Indivior Pharmaceuticals, Inc.: Form 10-K for the period ended Dec 31, 2024

Overview

Indivior is a global pharmaceutical company working to help change patients' lives by developing medicines to treat substance use disorders (“SUDs”). As a pioneer in developing evidence-based treatments for opioid use disorder (“OUD”), our vision is that the millions of people across the globe suffering from SUDs will have access to evidence-based treatment to change lives. As a leader in addiction treatment, Indivior is dedicated to transforming SUD from a global human crisis to a recognized and treated chronic disease.

Headquartered in the U.S. in Richmond, Virginia, Indivior employs more than 1,000 individuals globally and its portfolio of products is available in more than 30 countries worldwide.

Our core products include the following approved treatments:

• SUBLOCADE (buprenorphine extended-release monthly injection);
• SUBOXONE Film (buprenorphine and naloxone sublingual film);
• SUBOXONE Tablet (buprenorphine and naloxone sublingual tablets); and
• SUBUTEX Tablet (buprenorphine sublingual tablets),

all of which are treatments for OUD, and

• OPVEE (nalmefene) nasal spray for opioid overdose reversal.

Product availability varies across the countries in which Indivior treatments are available, including in terms of dosage form, strength and indication.

The Company sells its products in the U.S. and in other selected areas of the world, such as much of Europe, Canada, Australia and through distribution partners in other parts of the world. Our core geographic market (based on the country where the sale originates) is the U.S., which accounted for 85%. 83%, and 81% of net revenues for the years ended December 31, 2024, 2023, and 2022, respectively.

Our business was initially developed and managed as a separate division of Reckitt Benckiser Group PLC (“RB” and, together with its subsidiaries, the “RB Group”), a public limited company incorporated under the laws of England and Wales. Indivior PLC was incorporated on September 26, 2014 for the purpose of acquiring the specialty pharmaceutical business unit from RB (the “Demerger”). Following the Demerger, which was effective on December 23, 2014, Indivior PLC has operated as a standalone business.

Treatment of OUD

The treatment of OUD as a therapeutic area emerged in the early 1920s. The U.S. government’s efforts to address OUD through supply regulation and control, and to address public health concerns through scientific innovation, influenced a gradual shift in research interest towards developing a treatment for OUD.

In 1966, RB led the breakthrough discovery of buprenorphine and developed, in partnership with the U.S. National Institute on Drug Abuse (“NIDA”), buprenorphine for the treatment of OUD. SUBUTEX Tablet (buprenorphine sublingual tablet) was our first approved product specifically indicated for the treatment of OUD. SUBUTEX Tablet was launched in France in February 1996 by Schering-Plough, which licensed the global marketing rights to the buprenorphine products from RB Group. Shortly thereafter, SUBUTEX Tablet was approved in additional EU countries. SUBOXONE Tablet (buprenorphine/naloxone) sublingual tablet was approved across the EU by the EMA in September 2006.

In the U.S., the enactment of the Drug Addiction and Treatment Act of 2000 (“DATA 2000”) was a significant development in the history of addiction treatment. Previously, treatment options for OUD in the U.S. were limited: either abstinence-based programs that have a high rate of relapse, or methadone clinics (the only medication-assisted treatment option). Methadone clinics in the U.S. provide daily dosing and may be unpopular with opioid-dependent individuals owing to inconvenience and the significant societal stigma associated with methadone. As a result, many opioid-dependent individuals remained untreated.

Under DATA 2000, office-based physicians who had completed appropriate training were able to obtain a federal waiver to treat a limited number of opioid-dependent patients with medications specifically approved by the U.S. Food and Drug Administration (FDA) for the treatment of OUD, and to prescribe and/or dispense these medications in their office-based settings. By permitting treatment for OUD in the privacy of physicians’ offices with take-home doses, DATA 2000 was significant in creating access to treatment and beginning to treat OUD as a medical condition like other chronic diseases.

In December 2022, Congress enacted the Mainstreaming Addiction Treatment Act (MAT Act) which eliminated the requirement for a health care practitioner (HCP) to apply for a separate waiver through the Drug Enforcement Administration (DEA) to dispense certain treatments (including buprenorphine) for maintenance or detoxification of patients with OUD. Indivior believes the elimination of these requirements as part of this legislation will help to normalize the view of addiction as a chronic brain disease and expand access to evidence-based buprenorphine treatment. The Company supports efforts to encourage more HCPs to provide medication for OUD.

Indivior Global Integrity & Compliance Program

Indivior has developed and maintained a Corporate Compliance function and Program dating back to before its demerger from RB Group. It has since undergone continuous learning and evolution of its capabilities, including:

• hiring an executive committee level Chief Integrity and Compliance Officer in 2018 who reports directly to the CEO and also to the Board;
• using external consultants and relevant best practice standards and benchmarks to evaluate and assist with evolution of its Global Integrity & Compliance Program; and
• accelerating the build-out of its updated Integrity & Compliance team structure, including hiring additional credentialed personnel.

This team now includes more than 20 professionals who have established and support administration of the defined and communicated “Indivior Global Integrity & Compliance Program Framework” which is based on the elements of an effective compliance program as defined by governing authorities. Our Integrity & Compliance team supports the business and functions in the assessment and mitigation of healthcare compliance risks and co-leads with the Legal team compliance with our obligations under the Government Agreements (i.e., CIA, DOJ Compliance Measures, and the FTC Order. It is responsible for administering our Code of Conduct and related healthcare compliance policies, procedures and guidance with integrated controls. In addition, it works to ensure an appropriate tone at the top, promotion of a "speak-up" culture, develops various integrity and ethics initiatives, including Integrity & Compliance team and business-led risk monitoring, educates on relevant risks to help support strong risk monitoring, and is responsible for administering the Company’s Global Integrity & Compliance Program, together with the executive committee who are the members of the Indivior Compliance Committee.

Product Development

Launch of SUBUTEX Tablets, SUBOXONE Tablets, and SUBOXONE Film in the U.S.

The FDA approved SUBUTEX Tablet (buprenorphine) and SUBOXONE Tablet (buprenorphine/naloxone) in October 2002 and we launched sales of these products in the U.S. in 2003. Subsequently, in August 2010, the FDA approved SUBOXONE Film (buprenorphine/naloxone) sublingual film, which dissolves more quickly than SUBUTEX and SUBOXONE Tablets. We discontinued the U.S. distribution of

SUBUTEX Tablets in 2011 and SUBOXONE Tablets in 2013. In 2020, the Company’s U.S. sales force ceased promoting SUBOXONE Film as part of the Resolution Agreement with the Department of Justice (“DOJ”), discussed below, and ceased all detailing of the product in that year, though it remains available for sale.

Our SUBOXONE Film product faces four generic competitors in the U.S., and a fifth is expected in early 2025. Despite the launches of these generic formulations of tablets and film and branded competition, SUBOXONE Film has maintained a share of the buprenorphine-based OUD treatment market (by mg volume) of approximately 16% in 2024.

Launch of SUBLOCADE in the U.S.

The FDA approved SUBLOCADE (buprenorphine extended-release) injection for subcutaneous use in 2017 and we launched sales of this product in 2018. As the first long-acting buprenorphine-based injectable approved by the FDA for the treatment of moderate to severe OUD, SUBLOCADE became the largest product by net revenue for the Company by the second quarter of 2022.

Approval and Launch of OPVEE for Overdose Reversal in the U.S.

In May 2023, the FDA approved OPVEE (nalmefene) nasal spray for the emergency treatment of known or suspected opioid overdose induced by natural or synthetic opioids in adults and pediatric patients aged 12 years and older, as manifested by respiratory and/or central nervous system depression. OPVEE (nalmefene) nasal spray is intended for immediate administration as emergency therapy in settings where opioids may be present. OPVEE (nalmefene) nasal spray is not a substitute for emergency medical care. We acquired OPVEE as part of our acquisition of Opiant Pharmaceuticals, discussed below. We began marketing OPVEE in the U.S. in October 2023.

In September 2023, we were awarded a contract by the U.S. Biomedical Advanced Research and Development Authority (BARDA) (i) for the procurement of finished, packaged OPVEE held as vendor-managed inventory as a medical countermeasure in the event of a synthetic opioid community or mass casualty event, and (ii) to support FDA-required post-marketing requirement studies, a three-year stability study to support shelf-life extension, and real world evidence studies. This funding covers technical expertise for further clinical development and regulatory approval of OPVEE for use in children under 12 years of age. The contract also has an initial purchase and options for purchases and delivery of OPVEE over another 9 years at guaranteed pricing through 2033. Product delivered pursuant to the contract is expected to become part of the U.S. Strategic National Stockpile, which is the U.S.' national repository of antibiotics, vaccines, chemical antidotes, antitoxins, and other critical medical supplies. The role of the U.S. Strategic National Stockpile is to supplement state and local supplies during public health emergencies.

Launch of PERSERIS in the U.S.

The FDA approved PERSERIS as the first once-monthly subcutaneous extended-release injectable suspension of risperidone indicated for the treatment of schizophrenia in adults in 2018. We launched commercial sales of PERSERIS in the U.S. in 2019.

However, on July 9, 2024, the Company announced that it would immediately cease all promotion and marketing activities related to PERSERIS. The Company believed this action was in the best interests of shareholders due to the highly competitive market and impending changes that were expected to intensify payor management in the treatment category in which PERSERIS participates. Analysis of forthcoming changes suggested that there was no longer a path forward for PERSERIS that was financially viable.

Product Availability Outside the U.S.

In Europe, generic versions of the SUBUTEX Tablets and SUBOXONE Tablets have been available since 2010 and 2018, respectively. Despite strong competition, our Group’s total share of oral buprenorphine medication-assisted treatment ("BMAT") (by mg volume) remained significant at 50%, 51%, and 49% in 2024, 2023, and 2022, respectively. In Canada, our SUBOXONE Tablets product faces two generic competitors. In addition, we face competition from branded oral buprenorphine-based tablets and historically well-established methadone oral formulations.

We distribute SUBLOCADE (under the name SUBUTEX Prolonged Release in Europe) primarily in the U.S., Australia, Canada, Finland, Israel, and Sweden.

We distribute SUBOXONE Film primarily in the U.S., Australia, Canada, Finland, Israel, Italy, Malaysia, and Sweden.

We distribute SUBOXONE Tablets primarily in Belgium, Canada, Germany, and the U.K, and SUBUTEX Tablets primarily in Australia, France, Germany, Israel, Norway, Switzerland, and the U.K.

Development Pipeline

In addition to our commercially available products our product pipeline includes two new drug candidates for the treatment of OUD.

Agreements with DOJ, FTC and HHS-OIG Regarding Marketing and Promotional Practices

In 2020 the Company and certain of its subsidiaries reached agreements with the DOJ, the U.S. Federal Trade Commission (“FTC”), the U.S. Attorney’s Office for the Western District of Virginia, and U.S. state attorneys general to resolve potential criminal and civil liability arising from an indictment brought in 2019 by a grand jury in the Western District of Virginia, a civil lawsuit in which the DOJ partially intervened and an investigation by the FTC, all of which generally concerned Indivior, Inc. and certain of its subsidiaries’ marketing and promotional practices related to SUBOXONE Film, and SUBOXONE Tablet. The 2019 indictment followed a federal criminal grand jury investigation that began in 2013.

As part of the agreement with the DOJ (“Resolution Agreement”), a wholly owned subsidiary of Indivior PLC pleaded guilty to a single count of making false statements relating to healthcare matters in 2012 in violation of 18 U.S.C. Section 1035 related to SUBOXONE Film, and was excluded from participating in government healthcare programs. The exclusion did not pertain to the rest of the Company and did not limit access to our medications for patients in the U.S. Under the terms of the agreements, DOJ dismissed all charges in the 2019 indictment against the rest of the Company and its subsidiaries and the Company agreed to make payments to federal and state authorities totaling $600 million (plus applicable interest of 1.25% on a portion of that total amount). Pursuant to the resolution agreement, aggregate payments of $263 million (including interest) have been made through December 31, 2024. An additional payment of $52 million was made in January 2025 and two annual installments of $50 million plus interest will be due in January 2026 and 2027, with the final installment of $200 million plus interest due in December 2027.

As part of the resolution, the Company and Indivior Inc. agreed to significant compliance and reporting obligations under the Resolution Agreement with DOJ and a stipulated injunction with the FTC, and Indivior Inc. agreed to a Corporate Integrity Agreement (“CIA”) with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG”). See (i) “Item 1A. Risk Factors—”Compliance with the terms and conditions of our Corporate Integrity Agreement, the Resolution Agreement with the U.S. Attorney’s Office for the Western District of Virginia and the U.S. Department of Justice’s Consumer Protection Branch, and the Stipulated Order for Permanent Injunction and Equitable Monetary Relief with the FTC, requires significant resources and management time and, if we fail to comply, we could be subject to criminal charges, penalties, or, under certain circumstances, excluded from government healthcare programs, which would materially adversely affect our business,” (ii) Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 11. Accrued Litigation Settlement Expenses for more information. We have filed copies of the Resolution Agreement, the Corporate Integrity Agreement, and the Stipulated Order for Permanent Injunction and Equitable Monetary Relief between the FTC and Indivior Inc. as Exhibits 10.2, 10.3, and 10.4, respectively, to this annual report. We have complied and continue to comply with our reporting obligations under each of the agreements and our obligations to make investments in our Global Integrity & Compliance Program to promote compliance and drive continuous learning and evolution of an effective compliance program. We expect to complete our obligations under the CIA later this year.

Recent Developments

Transition of Primary Listing to Nasdaq

Effective June 27, 2024, we transitioned our primary stock exchange listing to Nasdaq from the London Stock Exchange ("LSE"). We continue to have a secondary listing on the LSE where our ordinary shares trade on the Equity Shares (Transition) category.

Label Expansion for SUBLOCADE

On February 24, 2025, we announced that the U.S. Food and Drug Administration (FDA) approved label changes in the U.S. for SUBLOCADE including a rapid initiation protocol and alternative injection sites. Healthcare providers can now initiate treatment with SUBLOCADE after a single dose of transmucosal buprenorphine and a one-hour observation period to confirm tolerability. Also, SUBLOCADE can now be administered subcutaneously in the abdomen, thigh, buttock, or back of the upper arm, offering patients and healthcare providers increased flexibility in treatment administration.

These FDA label changes can provide important benefits for patients and healthcare providers. Rapid initiation may lessen some of the practical obstacles to treatment induction, which may increase the likelihood that patients and providers will start therapy quickly, thereby shortening the time to achieve SUBLOCADE's therapeutic levels that provide continuous buprenorphine concentrations above 2ng/mL. Additionally, the ability to select a different injection site may provide patients more flexibility so that they may be inclined to continue their treatment. More options for healthcare providers to administer SUBLOCADE will streamline the course of treatment and improve integration into different healthcare environments.

Share Repurchase Programs

On November 17, 2023, Indivior commenced a share repurchase program of up to $100 million, which was completed on August 2, 2024. The Company repurchased and canceled 5,944,547 ordinary shares at an average purchase price of approximately $16.96. The cost was approximately $101 million, which includes directly attributable transaction costs.

On July 25, 2024, Indivior announced a new non-discretionary $101 million share repurchase program that commenced on August 5, 2024, which was completed on January 31, 2025. The Company repurchased and canceled 9,415,726 ordinary shares as part of this program, equivalent to approximately 6.4% of diluted shares outstanding, at an average purchase price of approximately $10.71.

Refinancing of Long-Term Debt

On November 4, 2024, we repaid the outstanding balance under our existing credit agreement and announced that our wholly-owned subsidiary, RBP Global Holdings Limited had entered into a Note Purchase Agreement with Piper Sandler Finance LLC as agent and certain purchasers for the issuance of up to $400 million of senior secured notes, comprised of a $350 million of term notes and up to $50 million of variable notes at any time outstanding, (the “Note Purchase Agreement”). Proceeds from the new term notes were used to fully repay the exiting term loan and pay transaction fees and expenses, and will also be used for general corporate purposes. See Item 7. Management's Discussion & Analysis—Liquidity and Capital Resources.

Industry Overview

Substance Use and its Impact

According to the United Nations Office on Drugs and Crime World Drug Report 2022, World Drug Report 2024, there number of people who use drugs globally has risen to 292 million in 2022, a 20% increase over 10 years.

People who use drugs regularly are likely to experience negative health consequences. They are also more at risk of contracting infectious diseases such as HIV and hepatitis C, and to experience overdose and suffer premature death. Furthermore, an association exists between SUD and co-occurring or comorbid mental health disorders (for example, depression, anxiety or psychosis). There is also an association between SUD and socioeconomic disadvantage, low educational attainment, increased difficulty in finding and remaining in employment, and financial instability and poverty.

World Health Organization’s (WHO) Global Status Report on Alcohol and Health and Treatment of Substance Use Disorders published in June 2024 reported that 2.6 million deaths per year globally were attributable to alcohol consumption, accounting for 5% of all deaths, and 0.6 million deaths to psychoactive drug use.

The threat SUD poses to global health has long been recognized, and as such strengthening the prevention and treatment is included in the United Nations’ Sustainable Development Goals for 2030.

Overdose deaths continue to be significant in the U.S. According to the latest data from the U.S. Center for Disease Control & Prevention (CDC) there were 97,000 fatal overdoses over the previous 12-month period ending July 2024 of which 67,952 were linked to natural and synthetic opioids

Substance Use Disorder: The Disease

Substance Use Disorder ("SUD”) has been described as a “medical disorder that affects the brain and changes behavior.” Various substances may be involved including alcohol, illicit drugs, prescription medications, and even some over-the-counter medicines.

The National Institute on Drug Abuse ("NIDA”), the Substance Abuse and Mental Health Services Administration ("SAMHSA") and the National Institutes of Health ("NIH”) all describe SUD as a long-term and relapsing condition characterized by the individual compulsively seeking and using drugs despite adverse consequences.

Since SUD is marked by periods of recovery and symptom recurrence, or relapse, it resembles other chronic diseases like hypertension and type-2 diabetes. These diseases are lifelong conditions that require continual effort to manage. Symptoms will likely return during periods where treatment compliance is low or absent, and symptoms will likely diminish when compliance to treatment begins again in earnest.

