Indivior PLC

LSE:INDV

Earnings Call Analysis

Indivior Plans Strong Growth Amid Market Challenges

Indivior faced a challenging quarter, impacted by market changes and transitory headwinds. Despite this, SUBLOCADE showed a 24% revenue growth year-over-year. The company has ended PERSERIS sales, saving $50 million annually. Indivior announced a revised 2024 revenue guidance of $1.15-$1.215 billion, reflecting 8% growth. It plans a $100 million share repurchase, showcasing confidence in achieving $1 billion SUBLOCADE net revenue by 2025. The company continues investing in justice systems and has increased active SUBLOCADE prescribers significantly. Indivior is progressing with its opioid litigation settlements, streamlining operations, and preparing for US GAAP reporting in 2025.

Navigating a Challenging Quarter

Indivior's recent earnings call unfolded against a backdrop of challenges, particularly related to its product SUBLOCADE and the decision to cease the promotion of PERSERIS. The company faced significant transitory headwinds which impacted revenue growth. The call highlighted that second-quarter net revenue reached $299 million, reflecting an 8% year-over-year growth, despite difficulties stemming from Medicaid disenrollment and a comparative year-over-year boost in the previous quarter.

A Strategic Shift with PERSERIS

Indivior announced a strategic decision to halt sales and marketing efforts for PERSERIS, which resulted in a one-time charge of approximately $65 million. This includes severance costs and write-offs and is expected to lead to an annual savings of about $50 million moving forward. The implications are significant: while this decision is expected to create savings, it also reflects a shift in focus that may impact short-term revenue streams.

Positive Trends in SUBLOCADE

Notably, SUBLOCADE’s revenue demonstrated robust growth, recording a year-over-year increase of 24%, with total net revenue of $192 million for the quarter. The drug’s forward momentum is expected to continue, with guidance indicating a target of $765 million to $805 million for 2024, positioning it for a solid 25% growth year-over-year at the midpoint. The company shared optimistic projections about reaching a billion-dollar run rate by the end of 2025, potentially exceeding $1.5 billion in annual revenues.

Operational Margins and Cost Efficiency

Indivior reported an adjusted gross margin of 84% slightly above the prior year, driven by improved product mix and favorable manufacturing variances. The SG&A expenses reflected a 15% increase at $144 million, attributed to enhanced commercial investments. However, the company's recalibrated OpEx guidance for 2024 now stands at $550 million to $560 million, showing a reduction of $25 million to $30 million mainly due to cost-saving measures following the cessation of PERSERIS.

Future Outlook and Revenue Guidance

The company revised its full-year guidance for total net revenue to a range of $1.15 billion to $1.215 billion, reflecting transitory headwinds. This guidance implies an 8% growth at the midpoint. For OPVEE, expected revenues have been adjusted to between $9 million and $14 million, primarily based on a BARDA order contributing around $8 million expected in Q3.

Strengthening Confidence with Share Buybacks

In a show of confidence, Indivior has initiated a new $100 million share repurchase program, expressing commitment to enhancing shareholder value. This measure demonstrates the company's belief in its underlying business fundamentals and strategic goals for SUBLOCADE’s growth in the coming years.

Challenges Ahead: External Pressures

Despite the encouraging projections, Indivior must navigate competitive pressures, especially with the rise of alternative treatments like Brixadi. Currently, 80% of new patients are reportedly opting for SUBLOCADE, indicating strong market preference. However, the company is also bracing for potential impacts from Medicaid disenrollments which could affect patient retention in the coming quarters.

Conclusion: A Mixed but Positive Future

While challenges related to the opioid litigation and product transitions remain, Indivior's strategic focus on SUBLOCADE remains promising. With effective management of costs, a strong growth trajectory, and a clear pathway for enhanced shareholder value through share buybacks, the company positions itself for future successes despite current hurdles.

Earnings Call Transcript 2024-Q2

[Operator]

Good day, and thank you for standing by. Welcome to the Indivior PLC Half Year Results 2024 Conference Call and Webcast.

[Operator Instructions]

Please note that today's conference is being recorded. I would now like to turn the conference over to your first speaker, Mr. Jason Thompson, Head of Investor Relations. Please go ahead.

