Indivior Targets Addiction

08/30/2016 10:00 am EST


Vivian Lewis

Editor and Publisher, Global Investing

This addiction treatments firm has a new slow-release depot (subcutaneously applied) formulation of buprenorphine, RBP-6000, to treat heroin addiction, explains Vivian Lewis, editor of Global Investing.

The trial — undertaken by London-based Indivior (OTC: INVVY; LON: INDV) — enrolled 489 addicts who were not in current treatment but wanted to manage their disorder.

It allows recovering addicts to avoid having to take medication daily. RBP-6000 is injected monthly. The treatment proved successful -- meeting both endpoints in Phase III clinical trials

INVVY is on track to complete analysis of the date by Q1 2017. The US FDA classified RBP-6000 for fast-track priority review meaning this potential blockbuster could hit the US market by Q3 or Q4 next year.

Medical heroin addiction treatments are supposed to become more accessible under the Comprehensive Addiction and Recovery Act (CARA) of 2016. Apart from RBP-6000, addicts will be given behavioral therapy and psycho-social support.

INVVY stock surged 15% in London trading on the news. It is also up 140% year-to-date in sterling. Our reporter Martin Ferera found the share for us before it was spun out by Reckitt Benckiser, (RBGLY), a previous holding in our portfolio which had been sold.

We note that Beaufort Securities, a UK brokerage, says that another reason to be enthusiastic about Indivior is its boosted R&D budget in the first half of the fiscal year, despite lower profits.

Playing a long game, the broker has boosted its 2016 estimates for revenues to top $1 billion vs. $960 million earlier.

Profits are now expected to come in at $180 million vs. an earlier $165 million, boosted by the new extended release delivery system for addiction treatment.

The brokers also cheer on a possible alcohol treatment and its phase III schizophrenia medication. Jefferies also tipped Indivior as a buy.

Overall, we consider the US-listed shares of Indivior as a buying opportunity.

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