 66p let alone 50p. As ever DYOR
https://www.fool.co.uk/investing/2020/08/20/is-the-amigo-share-price-about-to-surge-back-above-50p/
Large Pharma companies taking over smaller Pharma with an expertise in an area where huge growth prospects is very common within the industry. Current acquisition of Momenta by Johnson & Johnson at a 70% premium to SP is a case in point. "In the corporate space, Johnson & Johnson announced its acquisition of Momenta Pharmaceuticals for roughly $6.5bn in cash to improve its portfolio treatments for autoimmune diseases". INDV is the market leader in opioid addiction treatment and has a SP that does not reflect its true worth. Big Pharma will be salivating over the opportunities afforded by taking over the company for what in effect will be "small change" to them. I speculate (please note the word speculate) that now that the DoJ case is over (US court rubber-stamp to the deal pending) INDV will soon be bought by big Pharma and at a price well North of £3 per share.
As ever, DYOR.
"Announcing net zero emissions target and 30% gender diversity target by 2030". A very shrewd mood move by Asfari. This is where the industry/society is & will tick all the right boxes with the diversity/sustainability champions and position PFC nicely for new contract awards.
Now that DoJ has been settled IIs will be more likely to buy and hold in this market leader. Evidenced also by an SP that changed little on the results and is now firming (SP currently 144.80) on a generally bad day for the overall market (FTSE down 92).
Market seems to be reasonably satisfied so far given current SP. SUBLOCADE is showing good growth and PERSERIS will grow particularly as marijuana usage widens. Given the world's current understandable fixation with COVID, INDV is performing well. The "real" and IMO very positive update on the company's performance will be post-court approval of the DoJ settlement.
IMHO, DYOR