[Jason Thompson, executive]

Thanks, Rav, and good morning, everyone. Before we begin, I need to remind everyone that on today's call, we may make forward-looking statements that are subject to risks and uncertainties, and that actual results may differ materially. We list the factors that may cause our results to be materially different on Slide 2 of this presentation. We also may refer to non-GAAP measures. The reconciliations for which may also be found in the appendix to the presentation that is now posted on our website at indivior.com. I'll now turn the call over to Mark Crossley, our CEO.

[Mark Crossley, executive]

Thank you, Jason and good morning and good afternoon, everyone. Thanks for joining us. Joining me today are Dr. Christian Heidbreder, our Chief Scientific Officer; Jeff Burris, our Chief Legal Officer; and Ryan Preblick, our Chief Financial Officer. I'll quickly highlight our results and some updates from our release earlier in the month and then Ryan will detail the financials and our full year 2024 outlook. We'll then open the line for questions.

Our results for the second quarter were in line with the expectations we preannounced earlier this month. SUBLOCADE delivered year-over-year net revenue growth in the quarter of 24%. As we previously discussed, SUBLOCADE's growth continued to be impacted by transitory headwinds, which we expect to ease during the second half and especially as we look into 2025.

There are two significant new items in today's announcement. The first is that we've taken a $75 million provision for the agreed quantum of an expected settlement for opioid litigation brought by certain municipalities and tribal nations. This continues our path of proactively resolving legacy litigation items at the right value for shareholder certainty.

The second item is the Board's decision to initiate a new $100 million share repurchase program, which we will seek to execute in an accelerated time frame given the attractive value the shares currently represent. This new buyback program is a strong indication of our confidence in delivering on our intermediate and long-term objectives for SUBLOCADE exiting 2025 at a $1 billion net revenue run rate and achieving greater than $1.5 billion in peak annual net revenue.

I'm not going to repeat everything we outlined in our July 9 release, but I do want to provide a few incremental updates since that announcement. First, we're starting to see the benefits of our increased commercial investments behind SUBLOCADE. Recall that over the past year, we've increased our field force by 50% and our justice systems team by 25%, and we're seeing significant increases in customer engagement and activation as a result.

In terms of key metrics, through the end of Q2, we've increased active SUBLOCADE dispensing HCPs to over 7,200 from approximately 6,700 at the end of fiscal year 2023. And we've activated approximately 120 new CGS facilities thus far in 2024 to reach over 700 total activated justice system accounts.

Second, we've completed the actions related to the cessation of PERSERIS sales and marketing. We thank our former colleagues for their professionalism and past contributions to Indivior, and we wish them the very best for the future.

Additionally, we anticipate making product available to patients for up to a year to help manage treatment transition. Third, we expect fulfillment of the BARDA contract for OPVEE to begin this quarter, which, as a reminder, will amount to approximately $8 million in net revenue in fiscal year 2024.

Lastly, in terms of key items for the quarter, we're pleased to complete our U.S. primary listing at the end of June with strong support from shareholders. Over time, we expect the benefits to be increased awareness of Indivior among the U.S. investment community and U.S. index inclusion. As part of this effort, we'll begin reporting in U.S. GAAP next year, starting with our first Form 10-K filing in March 2025. This is a key requirement for U.S. index inclusion.

Next, I want to call out some highlights from our regular quarterly reported card. Beginning with SUBLOCADE patients in treatment that which grew 49% year-over-year to 160,400 at the end of the second quarter. On a sequential basis, this represents a 7% increase with over 10,000 patients gained in the quarter. Recall, we target greater than 270,000 patients to deliver our peak net revenue goal of greater than $1.5 billion.

SUBLOCADE dispenses of 155,700 increased 25% versus last year and 5% versus the prior quarter. The difference between the sequential dispense growth rate of 5% and the net revenue growth of 7% is primarily due to destocking activity in Q1. I'm also pleased to report that our alternate sites of care efforts are continuing to show good progress. The number of SUBLOCADE injections at these sites increased 55% in the second quarter compared to the previous quarter and our network has now grown to over 1,200 locations across 22 states with 5 partners.

