Indivior’s shares $INDV have lost nearly a third of their value this week, following the company’s announcement Tuesday that it was shelving a schizophrenia drug and had revised down its 2024 revenue projections.
Mark CrossleyOn Tuesday, the company said that it was cutting its revenue projections to $1.15 billion to $1.215 billion, down from the $1.24 billion to $1.33 billion it projected in late May. In the statement, CEO Mark Crossley cited “a combination of transitory factors” for the cut, including a decreasing number of people covered through Medicaid. Indivior also said it was experiencing “lower-than-expected stocking levels” of its lead drug, and said the cyberattack on UnitedHealth’s Change Healthcare had “a greater than expected impact.”
Indivior’s main products are opioid treatment agents, including Sublocade, a long-acting injectable of buprenorphine for patients treating opioid abuse. About a week prior to the guidance cut, Crossley had told the Wall Street Journal that he expected the ongoing addiction epidemic in the US to continue to drive the company’s sales upward.
While the company is still anticipating growth, Tuesday’s announcement sent its shares into a 40% decline; they’re still down about 30% since the announcement. Spokespeople for Indivior did not immediately respond to a request for comment.
To help cut costs, Indivior is discontinuing its sale of Perseris, an antipsychotic drug used to treat schizophrenia. The company said it will immediately end sales and marketing of the product and cut roughly 130 employees. The company projects that it made between $10 million to $13 million from the drug in the second quarter. Culling the product and layoff-related charges are expected to total $65 million.
“While we believe discontinuing Perseris is the right business decision, unfortunately it will impact our people and patients, and we will support them through this transition,” Crossley said in the release. The company specifically blamed “adverse impacts from increased payor management” that would “make the product no longer financially viable.”
The market for improved schizophrenia treatments has been growing, evident in a flurry of M&A deals in December 2023, during which Bristol Myers Squibb bought Karuna Therapeutics for $14 billion and AbbVie announced an $8.7 billion deal for Cerevel. New antipsychotics have generally been a hotbed of investor interest, with ex-Karuna execs launching Seaport Therapeutics in April with $100 million in Series A capital.
Editor’s note: This story was updated to correct that the revenue projections apply to 2024, not 2023.