In 2023, 48.5 million people aged 12 or older (or 17%) had a substance use disorder (SUD) in the past year, including 28.9 million who had an alcohol use disorder (AUD), 27.2 million who had a drug use disorder (DUD), and 7.5 million people who had both an AUD and a DUD, according to SAMHSA’s 2023 Survey on Drug Use and Health.

There is no single cause of SUD; people begin using substances for many reasons and one person’s path to addiction may look drastically different from that of another. The prevailing view is that no one thing can predict someone’s risk of developing a SUD—rather, the interaction of the person’s unique biology and their environment influences how the drug will impact a person’s susceptibility to becoming addicted.

Opioid Use Disorder

Opioids are a major concern in many countries because of the severe health consequences associated with their use, including non-fatal and fatal overdose.

OUD is a growing global public health crisis which still carries significant stigma in many countries. OUD is often perceived as a moral failing and sign of personal weakness rather than a chronic and relapsing disease affecting the brain that can be managed and responds to treatment. As a consequence, we believe coherent action to deal with sufferers and addiction is generally lacking.

According to the United Nations' World Drug Report 2024, an estimated 60 million people used opioids in 2022, representing 1% of the global population. In 2022, opioid use in North America remains high, with 3% of the adult population reporting past-year use (9 million users).

In addition, the number of deaths from opioid overdose in the U.S. continues to remain high, twice the level just a decade ago. The majority of opioid-related overdose deaths in the U.S. are now the result of fentanyl being ingested as a substitute for heroin or with drugs such as cocaine and methamphetamine that had been adulterated, or “cut,” with the opioid. Fentanyl is 30 to 50 times more potent than heroin and can cause rapid and profound respiratory depression. Individuals may not be aware that they have been exposed to fentanyl-laced drugs including heroin, prescription opioids, or psychostimulants.

Against the context of the dramatic rise in deaths from opioid overdose, Indivior is doing more to understand the interaction between fentanyl and buprenorphine. According to a peer-reviewed study conducted by the University of Leiden in Leiden, Netherlands and completed in 2019, sustained high-plasma concentrations of buprenorphine (similar to those provided by SUBLOCADE at steady-state) significantly reduced fentanyl-induced respiratory depression in opioid-tolerant participants.

The European market is smaller than the U.S. market with an estimated 860,000 high-risk opioid users, according to the European Union Drugs Agency European Drug Report 2024. The report also found that opioid use was reported as the main reason for entering specialist drug treatment by 63,000 clients in 2022, representing 25% of all those entering drug treatment in Europe.

According to the Australian Institute of Health and Welfare, in 2023 on an average day, 53,300 clients received pharmacotherapy treatment for their OUD across Australia. There is increasing awareness among healthcare providers in Australia of the misuse of opioid analgesics and the need for treatment. Recent policy changes to address this concern in Australia include re-classifying products containing Codeine so that they must be dispensed by a pharmacist rather than being available over the counter.

Similarly, according to the Canadian Centre on Substance Use and Addiction, approximately 10% of Canadian adults who used opioid medications, or 351,000 persons, reported problematic use, and approximately 153,000 are in treatment according to data from IQVIA (a health information provider). Outside of the U.S., Canada, and Australia, approximately 269 million people aged 15 to 64 suffer from drug use disorders or drug dependence, according to the United Nations Office on Drugs and Crime. Treatment services are generally very underdeveloped (with the exception of Australia and New Zealand), the key challenge being to convince governments to treat addiction as a chronic medical disease rather than a social disorder.

Treatment for Opioid Use Disorder

Medication for opioid use disorder ("MOUD") is the use of medications, in combination with counseling and behavioral therapies, to provide a “whole patient” approach to the treatment of OUD. Medications used in MOUD are approved by the FDA and MOUD programs are clinically driven and tailored to meet each patient’s needs.

Research shows that a combination of medication and psychosocial support can successfully treat these disorders, and for some people struggling with addiction, MOUD can help sustain recovery. MOUD is also used to prevent or reduce opioid overdose.

MOUD is primarily used for the treatment of addiction to opioids such as heroin and prescription pain relievers that contain opiates. The prescribed medication normalizes brain chemistry, blocks the euphoric effects of opioids, relieves physiological cravings, and normalizes body functions without the negative and euphoric effects of the substance. MOUD has been shown to be more effective than medication or counseling alone in treating OUD.

A common misconception about MOUD is that some of the medicines used simply substitute one drug for another. However, these medications may restore healthy brain function, which leads to improvements in behaviors associated with addiction. Longer-term use of these medications is associated with improved outcomes.

Treatment methods in the EU differ from those in the U.S. While U.S. patients can obtain a 30-day prescription and self-administer treatment, such as SUBOXONE Film, prescribed by a treating physician, supervised dosing in the EU requires a daily visit to the clinic for many patients. Methadone and generics are also generally more broadly available as social funding puts pressure on prices, and treatment is more highly regulated. However, the harm reduction mindset is now changing towards recovery and the EU has begun to recognize the need to implement treatment systems that allow patients to return to a more normal lifestyle.

Treatment access

Despite the prevalence of SUD, including opioid misuse, and the existence of effective treatments, including medication for opioid use disorder, most people who need treatment do not seek or receive it. In 2022, an estimated 4% of U.S. adults (9,367,000) needed OUD treatment. Among these, 55% (5,167,000) received OUD treatment, and 25% (2,353,000) received medications for OUD. Source - Treatment for Opioid Use Disorder: Population Estimates—United States, 2022 Morbidity and Mortality Weekly Report.

People in urgent need of treatment are often unaware of their treatment options, have limited access to treatment and counseling, or simply do not seek it out because they are afraid of being stigmatized. In addition, access is also limited by numerous legal restrictions for pharmacological treatment, inadequate training of clinicians, and the number of HCPs who are willing to treat this population.

During 2023, our INSUPPORT® Community Reentry Program (“CRP”) reached a celebrated milestone of receiving over 100 program enrollments. INSUPPORT was created to provide information aimed at helping eligible patients with the process of obtaining Indivior medicines and to enhance our existing patient transition of care offerings. CRP was designed for patients released from the CJS who are experiencing a gap in insurance coverage. Eligible patients may receive up to two months of SUBLOCADE® (buprenorphine extended-release) subcutaneous injection at no cost while awaiting reinstatement of health insurance.

Focus on the Criminal Justice System

In the U.S., a substantial share of persons suffering from OUD repeatedly cycle through the criminal justice system. Further, persons exiting the criminal justice system have been shown to be 40 times more likely to suffer from opioid overdose than persons in the general population.

While as recently as 2019 buprenorphine was rarely available to patients in criminal justice settings, such treatment is increasingly becoming available. The shift has been spurred by research findings and pronouncements from industry and professional medical societies that evidence-based treatment for OUD in correctional settings saves lives, which in turn has shaped changes in law and policy. Treatment for OUD in correctional settings has been shown to reduce overdose deaths by 75%, reduce recidivism by 32%, and reduce transmission of HIV and hepatitis.

Public policy is trending toward increasing treatment of SUD and serious mental illness in criminal justice settings. Congress continues considering legislation authorizing Medicaid coverage of persons in correctional settings. The Centers for Medicare & Medicaid Services (CMS) has published guidance to states on how they can apply to the agency for Medicaid funding to support treatment of patients with OUD and mental illness in the criminal justice system up to 90 days pre-release.

The U.S. Department of Justice (DOJ) issued guidance in April 2022 underscoring the rights of persons with OUD to treatment under the Americans with Disabilities Act, including in correctional settings. States have been increasingly enacting legislation and appropriations, and seeking federal waiver authority, to expand treatment availability in criminal justice settings.

Opioid Overdose Reversal

In addition to OUD treatments, we provide OPVEE (nalmefene) nasal spray for overdose reversal. A large and growing addressable market for opioid overdose reversal agents exists in the U.S., such as first responders, including fire departments, emergency medical services, law enforcement, and other community groups. We expect the primary customers for OPVEE to include state health departments, substance abuse centers, federal agencies, and eventually consumers through pharmacies fulfilling physician-directed or standing order prescriptions. The co-prescribing of opioid overdose reversal agents alongside prescription opioids has also driven growth of overdose reversal agents.

Indivior Products

Our marketed products are described below:

(1) See “Item 7. Management's Discussion & Analysis—Operating Results” for data for each of the last three financial years.

SUBLOCADE Long-acting injectable (buprenorphine) extended-release injection

As the first long-acting buprenorphine-based injectable approved by the FDA for the treatment of moderate to severe OUD, SUBLOCADE is a highly differentiated treatment. Our RECOVER extension study, which was a 24-month observational study of individuals who participated in the Phase 3 SUBLOCADE study, assessed life changes in patients with OUD who received SUBLOCADE as part of a randomized clinical efficacy study. It showed that SUBLOCADE may translate into (1) increased abstinence from illicit opioids compared to placebo; (2) improved patient-reported quality-of-life outcomes (such as health status, employment and insurance status, and healthcare resource utilization); and (3) improved recovery post-treatment. Administration of monthly subcutaneous injections of SUBLOCADE also eliminates the risk of missing daily doses that might result in subtherapeutic plasma levels (see below), potentially leading to relapse to opioid-seeking and opioid-taking behaviors. Finally, because SUBLOCADE may only be administered by a healthcare practitioner via a closed distribution system whereby the patient never has access to the drug, it is expected to reduce the potential for diversion or misuse.

The logic that underpins this technology lies in a deep understanding of the relationship between buprenorphine plasma levels, whole-brain mu-opioid receptor occupancy (MOR) in the brain, and the key clinical pharmacodynamic effects of withdrawal suppression and opioid blockade. Clinical studies confirmed that the minimum threshold plasma concentration of buprenorphine needed to effectively block the subjective drug-liking effects of a full opioid agonist such as hydromorphone is 2 ng/mL, which translated into at least 70% MOR occupancy for the entire one-month period. These unique pharmacokinetic and pharmacodynamic properties of SUBLOCADE also translated into clinical efficacy and safety and better patient outcomes.

The expected benefits of these levels of receptor occupancy/opioid blockade are that:

• Patients would likely experience substantially reduced levels of cravings associated with addiction;
• Patients should receive no gratification from abuse of opioids;
• Levels of adherence and compliance with treatment should be significantly improved because it is administered once monthly and late administration of up to 14 days is not expected to affect clinical efficacy;
• It is designed to protect patients right from the start of treatment, through every day of the month, including moments of vulnerability;
• For physicians, there should be positive clinical and patient outcomes using this technology;
• For physicians and wider society, there should be reduced levels of potential diversion and abuse compared to sublingual buprenorphine—once injected, the buprenorphine cannot easily be extracted and diverted; and
• For payors, the benefit should come in reduced costs from higher compliance, better clinical outcomes and reduced abuse and diversion.

On February 24, 2025, we announced that the U.S. Food and Drug Administration (FDA) approved label changes for SUBLOCADE including a rapid initiation protocol and alternative injection sites. Healthcare providers can now initiate treatment with SUBLOCADE after a single dose of transmucosal buprenorphine and a one-hour observation period to confirm tolerability. Also, SUBLOCADE can now be administered subcutaneously in the abdomen, thigh, buttock, or back of the upper arm, offering patients and healthcare providers increased flexibility in treatment administration.

These FDA label changes can provide important benefits for patients and healthcare providers. Rapid initiation may lessen some of the practical obstacles to treatment induction, which may increase the likelihood that patients and providers will start therapy quickly, thereby shortening the time to achieve SUBLOCADE's therapeutic levels that provide continuous buprenorphine concentrations above 2ng/mL. Additionally, the ability to select a different injection site may provide patients more flexibility so that they may be inclined to continue their treatment. More options for healthcare providers to administer SUBLOCADE will streamline the course of treatment and improve integration into different healthcare environments.

We currently distribute SUBLOCADE (under the name SUBUTEX Prolonged Release in Europe) primarily in the U.S., Australia, Canada, Finland, Israel, and Sweden.

SUBOXONE Film (buprenorphine and naloxone) sublingual film

SUBOXONE Film was initially launched in the U.S. in 2010 and is currently approved in the U.S. and sold in more than 30 other countries. It is one of only four products currently approved by the FDA for the treatment of OUD in both the induction and maintenance phases of treatment (although several are approved for “treatment of opioid dependence”). SUBOXONE Film was developed as an alternative to the sublingual tablet.

SUBOXONE Film was developed through an exclusive agreement with Aquestive (formerly known as Monosol), utilizing its proprietary technology, to deliver SUBOXONE Film in a fast-dissolving sublingual film.

SUBOXONE Film containing 2 mg buprenorphine and 0.5 mg naloxone, and 8 mg buprenorphine and 2 mg naloxone, was first approved for the maintenance treatment of OUD in the U.S. in August 2010. Additional dosage strengths of SUBOXONE Film containing 4 mg buprenorphine and 1 mg naloxone, and 12 mg buprenorphine and 3mg naloxone, were subsequently approved in the U.S. in August 2012 and in

Australia in May 2014. SUBOXONE Film was also approved in the U.S. in April 2014 for use in the induction phase of buprenorphine-based treatment of OUD. In addition, in September 2015 the FDA approved the buccal (against the cheek) route of administration for SUBOXONE Sublingual Film.

The Company’s U.S. sales force ceased promoting SUBOXONE Film as required by the Resolution Agreement with the DOJ and ceased all detailing of the product in 2020, though it remains available for sale. For more information, see Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 16. Commitments and Contingencies.

We currently distribute SUBOXONE Film primarily in the U.S., Australia, Canada, Finland, Israel, Italy, Malaysia, and Sweden.

SUBOXONE Tablet (buprenorphine and naloxone) sublingual tablet

SUBOXONE Tablet is a fixed-dose combination of buprenorphine and naloxone in the ratio of four parts buprenorphine to one part naloxone. SUBOXONE Tablet was designed to discourage intravenous abuse of the tablet formulation in patients dependent on full opioid agonists (e.g., heroin and morphine). Naloxone is a potent antagonist at opioid receptors.

SUBOXONE Tablet containing 2 mg buprenorphine and 0.5 mg naloxone, and 8 mg buprenorphine and 2 mg naloxone, was approved in the U.S. by the FDA in October 2002 as an orphan drug for maintenance treatment of opioid dependence.

SUBOXONE Tablet is distributed primarily in Belgium, Canada, Germany, and U.K. (We discontinued distribution of SUBOXONE and SUBUTEX Tablets in the U.S. market in March 2013.)

SUBUTEX Tablet (buprenorphine) sublingual tablet

SUBUTEX Tablet containing 0.4 mg, 2 mg, and 8 mg buprenorphine was first approved for the treatment of opioid dependence in France in July 1995 and was launched in the French market in February 1996. In April 2003, 2 mg and 8 mg tablets were subsequently approved in the U.S. and launched but were discontinued from sale in the U.S. market in September 2011. We primarily distribute SUBUTEX tablets primarily in Australia, France, Germany, Israel, Norway, Switzerland, and U.K.

OPVEE (nalmefene) nasal spray

On May 22, 2023, the FDA approved OPVEE (nalmefene) nasal spray for the emergency treatment of known or suspected opioid overdose induced by natural or synthetic opioids in adults and pediatric patients aged 12 years and older, as manifested by respiratory and/or central nervous system depression. OPVEE (nalmefene) nasal spray is intended for immediate administration as emergency therapy in settings where opioids may be present. OPVEE (nalmefene) nasal spray is not a substitute for emergency medical care. OPVEE contains 2.7 mg nalmefene.

Nalmefene works quickly by blocking the brain opioid receptors. In a clinical model of opioid-induced respiratory depression in opioid-experienced, non-dependent subjects, OPVEE had an onset of action of 2.5 to 5 minutes and fully reversed respiratory depression as early as 5 minutes after OPVEE administration. Other clinical data include a terminal plasma half-life of approximately 11 hours. While the duration of action of nalmefene is as long as most opioids, a recurrence of respiratory depression is possible. We currently only distribute OPVEE in the U.S.

Discontinuation of marketing and promotion of PERSERIS

In July 2024, the Company discontinued the marketing and promotion of PERSERIS due to impending market changes that would make the product no longer financially viable. The Company has continued to supply PERSERIS to avoid disruption to patient care but no longer deploys a dedicated sales force.

Competition

We operate in a highly competitive industry. While we seek patent and trademark protection where appropriate, several of our branded products face competition from generic products in key markets as well as competition from alternative products and treatments.

For example, SUBLOCADE is patent protected in the U.S., Australia, Canada, the U.K., Ireland, France, Germany, Italy, Spain, Denmark, Finland, Norway, the Netherlands, Switzerland, Sweden, Israel, Japan, Mexico and New Zealand. However, Camurus, in partnership with its U.S. marketing partner Braeburn, obtained FDA approval of its LAI buprenorphine product BRIXADI® in the U.S. Outside the U.S., this product (marketed as BUVIDAL®) enjoys first mover advantage in all countries except Canada. It is well established in the Nordics (Norway, Sweden, Finland, and Denmark) and Australia, and available in other parts of Europe.

Our SUBOXONE Film product already faces five generic competitors in the U.S. We have seen the market share of our film product decline to an average share of 16% in 2024 and expect further declines if other competing products become available or if existing participants choose to disrupt the market in line with industry analogs. We no longer promote SUBOXONE Film in the U.S. as discussed above. In contrast, no generic competition is present in Australia. In Europe and Canada, SUBOXONE Film enjoys patent protection until 2030.

In Europe, generic versions of the SUBUTEX Tablets have been available since 2010 and SUBOXONE Tablets since 2018. In addition, we face competition from branded oral buprenorphine-based tablets and historically well-established methadone oral formulations. In Canada, our SUBOXONE Tablets product faces two generic competitors. We have seen our market share of SUBOXONE Tablets eroding overtime.

OPVEE is the first nalmefene nasal spray approved by the FDA for the emergency treatment of known or suspected opioid overdose in adults and pediatric patients aged 12 years and older, as manifested by respiratory and/or central nervous system depression. OPVEE (nalmefene) nasal spray is intended for immediate administration as emergency therapy in settings where opioids may be present. OPVEE (nalmefene) nasal spray is not a substitute for emergency medical care. It competes with branded and generic naloxone nasal sprays including Narcan® (naloxone HCI) Nasal Spray 4 mg (which is not available without a prescription), 4 mg naloxone generic equivalents, and KLOXXADO® (naloxone HCI) Nasal Spray 8 mg. It also competes with naloxone or nalmefene administered by syringe and over-the-counter (“OTC”) intranasal naloxone HCl.