Looking at diversification. We continue to build a funding trial and experience environment for OPVEE, which we're confident will translate into paying customers over time. In the short term, we are facing some pushback to adoption from the views of certain harm reduction advocates. We'll continue to engage these voices with science and real-world evidence to counteract them and accelerate adoption as we believe the ultimate goal must be to save lives.

Meanwhile, as I just highlighted, we expect delivery on the BARDA contract to begin this quarter, which will account for most of OPVEE's net revenue in fiscal year 2024.

Turning to our Rest of World business. We continue to see good growth and contribution from our new products, SUBLOCADE and SUBOXONE Film. Their solid progression is helping us offset the ongoing challenges to our legacy tablet products. In particular, ex-U.S. sales of SUBLOCADE grew 25% year-over-year in the first half to $25 million, with growth led by Canada and an increasing contribution from the Nordics. You should note that our order timing and elevated stocking in the year ago quarter had an adverse impact on overall Rest of World performance. That said, we continue to expect modest growth for the full year.

Turning to our pipeline. A few highlights to mention starting with SUBLOCADE, where we've completed the clinical studies supporting important label updates for rapid induction and alternate sites of injection, and we'll be making regulatory submissions to the FDA this quarter. We announced that Indivior-2000 has commenced Phase II development with patient dosing starting last month. Our excitement about this asset reflects our belief in the significant unmet need for non-opioid option for patients as part of the OUD treatment continuum.

Turning to AEF0117 for cannabis use disorder. We expect top line results from the clinical Phase IIb study this quarter, which we'll release when final. In terms of next steps, we would then expect to have an end of Phase II meeting with the FDA to discuss the Phase IIb data as well as clinical Phase III study design and clinical endpoints.

We'll then evaluate the outcome from that meeting, the clinical results and our market research to form a view on commercial potential. This will inform our decision on whether to exercise our option on the asset and enter Phase III development.

Finally, on clinical developments, I'll just quickly highlight that we discontinued INDV-5004 drinabant for acute cannabinoid overdose based on our assessment of a limited market opportunity for the product.

Moving to capital allocation. As I noted, we're today announcing a new $100 million buyback based on our confidence in delivering against our medium-term profitable growth framework. We're also making good progress in resolving legacy litigation matters. As we disclosed at the start of this month, we've agreed to pay $85 million to certain end payers, ending the antitrust trial that was scheduled to begin on July 15.

In addition, we are today taking a $75 million provision for an agreed settlement amount for certain opioid litigation, including the opioid MDL matters related to municipalities and tribal nations. While this quantum is agreed and payable over multiple years, the parties still must negotiate material terms and conditions of the final settlement agreement. We expect to make a further disclosure upon reaching that final settlement. With that, I'll hand over to Ryan.

[Ryan Preblick, executive]

Thanks, Mark, and good morning and good afternoon to everyone. This was a challenging quarter as a result of the transitory headwinds affecting SUBLOCADE and the changed market outlook for PERSERIS. I nevertheless want to reiterate Mark's confidence that we are on track to deliver against our medium-term profitable framework and to create significant shareholder value. For today, I will start my comments by summarizing the financial impacts of our decision to end the sales and marketing of PERSERIS before briefly walking you through the financials for the second quarter and closing on our full year guidance, which we revised on July 9.

Our strategic decision to end the promotion of PERSERIS will result in a charge of approximately $65 million, with $42 million recognized this quarter and the balance of approximately $23 million in Q3. This charge includes severance costs, write-offs for inventory, equipment and intangibles and other termination payments. The cash impact will be approximately $20 million and will largely be incurred in Q3. On an annualized basis, we expect this result in savings of approximately $50 million, with $20 million included in the revised SG&A guidance for full year 2024.

Turning to the performance drivers in the quarter, starting with the top line. Total net revenue of $299 million reflected growth of 8% versus the year-ago quarter, both on a reported basis and at constant exchange rates. By geography, total U.S. net revenue grew by 12%. The Rest of the World business was down 10%, 8% when excluding FX. The quarter was negatively impacted by shipment timing in this quarter and elevated stocking in the comparable period last year.

