Indivior is a pioneer in helping patients overcome substance addiction. It is healthily cash generative and profitable on an underlying basis, is buying back stock, and has decades of expertise and a strong market position in its niche.
The group’s two new products, Sublocade and Perseris, have a combined revenue potential of $1.3bn, with additional treatments in the development pipeline. Together, holders will be hoping that this is enough to offset declining revenue in its legacy business, which is under pressure from generic competition.
As a result of its prospects and valuation, Indivior has comfortably outperformed the wider market over the past year.
From the company:
By fully understanding the challenges that patients face, we aim to transform addiction from a global human crisis to a recognized and treated disease around the world, empowering patients to take the first step towards changing their lives.
That sounds very noble, yet there is ethical risk associated with this stock. The following statement from Virginia Attorney General Mark Herring regarding Indivior’s recent $600m out-of-court settlement stands in stark contrast to the drugmaker’s own rhetoric:
The opioid crisis has devastated families and communities across the Commonwealth and drug manufacturers must be held accountable for their role in creating and prolonging this crisis.’
There’s two sides to every story, but this still makes for uncomfortable reading as a prospective shareholder. The group has recently resolved a large case with the US Department of Justice but there are additional legal matters outstanding which are difficult to quantify.
The recent share price performance and improving StockRank appears to indicate value here, but is Indivior a good stock to own? And, as shareholders, is it our job to care?
Profile
What are the company's principal business activities, how does it generate its revenues?
Indivior creates treatments for addiction, with a core focus on the US opioid epidemic. It develops, manufactures, and markets these products to organised health systems (OHS) and says there is a global opportunity to address addiction as a highly treatable medical condition.
The group has three main products. Two of these are opioid addiction treatments: Sublocade, a ‘potentially game changing treatment of OUD’, and Suboxone, the legacy business still responsible for the majority of group revenue. The third is Perseris, which is indicated for schizophrenia for extended-release injectable suspension.
Suboxone faces…
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