The introduction of generic or branded products that compete with the Company’s products or heightened competition amongst existing participants could impact both the market share of the Company’s products and pricing and, therefore, adversely impact its results of operations. The introduction of generic products typically leads to a loss of sales of a branded product and/or a decrease in the price at which branded products can be sold. In addition, legislation enacted in the U.S. and several EU countries allows for, and in a few instances in the absence of specific instructions from the prescribing physician, mandates the dispensing of generic products rather than branded products where a generic version is available.

Research and Development

We invest in research and development to create innovative medications and services that address the needs of patients with the complex chronic condition of SUD. These efforts include the development of new medications that are designed to minimize diversion and misuse, increase compliance with treatment, support public health, improve patient outcomes and expand access to treatment for areas of SUD where no pharmacotherapy is currently available.

Chronic addictive behaviors are characterized by compulsive drug and alcohol use, loss of control over drug-seeking and drug-taking, and an intense drive to take the drug at the expense of other behaviors, with little regard for subsequent consequences. From a psychiatric perspective, SUD has aspects of both impulse control disorders and compulsive disorders. In addictive and compulsive disorders, which have prominent motivational drivers, dysfunction in the brain’s cortical regions significantly affects cognitive regulatory processes such that the individual fails to inhibit self-defeating urges or desires appropriately. This failure to resist repetitive, maladaptive behaviors is a key clinical feature of SUD, and aspects of decision-making are compromised either directly (i.e., a dysfunctional inhibitory system) or indirectly (i.e., a dysfunctional reward system).

Indivior has a long history of supporting the SUD treatment community: it discovered buprenorphine in 1966 and has been involved in manufacturing and supplying buprenorphine to patients as a treatment for OUD. See Heidbreder C, Fudala PJ, Greenwald MK (2023) History of the discovery, development, and FDA-approval of buprenorphine medications for the treatment of opioid use disorder. Drug and Alcohol Dependence Reports. https://doi.org/10.1016/j.dadr.2023.100133. Indivior has built a portfolio of treatments for OUD and a pipeline of new molecules. Indivior launched the first buprenorphine-based medication for the treatment of OUD in France in 1996. The Company’s medications are now available in more than 30 countries and include buprenorphine sublingual tablets (SUBUTEX), buprenorphine and naloxone sublingual tablets (SUBOXONE), buprenorphine and naloxone sublingual film (SUBOXONE Film), and the first FDA-approved once-monthly injectable buprenorphine formulation (SUBLOCADE). All along, Indivior has invested in education programs on evidence-based treatment models that have helped change modern addiction medicine and transform the perception of SUD from a global human crisis to a chronic disease that should be recognized and treated.

Our research and development personnel also have experience in opioid overdose reversal as a result of our acquisition of Opiant Pharmaceuticals, Inc. in March 2023. Members of our Research and Development staff contributed to the regulatory approval of OPVEE (nalmefene) nasal spray for the emergency treatment of known or suspected overdose induced by natural or synthetic opioids in adults and pediatric patients aged 12 years and older. On September 27, 2023, the U.S. Biomedical Advanced Research and Development Authority (BARDA) awarded us a $32 million contract to support FDA-required post-marketing requirement studies, 3-year stability studies to support shelf-life extension, real world evidence studies, and procurement of packaged OPVEE held as vendor-managed inventory as a medical countermeasure in the event of a synthetic opioid community or mass casualty event.

Our research and development team is led by our Chief Scientific Officer, Dr. Christian Heidbreder, a leading authority in the development of SUD treatments, and consists of approximately 100 persons distributed across the following sub-functions:

• Global Chemistry, Manufacturing, and Controls ("CMC") includes capabilities spanning formulation development, analytical development, chemical development, process development, and technology transfer. Indivior CMC facilities based in Hull (United Kingdom) and Fort Collins (Colorado, USA) are equipped with cutting-edge technologies including pilot plant storage, formulation laboratories, analytical laboratories, chemistry laboratories, stability chambers, office spaces, and support spaces. These facilities are also built to environmental and energy-saving standards, including the installation of a solar panel farm to increase use of renewable energy.
• Global Medicines Development encompasses all required functions to support clinical and nonclinical development, from early to late stage clinical development including pivotal Phase 3 trials and post-marketing commitment and requirement studies: (1) medical, scientific writing, publications and communication; (2) clinical development and operations; (3) data and statistical sciences; (4) clinical pharmacology and nonclinical sciences; (5) epidemiology; (6) clinical, medical and safety compliance, and (7) translational medicine.
• Global Regulatory Affairs focuses on (1) regulatory strategy; (2) regulatory CMC and compliance; (3) regulatory operations; (4) global labeling and advertisement/promotion; and (5) local regulatory affairs in North America (US and Canada), Europe and Middle-East (EEA (31 countries), Switzerland, Israel, South Africa, Botswana, Lebanon, Kuwait, Qatar, Bosnia, Turkey, Algeria), and Australasia (Australia, New Zealand, Indonesia, Malaysia, Singapore, Vietnam, Hong Kong & Taiwan).

Our research and development function endeavors to conduct all clinical trials (Phase I through Phase IV) in partnership with Clinical Research Organizations. During Phase II and Phase III clinical trials, we also engage contractors with the relevant capabilities because the formulation of the medication must be finalized and the scalability of production proven. During the various phases of clinical trials, the number of participants in, and consequently the expenses related to, the project increase significantly. Please refer to “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations” for further details of research and development expenses during the financial periods included in this annual report.

Pipeline

Our research and development activities are focused on building on our leadership position in the treatment of opioid use disorder ("OUD"). However, our pipeline reflects only potential products, and any product requires completion of clinical trials to demonstrate safety and efficacy, and approval by the FDA. See “Item 1A—Risk Factors—Clinical trials for the development of products, including our key pipeline products, may be unsuccessful and our product candidates may not receive authorization for manufacture and sale.”

INDV-2000 Selective Orexin-1 Receptor Antagonist

We are developing INDV-2000 (Selective Orexin-1 Receptor Antagonist), as a non-opioid treatment for moderate to severe OUD. On June 10, 2024 we announced the dosing of the first subject with INDV-2000 in a Phase 2 double-blind, placebo controlled, randomized, dose-ranging study to assess the safety and efficacy of INDV-2000 over 3 months in treatment-seeking individuals with OUD. The purpose of this proof-of-concept study is to measure safety and efficacy and to determine the dose-response relationship for INDV-2000 in participants with moderate to severe OUD who are treatment-naïve, have recently initiated or completed short-term medically supervised opioid withdrawal with transmucosal (TM) buprenorphine, and are interested in transitioning to a non-opioid treatment. We expect this study to be completed by the end of 2025. The U.S. patents for INDV-2000 expire in 2037.

INDV-6001 Sustained Release LAI Prodrug of Buprenorphine

INDV-6001 is potentially the first three-month LAI buprenorphine for the treatment of OUD. In 2023, the Company secured global rights from Alar Pharmaceuticals to develop, manufacture, and commercialize INDV-6001 and a portfolio of buprenorphine-based LAI. The Company made an upfront payment of $10 million, which is in addition to the $5 million option payment made by the Company in the first quarter of 2023. The licensor would be entitled to potential milestone payments upon the achievement of various developmental, regulatory, and commercial goals, and entitled to royalties in the low double digit to mid-teens as a percentage of net revenue. The U.S. patents for INDV-6001 expire in 2039.

In September 2024, we commenced a multiple dose clinical Phase 2 Pharmacokinetic study which we expect to complete by the end of 2025.

Decision to Not Exercise Option For AEF0117 Aelis

On September 4, 2024, we noted Aelis Farma's announcement of the results from its clinical Phase 2B trial with AEF0117, a synthetic CB1 specific signaling inhibitor designed to treat cannabis-related disorders. This clinical Phase 2B study was part of the strategic collaboration between Aelis Farma and Indivior, which included an exclusive option for Indivior to license the global rights to AEF0117, and was designed to evaluate the efficacy and safety in treatment-seeking participants with moderate to severe Cannabis Use Disorder. Given the lack of separation from placebo on primary and secondary endpoints, and before seeing further additional favorable clinical data, we announced that we do not currently expect to exercise our option.

Manufacturing and Supply

Raw Materials

Active Pharmaceutical Ingredients (“API”)

The Company sources a large portion of its active pharmaceutical ingredients ("API") from its own manufacturing facilities.

The API used in our buprenorphine products are manufactured at our Fine Chemical Plant ("FCP") located in Hull, United Kingdom. FCP manufactures the buprenorphine HCl API used in the manufacture of SUBOXONE Film, SUBUTEX Tablet, and SUBOXONE Tablet and the buprenorphine base API ("buprenorphine") used in the formulation of SUBLOCADE long-acting injection. Historically, a third party has manufactured the buprenorphine base and the FCP will be capable of manufacturing the base beginning in 2025. FCP has the capacity to produce all of our current buprenorphine related requirements with approximately 25% demonstrated capacity remaining. We believe there are adequate supplies of the raw materials used to manufacture buprenorphine, and the ingredient is readily available from other suppliers (although it would require significant time to qualify and obtain regulatory approval to change suppliers).

We procure the naloxone HCl active pharmaceutical ingredient mainly from a single supplier for both SUBOXONE Tablet and SUBOXONE Film, although this is readily available from other suppliers (it would require significant time to qualify and obtain regulatory approval to change suppliers).

Buprenorphine and products containing buprenorphine are classified as Schedule III controlled narcotics in the U.S. and require permits for import and export. An annual importation assessment value for buprenorphine and products containing buprenorphine is set by each importing country through the International Narcotics Control Board (the “INCB”). Once the assessment value has been reached for a given country, no additional import permits may be issued unless proper justification for an assessment value increase is provided to the respective country’s governing body, which reports to the INCB. While this process has not impacted product supply to our patients in the past, it presents a manufacturing and product supply risk that must be monitored and managed closely.

We procure the active ingredient (nalmefene HCl) and the absorption enhancer (dodecyl maltoside) for OPVEE from single suppliers.

SUBLOCADE

SUBLOCADE (buprenorphine extended-release) injection for subcutaneous use is manufactured under an agreement with Curia. We provide the buprenorphine base, polymer and syringe assembly used in the manufacture of SUBLOCADE. Curia has two manufacturing facilities located in Burlington, Massachusetts and Albuquerque, New Mexico. Manufacture of all SUBLOCADE output for the U.S. and Canadian markets is approved at both facilities, while output intended for the Most of World currently is approved only at the Burlington facility. We plan to obtain approval to manufacture SUBLOCADE for the Most of World at the Albuquerque facility.

In addition, we are improving our Raleigh Manufacturing Facility to potentially manufacture SUBLOCADE to better secure its long-term supply. However, it will take time and investment in equipment and validation testing before we can make regulatory submissions to gain approval for commercial manufacture of SUBLOCADE at this site. See “Item 1A.—Risk Factors—We rely on third parties to manufacture commercial supplies of most of our products, whose facilities and processes must meet stringent regulatory requirements.”

We rely on third parties to manufacture and package the products, and to perform quality assurance and quality testing.

SUBOXONE Film

SUBOXONE Film is manufactured under an exclusive license and supply agreement with Aquestive Therapeutics. Under the terms of the agreement, Aquestive is the exclusive global manufacturer and primary packager of SUBOXONE Film and is prohibited from developing any other film product containing buprenorphine without our written consent. We provide both the buprenorphine HCl and the naloxone HCl used in the manufacture of SUBOXONE Film.

Aquestive has two manufacturing facilities located in Portage, Indiana. Manufacturing and primary packaging of all SUBOXONE Film output for most markets is approved at both facilities.

SUBOXONE and SUBUTEX Tablets

We contract with RB to manufacture SUBOXONE and SUBUTEX Tablets. We provide both buprenorphine HCl and naloxone HCl used in the manufacture of SUBOXONE and SUBUTEX Tablets. RB manufactures and performs the packaging of all SUBOXONE and SUBUTEX tablets globally at its facility in Hull, United Kingdom.

OPVEE (nalmefene) nasal spray

We have contracted for the commercial supply of OPVEE with Kindeva Drug Delivery (formerly Summit BioSciences). SpecGx LLC provides the nalmefene HCl and Aegis Therapeutics, LLC provides the dodecyl maltoside (an absorption enhancer) used in the manufacture of OPVEE.

Our exclusive license agreement with Aegis Therapeutics obligates us to pay a tiered low to mid-single digit royalty on net sales, and a potential time sales milestone of $2 million for this nalmefene-dodecyl maltoside combination product. PCI Pharma Services performs tertiary packaging of the commercial product.

Additional Manufacturing and Distributions Processes

We outsource to third parties certain aspects of the manufacturing and distribution process, including packaging our products with tamper evident pouches or child resistant components, in serialized cardboard cartons, and securely storing products, fulfilling orders, and providing other customer service functions.

Sales, Marketing and Distribution

Our sales, marketing, and distribution processes for our products begin with a focus on the patient. Our products are intended for patients who suffer from OUD or opioid overdose, each a highly stigmatized disease or disease state. These patients are found not just in private physician offices, but also in emergency rooms, hospitals, addiction or rehabilitation centers, OHSs and, frequently, as part of their journey with addiction, as incarcerated individuals in the criminal justice system. Accordingly, we focus our sales and marketing efforts not just on physicians in private practice but also to healthcare providers situated in these diverse treatment environments.

Our sales, marketing, and distribution efforts vary by market.

United States

We derive approximately 85% of our net revenues, and an even larger portion of our profitability, from the U.S. market. Unlike many markets in the Most of World, the U.S. market is not a single payor market. Instead, our activities are directed at a patchwork of federal and state agencies, organized health systems, criminal justice systems, and healthcare providers who provide treatment and assistance for patients suffering from OUD.

Payors and Reimbursement

We have dedicated professionals responsible for obtaining access and eliminating barriers to care at the national, regional, and state payor level, including every state Medicaid program. We have coverage from approximately 90% of payors for our OUD products, including almost all commercial insurance payors, and the Veterans’ Administration, the Department of Defense, and the Bureau of Indian Affairs.

A significant portion of our customers are reimbursed through the Medicaid plans of states and the District of Columbia, primarily because most individuals suffering from OUD are not employed or do not have employer-based health coverage.

We have begun offering OPVEE to various government entities and community agencies. These organizations typically receive grant funding related to the opioid epidemic which can be used for overdose reversal medications.

Organized Health Systems ("OHS")

Many patients who use our products are found at OHSs, such as health systems including hospitals and addiction treatment centers. OHS are an important channel for our products because they have the resources and administration to appropriately handle controlled substances that are prescribed, delivered, and stored, and are equipped to administer the requirements applicable to our products, including REMS. Our account teams call on key decision makers at OHSs to expand access to our products. Our goal is to ensure access to our products by establishing treatment protocols (both medical and logistical), removing barriers to access, gaining formulary access where needed, and ensuring that protocols are in place to ensure compliance with applicable DEA, state, and local requirements regarding the storage of controlled substances. As part of this process, the sales team focuses on effectively communicating the scientific rationale and the benefits of our products to HCPs, appropriately balanced with safety information, and the account teams and medical team focus on educating key decision makers about potentially better adherence, increased continuity of care, and overall cost and resource optimization in the total treatment plan.

Criminal Justice Systems ("CJS")

We also have dedicated teams for customers in the CJS, including various types of prisons, such as state departments of corrections, county jails, and federal prisons, along with specialty treatment courts. A specialty treatment court is a court with expertise in substance abuse disorders which may offer alternative and deferred prosecution arrangements for appropriate persons.

For prisons, our dedicated teams attempt to increase access to our products, overcome logistical barriers to care, and promote particular products, but do not call on HCPs behind the walls of the prisons.

For specialty treatment courts, our Criminal Justice Access Directors, including approximately 46 trained and experienced professionals, educate judges, prosecutors, social workers, and patients about the benefits of our products. The patient is ultimately referred to an HCP, either in a private office or federally qualified health center, where the decision to use medication for OUD, such as SUBLOCADE, is the patient’s decision with the assistance of his or her HCP. At these referral sites and locations, our sales personnel coordinate with the HCPs and their staff to ensure understanding of the scientific rationale and the benefits of our products, appropriately balanced with safety information.

Commercialization Activities

Our commercial activities in the U.S. are currently focused on SUBLOCADE long-acting injectable and OPVEE nasal nalmefene spray. Our sales force does not promote SUBOXONE Film in the U.S. Our sales organization in the U.S. comprises approximately 255 trained and experienced pharmaceutical professionals, which we call Clinical Specialists, who are managed by Area Sales Directors. Clinical Specialists act as a vital link between the various stakeholders within the addiction community, including key opinion leaders, counselors, treatment advocates, pharmacists, nurses and healthcare providers in specialized treatment centers. We believe that our clear focus on patient needs helps deepen customer relationships which then allows the team the time to engage in clinical and logistical discussions that dramatically improve patient access to treatment with SUBLOCADE.

Our Clinical Specialists are supported by dedicated and experienced professionals in our managed care group who create access to treatment for patients by partnering with U.S. commercial payors and federal, state, and local governmental payors.

OPVEE

Our commercialization efforts for OPVEE are not targeted at patients initially. Instead, we expect the primary customers for OPVEE will be:

• Single state authorities / grant administrators;
• Naloxone Coordinators;
• State/County/City Departments of Health;
• Veterans Affairs;
• Community based organizations groups;
• Substance abuse centers and opioid treatment programs;
• Law Enforcement;
• Department of Corrections;
• Fire/Emergency services; and
• Targeted Healthcare Providers prescribing overdose reversal agents; prescriptions would be filled at retail pharmacy and picked up by the patient.

Our commercialization strategy for OPVEE includes ensuring access to OPVEE via inclusion in state standing orders, enabling public funding, establishing relevant state emergency medical protocols, and securing adjustments to state Good Samaritan laws, through the work of our government affairs and medical teams.