SUBLOCADE net revenue outside of the U.S. grew 30% year-over-year to $13 million in the quarter. Total SUBLOCADE net revenue was $192 million, up 24% versus Q2 of last year. As previously discussed, this was lower than we had expected, due primarily to Medicaid disenrollment impacts, lower stocking levels and delays in some newer CGS account activations.

On a sequential basis, SUBLOCADE net revenue grew 7%, slightly ahead of dispenses given the destocking activity in Q1. For OPVEE, net revenue in the quarter was minimal. For SUBOXONE Film, the average share of approximately 16% in the quarter was down compared with both the first quarter and the year ago quarter, as expected. As a reminder, we do not promote SUBOXONE Film in the U.S.

Moving down to P&L. Our second quarter adjusted gross margin of 84% was up slightly versus the prior year quarter, primarily reflecting favorable manufacturing variances and improved product mix from increased SUBLOCADE net revenue. Adjusted SG&A expenses were $144 million in the quarter, an increase of 15% versus Q2 of last year, reflecting the incremental commercial investments we have made. R&D expenses were $27 million in the quarter. The decrease in R&D reflected phasing of expenses related to post-marketing studies for SUBLOCADE, partially offset by pipeline development efforts, which will accelerate into the second half of this year. Adjusted operating income of $79 million in the second quarter was up 11% versus the prior year.

Lastly, on the P&L, our adjusted net income of $60 million grew 7% in the quarter, reflecting the dynamics I just highlighted. Quickly touching on the balance sheet and our capital position. We ended the second quarter with gross cash and investments of $405 million. During the first half, positive cash flow from operations was offset by litigation-related payments and by our existing $100 million stock repurchase plan, which we expect to finish by the end of this month.

As Mark mentioned, today, we announced a new $100 million share repurchase program to reflect our confidence in the business, and we are provisioning $75 million for an agreed settlement for certain opioid litigation, with the quantum agreed and payable over multiple years. I would highlight that the $75 million provision will be remeasured once we reach final settlement with all the parties. The provision would then be reclassified to a liability and the amount would be lowered to approximately $65 million by using a risk-adjusted rate versus a risk-free rate when discounting to the net present value.

Closing on our full year 2024 guidance, which we updated on July 9, I want to highlight a few key takeaways. Our revised total net revenue guidance of $1.15 billion to $1.215 billion reflects the transitory headwinds we are facing in full year 2024 and at the midpoint, represents 8% year-over-year growth. As we noted on the investor call on July 9, we expect to move beyond these items as the year progresses and especially as we look into 2025. For SUBLOCADE, our guidance of $765 million to $805 million represents 25% year-over-year growth at the midpoint and keeps us on track to exit 2025 at $1 billion run rate and on a path to exceed $1.5 billion.

For OPVEE, based on the slower-than-anticipated ramp, we recalibrated our net revenue expectations for full year 2024 to $9 million to $14 million. The majority of this reflects the BARDA order of approximately $8 million that we expect in the third quarter. Our guidance for Film is unchanged.

Our guidance for OpEx of $550 million to $560 million reflects a reduction of $25 million to $30 million versus prior expectations. This reduction includes the $20 million of anticipated cost savings relating to PERSERIS as well as lower volume dependent expenses. Our guidance for R&D is unchanged. Taking all the pieces together, we now expect adjusted operating income to be between $285 million and $320 million. At the midpoint, this implies solid year-over-year growth of 12% and an approximately 100 basis point margin improvement. I will now turn the call back over to Mark.

[Mark Crossley, executive]

Thanks, Ryan. Despite a challenging first half, I hope we've demonstrated that we remain highly confident that the underlying fundamentals of our business and strategy remain intact and that we're on a path to help patients in this largely undertreated market while generating substantial shareholder value. We're happy to now take questions.

[Operator]

[Operator Instructions] We are now going to proceed with our first question. The question come from the line of David Amsellem from Piper Sandler.

[David Amsellem, analyst]

Just have a few. First, can you talk about what percent of new starts you're getting versus the competitor, Brixadi? And more importantly, how are you thinking about the mix between SUBLOCADE and Brixadi as we move through the second half of the year and into '25? That's number one.

Number two, looking at the guide for SUBLOCADE, can you talk about the extent to which it contemplates competitive headwinds related to Brixadi? In other words, does it just contemplate the disenrollments or does it contemplate competitive headwinds as well?

