On Friday, Piper Sandler maintained its Overweight rating on Indivior shares (NASDAQ: INDV) but reduced its price target to $15 from $22. The adjustment follows Indivior's revised sales forecast for its product Sublocade, a long-acting injectable treatment for opioid dependence. The company now projects 2024 sales for Sublocade to range between $725 million and $745 million, a decrease from the previously estimated $765 million to $805 million.
Indivior's adjustment in forecast is attributed to several factors, including increased competition from Braeburn's Brixadi, the only other long-acting injectable buprenorphine medication-assisted treatment option available. Additionally, variability in the criminal justice system accounts and inventory challenges have influenced the new sales expectations.
Despite the lowered sales projection, which suggests a growth of 17% versus 2023 at the midpoint, the market for long-acting injectable treatments for opioid dependence is expanding. However, the company's challenges in setting achievable expectations have overshadowed the positive market dynamics.
Piper Sandler's analyst highlighted the valuation of Indivior, noting its enterprise value to 2025 estimated EBITDA ratio of approximately 4 times. This valuation is seen in the context of the company's strong asset durability and a relatively clean capital structure. The firm's reiteration of the Overweight rating indicates a continued positive outlook on Indivior's stock despite the revised sales guidance and price target reduction.
In other recent news, Indivior PLC has revised its 2024 revenue forecast and Q3 2024 results due to increased competition. The company reported preliminary net revenue of $302 million to $309 million for Q3 2024, a 13% increase compared to the same period in 2023. However, the company has lowered its full-year 2024 SUBLOCADE net revenue forecast to $725 million to $745 million. Despite these adjustments, Indivior's CEO expressed confidence in SUBLOCADE’s market position.
The U.S. Food and Drug Administration (FDA) has also granted Priority Review for a Prior Approval Supplement (PAS) for SUBLOCADE®, potentially improving treatment options. Indivior PLC has also secured an $8.7 million order from the Biomedical Advanced Research and Development Authority (BARDA) for OPVEE®, a medication designed to reverse opioid overdoses.
Analysts have weighed in on the company's prospects. Craig-Hallum reduced Indivior's stock price target from $24.00 to $20.00, maintaining its Buy rating. Meanwhile, Piper Sandler held an Overweight rating on the company's stock, emphasizing the long-term growth potential of Sublocade.
InvestingPro Insights
Recent InvestingPro data provides additional context to Indivior's current market position. The company's market capitalization stands at $967.62 million, reflecting the market's reaction to the revised sales forecast. Despite the challenges, Indivior's revenue for the last twelve months as of Q2 2024 reached $1.147 billion, with a notable revenue growth of 14.47% over the same period.
InvestingPro Tips highlight some key aspects of Indivior's financial situation. The stock is currently trading near its 52-week low, which aligns with the recent price target reduction by Piper Sandler. Additionally, the company's net income is expected to grow this year, potentially offsetting some concerns about the revised Sublocade sales forecast.
It's worth noting that Indivior operates with a moderate level of debt, which could provide some financial flexibility as it navigates the competitive landscape of long-acting injectable treatments for opioid dependence.
For investors seeking a more comprehensive analysis, InvestingPro offers 15 additional tips for Indivior, providing a deeper understanding of the company's financial health and market position.
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