In September 2023 we were awarded a contract by BARDA for the procurement of finished, packaged OPVEE held as vendor-managed inventory as a medical countermeasure in the event of a synthetic opioid community or mass casualty event. The role of BARDA is to supplement state and local supplies during public health emergencies. The contract also has options for purchases and delivery of OPVEE over 10 years at guaranteed pricing through 2033. We delivered two orders to BARDA in 2024 for 200,000 doses.

Ultimately, or goal is to establish OPVEE as a differentiated brand by developing real world evidence, driving awareness by providing education to key stakeholders, and establishing OPVEE as the standard of care with the rise of synthetic opioids like fentanyl.

Advocacy, Education, and Patient Support

We collaborate with patient organizations, stakeholders and policymakers to achieve our vision that the millions of people across the globe suffering from SUDs will have access to evidence-based treatment to change lives. Our advocacy agenda focuses on expanding access to treatment, advancing treatment equity, and increasing focus on patients in correctional settings.

Our educational and engagement efforts have focused on expanding the availability of treatment options beyond the clinical setting in the U.S. in order to give patients the flexibility to receive appropriate treatment in the privacy of a physician’s office.

We also advocate for access to evidence-based treatment in correctional settings to ensure that resources are focused where challenges are greatest.

Equity in treatment is a barrier to care for patients. For instance, patients in correctional settings sit outside the insurance system and are ineligible by federal law for Medicaid benefits. We work to advance initiatives to increase patient access to medical care while incarcerated as well as access to care and coverage as they re-enter their communities. We also advocate to eliminate other barriers to care, including prior authorizations, step edits, and deductibles.

We have various programs to help patients access our products. For example, we sponsor a commercial co-pay assistance program that helps patients meet co-payment obligations imposed by their commercial insurance.

Additionally, we sponsor an insurance reimbursement hub to facilitate the dispensing of our products that HCPs and pharmacies may access via telephone to confirm coverage and level of benefits. We also provide patient access specialists to problem solve access issues, coverage, and coding (after a product has been ordered).

There has been enhanced scrutiny of company-sponsored patient assistance programs, both from government enforcement and payors.

Medical Affairs Team

Our Medical Affairs Team, which supports HCPs and health administrators and includes Medical Science Liaisons and Medical Outcomes Value Liaisons responsible for responding to unsolicited off-label questions, clarifying data related to our products, working with study investigators, and developing and delivering real world evidence regarding the usage and potential benefits or risks of a medical product derived from an analysis of real-world data. Our Medical Affairs team is separate from sales and marketing.

Marketing

Our marketing efforts are focused on reaching the sufferers of the diseases that our products treat and the HCPs who treat them. In each of our markets, our commercial activities are supported by strategic planning, business analytics and measurement, and quarterly territory plans, ensuring that each market and sales territory is effectively resourced to maximize market access, and to increase appropriate use of our products.

In the U.S., our marketing team is responsible for developing marketing and sales materials, product websites, conference presentations and presence, and media plans which are reviewed by our Promotions Review Committee (PRC) consisting of medical, regulatory, and legal team members to assess compliance with rules and regulations as appropriate. We also provide reimbursement support for our U.S. markets. In addition, we have established strong marketing expertise in increasing disease state and treatment awareness, embedded in various platforms including digital and traditional media. We employ third party vendors, such as advertising agencies, market research firms and suppliers of marketing and other sales support-related services, to assist with our commercial activities.

The challenges that we face in the sales process for our products include:

• understanding of the science that underpins the SUBLOCADE value propositions,
• considerations related to buprenorphine being a controlled substance that is subject to regulation in the countries where our products are marketed,
• SUBLOCADE having been approved by the FDA with a REMS,
• SUBLOCADE requiring secure, refrigerated storage and the requirement that SUBLOCADE be administered by an HCP, and
• developing strategies to ensure market acceptance of OPVEE, competing with an established product, and serving customers, most of which are expected to be incremental to our existing customer base.

To assist our sales and marketing efforts, we invest in data infrastructure and related professionals to derive insights from our data. These insights allow us to prioritize our marketing efforts, identify obstacles and barriers to treatment, and suggest new approaches.

Distribution

We distribute our products in more than 30 countries. Based on the country where sales originate, we derived 85%, 83%, and 81% of our net revenues from the U.S. in 2024, 2023, and 2022, respectively.

The distribution of our buprenorphine products is more complicated than other specialty pharmaceutical products because buprenorphine is regulated in the U.S. as a Schedule III drug by the FDA, and similarly restricted by law enforcement authorities in the Most of World. Additionally, certain products, like SUBLOCADE, utilize a restricted delivery network. Additionally, to ensure proper administration, SUBLOCADE may only be administered by an HCP and are not dispensed to the patient directly. To ensure that our products are available to HCPs and patients, we utilize specialty distributors and a network of several hundred specialty pharmacies that are equipped to adhere to these special requirements.

(The FDA requires a REMS for SUBOXONE Film and for SUBLOCADE Injection. The goal of the SUBLOCADE REMS program is to mitigate the risk of serious harm or death that could result from intravenous self-administration by ensuring healthcare settings and pharmacies are certified and only provide SUBLOCADE directly to a healthcare provider for administration by a healthcare provider to the patient. SUBOXONE Film is part of the Buprenorphine Transmucosal Products for Opioid Dependence ("BTOD”) shared REMS program, the goals of which are to: 1) mitigate the risks of accidental overdose, misuse, and abuse, and 2) inform prescribers, pharmacists, and patients of the serious risks associated with buprenorphine-containing products.)

In contrast, SUBOXONE Film may be dispensed directly to a patient by a pharmacy with an appropriate DEA license. Accordingly, a substantial portion of our sales are to pharmaceutical wholesalers, specialty pharmacies, and distributors who, in turn, sell our products to pharmacies, hospitals, and other customers, including federal and state entities.

Our three largest customers (which are wholesale pharmaceutical companies in the U.S.) accounted for 55%, 54%, and 55% of global net revenues in 2024, 2023, and 2022, respectively. Our largest customer in each year accounted for 19%, 19%, and 22% of our net revenues in 2024, 2023, and 2022, respectively. These customers are our primary purchasers of SUBOXONE Film in the U.S., and as sales of SUBLOCADE grow, which is sold mostly through specialty pharmacies and specialty distributors, the relative importance of these three largest customers declines. Our fourth largest customer is one of these specialty pharmacies.

Logistics

We use central third-party logistics and warehouses that comply with applicable local regulations for storage and distribution of our products into the supply chain. Our third-party logistics provider specializes in integrated operations that include warehousing and transportation services that can be scaled and customized to our needs based on market conditions and the demands and delivery service requirements for our medicines and materials. Their services eliminate the need to build dedicated internal infrastructures that would be difficult to scale without significant capital investment. Our third-party logistics provider warehouses all medicines in controlled FDA-registered facilities in the U.S., or which meet applicable requirements outside the U.S. Orders are prepared and shipped through an order entry system to ensure adequate supply and delivery of our medicines.

Most of World

Our commercial activities are currently focused on SUBLOCADE long-acting injectable (also called SUBUTEX Prolonged Release), SUBUTEX Tablet, SUBOXONE Tablet and SUBOXONE Film. Depending on the size and demands of the relevant markets, dedicated teams of clinical liaisons, health policy liaisons, or a combination of both, work to accelerate access to treatment for patients.

In Canada and in approved markets in Europe and Australia, we have a field force of sales specialists. In markets where these products either are not approved or are unable to be promoted under local regulation, we have medical affairs personnel responsible for responding to medical information requests and for providing information consistent with local treatment protocols with respect to such products. Such medical affairs personnel are separate from sales and marketing personnel. In certain European markets, we have a sales team and a separate team of medical science liaisons supporting our rolling launches of SUBLOCADE and SUBOXONE Film.

Outside the U.S. and Europe, we directly market SUBLOCADE, SUBOXONE Film, and SUBOXONE Tablets in in Canada and SUBLOCADE, SUBOXONE Film, and SUBUTEX Tablets in Australia. We also utilize distributors in certain markets outside the U.S. where we do not market our products directly.

Intellectual Property

We own or license several patents and patent rights in the U.S. and other countries covering or relating to certain of the products and pipeline products mentioned above and have created brand names and also registered trademarks where appropriate for our products. Generally, and where possible, we rely upon patent protection to ensure market exclusivity for the life of the patent. We consider the overall protection of our patents, trademarks, and license rights to be of material value and take actions to protect these rights from infringement or misuse where appropriate.

The majority of an innovative product’s commercial value is usually realized during the period in which the product has market exclusivity. In the branded pharmaceutical industry, an innovator’s product’s market exclusivity is generally determined by two forms of protection: patent rights held by the innovator company; and any regulatory forms of exclusivity to which the innovator is entitled. In the U.S. and some other countries, when market exclusivity expires and generic versions of a product are approved and marketed, there are often very substantial and rapid declines in the branded product’s sales. The rate of this decline varies by country and by therapeutic category; however, following patent expiration, branded products often continue to have some market viability based either upon the goodwill generated by the product name, which typically benefits from trademark protection, or upon the difficulties associated with replicating the product formulation or bioavailability.

Patents are a key determinant of market exclusivity for most branded pharmaceuticals as they can provide the innovator with the right to exclude others from practicing an invention related to the product. Patents may cover, among other things, the active ingredient(s), various uses of a drug product, pharmaceutical formulations, drug delivery mechanisms, the manufacture of products and processes for the manufacture of products, and intermediate compounds useful in the manufacture of products. Protection for aspects of individual products extends for varying periods in accordance with the expiry dates of patents in the various countries. The protection afforded, which may also vary from country to country, depends upon the type of patent, its scope of coverage and the availability of meaningful legal remedies in the country. However, patents and other forms of protection can never protect us from all forms of competition, such as from similar products or from alternatives. See, for example, “Item 1. Business—Competition.”

Many developed countries provide certain non-patent incentives for the development of pharmaceuticals. For example, the U.S., EU and Japan each provides for a minimum period of time after the approval of certain new drugs during which the regulatory agency may not rely upon the innovator’s data to approve a competitor’s generic copy. For example, OPVEE enjoys regulatory exclusivity in the U.S. through May 2026. Regulatory exclusivity is also available in certain markets as incentives for research on new indications, orphan drugs (drugs that demonstrate promise for the diagnosis or treatment of rare diseases or conditions) and medicines that may be useful in treating pediatric patients. Regulatory exclusivity is independent of any patent rights and can be particularly important when a drug lacks broad patent protection. However, most regulatory forms of exclusivity do not prevent a second innovative competitor from gaining regulatory approval prior to the expiration of regulatory exclusivity when the second innovative competitor has conducted its own safety and efficacy studies on its drug, even when that drug is identical to that marketed by the first innovator.

We estimate the likely market exclusivity period for each of our branded products on a case-by-case basis. It is not possible to predict with certainty the length of market exclusivity for any of our branded products because of the complex interaction between patent and regulatory forms of exclusivity, the relative success or lack thereof of potential competitors’ experience in product development and inherent uncertainties concerning patent litigation. There can be no assurance that a particular product will enjoy market exclusivity for the full period of time that we currently estimate or that the exclusivity will be limited to the estimate.

We also rely on trade secrets, know‑how and inventions, which are not protected by patents and try to protect this information by entering into confidentiality agreements with parties that have access to it, such as our corporate partners, collaborators, licensees, employees, and consultants. We also license or assign certain intellectual property rights to third parties.

The Company (generally Indivior U.K. Limited) also owns or licenses, patent rights (i.e., granted patents or pending applications) in certain key jurisdictions in respect to our products and pipeline products. The patent rights listed below are those which are critical to our products:

1 OPVEE enjoys regulatory exclusivity in the U.S. through May 2026.

Licensed Technology

We own Patent No. 11,458,091, which includes claims covering combinations of nalmefene and Intravail® (dodecyl maltoside, an absorption enhancer) in a nasal formulation which expires in 2038. Our exclusive license agreement with Aegis Therapeutics obligates us to pay a tiered low to mid-single digit royalty on net sales, and a potential one-time sales milestone of $2 millions for OPVEE.

Regulatory Overview

Our activities are subject to a rigorous regulatory framework on a local and international level that conditions and affects our activities. The process of obtaining regulatory approvals and the subsequent compliance with applicable laws, regulations and other requirements require the expenditure of substantial time and financial resources. The following is a summary of the regulatory landscape applicable to our business and the reimbursement programs applicable to our products in the key markets in which we operate.

United States

Overview

Pharmaceutical companies operate in a highly regulated environment. In the U.S., we must comply with laws, regulations and other requirements promulgated by numerous federal and state authorities, including the FDA and other agencies and divisions of the Department of Health and Human Services, the Drug Enforcement Agency (“DEA”), and other agencies of the DOJ, the Consumer Product Safety Commission, the Environmental Protection Agency, the U.S. Bureau of Customs and Border Protection (the “CBP”), and state agencies such as boards of pharmacy. Applicable legal requirements govern to varying degrees the research, development, manufacturing, commercialization and sale of our prescription pharmaceutical products, including pre-clinical and clinical testing, approval, production, labeling, sale, distribution, import, export, post-market surveillance, advertising, dissemination of information and promotion. Failure to comply with applicable legal requirements can result in product recalls, seizures, injunctions, refusal to approve or withdrawal of approval of product applications, monetary fines or criminal prosecution.

Food and Drug Administration

The FDA’s authority to regulate pharmaceuticals comes primarily from the Federal Food, Drug, and Cosmetic Act (“FFDCA”). In addition to reviewing NDAs for branded drugs and additional new drug applications ("ANDAs") for generic drugs, the FDA has the authority to ensure that pharmaceuticals introduced into interstate commerce are neither “adulterated” nor “misbranded.” Adulterated means that the product or its manufacture does not comply with FDA quality and related standards. A drug is adulterated if, among other things: (i) it is prepared under unsanitary conditions such that it may have been contaminated or may cause injury to patients, (ii) its manufacture does not comply with cGMP, (iii) it does not comply with an official compendium, (iv) its strength, purity or quality differs from that which it purports to possess, or (v) if it is manufactured, processed or held in a facility which refuses FDA inspection. Misbranded means, among other things, that the labeling of, or advertising or promotional materials for, the product contains false or misleading information, fails to conform to the FDA approval for the drug, or fails to include required information about risks.

In order to market and sell a new drug product in the U.S., a drug manufacturer must file with the FDA an NDA that shows the safety and effectiveness of the new drug. In order to market and sell a generic version of an already-approved drug product, a drug manufacturer must file an ANDA that shows that the generic version is, with narrow exceptions, the same active ingredient, dosage form, strength and route of administration as a previously approved reference product, and “bioequivalent” to that reference product, meaning that it is absorbed at the same rate and to the same extent as the reference product. The FDA classifies certain generic drugs as “therapeutically equivalent,” meaning that they are expected to have the same clinical effect and safety as the branded drug product. Alternatively, a manufacturer may submit an NDA under FFDCA section 505(b)(2) for a drug product that has some differences from an already-approved drug product, but that relies in whole or in part on the findings of safety and/or effectiveness of a previously approved reference product, or on medical literature. A section 505(b)(2) NDA must demonstrate that the proposed product is safe and effective notwithstanding the differences from the approved drug product.

Clinical Trials and Marketing Approval

The path leading to FDA approval of an NDA for a new drug begins when the drug product is merely a chemical formulation in the laboratory. In general, the process involves the following steps:

(i) completion of formulation, laboratory and animal testing in accordance with good laboratory practices (“GLP”), which characterizes the drug product from a pre-clinical perspective and provides preliminary evidence that the drug product is safe to test in human beings;

(ii) filing with the FDA an Investigational New Drug Application ("IND") which once effective will permit the conduct of clinical trials (testing in human beings under adequate and well-controlled conditions) in the U.S.;

(iii) designing and conducting clinical trials to show the safety and efficacy of the drug product in accordance with good clinical practice ("GCP") and other requirements;

(iv) submitting the NDA for FDA review, which generally must include data from at least two well-controlled clinical trials demonstrating safety and effectiveness, as well as characterization of the drug product and a description of the manufacturing process, controls and facilities;

(v) satisfactory completion of FDA pre-approval inspections regarding the conduct of the clinical trials and manufacturing at the designated facility or facilities in accordance with current Good Manufacturing Practices ("cGMP");

(vi) if applicable, completion of an FDA Advisory Committee meeting in which the FDA requests views and recommendations from outside experts in evaluating the NDA;

(vii) final FDA approval of the full prescribing information, labeling and packaging of the drug product; and

(viii)in some cases, commitments to meet post-approval requirements, including ongoing monitoring and reporting of adverse events related to the drug product, implementation of a Risk Evaluation and Mitigation Strategy ("REMS") program, if applicable, and conduct of any agreed post-marketing requirement or post-marketing commitment studies.

Clinical trials are typically conducted in four sequential phases, although they may overlap. The four phases are as follows:

(i) Phase I trials are typically small (fewer than 100 study subjects and often involving healthy volunteers) and are primarily designed to determine the pharmacokinetics and toxicity of the drug product.

(ii) Phase II trials usually involve 100 to 300 participants and are designed to determine whether the drug product produces any clinically significant effects in patients with the intended disease or condition and to provide further information about safety and dosing. If the results of these trials show promise, then larger Phase III trials may be conducted.

(iii) Phase III trials are often multi-institution studies that involve a large number of participants and are designed to show efficacy and safety in the intended treatment population. Phase III (and some Phase II) trials are designed to be pivotal trials. The goal of a pivotal trial is to establish the safety and efficacy of a drug product with sufficient robustness for purposes of regulatory approval.

(iv) Phase IV studies are conducted following approval. In some cases, the FDA requires post marketing requirement studies or post-marketing commitment studies after the NDA has been approved. Such post-marketing clinical studies or surveillance programs are intended to obtain more information about the risks of harm, benefits and optimal use of the drug product by evaluating the results of the drug product in a larger number of patients. The FDA may require post-approval studies either at the time of approval or, if it becomes aware of new safety information, after approval.

A drug manufacturer may conduct clinical trials either in the U.S. or outside the U.S., but in all cases must comply with GCP and must ensure that there is: (i) a legally effective informed consent process when enrolling participants; (ii) an independent review by an Institutional Review Board or ethics committee to minimize and manage the risks of harm to participants; and (iii) ongoing monitoring and reporting of adverse events related to the drug product.