And then lastly, just on the inventory. Is that a statement on the competitive dynamics? Or is there something else going on there?

[Mark Crossley, executive]

Thanks, David. Let's start with the Brixadi question. And I think as we look to the market, we continue to see a market where nothing hinders our conviction behind our belief that SUBLOCADE is a paradigm shift in treatment. And we don't see other products that match the offering, especially in a market where the opioid epidemic has transitioned to fentanyl in other highly powered synthetic opioids. This is further reinforcing to your question, David, that we're seeing 4 out of 5 new patients are choosing SUBLOCADE. So a significant patient choice as new patients are coming into treatment.

With regards to the guide, the guide, we have extreme confidence with regards to what we've guided on SUBLOCADE. And that includes all the factors we currently see in the market, the transitory issues as well as competitive pressures. And if you could repeat your third question? I missed it when you asked it.

[David Amsellem, analyst]

Oh yes, sure. On the inventory, just the lower stocking levels, is that a statement on the competitive dynamics? Or is there something else going on there?

[Mark Crossley, executive]

Thank you. I'll hand that to Ryan.

[Ryan Preblick, executive]

Yes. No, that's a good question. And at this point, we believe it's a onetime reset as we get through 2024. Primarily driven by, as we become more focused on these OHS larger networks, they tend to be able to streamline their order pattern. So the turns at the wholesalers have become lower, which then has the byproduct of requiring less stocking at this point.

[David Amsellem, analyst]

Okay. And if I may just sneak in one follow-up, just on net pricing, net realized price over time. With a 2-player LAI market now, how do you think about the trajectory of net price, not just for this year, but also as we move through next year?

[Mark Crossley, executive]

Yes. I think we'll probably guide on '25 in February. But what we see now is, on an absolute pricing basis is it's incredibly stable. And any of the sort of variances I think that folks would be modeling are going to be more mix related as the channel sort of mix shift through time. And David, let me just say a bit remiss, I probably should have started with this. Welcome to coverage. So initiate this week. Thanks for joining.

[David Amsellem, analyst]

All right. Happy to be here, I'll jump back in the queue.

[Operator]

We're now going to proceed with our next question. The questions come from the line of Paul Cuddon from Deutsche Numis.

[Paul Cuddon, analyst]

Just 2 questions from me, please. Just noting the success in the alternate sites of care between Q1 and Q2. I'm just wondering if you could elaborate on those 5 partners? What exactly is sort of working well there? And are they exclusive relationships? And there has been secondly, just for me on uncertainty over the impact of Medicaid disenrollments. You had a peer with high Medicaid sales and site that they haven't seen any impact. So I'm just wondering if you could just help me quantify the impact that you have seen and why that might be different?

[Mark Crossley, executive]

Certainly. So with regards to [indiscernible], we're really pleased with that and the progress that we've had and continue to have and remind everyone, this is something that's going to take quarters and years to build out a nationwide network to open this up for these independent physicians who've previously been held out because of the administrative burden of specialty pharmacy products. So we now have over 12,000 locations across 22 states with 5 partners and seeing injection growth grow over 55% as we're able to start calling on these independent physicians and be able to highlight that there are those local pharmacies there is very important. So very excited about over 1,200 locations.

With regards to the Medicaid re-enrollment, I can't speak to other people's business. But what I can say is we spent an immense amount of time diagnosing our business and where we are. And what we've seen with the waves of both the change healthcare and the re-enrollments is we've seen a major shift in our retention curves that fluctuated through time that we believe have impacted our business of the $60 million reduction on SUBLOCADE, about $30 million or about 5% growth year-over-year.

I do have to highlight, we're still forecasting that we're going to grow over 25% on SUBLOCADE year-over-year. So while a bit slower than we expected because of the transitory issues. We're still seeing significant growth and are excited about the fact that we are receiving 4 out of 5 new patients.

[Operator]

We are now going to proceed with our next question. The questions come from the line of Chase Knickerbocker from Craig-Hallum.

