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Further good news which will help propel INDV back to a SP that properly reflects its true value. It also removes the last major hurdle to a predator taking out INDV with its market leading products. I expect there to be more than 1 major pharma to be interested in taking over INDV. Interesting times.

This Report is excellent, very comprehensive & well worth the read. Some of the points it makes are as follows:
"Suboxone sales have remained resilient in the face of generic competition (and even saw modest growth in the most recent quarter, Q3 2020)
Sublocade unit growth is accelerating (growing 15% in Q3 2020 over Q2 2020)
Sublocade sales should easily exceed management guidance
A competitive entrant, Brixadi, has been delayed (likely, >12 months) as Braeburn (Brixadi's license holder in the U.S.) received a complete response letter from the FDA.
Based on our projections for Sublocade sales growth it is easy to see a near term value for Indivior ordinary shares of 200p."
It also states that the Reckitt claim is a " baseless preliminary claim filed by Indivior’s former parent company" that is "procedurally defective and substantively precluded due to Reckitt’s alleged acts of fraud or dishonesty." I agree with the Report and believe that the Reckitt claim was a crude attempt to try & stifle a much stronger claim by INDV on Reckitt. This is also the view taken by the Report. It goes on to forecast an SP of £5 for INDV by 2025 based on INDV's market leading position and on the growth of SUBLOCADE as well as other products supplied by INDV using their monthly injectable technology such as PERSERIS designed to combat Schizophrenia.
INDV's SP should continue to firm from here on the run-up to releasing its full year results on 18th February.

Within context of broad market conditions this update is reasonable. The big overhang for PFC is the SFO enquiry. Iskander taking over from Asfari may be a precursor to the long-awaited completion of that enquiry. Once the enquiry is completed and uncertainty removed together with the oil market strengthening PFC will fly.

So when INDV's claim against Reckitt's is made the damage to Reckitt's SP will be limited given that shareholders know they already have their claim in. These tactics will have been initiated to protect Reckitt's SP irrespective of the true merit of their claim.

I should also have mentioned that one side's legal position always looks shocking until the other side is able to respond. There are always 2 sides to the coin and what would have happened to Reckitt's SP if INDV had got their Claim in first? I don't think that Reckitt would have liked having their SP hit by INDV's claim coming in first and knocking 10-15% or more off their SP.

Commercial law firms will always talk up a client's case in order to generate fees. Its what they do best as anybody who has had the misfortune of having to deal with them will testify. I have not had chance to research the legalities but there will undoubtedly be indemnities on both sides of the deal. Also, this matter is nowhere near the DoJ case in terms of potential damage to INDV. This is company to company and in my opinion & that of a commercial lawyer I have just contacted (see his quote below) may well be RB just getting in early to forestall/limit an INDV claim. He also makes mention of there being significant insurance coverage to cover any claim:
"And yes - it may very well go both ways (in terms of indemnity claims) here and perhaps (the RB action is to) offset damages or be a defense to the claims. It is highly likely that there is significant insurance coverage as well. " (parentheses mine)
If you do take the view that the claim & INDV's potential counter claim basically cancel themselves out then there is the legal cost to factor in to the SP. But this will drag on for years (as all these issues invariably do) and the relative hit of legal costs will be insignificant & swamped by the further good news emanating from INDV in terms of increased sales, profit, new product releases, takeover talk etc. INDV also has $700m cash on its Balance Sheet at end September 2020. Obviously DYOR but the decrease in SP today is a massive over-reaction & affords a very cheap buy-in price.

Graham Hetherington formerly of BTG (recently taken over by Boston Scientific) makes following comment:
"Indivior is at an important stage of its development. I am honoured to be appointed Chair of the Board at this time. Indivior is a pioneer in its field and I look forward to working with the Board and leadership team to realize SUBLOCADE®'s (buprenorphine extended-release) full potential and more broadly its important Vision on behalf of all stakeholders."

Comment by Daniel Tassé, Senior Independent Director:
"We are pleased to announce that Graham Hetherington has been appointed Chair of the Board. Graham has a strong record of value creation including in specialty pharma. We look forward to his continued active participation and leveraging his deep strategic, operational and financial experience to achieve the Group's strategic priorities."

Hetherington's experience with BTG (developer of new health care products) is obviously beneficial for INDV and his experience of BTG's take-over by Boston Scientific may also prove to be very useful.

Attempting to calculate "fair" SP for any share is extremely difficult but I have just calculated a current "fair" SP for INDV of approx. £2.50. This is based on recent 3rd quarter figures and update given which is set against the COVID backdrop so should be viewed as low. Once things start returning to something akin to normal and assuming continued reasonable growth in SUBLOCADE and increasing take-up of PERSERIS the SP should be in the top half of £3-£4. These figures do not take account of any financial contribution of the new products for treating other chronic conditions such as alcohol abuse nor do they include any potential take-over interest/premium. With respect to these figures please note they are my approximations/forecasts only and based on my own research. So (as ever) DYOR.

Given the price rise today this must be Institutional buying. Hardly surprising given the SP is still very, very low and after DoJ issue put to bed, excellent 3rd Quarter results and notification of new products pipeline including INDV's developing of products for other chronic conditions including alcohol use disorder. Developing new products for other chronic conditions obviously serves to widen INDV's reach in the health care industry and the new product for alcohol abuse will propel INDV into a market dealing with a massive global problem. This alone represents a huge opportunity for INDV. Additionally, take-over interest from large Pharma for this market leader in opioid addiction treatment with a large emphasis on new product research has to be a very real possibility.

Apart from removing the uncertainty, the deal with DoJ allows INDV to pay the USD 600 million fine over 7 years. INDV have already instigated annual cost savings of USD 60-70m per year which substantially covers the annual cost of the fine. INDV has approx. USD 700 million in net cash at end Sept 2020. Now that the deal has been approved by the Court the company is in play for any big PHARMA companies who could well be attracted to this market leader whilst its SP still languishes at the current low price.

Now that DoJ deal rubber-stamped and uncertainty removed, INDV should finally start to get back to an SP that properly reflects the company's position as the market leader in opioid addiction treatment with a pipeline of new products for both opioid & other chronic addictive disorders.

INDV beginning to give a glimpse of what's to come. Following is taken from yesterday's RNS and refers to a "pipeline" of product candidates expanding on opioid addiction treatment but also on other chronic conditions including alcohol use disorder: "Building on its global portfolio of opioid dependence treatments, Indivior has a pipeline of product candidates designed to both expand on its heritage in this category and potentially address other chronic conditions and co-occurring disorders of addiction, including alcohol use disorder." As we all know, alcohol abuse is a massive global problem and represents a huge opportunity for INDV.

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.