In addition, under the Pediatric Research Equity Act 2003 ("PREA") as amended, all NDAs must include assessments on a drug in pediatric patients unless the applicant receives a waiver or deferral. A drug sponsor may also seek to conduct a clinical trial of a drug product on pediatric patients based on a written request from the FDA in order to obtain a form of marketing exclusivity as permitted under the Best

Pharmaceuticals for Children Act 2002, as amended. Under PREA, FDA may require post-approval studies assess the safety and effectiveness of the indication in pediatric patients.

The path leading to FDA approval of a section 505(b)(2) NDA for a drug product that has differences from an already approved product is somewhat shorter. In a section 505(b)(2) NDA, the drug sponsor relies, in whole or in part, on investigations to which the sponsor does not have a right of reference to establish that its proposed product is safe and effective. For example, a section 505(b)(2) NDA may rely on published literature or on the FDA’s prior finding of safety and effectiveness of another company’s product. Section 505(b)(2) NDAs are typically used for new products with differences from previously approved products such as in dosage forms, dosage strengths, route of administration or indication and where, therefore, an ANDA may not be used. New clinical trial data may also be needed to establish that the proposed product is safe and effective given its differences.

Under the U.S. Prescription Drug User Fee Act 1992, as amended, the FDA has the authority to collect fees from drug manufacturers who submit NDAs and section 505(b)(2) NDAs for review and approval. For U.S. fiscal year 2024, the user fee rate has been set at $4,310,002 for an NDA and $2,155,002 for an NDA not requiring clinical data, generally certain section 505(b)(2) NDAs.

ANDA process

The path leading to FDA approval of an ANDA is very different from that of an NDA. By statute, the drug manufacturer does not complete pre-clinical studies and safety and efficacy clinical trials, and instead focuses on a showing of sameness and bioequivalence to a previously approved Reference Listed Drug (“RLD”), typically a branded drug approved under an NDA. Sameness means, with limited exceptions, the same active ingredient or ingredients, dosage form, strength, route of administration and labeling. Bioequivalence is generally established by studies that involve comparing the absorption rate and concentration levels of a generic drug in the human body to that of the RLD. In the event that the generic drug behaves in the same manner in the human body as the RLD, the two drug products are considered bioequivalent. The FDA considers a generic drug therapeutically equivalent, and therefore the drug is generally substitutable under state pharmacy dispensing law, where it is shown to be the same as and bioequivalent to the RLD. Legislation enacted in most states in the U.S. allows or, in some instances mandates, that a pharmacist dispense an available generic drug that has been rated therapeutically equivalent when filling a prescription for a branded product, in the absence of specific contrary instructions from the prescribing physician. ANDA filings must include information on manufacturing processes, controls, and facilities comparable to an NDA.

In 2010, Congress passed into law the Generic Drug User Fee Act to address the FDA’s backlog, which at the time was over 2,000 ANDA filings. This legislation granted the FDA authority to collect, for the first time, user fees from generic drug manufacturers who submit ANDA filings for review and approval, and the fees collected help the FDA fund the drug approval process. For U.S. fiscal year 2025, the user fee rate is set at $1,891,664 for an ANDA submitted by a large size operation generic applicant. The FDA will also collect from generic drug manufacturers a separate fee where they reference a so-called Drug Master File for a contract manufacturer, and separate annual manufacturing facility fees for API and finished drug products.

Aside from the backlog described above, the timing of FDA approval of ANDA filings depends on other factors, including whether an ANDA holder has challenged any listed patents to the reference listed drug (the “RLD”) and whether the RLD is entitled to one or more periods of non-patent data or marketing exclusivity under the FFDCA, as discussed elsewhere in this section.

Patent and non-patent exclusivity periods

A sponsor of an NDA is required to identify in its application any patent that claims the drug or a use of the drug subject to the application. Upon NDA approval, the FDA lists these patents in a publication referred to as the Orange Book. Any person that files a section 505(b)(2) NDA that relies upon reference to an approved NDA for which the patents are listed, or an ANDA to secure approval of a generic version of the previously approved drug, must make a certification in respect of listed patents. If the ANDA or section

505(b)(2) NDA applicant certifies that there are no listed patents or that the listed patents have expired, the FDA may approve the application immediately. If the applicant certifies that the patents have not expired, the FDA may only approve the application upon expiry of the patents. Alternatively, the applicant may certify that the listed patents are invalid, unenforceable and/or not infringed by the proposed drug. The applicant must give notice to the holder of the NDA for the RLD and the patent holder (if different) of the bases upon which the patents are challenged. If the NDA holder or patent owner sues the applicant for infringement within 45 days, the FDA may not approve the ANDA or section 505(b)(2) NDA until the earliest of: (i) 30 months after receipt of the notice by the holder of the NDA for the RLD; (ii) entry of a district court of appellate court judgment holding the patent invalid, unenforceable or not infringed; (iii) such other time as the court may order; or (iv) the expiry of the patent. If an infringement suit is not initiated within 45 days of notice to the NDA holder, the FDA may approve the application immediately.

A key motivation for ANDA applicants to challenge patents is the 180-day market exclusivity period (“generic exclusivity”) granted to the developer of a generic version of a product that is the first to submit an ANDA with a Paragraph IV certification. For a variety of reasons, there are situations in which a company may not be able to take advantage of an award of generic exclusivity. The determination of when generic exclusivity begins and ends is complicated and is subject to several forfeiture provisions.

The holder of the NDA for the RLD may also be entitled to certain non-patent exclusivity during which the FDA cannot accept for filing or approve an application for a competing generic product or section 505(b)(2) NDA product. Generally, if the RLD is a new chemical entity, the FDA may not accept for filing any application that references the innovator’s NDA for five years from the approval of the innovator’s NDA. However, this five-year period is shortened to four years where an applicant’s ANDA includes a Paragraph IV certification, and the 30-month stay on FDA approval is lengthened accordingly. In other cases, where the innovator has provided certain clinical study information essential for approval, the FDA may accept for filing, but may not approve, an ANDA or section 505(b)(2) application that references the corresponding aspect of the innovator’s NDA for a period of three years from the approval of the innovator’s NDA. Certain additional periods of exclusivity may be available, such as orphan exclusivity if the RLD is indicated for use in a rare disease or condition, or pediatric exclusivity if the RLD is studied for pediatric patients based on a written request from the FDA.

Risk Evaluation and Mitigation Strategies ("REMS")

The FDA has the authority to require the manufacturer to provide a REMS that is intended to ensure that the benefits of a drug product (or class of drug products) outweigh the risks of harm. The FDA may require that a REMS include elements to assure safe use to mitigate a specific serious risk of harm, such as requiring that prescribers have particular training or experience or that the drug product is dispensed in certain healthcare settings. The FDA has the authority to impose civil penalties on or take other enforcement action against any drug manufacturer who fails properly to implement an approved REMS. Separately, there are prohibitions on a drug manufacturer using an approved REMS to delay generic competition. The FDA has been active in instituting class-wide and product-specific REMS for opioid drug products.

The FDA requires a REMS for SUBOXONE Film and for SUBLOCADE Injection. SUBOXONE Film is part of the Buprenorphine Transmucosal Products for Opioid Dependence ("BTOD”) shared REMS program, the goals of which are to: 1) mitigate the risks of accidental overdose, misuse, and abuse, and 2) inform prescribers, pharmacists, and patients of the serious risks associated with buprenorphine-containing products. The goal of the SUBLOCADE REMS program is to mitigate the risk of serious harm or death that could result from intravenous self-administration by ensuring healthcare settings and pharmacies are certified and only provide SUBLOCADE directly to a healthcare provider for administration by a healthcare provider to the patient.

Other products for which the Company secures NDA approval in the U.S. in the future may become subject to a REMS specific to the product or shared with other products in the same class of drug, if the FDA determines that additional steps beyond labeling are required to help ensure the benefits of the medication outweighs its risks.

Quality assurance requirements

The FDA enforces requirements to ensure that the methods used in, and the facilities and controls used for, the manufacture, processing, packaging, and holding of drugs conform to cGMP. The cGMP requirements that the FDA enforces are comprehensive and cover all aspects of manufacturing operations, from receipt of raw materials to finished product distribution, and are designed to ensure that the finished products meet all the required identity, strength, quality, and purity characteristics. Ensuring compliance requires a continuous commitment of time, money, and effort in all operational areas.

The FDA conducts pre-approval and post-approval inspections of facilities engaged in the development, manufacture, processing, packaging, testing, and holding of the drugs subject to NDAs and ANDA filings. Prior to approval, if the FDA concludes that the facilities to be used do not or did not meet cGMP, it will not approve the application. Corrective actions to remedy the deficiencies must be performed and are usually verified in a subsequent inspection.

The FDA also conducts periodic post-approval inspections of drug manufacturing facilities to assess their cGMP status. Adverse inspections can lead to FDA inspection observations, warning letters, seizure, recalls, injunctions, and shutdown of facilities. In addition, where products or components for manufacturing are being imported into the U.S., the FDA may issue an import alert to prevent shipments into the country. In addition, if the FDA concludes that a company is not in compliance with cGMP requirements, sanctions may be imposed that include preventing that company from receiving the necessary licenses to export its products, preventing further approvals for applications involving the facility or facilities and issue and classifying that company as an “unacceptable supplier,” thereby disqualifying that company from selling products to governmental agencies.

Reporting requirements

Pharmaceutical manufacturers are subject to adverse event reporting requirements during clinical trials and following approval, with expedited reporting for certain serious adverse events and periodic reporting for other adverse events. To comply with these requirements, manufacturers must have robust procedures for surveillance, receipt, evaluation, and reporting of adverse events. Manufacturers must also submit annual reports to FDA for each approved product and field alert reports where there is a quality or labeling issue with a product already distributed to the market.

Labeling and marketing

For all pharmaceuticals sold in the U.S., the FDA and other regulatory and law enforcement bodies also regulate sales and marketing to ensure that drug product claims made by manufacturers are not false, misleading or otherwise improper. Manufacturers are required to file copies of all product-specific promotional materials with the FDA’s Office of Prescription Drug Promotion at the time of their first use. Failure to implement a robust internal company review process and to comply with FDA requirements regarding labeling and promotion increases the risk of enforcement action by the FDA, the DOJ, or the states.

In addition, the FDA has the authority to require labeling changes after approval of a drug if it becomes aware of new safety information.

Import and export requirements

To import pharmaceuticals into the U.S., the importer must file an entry notice and bond with the Customs and Board Protection (“CBP”). All drugs are subject to FDA examination before release by the CBP. Any article that appears to be in violation of the FFDCA may be refused admission and a notice of detention and hearing may be issued. If the FDA ultimately refuses admission, the CBP may issue a notice for redelivery and assess liquidated damages for up to three times the value of the drugs.

Products for export from the U.S. are subject to foreign countries’ import requirements and the exporting requirements of the FDA. For example, international sales of drugs manufactured in the U.S. that are not approved by the FDA for use in the U.S. are subject to FDA export requirements. FDA will provide a certificate of pharmaceutical product ("eCPP") directly to a requesting country to provide assurance that the product has been approved for export from the U.S. and that the manufacturing facilities are in compliance with cGMP. To obtain this certificate, the drug manufacturer must apply to the FDA.

Drug Enforcement Administration

The U.S. Drug Enforcement Agency (“DEA”) is the federal agency in the U.S. responsible for enforcement of the Controlled Substances Act (“CSA”). The CSA classifies drugs and other substances based on identified potential for dependence and abuse. Schedule I controlled substances are those with a high abuse potential and have no currently accepted medical use; thus they cannot be lawfully marketed or sold. Schedule II/IIN substances have a high potential for abuse which may lead to severe psychological or physical dependence. Many narcotics and stimulants are Schedule II controlled substances. Schedule III/IIN substances have a potential for abuse less than substances in Schedules I or II and abuse may lead to moderate or low physical dependence or high psychological dependence. Examples of Schedule III substances are products containing not more than 90 milligrams of Codeine per dosage (Tylenol® with Codeine) and buprenorphine, the active ingredient in SUBLOCADE and SUBOXONE. Consequently, the manufacture, storage, distribution, and sale of these substances are all highly regulated.

DEA regulations make it extremely difficult for a manufacturer in the U.S. to import finished dosage forms of controlled substances manufactured outside the U.S., particularly for Schedule II controlled substances and narcotics in other Schedules. These rules reflect a broader enforcement approach by the DEA to regulate the manufacture, distribution and dispensing of legally produced controlled substances. Accordingly, drug manufacturers who market and sell finished dosage forms of controlled substances in the U.S. often manufacture or have them manufactured in the U.S.

The DEA also requires drug manufacturers to design and implement a system that identifies suspicious orders of controlled substances, such as those of unusual size, those that deviate substantially from a normal pattern and those of unusual frequency, prior to completion of the sale. A compliant suspicious order monitoring system includes well-defined due diligence, “know your customer” efforts and order monitoring.

To meet its responsibilities, the DEA conducts periodic inspections of registered establishments that handle controlled substances. Annual registration is required for any facility that manufactures, tests, distributes, dispenses, imports or exports any controlled substance. The facilities must have the security, control and accounting mechanisms required by the DEA to prevent loss and diversion. Failure to maintain compliance, particularly as manifested in loss or diversion, can result in regulatory action. The DEA may seek civil penalties, refuse to renew necessary registrations or initiate proceedings to revoke those registrations. In certain circumstances, violations could lead to criminal proceedings.

Individual states also regulate controlled substances, and manufacturers, distributors and third-party active pharmaceutical ingredient suppliers and manufacturers, are subject to such regulation by several states with respect to the manufacture and distribution of these products.

Government benefit programs

Statutory and regulatory requirements for Medicaid, Medicare, Tricare (the uniformed services healthcare program for active duty service members, active duty family members, National Guard and Reserve members and their family members, retirees and retiree family members, survivors, and certain former spouses worldwide) and other government healthcare programs govern provider reimbursement levels for government beneficiaries, including requiring that pharmaceutical companies pay rebates to individual states based on Medicaid utilization of the manufacturer’s products. The federal and state governments may continue to enact measures in the future aimed at containing or reducing payment levels for prescription pharmaceuticals paid for in whole or in part with government funds. In the new Congress convening in 2025, federal policy makers may offer proposals to reform the Medicaid program, which could affect the pharmaceutical industry.

From time to time, legislative or regulatory changes are made to government healthcare programs that impact our business. For example, the Medicare Prescription Drug Improvement and Modernization Act

2003 (“Medicare Part D”) created a new outpatient prescription drug coverage program for people with Medicare through a new system of private market drug benefit plans. This law provides an outpatient prescription drug benefit to seniors and individuals with disabilities in the Medicare program.

Further, the Inflation Reduction Act of 2022, or IRA, among other things, requires the U.S. Department of Health and Human Services Secretary to negotiate, with respect to Medicare units and subject to a specified cap, the price of a set number of certain high Medicare spend drugs and biologicals per year starting in 2026, penalizes manufacturers of certain Medicare Parts B and D drugs for price increases above inflation, and makes several changes to the Medicare Part D benefit, including a limit on annual out-of-pocket costs, and a change in manufacturer liability under the program. Congress continues to consider various policy proposals that may result in pressure on the prices of prescription drugs in the government health programs.

In addition, the Patient Protection and Affordable Care Act (“Affordable Care Act”) has changed the way healthcare services are delivered and financed by both government and private insurers in the U.S. The overall impact of the Affordable Care Act reflects several uncertainties; the impact to our business is largely attributable to changes in the Medicare Part D coverage gap, the imposition of an annual fee on branded prescription pharmaceutical manufacturers and increased rebates payable to state Medicaid programs. There are several other provisions in the legislation that collectively have additional impact, including originator average manufacturer price for new formulations and the expansion of the ceiling prices under section 340B of the Public Health Service Act, as amended (the “340B Program”) to new entities.

Further, federal policy makers have taken steps toward expanding healthcare coverage beyond the Affordable Care Act, which could have ramifications for the pharmaceutical industry. In 2025, some federal lawmakers may continue with these efforts. In the 119th Congress, however, there also may be renewed attempts to alter the Affordable Care Act. Additional legislative changes, regulatory changes, or guidance could be adopted, which may impact marketing approvals and reimbursement for our products. For example, there has been increasing legislative, regulatory, and enforcement interest in the U.S. with respect to drug pricing practices. There have been several inquiries by the U.S. Congress and proposed and enacted federal and state legislation and regulatory initiatives designed to, among other things, bring more transparency to product pricing, evaluate the relationship between pricing and manufacturer patient programs, and reform government healthcare program reimbursement methodologies for drug products.

Healthcare fraud and abuse laws; Privacy

Federal and state healthcare laws and regulations restrict business practices in the pharmaceutical industry. These laws may impact, among other things, our current and future business operations and proposed sales, marketing and education programs and constrain the business or financial arrangements and relationships with healthcare providers and other parties through which we market, sell and distribute our products. These laws include anti-kickback and false claims laws and regulations, data privacy and security, and transparency laws and regulations, including, without limitation, those laws described below.

The U.S. federal Anti-Kickback Statute (AKS) prohibits any person or entity from, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce or in return for purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order of any item or service reimbursable under federal healthcare programs, including Medicare and Medicaid. The term “remuneration” has been broadly interpreted to include anything of value. The AKS has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers on the other. Although there are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, the exceptions and safe harbors are drawn narrowly. Practices that involve remuneration that may be alleged to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor. Several courts have interpreted the AKS’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the AKS has been violated.

A person or entity does not need to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation. Violation of the AKS carries criminal penalties and fines as well as administrative sanctions under the Civil Money Penalties Law. In addition, the government may assert that a claim including items or services resulting from a violation of the AKS constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act.

Federal civil and criminal false claims laws and civil monetary penalties laws, including the federal civil False Claims Act, which can be enforced by individuals through civil whistleblower and qui tam actions, prohibit any person or entity from, among other things, knowingly presenting, or causing to be presented, a false claim for payment to the federal government or knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government. A claim includes “any request or demand” for money or property presented to the U.S. government. Several pharmaceutical and other healthcare companies have been prosecuted under these laws for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product. Other companies have been prosecuted for causing false claims to be submitted because of the companies’ marketing of products for unapproved, and thus non-reimbursable, uses. Most U.S. states have equivalents of these federal laws that apply to state healthcare programs, and those state laws may be broader than their federal counterparts.