[Chase Knickerbocker, analyst]

So just starting on SUBLOCADE, just to kind of work off a question that David had asked. So you had said kind of when we were originally doing 2024 guidance with the update earlier this month that the competitive kind of headwind, so to say, was kind of in line with your expectations when you had originally guided. Can you kind of walk us through what it assumes from kind of new patient starts from your competitor in the second half of the year? Does your guide assume that those new patient starts for your competitor kind of ramp up further from the 21% that I think you referenced earlier? Just kind of benchmarking us on guidance for the second half there.

[Mark Crossley, executive]

Yes, Chase. We don't provide guidance on all kind of the leading and lagging KPIs. I think the key part here is we've given a guidance range for the balance to go, that we have extreme confidence in. We highlighted at the interim update, the transitory nature, the transitory have made it more difficult to forecast what the move forward on a quarter-to-quarter basis. But we have confidence in the range on the year that we'll achieve that.

[Chase Knickerbocker, analyst]

Got it. And then maybe just one for Jeff, he's on the call here. On the new provision, there's obviously quite a few points is kind of around the opioid MDL items. Can you just kind of help us clarify this preliminary settlement, kind of what you would expect it to settle when it comes to the opioid litigation? Is this kind of a wholesome potential preliminary settlement? Just kind of help us there.

[Jeffrey Burris, executive]

Yes, sure, Chase. Thanks for the question. So the settlement is -- potential settlement is with the municipalities and tribal nations, which if you look at our Note 13, when we talk about that, about 1/3 of the cases are private plaintiffs and 2/3 of those 400 cases are municipalities and tribal nations. So we would expect it to settle -- put those cases with the municipalities behind us.

[Chase Knickerbocker, analyst]

Got it. And then just last one. We haven't really talked about it too much with kind of all the recent items. Maybe just speak to kind of how the reception has been from potential customers relative to what your original expectations were? And then kind of just the main drivers for kind of the revision and expectations that we've seen recently. Then a little bit more context, if you would, on kind of the pushback that you're receiving from some harm reduction advocates.

[Mark Crossley, executive]

Yes. Thank you, Jason. What I'd say is -- maybe I'll start with your last point and then build that into what we're seeing. I think the pushback that we're seeing from certain harm reduction folks has been larger than we would have expected. We have a medication here that we believe is very suited for the synthetic opioids that have overtaken the drug supply that are causing poisonings of nonaddictive people as well as overdose of those that are choosing to recreationally use opioids. And we believe that nalmefene is a breakthrough paradigm shift for these folks. And it's the only one specifically called out for synthetic opioids on the label.

So we've seen a stronger-than-expected voice from harm reduction who have a fear of precipitated withdrawal. And obviously, that's not been studied in market, which makes it tough. I think from our standpoint, what we're doing is helping drive experience through our experience program.

As we mentioned at the interim results, we have over 170 activations of new experience programs where people are able to get product and use it. I think for me, the extreme positive there is that as people are getting this product and using it, the average units used in our initial pilot up in Michigan was 1.2 units. So you're using less units. It's a simpler rescue and it's acting exactly as we'd expected with differentiation versus Narcan in the initial samples.

Now we have to translate that into real-world evidence that we can use with customers. But we expect through time that the experience program, the in-market performance will translate into sales to customers and in line with our expectations.

[Operator]

We are now going to proceed with our next question. The questions come from the line of Thibault Boutherin from Morgan Stanley.

[Thibault Boutherin, analyst]

My first question is on the average number of dispensed per patient. So we see the number of patients increasing faster than the number of dispensed. And if we do a very good math on the average dispensed per patient, that number has been coming down for a number of quarters. Just wanted to know if you could help us understand what this means? I interpret this as a faster turnover of the patient population. So in average, lower duration of treatment. First of all, is this correct? And also, is it related to the Medicaid disruption of your patient base? And so could we expect the average number of dispensed per patient coming back up as we get out of the Medicare disruption? So that's the first question.

And second question on the share buyback. Could there be any potential technical constraints here? Because you're paying a large proportion of the outstanding shares over a relatively short amount of time. So I just wanted to know if you could potentially run into any technical limitation.

