Tag Archives: indivior plc

Indivior Plc (INDV.L) is a specialty pharmaceutical company. The Company’s Buprenorphine Business Group is focused on developing buprenorphine for the treatment of opioid dependence. It is engaged in discovering and developing medications and treatment for alcohol addiction, opioid overdose, cocaine intoxication and co-occurring conditions, such as schizophrenia. It is focused on providing therapeutic pipeline for the health epidemic of addiction and related mental health disorders. The Company markets and promotes SUBOXONE (buprenorphine and naloxone) Sublingual Film, SUBOXONE (buprenorphine and naloxone) Sublingual Tablet and SUBUTEX (buprenorphine) Sublingual Tablet. SUBOXONE (buprenorphine and naloxone) Sublingual Film (CIII) is prescription medicine indicated for treatment of opioid dependence. SUBUTEX (buprenorphine) Sublingual Tablet is for the chronic diseases of addiction, including opiate overdose, alcohol use disorders and cocaine intoxication.

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On July 27^th 2017, INDV published half-year results that it said were ahead of plan. Net half year revenues grew 4% to $553m (5% at constant FX), with operating profits 23% higher at $244m. INDV ended the period with a net cash balance of $792m (FY 2016: $692), and raised its guidance for the full year outcome, reflecting strong US market conditions, market share resilience of Suboxone® Film and lower expenses (primarily legal and R&D). FY 2017 net revenues are anticipated to be in a range of $1,090m to $1,120m (previously $1,050m – $1,080m) and adjusted net income of $265m to $285m (previously $200m-$220m) assuming no material changes to current market conditions, excluding exceptional items and at constant FX. CEO Shaun Thaxter said the company had maintained “good business momentum and executed well throughout H1 2017”, and added that he was pleased in the quarter to have “conclusively resolved outstanding litigation with Amneal, which we believe is in the best interest of shareholders and is another step in resolving the legal risks to our business.”

The VectorVest GRT (Earnings Growth Rate) metric flagged up the potential at INDV, both at the start of the year, when the shares were trading around 266p, and in the run up to the results announcement, when they traded at around 300p. Now at trading at 388p, INDV still has a forecasted GRT of 18%, which VectorVest considers to be very good, and something that is certainly borne out by the stated outlook for the full year. Added to this, the VST – (VST-Vector is the master indicator for ranking every stock in the VectorVest database) – logs INDV at 1.29, which is very good on a scale of 0.00 to 2.00. From a valuation standpoint, backed by the metrics outlined above, VectorVest has a current rating of 502p, even higher than brokers Numis and Jefferies, which both rate the stock as a buy with a 490p price target.

The chart of INDV.L is shown below where the price is in candlestick format over the past 18 months. After a period of strong trending behaviour the share has consolidated in a range for the past 12 months. The price ceiling of approximately 370 was rejected three times within the range and as expected by the technical community the share seems to have broken the range on the 4^th attempt. Technically the previous range (as shown by the vertical line on the chart) should be repeated. This would result in a technical target similar to the VectorVest valuation at 502p.

Summary: With a strong portfolio of speciality pharmaceuticals, it is clear from a fundamental standpoint that INDV is a share very much in its ascendancy. This view is also supported by the charting and technical picture, both of which offer ample support and justification for our 502p price target. The share is on a buy recommendation, but please note the share is not without risk as the VectorVest Relative Safety metric is less than 1. The opportunity is for those traders that can manage risk carefully and without hesitation.

Dr David Paul

August 1 2017

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