The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, created additional federal criminal statutes that prohibit, among other things, knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private third-party payors and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Also, many states have similar fraud and abuse statutes or regulations that apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor.

In addition, we may be subject to data privacy and security regulations promulgated by both the federal government and the states in which we conduct our business. HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their respective implementing regulations, impose specified requirements on certain types of individuals and entities relating to the privacy, security and transmission of individually identifiable health information. Among other things, HITECH makes HIPAA’s security standards directly applicable to “business associates,” defined as independent contractors or agents of covered entities, which include certain healthcare providers, healthcare clearinghouses and health plans, that create, receive, maintain or transmit individually identifiable health information in connection with providing a service for or on behalf of a covered entity. HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorney’s fees and costs associated with pursuing federal civil actions.

The federal regulations addressing the Confidentiality of Substance Use Disorder Patient Records, codified at 42 C.F.R. Part 2 (Part 2), strictly restrict the circumstances under which patient records relating to diagnosis of or treatment for a substance use disorder may be used and disclosed by any person or organization other than the treating provider. Recently, the Part 2 regulations have been modified to permit increased sharing for approved purposes and to better align the requirements of Part 2 and HIPAA to reduce confusion about the interaction of those different regulations, but such modifications now require persons or entities holding Part 2 records and experiencing a breach of unsecured Part 2 records to notify affected individuals and the Secretary of HHS about such breach to the same extent as breaches of unsecured protected health information must be reported pursuant to HIPAA. In addition, state laws governing the privacy and security of health information in certain circumstances, including laws addressing behavioral health diagnosis and treatment—many of which are not pre-empted by HIPAA—differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. The federal Physician Payments Sunshine Act (Sunshine Act) requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare &

Medicaid Services (CMS) information related to payments or other transfers of value made to physicians, advanced practice providers, and teaching hospitals. The Sunshine Act also requires applicable manufacturers and applicable group purchasing organizations to report annually to CMS ownership and investment interests held by physicians and their immediate family members.

We may also be subject to state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers, marketing expenditures or drug pricing, and state and local laws that require the registration of pharmaceutical sales representatives.

Because of the breadth of these laws and the narrowness of available statutory exceptions and regulatory safe harbors, it is possible that some of our business activities could be subject to challenge under one or more of such laws. If we were found to be in violation any of the federal and state laws described above or any other governmental regulations that apply to us, including any violation of the CIA, we may be subject to significant criminal, civil and administrative penalties including damages, fines, imprisonment, disgorgement, contractual damages, reputational harm, diminished profits and future earnings, disgorgement, exclusion from participation in government healthcare programs and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

We must comply with the FCPA worldwide and similar anti-bribery laws in non-U.S. jurisdictions such as the U.K. Bribery Act of 2010, which generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. Because of the predominance of government-sponsored healthcare systems around the world, most of our customer relationships outside the U.S. are with governmental entities and are therefore subject to such anti-bribery laws. See also, “Item 1A. Risk Factors—We are subject, directly or indirectly, to a variety of U.S. and international laws and regulations related to fraud and abuse and transparency. Enforcement actions under such laws have increased in recent years. If we fail to comply, or have not fully complied, with such laws, we could face substantial penalties.”

European Union and U.K.

Overview

In the EU and U.K., medicinal products are subject to extensive pre- and post-marketing regulation by regulatory authorities at both the EU and national levels. Additional rules also apply at the national level relating specifically to controlled substances.

Following a referendum in 2016, the U.K. formally left the EU on January 31, 2020 and the transition period, during which EU laws continued to apply to the U.K., expired on December 31, 2020.

A significant proportion of the regulatory framework in the U.K. applicable to medicinal products is currently derived from European Union Directives and Regulations, and since January 1, 2021, the EU laws which have been transposed into U.K. law through secondary legislation continue to be applicable in the U.K. as retained EU law, although any new EU law developments have ceased to apply in the U.K. from that date. The divergence between the U.K. and the EU regimes may increase as time passes, including for example, with respect to EU law developments to which the U.K. is not subject, such as the Clinical Trials Regulation. There have been no new significant legislative enactments in the U.K. since its exit from the EU with respect to medicinal products which would materially deviate the U.K.’s overall regulatory position from the EU law at the time the U.K. exited the EU. However, there are important procedural and other differences, such as the requirement to obtain a U.K.-specific marketing authorization, for example.

There are several ongoing U.K. government consultations relevant to medicinal products, most notably with respect to clinical trials and the future regulatory landscape in the U.K. is uncertain.

The position in Northern Ireland differs in certain respects from that of the rest of the United Kingdom (England, Scotland, and Wales) as Northern Ireland has chosen to retain some EU rules following the U.K.’s departure from the EU.

Clinical trials and marketing approval

Clinical trials of medicinal products in the EU must be conducted in accordance with EU and national regulations and the International Council for Harmonization (“ICH”) guidelines on GCP. Prior to commencing a clinical trial, the sponsor must obtain a clinical trial authorization from the competent authority and a positive opinion from an independent ethics committee. The application for a clinical trial authorization must include, among other things, a copy of the trial protocol and an investigational medicinal product dossier containing information about the manufacture and quality of the medicinal product under investigation.

Under the EU Regulation on Clinical Trials (Regulation (EU) 536/2014) which came into force as of January 31, 2022, and replaces the existing Directive 2001/20/EC, a centralized procedure is in place where the sponsor submits the application for a clinical trial through an EU portal. The application is then evaluated and approved or rejected by the respective member state where the trial is to take place. If more than one member state is concerned, the application will be reviewed in a coordinated process with one member state acting as “reporting” member state. Any subsequent substantial changes to the trial protocol or other information submitted with the clinical trial applications must be approved by the member states concerned. The EU Regulation on Clinical Trials provides for certain transitional rules for clinical trials applied for before it came into effect and gives sponsors a choice as to whether to apply the previous rules until January 31, 2023.

The U.K. regulatory framework in relation to clinical trials is derived from secondary national U.K. legislation implementing the EU Directive 2001/20/EC. The U.K. is not subject to the new EU Regulation on Clinical Trials and the details of the future regulation of clinical trials in the U.K. are as yet uncertain.

After completion of the required clinical testing, a drug manufacturer must obtain a marketing authorization in line with Regulation EC 726/2004 (and as transposed into national laws) before it may place its medicinal product on the market in the EU. There are various application procedures available depending on the type of product involved. The centralized procedure gives rise to marketing authorizations that are valid throughout the EU and, by extension (after national implementing decisions), in Norway, Iceland and Liechtenstein, which, together with the EU member states, comprise the EEA. Applicants file marketing authorization applications with the EMA where they are reviewed by a relevant scientific committee, in most cases the Committee for Medicinal Products for Human Use (“CHMP”). The EMA forwards CHMP opinions to the European Commission, which uses them as the basis for deciding whether to grant a marketing authorization. The centralized procedure is compulsory for medicinal products that (i) are derived from biotechnology processes; (ii) contain a new active substance (not yet approved on November 20, 2005) indicated for the treatment of certain diseases, such as HIV/AIDS, cancer, diabetes, neurodegenerative disorders, viral diseases or autoimmune diseases and other immune dysfunctions; (iii) are orphan medicinal products; or (iv) are advanced therapy medicinal products, such as gene or cell therapy medicines.

For those medicinal products for which the centralized procedure is not available, the applicant must submit marketing authorization applications to the national medicines regulators through one of three procedures: (i) a national procedure, which results in a marketing authorization in a single EU member state; (ii) the decentralized procedure, in which applications are submitted simultaneously in two or more EU member states; and (iii) the mutual recognition procedure, which must be used if the product has already been authorized in at least one other EU member state, and in which the EU member states are required to grant an authorization recognizing the existing authorization in the other EU member state, unless they identify a serious risk to public health. A national procedure is only possible for one-member state; as soon as an application is submitted in a second member state the mutual recognition or decentralized procedure will be triggered. Marketing authorizations granted under a national procedure are also initially valid for five years but can be renewed indefinitely.

Marketing authorization applications for generic medicinal products do not need to include the results of pre-clinical and clinical trials but can instead refer to the data included in the marketing authorization of a reference product for which regulatory data exclusivity has expired. If a marketing authorization is granted for a medicinal product containing a new active substance, that product benefits from eight years of data exclusivity during which generic marketing authorization applications referring to the data of that product may not be accepted by the regulatory authorities, and a further two years of market exclusivity during which such generic products may not be placed on the market. The two-year period may be extended to three years if during the first eight years a new therapeutic indication with significant clinical benefit over existing therapies is approved.

In the U.K., the EU centralized procedure described above no longer applies and a separate application will be required to the U.K. Medicines and Healthcare products Regulatory Agency (“MHRA”) for a U.K. marketing authorization. The MHRA may consider marketing authorizations approved in the European Economic Area (EEA) member states through decentralized or mutual recognition procedures, which may accelerate the process of granting a marketing authorization in the U.K.

In the EU, companies developing a new medicinal product must agree to a Pediatric Investigation Plan (“PIP”) with the EMA and must conduct pediatric clinical trials in accordance with that PIP unless a waiver applies, for example because the relevant disease or condition occurs only in adults. The marketing authorization application for the product must include the results of pediatric clinical trials conducted in accordance with the PIP, unless a waiver applies, or a deferral has been granted, in which case the pediatric clinical trials must be completed at a later date. Products that are granted a marketing authorization on the basis of the pediatric clinical trials conducted in accordance with the PIP are eligible for a six-month extension of the protection under a supplementary protection certificate (if any is in effect at the time of approval). This pediatric reward is subject to specific conditions and is not automatically available when data in compliance with the PIP are developed and submitted. In the U.K., after January 1, 2021, PIP applications were required to be submitted separately to the MHRA though EU PIPs agreed prior to that date were adopted as U.K. PIPs as at that date. The U.K. MHRA PIP application system mirrors the EU system and the MHRA has said it will continue to follow the EU guidelines on such applications. The MHRA will take account of whether an EU PIP is already granted when deciding whether to grant a U.K. PIP. The MHRA strongly encourages parallel submission to EMA and MHRA.

Pharmacovigilance and risk management

The holders of a marketing authorization are subject to extensive pharmacovigilance and risk management obligations under Directive 2001/83/EC and Regulation EC 726/2004.

According to EMA, pharmacovigilance “is the science and activities relating to the detection, assessment, understanding and prevention of adverse effects or any other medicine-related problem.” In the EU and the U.K., the holders of a marketing authorization must establish and maintain a pharmacovigilance system with the overall aim to monitor and ensure the safety of a medicinal product and appoint an individual qualified person for pharmacovigilance who is responsible for oversight of that system. They are also required to establish and maintain a pharmacovigilance system master file detailing the pharmacovigilance system. On request, the system master file must be made available to the competent authorities for inspection. In the U.K., if the qualified person does not reside or operate in the U.K., there will need to be a national pharmacovigilance contact person who does reside or operate in the U.K. Key pharmacovigilance obligations include the recording of suspected serious adverse reactions to the medicinal product in and outside the EU and promptly reporting them through the centralized EudraVigilance database. In addition, the holders of a marketing authorization are required to submit periodic safety update reports ("PSURs").

All new marketing authorization applications must include an RMP describing the risk management system that the holder of the marketing authorization will put in place and documenting measures to prevent or minimize the risks associated with the product. The regulatory authorities may also impose specific obligations as a condition of the marketing authorization. Such risk-minimization measures or post-authorization obligations may include additional safety monitoring, more frequent submission of PSURs or the conduct of additional clinical trials or post-authorization safety studies.

Promotional restrictions

In the EU and U.K., all advertising and promotional activities for the product must be consistent with the approved summary of product characteristics, and therefore all off-label promotion is prohibited. Direct-to-consumer advertising of prescription medicines is also prohibited. Although general requirements for advertising and promotion of medicinal products are established under EU and U.K. legislation, the details are governed by national regulations and can differ from one country to another.

Manufacturing and importing

Medicinal products may only be manufactured in the EU, or imported into the EU from another country, by the holder of a manufacturing authorization. The manufacturer or importer must comply with the EU GMP and have a qualified person who is responsible for certifying that each batch of product placed on the market in a member state has been manufactured in accordance with the laws in force in that member state and in accordance with the requirements of the marketing authorization. If a medicinal product is imported from outside the EU, each batch of product must undergo a full qualitative analysis, a quantitative analysis of at least all the active substances and all the other tests or checks necessary to ensure the quality of medicinal products in accordance with the requirements of the marketing authorization. Manufacturing facilities are subject to periodic inspections by the competent authorities for compliance with EU GMP and may, if products are produced for another market, also be subject to inspections under the GMP requirements applicable in that market. The position in the U.K. is broadly equivalent, save that a U.K. specific manufacturer’s license is required from the MHRA (in addition to the U.K. marketing authorization), which also requires compliance with EU GMP. For the purposes of EU legislation, the U.K. is now classified as a “third country.”

The manufacture, import, export, storage, distribution, and sale of controlled substances are subject to additional regulation at the national level in the EU and U.K. In many EU member states, the regulatory authority responsible for medicinal products is also responsible for controlled substances. In the U.K. and in certain EU member states, responsibility is split and in the U.K., the Home Office is responsible for controlled substances while the MHRA is responsible for medicinal products. Generally, any company manufacturing or distributing a medicinal product containing a controlled substance in the EU or U.K. will need to hold a controlled substances license from the competent national authority and will be subject to specific record-keeping and security obligations. Separate import or export certificates are required for each shipment into or out of the country.

Pricing and reimbursement

Pricing and reimbursement remain mostly within the discretion of the respective member state. However, the member states must at least comply with the Transparency Directive (Directive 89/105/EEC), which primarily provides procedural obligations. Governments influence the price of medicinal products in the EU and the U.K. through pricing and reimbursement rules and control of national healthcare systems that fund a large part of the cost of those products to patients. Some member states operate positive and negative list systems under which products may only be marketed once a reimbursement price has been agreed. To obtain reimbursement or pricing approval, some of these member states may require the completion of clinical trials that compare the cost-effectiveness of a particular product candidate to currently available therapies. Other countries allow companies to fix their own prices for medicinal products but monitor and control company profits. Such differences in national pricing regimes may create price differentials across Europe. The downward pressure on healthcare costs in general, particularly prescription medicines, has become intense. As a result, barriers to entry of new products are becoming increasingly high and patients are unlikely to use a drug product that is not reimbursed by their government.

In addition, in most European countries, physicians are encouraged or even required to prescribe generic rather than branded products and many governments also advocate generic substitution by requiring or permitting pharmacists to substitute a different company’s generic version of the branded drug product that was originally prescribed.

Most of World

Current markets

After the U.S. and Europe, our largest markets are Canada and Australia, where we market our products pursuant to standards set by Health Canada and the Therapeutic Goods Administration, respectively. We also market our products in certain other developed countries. The laws, guidelines and standards promulgated by the relevant regulatory authorities that regulate the development, testing, manufacturing, marketing, and selling of pharmaceuticals in each of these jurisdictions are broadly similar to those in the U.S. and Europe, although the precise requirements vary from country to country.

We also market our products in various emerging markets, where regulatory review and oversight processes continue to evolve. At present, such countries typically require prior regulatory approval or marketing authorization from large, developed markets (such as the U.S., European Union, Canada and Australia) before they will initiate or complete their review. Some countries also require the applicant to conduct local clinical trials as a condition of marketing authorization. Many emerging markets continue to implement measures to control drug product prices, such as implementing direct price controls or advocating the prescribing and use of generic drugs.

Environmental

Our Fine Chemical Plant manufactures the buprenorphine hydrochloride (“HCl”) and buprenorphine base active pharmaceutical ingredient used in the formulation of SUBLOCADE long-acting injection, SUBOXONE Film, SUBUTEX Tablet, and SUBOXONE Tablet. The FCP stores and uses hazardous materials as part of the manufacturing process; however, these aspects of the process are tightly controlled and, we believe, represent low risk to the surrounding environment.

Our approximate 80,000 square foot manufacturing plant in Raleigh, N.C. currently manufactures pharmaceutical products only for third party customers. Unlike the FCP, the Raleigh Manufacturing Facility does not use hazardous chemicals as part of its manufacturing processes at this time.

Our operations, like those of other pharmaceutical companies, involve the use of substances regulated under environmental laws, primarily in manufacturing processes and, as such, we are subject to numerous federal, state, local and non-U.S. environmental protection and health and safety laws and regulations. Environmental laws are complex, frequently amended and have generally become more stringent over time. Environmental agencies may require that we reimburse the government for costs incurred at these sites or otherwise pay for the cost of investigation and clean-up of these sites, including compensation for damage to natural resources. Also, certain environmental laws can impose liability on the current or former owners or operators of real property or facilities for the costs of investigation, removal or remediation of hazardous substances or materials at such properties, or at properties to which parties have disposed of hazardous substances. These laws can impose liability without regard to fault, and such liability may be joint or several with the previous owners or operators.

Human Capital

Our goal is to be an employer of choice and provide a fair, equitable, and conducive working environment free from discrimination and harassment. Indivior regards its employees as fundamental to its long-term success and provides a variety of training, development, and communication programs to ensure its business activities are always conducted in line with its guiding principles and stakeholder expectations.

At Indivior, we value our distinctive culture and believe it is a key source of sustainable competitive advantage. Our 50+ person Culture Champions network is well established and has helped us to implement many initiatives aimed at strengthening and building our culture. We also conduct an annual survey of employees to monitor engagement levels and act on feedback received through this process. In 2024, we remained certified as a Great Place To Work for all countries entered.

The table below sets forth the average monthly number of persons employed by the Company, excluding Directors, by business function during the years indicated.

As of December 31, 2024, the Company employed 1,051 people worldwide, of which 1,030 were full-time employees. Of these, 747 were located in the U.S., 274 were located in Europe, the Middle East, Africa, or Canada, and 30 were located in Australia.

Certain of our employees are represented by unions or works councils. We believe that we have a good relationship with our employees and with the unions and works councils that represent certain employees.

As of December 31, 2024, women or minorities held 31% (4 of 13) of the seats on our Board of Directors. As of December 31, 2024, 51% of our employees were women. Additionally, 34% of senior managers (including members of our Executive Committee who are not directors of Indivior PLC and directors of each subsidiary company) were women.