And then last question on the opioid, civil opioid agreement. So can you just clarify that all public entities have been dealt with and so the remaining ones are only the kind of private individual claims? And also if you could give us any insight into where you are in managing this remaining individual claims for the similar MDL. Is it possible to see potentially also settlement dealing with all of this at the same time at some point?

[Mark Crossley, executive]

If you could just repeat the end of your last question please Thibault. It broke up a little bit. I heard the portion on the opioid MDL, public versus individual or what we would call more product-related neonatals. What was the second part of that where you broke up?

[Thibault Boutherin, analyst]

The second part was just if you could give us any insight on where you are managing these claims. So if you could also see a potential settlement at some point?

[Mark Crossley, executive]

Thank you for that. Sorry, you broke up. So I'll handle the first, and I'll ask Ryan to handle the share buyback and then just let Jeff talk through the nuances of the opioid MDL, which is, again, a preliminary settlement agreement on quantum with more to come on the exact details of the paper. So when it comes to the average number of expenses, I think you virtually have answered your own question, Thibault -- is you are seeing a little bit of a disconnect on patient growth versus dispensers and you indicated a faster turnover. I think it is due to that retention curve shift that we saw associated with change health, associated with the Medicaid disenrollment where we're seeing patients out of treatment faster.

Our expectation is that retention curve will shift back to what's been a very consistent retention curve for the past 4 years. So we expect that as the transitory issues ease to come back and reconnect, so to speak, moving forward. So with that, on the SUBLOCADE dynamics, Ryan, do you want to talk about the technical constraints with regards to the buyback that Thibault was asking?

[Ryan Preblick, executive]

Yes. So the plan is to first wrap up the current program as soon as possible. We anticipate that end of July, early August, and then start this new program right after that. We have a plan of front-loading that to certainly take advantage in the disconnect in the share price and have a structure in place to have it last over 6 months. In regards to any constraints, we certainly have to abide by more trading rules. And the most common one is if the share price is 5% above the 5-day average, we do have to halt purchases at that point. That's something that's happened in the past and something that we will have to adhere to going forward.

[Mark Crossley, executive]

Thanks, Ryan. Jeff, do you want to talk to the opioid MDL?

[Jeffrey Burris, executive]

Yes, let me move this microphone a little closer to me. I really appreciate the question. So first, I didn't say this is the chase, but I just want to make sure everybody understands. We are really pleased to have reached an agreement on the quantum for the settlement because we do believe it will ultimately put the municipality litigation substantially behind us. Obviously, we still have to negotiate the final material terms, but we have reached that agreement with the Plaintiffs' Executive Committee and certain states' Attorney General.

I think you had asked a question about the private plaintiffs. So as it relates to private plaintiffs, those cases are very early in their stage, right? They've all been stayed. There has been little to no activity on them. You should view those claims, I think, as Mark mentioned, more along the lines of a product liability claim. But because they're in the very early stage, we have only begun our evaluation of the claims. Obviously, we believe we have meritorious defenses and we intend to vigorously defend ourselves in these private plaintiff actions.

And then lastly, we do expect and would plan on fulsome participation from municipalities in the cases. So we would expect fulsome participation. But until we get to final settlement terms, we don't know how that's going to play out.

[Operator]

We're now going to proceed with our next question. The questions come from the line of Max Herrmann from Stifel.

[Max Herrmann, analyst]

I've got a couple, if I may. Firstly, just in terms of looking towards the cannabis use disorder, AEF0117 data in September. What should we be looking for in terms of -- where do you see success in terms of the clinical outcomes? Obviously, conscious that you then have to wait till the end of Phase II meeting with the FDA and make a decision on whether to exercise your option. So that's the first question.

The second is just a bit more clarity on the, I guess, 1/3 of the -- third of the cases, I think you talked about 400 cases in the -- the opioid MDL, in the third private cases. What is the case because -- obviously, I thought the basis of most of these cases was to do with use of opioids for treatment of pain in individuals. What are the cases that they've got against Indivior then?

[Mark Crossley, executive]

Thanks for those questions, Max. I'm going to go ahead and start with Christian to talk about the end of Phase II results and meeting with the FDA, and then I'll ask Jeff to talk a little bit more color on those remaining cases that aren't part of the settlement.