Other Information and Corporate Governance

The Company’s legal name is Indivior PLC. Indivior PLC is a public limited company incorporated under the laws of England and Wales that was incorporated on September 26, 2014. The principal legislation under which the Company operates is the U.K. Companies Act 2006. The registered office address of Indivior PLC is: 234 Bath Road, Slough, Berkshire, U.K., SL1 4EE and its telephone number is +1 (804) 379-1090. The Company’s website is https://www.indivior.com/. Information on the Company’s website does not constitute a part of and is not incorporated by reference into this Annual Report.

Our ordinary shares are listed on the Global Select Market of The Nasdaq Stock Market LLC and on the Equity Shares (Transition) category of the London Stock Exchange under the ticker symbol “INDV.”

The Company is subject to the information reporting requirements of the Exchange Act applicable to foreign private issuers, and under those requirements files reports with the SEC. The SEC maintains a website at http://www.sec.gov from which this Annual Report and those other reports or other information may be accessed. We also make our electronic filings with the SEC available at no cost on the Company’s website, www.indivior.com/en/investors (http://www.indivior.com/en/investors), as soon as reasonably practicable after we file such material with, or furnish it to, the SEC. Upon the filing of this Annual Report on Form 10-K, the Company has assumed an obligation to file annual reports on Form 10-K, quarterly reports on Form 10-Q, and file or furnish Current Reports on Form 8-K rather than reports on Form 6-K.

Foreign Private Issuer Status

As a foreign private issuer, we are exempt from the rules under the Exchange Act related to the furnishing and content of proxy statements, and our officers, directors, and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.

We provide information with respect to our Board of Directors, Executive Officers, and corporate governance policies and principles on our website, www.indivior.com/en/about-us (http://www.indivior.com/en/about-us). Specifically, the Company makes available on its website, under the headings "About Us — Corporate Governance" (i) its codes of conduct or ethics for the Board, senior financial officers, and employees, and (ii) the committee charters of the Company’s board committees. If the Company makes changes in, or provides waivers from, the provisions of any of its codes of ethics that the SEC requires it to disclose, the Company intends to disclose these events in the "Corporate Governance" section of its website.

Summary of Risk Factors

You should carefully consider the risks described below, together with all of the other information in this annual report on Form 10-K. The risks and uncertainties below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we believe to be immaterial may also adversely affect our business. If any of the following risks occur, our business, financial condition, and results of operations could be seriously harmed, our stock price might decline, and you could lose all or part of your investment.

Risks Related to our Business

• We are subject to substantial litigation and ongoing investigations and information requests.
• We rely on third parties to manufacture commercial supplies of most of our products.
• Compliance with legal and regulatory settlements requires significant resources and, if we fail to comply, we could be subject to penalties or excluded from government healthcare programs.
• Congress may reduce spending on Medicaid.
• We are subject to additional risks because we import, manufacture, and distribute controlled substances.
• We are subject to risks related to the manufacture of our products.
• We receive substantial revenue from a small number of key proprietary products.
• We depend on our ability to commercialize our products and acceptance of our products by physicians, patients, and healthcare payors.
• Several factors affect the rate at which our revenues may grow.
• We operate in a highly competitive industry.
• We rely on some third parties to develop our pharmaceutical pipeline and conduct clinical trials.
• Clinical trials for the development of products may be unsuccessful.
• We depend on third-party payors for reimbursement for our products.
• The clinical study or commercial use of our products may cause unintended side effects.
• We face additional risks when we manufacture for others.
• We may fail to develop or acquire other new products or compounds.
• Acquisitions, partnerships, joint ventures, dispositions, and other business combinations or strategic transactions involve several inherent risks.
• We may be subject to adverse public opinion.
• Failure to retain key personnel or attract new personnel could have an adverse effect on us.
• We use hazardous materials in our manufacturing facilities.

Risks Related to Intellectual Property

• We may incur substantial costs as a result of intellectual property litigation or other proceedings.
• We may not be able to protect our intellectual property rights throughout the world.
• We may fail to obtain and maintain patents and protect other proprietary rights.
• Our employees may wrongfully use or disclose alleged trade secrets of their former employers.

Risks Related to Regulatory or Legal Matters

• The regulatory approval process is expensive, time-consuming, and uncertain.
• Regulatory agencies may impose limitations or post-approval requirements on our products.
• Guidelines published by professional societies, insurance carriers, physician groups, science foundations, and other organizations may affect the use of the Company’s products.
• Product liability and product recalls could have a material adverse effect on us.
• We are subject to federal, state, local, and foreign healthcare laws and regulations.
• We may fail to comply with payment and reporting obligations under governmental pricing programs.
• We are subject to healthcare fraud and abuse, transparency, and false claims laws.
• We are subject to anti-corruption laws and regulations.
• The pharmaceutical industry faces significant government scrutiny regarding pricing and competition.

Risks Related to our Financial Condition and Tax Matters

• Recently proposed tariffs on pharmaceutical products, and potential reciprocal responses by other countries, may adversely affect our revenues or profitability.
• We are subject to macroeconomic trends in the markets where we operate.
• Any reduction in annual sales may adversely affect our liquidity.
• The recent pandemic and governmental and societal responses thereto have adversely affected our business and may continue to do so.
• Our insurance coverage may not be adequate.
• Our $350 million term loan contains covenants that could limit our ability to plan for or respond to changes in our business.
• We may not be able to generate sufficient cash to service all of our indebtedness.
• Our effective tax rate may increase, and changes in tax rules and regulations, or interpretations thereof, may adversely affect our financial condition.
• Our deferred tax assets may not be realized.
• If a U.S. person is treated as owning at least 10% of our ordinary shares, such holder may be subject to adverse U.S. federal income tax consequences.

Risks Related to Our Ordinary Shares

• Our ordinary shares are subject to market price volatility.
• Our ordinary shares are listed to trade on more than one stock exchange, and this may result in price variations.
• The rights afforded to our shareholders are governed by English law.
• Provisions of our Note Purchase Agreement and the U.K. City Code on Takeovers and Mergers may delay or prevent an otherwise beneficial takeover attempt of us.
• Our business strategy may involve transactions which may dilute existing shareholders’ interests.
• Securities or industry analysts may fail to publish research or may publish inaccurate or unfavorable research about our business.
• We may not pay dividends in the future.
• We are a holding company with no business operations of our own and depend on our subsidiaries for cash, including in order to pay dividends.

Risks Related to Information Security and Data Privacy

• We are at risk for business interruptions or breaches of data security.
• We are required to maintain the privacy and security of personal information.

Risks Related to Our International Status and Operations

• We are subject to various risks related to the local and international nature of our business.
• We are exposed to risks related to currency exchange rates.

Risks Related to Being a Publicly Traded Company in the U.S.

• We may fail to maintain effective internal controls over financial reporting.
• We are a foreign private issuer and expect to lose our foreign private issuer status in the future.
• We have changed to U.S. generally accepted accounting principles.
• We are subject to risks related to changes in accounting standards, assumptions, and estimates.
• The obligations associated with being a public company in the U.S. are significant.

Risks Related to our Company and Its Business

We are currently, in the past have been, and in the future may be, subject to substantial litigation that could cause us to incur significant legal expenses, divert management’s attention, and result in harm to our business.

We have been, and may in the future become, involved in various legal proceedings, regulatory proceedings, and government enforcement actions. Such proceedings may include claims for, or the possibility of, damages or fines and penalties involving substantial amounts of money or other relief, including but not limited to civil or criminal fines and penalties. For example:

• In 2019, the U.S. Attorney’s Office for the Western District of Virginia brought an indictment, followed by a superseding indictment, against the Company in connection with our marketing and promotional practices related to SUBOXONE Film and SUBOXONE and SUBUTEX Tablets (the "2019 Indictment"). The indictment charged Indivior Inc. and Indivior PLC with health care fraud, mail fraud, wire fraud, and conspiracy to commit the same. It generally alleged that the Company had falsely represented that SUBOXONE film was safer and less susceptible to misuse, abuse, diverse, and inadvertent pediatric exposure than SUBOXONE tablets, purportedly to delay approval of generic versions of SUBOXONE tablets and retain market share. Pursuant to a Resolution Agreement made on July 24, 2020 as part of a global resolution with the U.S. Attorney’s Office for the Western District of Virginia, the DOJ’s Consumer Protection Branch, the FTC, and several U.S. state attorneys general, an indirect wholly owned subsidiary of Indivior PLC pleaded guilty to a single count of making false statements relating to healthcare matters in 2012 (the “Resolution Agreement”). The DOJ dismissed all charges in the indictment, and the Company agreed to a total of $600 million in fines, and agreed to substantial reporting and compliance obligations related to its U.S. operations, among other things. The Resolution Agreement is filed as Exhibit 10.2 to this annual report.
• In January 2021, the Company announced it had reached an agreement with Reckitt Benckiser Group plc (“RB”) to resolve claims that RB issued in the Commercial Court in London in November 2020, seeking indemnity under the Demerger Agreement entered into on November 17, 2014 between RB and Indivior to effect the Demerger and to govern the relationship between RB and the Company following the Demerger. Pursuant to the settlement, RB agreed to withdraw its $1.4 billion claim and to release the Company from any claim for indemnity under the Demerger Agreement relating to the DOJ and FTC settlements that RB entered into in July 2019, as well as other claims for indemnity arising from those matters. The Company agreed to pay RB a total of $50 million and released RB from any claims to seek damages relating to the Company’s settlement with the DOJ and the FTC.
• In July 2022, the Company settled antitrust, patent infringement, and wrongful injunction claims with the manufacturer of a generic buprenorphine/naloxone film drug product for approximately $72 million and approximately $15 million for similar claims made by a second manufacturer of such a generic film drug product in October 2023.
• During 2023, Indivior Inc. settled civil antitrust cases filed by a class of direct purchasers, a class of end payors, and 41 states and the District of Columbia that had been consolidated in multi-district litigation pending in the U.S. District Court for the Eastern District of Pennsylvania (the “Antitrust MDL”) for $385 million, $30 million, and $103 million, respectively. During 2024, Indivior settled state-court cases in Virginia, Kentucky, and Pennsylvania with all of the remaining insurance companies who had asserted claims similar to those asserted in the Antitrust MDL but opted out of the Antitrust MDL end payor class for a combined total of $125 million, payable through December 2025.

We are also subject to several significant unresolved matters. For example,

• The Company has been named as a defendant in more than 400 civil lawsuits alleging that manufacturers, distributors, and retailers of opioids engaged in a longstanding practice to market

opioids as safe and effective for the treatment of long-term chronic pain to increase the market for opioids and their own market share, or alleging individual personal injury claims (the "Opioid MDL"). Most of these cases have been consolidated and are pending in a federal multi-district litigation in the U.S. District Court for the Northern District of Ohio. Nearly two-thirds of the cases in the Opioid MDL were filed by cities and counties, while nearly one-third of the cases were filed by private plaintiffs, most of whom assert claims relating to neonatal abstinence syndrome ("NAS"). Pursuant to mediation, the Company reached agreement on the amount of a potential settlement. However, the parties still must negotiate material terms and conditions of the final settlement agreement, including the structure and scope of the release. The proposed settlement would resolve claims by cities and counties, but would not resolve private plaintiff cases against the Company and would not resolve claims brought outside of the MDL.

• the Company has been named as a defendant in numerous lawsuits alleging that SUBOXONE Film was defectively designed and caused dental injury, and that the Company failed to properly warn of the risks of such injuries. The plaintiffs generally seek compensatory damages, as well as punitive damages and attorneys’ fees and costs. These lawsuits and claims follow a June 2022 required revision to the Prescribing Information and Patient Medication Guide about dental problems reported in connection with buprenorphine medicines dissolved in the mouth to treat opioid use disorder. This revision was required by the FDA of all manufacturers of these products. Applications to file class actions based on similar allegations as in the Dental MDL, but also relating to SUBOXONE Tablets, were filed in Quebec and British Columbia against various subsidiaries of the Company, among other defendants, in April 2024. Product liability cases such as these typically involve issues relating to medical causation, label warnings and reliance on those warnings, scientific evidence and findings, actual/provable injury and other matters.
• On September 21, 2022, certain shareholders issued representative and multiparty claims against Indivior PLC in the High Court of Justice for the Business and Property Courts of England and Wales, King’s Bench Division (the "High Court"). The claims made in both the representative and multiparty actions generally allege that Indivior PLC violated the U.K. Financial Services and Markets Act 2000 (“FSMA 2000”) by making false or misleading statements or material omissions in public disclosures, including the 2014 Demerger Prospectus, regarding an alleged product-hopping scheme regarding the switch from SUBOXONE Tablets to SUBOXONE Film. On December 5, 2023, the High Court handed down a judgment allowing the Company's application to strike out the representative action. This decision was affirmed by the court of appeals on January 23, 2025. On February 20, 2025, the claimants notified the Company that they intend to appeal the judgment in the representative action to the U.K. Supreme Court. The multi-party proceeding remains pending.

The amount of time that is required to resolve legal or regulatory proceedings is unpredictable and any litigation or claims against us, even those without merit, may cause us to incur substantial costs, divert management’s attention from the day-to-day operation of our business, and materially harm our stock price and reputation. In addition, we are obligated to indemnify and advance expenses to certain individuals and entities involved in certain of these and related proceedings. Any adverse judgment in or settlement of any pending or any future litigation could result in significant payments, fines and penalties that could have a material adverse effect on our business, results of operations, financial condition and reputation.

Moreover, the outcome of these legal proceedings may differ from the Company’s expectations because the outcomes of litigation, including regulatory matters, are often difficult to reliably predict. Although the Company maintains general liability insurance, the amount of liability that may result from certain of these risks may not be covered by, or could exceed, the applicable insurance coverage. See "Our insurance coverage may not be adequate," below. Various factors or developments can lead the Company to change current estimates of liabilities and, to the extent applicable, related insurance receivables, or make such estimates for matters previously not susceptible of reasonable estimates, such as a significant judicial ruling or judgment, a significant settlement, significant regulatory developments or changes in applicable law. A future adverse ruling, settlement or unfavorable development could result in future charges that could have a material adverse effect on the Company’s results of operations or cash flows in any particular period. In addition, negative publicity related to these proceedings may negatively impact the Company’s reputation.

For a more detailed discussion involving the Company’s legal proceedings and associated accounting estimates, see Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 16. Commitments and Contingencies of this Report, especially at the captions “Civil Opioid Litigation” and "Dental Allegations" which provide information regarding additional matters that we believe may be significant to the Company as of the date of the filing of this annual report.

We rely on third parties to manufacture, package, test, and distribute our products and their facilities and processes must meet stringent regulatory requirements.

The Company relies almost exclusively on third parties, including contract manufacturing organizations, to manufacture, package, test, and distribute our products. The manufacturing of our products, which include oral solid dose tablet products, film products, a nasal spray product, and terminally sterilized and aseptically filled injectables, is subject to stringent global regulatory, quality, and safety standards, including current Good Manufacturing Practice (“cGMP”). Some of our products, including SUBOXONE Film, SUBLOCADE long-acting injectable, and OPVEE nasal spray, are significantly more complicated to manufacture than tablet products. We have limited control over the performance of our third-party manufacturers and are currently dependent on our third-party contract manufacturing partners whom we manage via supply and quality agreements.

Similarly, the Company relies on a third-party logistics vendor and a network of specialty pharmacists and specialty distributors to fulfill orders and distribute our products in the U.S. and logistics and distribution partners to distribute our products worldwide. This process is complicated because most of our products contain controlled substances that require special handling, such as import and export permits, adherence to a risk evaluation and mitigation strategy (“REMS”) protocol, and import restrictions on controlled substances. See also, Item 1A. Risk Factors—“We are subject to additional risks because we import, manufacture, and distribute controlled substances.”

We or our third-party manufacturers may encounter difficulties in production, such as issues with production costs and yields, process controls, quality control, and quality assurance, including testing of stability, impurities and impurity levels, sterility, and other product specifications by validated test methods, compliance with strictly enforced global and regional regulations, and disruptions or delays caused by man-made or natural disasters, pandemics or epidemics, or other business interruptions, including, for example, pandemics and government responses thereto. In November 2023 we purchased an approximately 80,000 square foot facility in Raleigh NC (the "Raleigh Manufacturing Facility") to provide additional manufacturing capacity. Once validated and given regulatory approval, it should meet anticipated demand for the next several years. However, there can be no assurance that such efforts will be successful. If such efforts are successful, we presently expect to begin production there in 2026 and potentially to begin realizing cost savings in 2027. To the extent we do not have redundant manufacturing capacity, we may suffer supply disruptions which would reduce growth in our net revenues and in turn have a material adverse effect on our business, financial condition, and results of operations.

If we or any of our third-party manufacturers cannot successfully manufacture material that conforms to our specifications and the applicable regulatory authorities’ strict regulatory requirements or pass regulatory inspection, we or our third-party manufacturers will not be able to ensure an adequate supply of products and/or secure or maintain regulatory approval for the manufacturing facilities. In addition, we have no direct control over the ability of third-party manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the FDA or any other applicable regulatory authorities do not approve these facilities for the manufacture of our products or if they withdraw any such approval in the future, or if the supply of our primary active ingredients or manufacture our products is somehow interrupted, we may need to find alternative manufacturing facilities, which may significantly impact our ability to develop, obtain regulatory approval for or market our products. To the extent our manufacturing facility or that of any third-party manufacturers that we engage with respect to our products are different from those currently being used for commercial supply in the U.S., studies will have to be completed, and the FDA will need to approve such facilities prior to our sale of any product manufactured using these facilities. Any delay or interruption in our ability to meet commercial demand for our products will result in the loss of potential revenues and could adversely affect our ability to gain market acceptance for these products. In addition, any delay or interruption in the supply of clinical trial supplies could delay the completion of clinical trials, increase the costs associated with maintaining clinical trials, and, depending upon the period of delay, require us to commence new clinical trials at additional expense or terminate clinical trials completely, which in turn could have a material adverse effect on our business financial condition, and results of operations.