[Christian Heidbreder, executive]

So as you know, I cannot comment clearly on the results at this stage. The study is complete. We are currently locking the database. And over the next several weeks and couple of months, we are going to thoroughly curate the data, analyze the data and interpret the data. So we are currently on track to have top line results in September.

Following these top line results, we will then prepare the submission to the FDA. This is a pretty substantial submission to the FDA in order to organize an end of Phase II meeting with the agency before the end of the year. And then it is, as Mark mentioned, the combination of the data of the Phase IIb study as well as the feedback from the FDA at the end of Phase II meeting, it will help us to make the decision as to whether or not we exercise the option, this asset in the first quarter next year.

[Mark Crossley, executive]

Yes. I think the key on that one, Max, is it is truly like a lock and key. The results will come out, and they'll be what they are versus the endpoint in the Phase II, which was an 80% reduction. But that will then inform a dialogue with the FDA with regards to a potential Phase III and what those endpoints would be, which could differ from the Phase II. So it truly -- you have to first see the results and then you have to have the discussion with the FDA. And only the 2 of those, when added with the market research on what we mean commercially, will inform the option. .

Jeff, could you please speak to the remaining cases?

[Jeffrey Burris, executive]

Yes, sure, Mark. And Max, so your question is what about the individual plaintiffs, the private plaintiffs. Most of them are asserting claims for what is called a neonatal abstinence syndrome. So these would be mothers or family members that have sued, alleging that a child was born with an addiction to opioids. And we have been named in a number of those lawsuits.

[Max Herrmann, analyst]

So this would be individuals who were taking, I guess, SUBOXONE? And as a result of their treatment, then they're in pregnancy, the child was born addicted to opioids?

[Jeffrey Burris, executive]

Yes, Max, I would maybe recharacterize it as they allege they take SUBOXONE. That's part of the issue, right? These are very early in their stages. So we don't really have a lot more information than they filed the claims. But yes, the allegations would be that they took some product that we had and that the child was born with neonatal abstinence syndrome.

[Operator]

[Operator Instructions] We are now going to proceed with next question. The questions come from the line of Paul Cuddon from Deutsche Numis.

[Paul Cuddon, analyst]

I just got a couple of follow-up questions, if I may. Just firstly, now there are 2 companies or at least 2 companies that they're promoting kind of long-acting injectables for opioid use disorder. I mean, are you starting to see any new clients come on board then getting in contact with you to ask about the potential benefits of SUBLOCADE that you may not have actuated yourself?

And then secondly, for me, a question for Christian on the start of the longer-acting product. Once you've shown the 2 nanograms per mil for 90 days, I mean what really would there be sort of needed to do to get that product through into kind of more, kind of pivotal studies?

[Mark Crossley, executive]

Maybe I'll handle the first one. And then I'll ask Christian to talk through the longer-acting. Listen, I think our belief has always been that when you look at this disease space, the high unmet need that's out there, less than 2 in 10 people in treatment, there is a huge role to play for long-actings.

And certainly, plenty of room for multiple people to participate. Our expectation is that the increased share of voice for long actings will actually drive market growth in the medium and long term as we continue to help more patients. And I think as I detailed in my prepared comments, what we are seeing is continued strong HCP and patient growth that are active prescribers. So now we're over 7,000 active prescribers of SUBLOCADE.

So we continue to see good growth and see it that we're in the early days because we only have about a 6% penetration of LAIs in the market. So excited about the bright future ahead. Christian, do you want to speak to the AOR partnership?

[Christian Heidbreder, executive]

[indiscernible] pharmacokinetics of a 3-month LAI with buprenorphine using the -- a larger delivery platform. This is based, however, on a single dose study. So the next step for us is to organize what we call a multiple dose pharmacokinetics study to really inform us and understanding the pharmacokinetic properties of this new product in order to then organize the meeting with the FDA before we embark on a period of Phase III trials.

[Operator]

We have no further questions at this time. I will now hand back to Mark for closing remarks. Thank you.

[Mark Crossley, executive]

Thank you, Rav. And with no more questions, this will conclude our second quarter, half one results presentation. I'd like to thank everyone for their continued interest in Indivior, and we look forward to updating the market as we progress. Have a great day.

[Operator]

This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you.