Compliance with the terms and conditions of our Corporate Integrity Agreement, the Resolution Agreement with the U.S. Attorney’s Office for the Western District of Virginia and the U.S. Department of Justice (“DOJ”)’s Consumer Protection Branch, and the Stipulated Order for Permanent Injunction and Equitable Monetary Relief with the U.S. Federal Trade Commission (“FTC”), along with a similar injunction with certain State Attorneys General, requires significant resources and management time and, if we fail to comply, we could be subject to criminal charges, penalties, or, under certain circumstances, excluded from government healthcare programs, which would materially adversely affect our business.

We operate on a global basis and the pharmaceutical industry is both highly competitive and highly regulated. Complying with all applicable laws and regulations, industry standards, and our Code of Conduct are core to the Company’s mission, culture, and practices. The Company has policies and procedures to identify (e.g., through reporting of concerns and monitoring), analyze and investigate potential or actual violations of law, regulation, or policy and, if necessary, take appropriate remedial or corrective actions. Effective procedures and controls assist in helping to ensure that we provide reliable information and prevent and detect potential fraud or misconduct. Failure to comply with applicable laws and regulations may subject the Company to civil, criminal, and administrative liability, including but not limited to the imposition of substantial monetary penalties, fines, damages and restructuring of the Company’s operations through the imposition of compliance or integrity obligations, and have a potentially adverse impact on the Company’s prospects, reputation, results of operations and financial condition.

In 2020, Indivior Inc. entered into a Corporate Integrity Agreement (“CIA”) with the U.S. Department of Health and Human Services Office of the Inspector General (“HHS-OIG”) which expires in July 2025, provided however that certain provisions of the CIA may continue for up to 120 days after HHS-OIG's receipt of: (a) Indivior Inc’s final Annual Report or (b) any additional materials requested by HHS-OIG, whichever is later. The CIA was part of the Company’s resolution of federal criminal and civil charges related to our film and tablet products. In particular, the 2019 Indictment charged Indivior Inc. and Indivior PLC with health care fraud, mail fraud, wire fraud, and conspiracy to commit the same. The 2019 Indictment generally alleged that the Company had falsely represented that SUBOXONE Film was safer and less susceptible to misuse, abuse, diversion, and inadvertent pediatric exposure than SUBOXONE and SUBUTEX Tablets, purportedly to delay approval of generic versions of SUBOXONE tablets and retain market share. The 2019 Indictment were dismissed as part of a resolution agreement with the DOJ in which the Company did not admit to any wrongdoing, except that subsidiary Indivior Solutions, Inc. (“Solutions”) pleaded guilty to a one-count felony information charging Solutions with making false statements to MassHealth (the administrator of Medicaid and the Children’s Health Insurance Program (CHIP) in Massachusetts) in October 2012. The resolution agreement also settled civil claims alleging that the Company caused false claims to be submitted to government healthcare programs.

The CIA imposes significant compliance obligations on Indivior Inc.’s business and practices and requires Indivior Inc. to engage an Independent Review Organization and a Board Compliance Expert (in CIA years 1 and 3) to assess Indivior Inc.’s compliance program. The CIA also sets forth monetary penalties that may be imposed on a per-day basis for failure to comply with certain obligations in the CIA. The CIA requires procedures under which Indivior Inc. must notify HHS-OIG of certain reportable events, and must notify HHS-OIG if it fails to meet the requirements under the CIA. The CIA requires Indivior Inc. to file annual reports describing steps it has taken to implement the terms of the CIA, certifications from certain employees that their department or functional area is compliant with certain laws and regulations, and a certification from the Compliance Officer and Chief Executive Officer that Indivior Inc. is in compliance with the CIA, to the best of their knowledge. The CIA also requires an annual resolution from the Compliance, Ethics & Sustainability Committee (formerly known as the Nominating & Governance Committee) of the

Company’s Board of Directors that it has reviewed the effectiveness of the Company’s compliance program. In the event that HHS-OIG determines Indivior Inc. to be in material breach of certain requirements of the CIA, including, without limitation, repeated violations or any flagrant violation of the CIA, a failure by Indivior Inc. to report a reportable event and take corrective action, a failure to engage and use an independent review organization, among others, Indivior Inc. may be subject to exclusion from participation in the U.S. federal healthcare programs, which would have a severe impact on the Company’s ability to comply with the financial covenants in the Company’s term loan, maintain sufficient liquidity to fund its operations, generate future revenue, and would ultimately impact the Company’s viability. Further, we expect to continue most of our compliance programs following the conclusion of the term of the CIA.

The Resolution Agreement imposes several significant compliance obligations on the Company, separate from the CIA, including without limitation certain reporting obligations and the requirement that the Company’s Chief Executive Officer (a) certifies on an annual basis that, to the best of their knowledge, after a reasonable inquiry, the Company was in compliance with the U.S. Federal Food, Drug and Cosmetic Act (and implementing regulations) and has not committed healthcare fraud, or (b) provides a certified list of all non-compliant activities and steps taken to remedy the activity. The Resolution Agreement also requires an annual resolution from the Company's Board of Directors that it has reviewed the effectiveness of the Company’s Compliance Measures set forth in Section I of Addendum A to the Resolution Agreement. A material breach of the Resolution Agreement could reinstate the indictment against the Company. Our obligations under the Resolution Agreement continue until December 2027, although we have the option to end the agreement after late 2025 by prepaying the remaining amount owed.

The FTC Stipulated Order contains specific notice and reporting requirements related to certain activities, including (i) notice of filing a Citizen Petition along with certain information; (ii) notice of filing of a New Drug Application for new drug formulations related to Indivior approved drugs, (iii) requirement to provide additional information about certain launch activities related to the new drug formulation; (iv) certain restrictions on pricing of the old drug formulations and activities regarding those old drug formulations for a period of time; (v) notice of FDA Approval of a drug or if Indivior Inc. obtains a drug through a license, acquisition or through obtaining control of an entity; (vi) notice of certain corporate activities such as a dissolution, merger, acquisition of Indivior Inc.; (vii) an obligation to provide the States (defined below) with certain information and interviews necessary to evaluate compliance with the Settlement Order; and (viii) an obligation to provide reports to the States explaining how Indivior has complied with the Settlement Order, if requested. The Company may be punished for contempt of court, including, but not limited to criminal contempt, if it fails to comply with any terms of the FTC Stipulated Order or Resolution Agreement. The obligations in the FTC Stipulated Order expire in November 2030.

Similarly, in June 2023, Indivior Inc. reached agreement with the Attorneys General of 41 States and the District of Columbia (the “States”) to resolve allegations that Indivior Inc. violated the Sherman Act and laws of the States by engaging in anticompetitive activities designed to impede competition from generic equivalents of the brand-name drug SUBOXONE, which Indivior Inc. disputes. As part of the settlement, Indivior Inc. also agreed to certain compliance and reporting obligations under a Stipulated Final Judgment and Dismissal with Prejudice (the “Settlement Order”). These obligations are similar to those in the FTC Order. The obligations in the Settlement Order expire concurrently with those of the FTC Stipulated Order in November 2030.

The Company’s policies, procedures and protocols are designed to prevent and detect failures to comply with the terms of the CIA, the Resolution Agreement, the FTC Order, and the Settlement Order; however, there can be no assurance that a relevant failure that bypasses established controls will be prevented or detected. Any failure to comply with such terms may subject the Company to criminal charges and penalties, or, under certain circumstances, could exclude the Company from U.S. government healthcare programs, which could have a material adverse effect on the Company’s business, financial condition and results of operation.

Congressional action to reduce spending may result in cuts to Medicaid which in turn might impair access to our products in the U.S., thereby adversely affecting our revenues and results of operations.

Congress is considering proposals to enact significant cuts to Medicaid via its fiscal 2026 budget that may include as much as $880 billion in cuts from Medicaid and health spending projections over 10 years. Approval of such a budget does not mean immediate reductions in Medicaid but rather sets off a long legislative process. Many barriers remain to enacting major Medicaid cuts.

Any cuts in Medicaid may impair access to our products in the U.S., thereby adversely affecting our revenues and results of operations.

We are subject to additional risks because we import, manufacture, and distribute controlled substances.

Our key products in the U.S. for opioid use disorder, SUBLOCADE long-acting injectable extended-release injection, SUBOXONE Film sublingual film, and outside the U.S., SUBLOCADE (called SUBUTEX Prolonged Release in the EU), SUBOXONE and SUBUTEX sublingual tablets, contain the active ingredient buprenorphine, which is a controlled substance under the Controlled Substance Act (CSA) and similar laws in other countries. Buprenorphine is a partial agonist opioid. Compared to a full opioid agonist, buprenorphine has less maximal euphoric effect and a ceiling on its ability to cause respiratory depression. While we market these products only for the treatment of opioid use disorder, the use of any opioid is highly stigmatized. Many people who are non-prescribers may fail to distinguish between drugs of abuse and drugs intended for treatment. The lack of distinction between the types and mechanisms of opioids, like buprenorphine, versus other opioids which have indications for pain, is widely misunderstood. These perceptions and misunderstandings may cause a variety of problems for the Company, including adverse publicity and cause some persons or entities to decline to do business with us. See for example, Item 1A. Risk Factors—“We may be subject to adverse public opinion,” and —“Failure to retain key personnel or attract new personnel could have an adverse effect on us."

Products designed to treat drug addiction, by their nature, face additional risks. Drug addiction is a difficult environment in which to market our products. Societally, there is a stigma that prevents many persons who suffer from OUD or other types of addiction from coming forward to receive treatment because of potential reputational damage, societal scrutiny, and other factors. Patients with OUD often suffer from other co-morbidities, including poor general health and mental health issues like schizophrenia, which may impact one’s understanding of the disease or affect their ability to obtain treatment. Similarly, drug addiction can result in job loss or unemployment, indebtedness, and criminal problems including incarceration which may make it more difficult for someone to obtain treatment. Other challenges include the misuse, diversion, or abuse of our products.

Regulators may impose additional requirements because of the nature of our products. Buprenorphine and products containing buprenorphine are classified as Schedule III controlled substances in the U.S. by the Drug Enforcement Agency (DEA) and similarly restricted by law enforcement authorities in the Most of World that are signatories to the WHO Single Convention on Narcotic Drugs (1961). Other molecules considered as product candidates, such as INDV-6001, may have more stringent classification (i.e., Schedule II) or ambiguous classifications.

Products containing opioids often require a risk evaluation and mitigation strategy (REMS) to mitigate potential risks which may be associated with the use of a product and to inform patients and prescribers of those risks. For example, the FDA requires a REMS for SUBLOCADE and SUBOXONE Film. The SUBLOCADE REMS restricts the distribution of the product so that SUBLOCADE is dispensed directly to certified healthcare settings and pharmacies for administration by a healthcare professional. This closed distribution system should help mitigate the risk related to the potential for misuse and diversion by the patient, since the product is not dispensed directly to the patient. Other products that we sell in the future may become subject to a REMS specific to the product or shared with other products in the same class of drug. The cost to implement the REMS may be high, which may in turn have a material adverse effect on our business, financial condition, and results of operations.

Individual states have also established controlled substance laws and regulations. Though state-controlled substance laws often mirror federal law, they may separately schedule our products or our product candidates as well. We or our partners may also be required to obtain separate state registrations, permits or licenses in order to be able to manufacture, distribute, administer or prescribe controlled substances for clinical trials or commercial sale, and a failure to meet applicable regulatory requirements could lead to enforcement and sanctions by the states in addition to those from the DEA or otherwise arising under federal law.

U.S. facilities conducting research, manufacturing, distributing, importing or exporting, or dispensing controlled substances must be licensed and must comply with the security, control, recordkeeping and reporting obligations under the CSA, DEA regulations, and corresponding state requirements. The ability to do so is considerably more difficult for molecules and product candidates with a Schedule I or II classification, or ambiguous classification. In addition, the DEA and state regulatory bodies conduct periodic inspections of certain registered establishments that handle controlled substances. Obtaining and maintaining the necessary registrations and complying with regulatory obligations may result in the delay of the importation, manufacturing, distribution or clinical research of our commercial products and product candidates. Furthermore, a failure to comply with CSA, DEA or state regulations by us or any of our third-party manufacturers can result in regulatory action, which can lead to criminal or civil penalties, the refusal to renew necessary registrations or proceedings to restrict, suspend or revoke applicable registrations.

A partial or total loss of revenue due to these delays or failure to comply with these regulations could have a material adverse effect on our business, results of operations and financial condition. Further, individual distributors and pharmacies may have their own legal, regulatory or business policy requirements that could impose restrictions or limits the distribution of prescription products. A partial or total loss of revenue from one or more such shipments could have a material adverse effect on our business, results of operations and financial condition.

We are subject to risks related to the manufacture and distribution of our products globally and must meet stringent current Good Manufacturing Practices.

All facilities and manufacturing techniques used for the manufacture of our products must be operated in conformity with the mandatory manufacturing standards (often referred to as current good manufacturing practice (cGMP)) of the FDA, the U.K. Medicines and Healthcare products Regulatory Agency (“MHRA”), the Irish Health Products Regulatory Authority (HPRA), and other regulatory authorities. Manufacturing facilities are subject to periodic unannounced inspections by the FDA, MHRA, HPRA, and other regulatory authorities. Failure to comply with applicable legal and regulatory requirements, and with the manufacturing details filed as part of our marketing authorization, subjects our manufacturing facilities or the facilities of our third-party manufacturers to possible legal or regulatory action, such as inspectional observations (e.g., Form FDA 483 notices), warning letters, suspension of manufacturing, product seizure, withdrawal of the product from the market, administrative, civil and criminal penalties, among other enforcement remedies. Therefore, such enforcement actions may adversely affect our ability to manufacture, or our third-party suppliers’ ability to supply, finished products.

For example, our Raleigh Manufacturing Facility was inspected by the FDA in January 2024 and July 2024 by two separate divisions (biologics, drugs) of the FDA regarding cGMP practices related to products we make for third parties. The FDA provided observations on its Form FDA 483, which is the document used by the FDA to highlight and summarize potential quality or regulatory issues or infractions at the end of each inspection. The observations were categorized as "Voluntary Action Indicated." We have responded to the FDA with a remediation action plan to address observations from both inspections and have completed all planned remediation actions.

Also, the manufacturing and distribution of our products globally are highly exacting and complex, due in part to strict regulatory and manufacturing requirements. Problems may arise during manufacturing and distribution for a variety of reasons, including but not limited to equipment malfunction, failure to follow specific protocols and procedures, testing nonconformities (e.g., sterility failure), failure to follow and provide oversight in cGMP, defective raw materials, product theft or diversion within our legal chain of custody, restricted supply of raw materials or components due to geopolitical disruption or pandemic, and environmental factors.

Our manufacturing facilities, and those owned by third-party contract manufacturing organizations (“CMOs”), also maintain high direct and indirect labor costs due to the complexity of manufacturing processes, often requiring specialized personnel. As such internal labor costs are largely fixed, we are unable to offset such costs if we experience any interruptions or delays in the manufacturing process, product or regulatory approval delays or product suspensions or recalls. In addition, any significant personnel shortages at our manufacturing facilities, whether temporary or prolonged, may cause significant interruptions to our manufacturing facilities and to our supply of products. While some of these costs may be borne directly by third-party CMOs, we may also incur costs directly for additional safety stock and supplies, repairs, and capital expenditures for improvements, even if not required to do so contractually, or indirectly for lost sales. We may also suffer from lost sales as a result of stock outs. This is more pronounced outside the U.S. market where packaging and labeling batches for particular markets tend to be quite small, and require substantial lead time. Please refer to “Item 1. Business—Manufacturing,” for more information.

We have either a single or dual source of supply for the raw materials, product components, and drug products used in most of our marketed products, drug product candidates under development, and their respective APIs (including buprenorphine). Single sourcing puts us at risk of a potential interruption to supply in the event of manufacturing, quality or compliance difficulties. In the event of any supply chain disruption or product quality issues, our suppliers or third-party manufacturers may not have adequate contingency plans in place that enable them to continue to supply or manufacture our products within contractual deadlines or at all. If any of our suppliers or third-party manufacturers fails or refuses to supply us for any reason, it would take a significant amount of time and expense to implement and execute the necessary technology and design transfer to, and to qualify, a new supplier or manufacturer, as applicable. Often, as a general guide, this transfer time averages 36 months and is based on several factors. The FDA and similar international or national regulatory bodies must approve our filings which identify the manufacturers of the active and inactive pharmaceutical ingredients and certain packaging materials used in our products. If there are delays in qualifying new suppliers or facilities or a new supplier is unable to meet the FDA’s or similar international regulatory body’s requirements for approval, there could be a shortage of the affected products for the marketplace or for use in clinical studies, or both, which could negatively impact our anticipated revenues and could potentially cause us to breach contractual obligations with customers or to violate local laws requiring us to deliver the product to those in need. Any delay in supplying, or any failure or refusal to supply, products to, or delays in manufacturing by, our suppliers, or any catastrophe or natural or man-made disaster affecting such third-party manufacturing facilities or suppliers, could result in our inability to meet current and future state commercial demands for our products, which in turn could materially adversely affect our business, prospects, results of operations and financial condition. The Company’s supply monitoring and contingency planning processes include proactive management of inventories throughout the supply-to-patient delivery process and initiatives to identify and qualify alternative sites and/or suppliers. Despite these mitigating measures, if major delays, interruptions, or quality events occur at those contracted suppliers, contracted manufacturers, or packaging organizations, the delivery of products to our patients could be significantly disrupted, which could materially adversely affect the sales of our products and accompanying revenues. Further, any interruption in supply could result in delays in meeting our contractual obligations and could damage our relationships with our licensees, including the loss of manufacturing and supply rights and/or revenues.

We receive substantial revenue from our key proprietary products and our success depends on our ability to successfully commercialize new products.

Historically, our business has been dependent on the sale of products containing buprenorphine. We developed SUBUTEX Tablets, SUBOXONE Tablets, SUBOXONE Film and SUBLOCADE for the treatment of OUD.

We have attempted to expand to other products that are not buprenorphine but the sales of those products have been limited compared to the sales of our buprenorphine products. For example, in October

2023, we launched OPVEE (nalmefene) nasal spray for the emergency treatment of known or suspected opioid overdose induced by natural or synthetic opioids in adults and pediatric patients aged 12 years and older, as manifested by respiratory and/or central nervous system depression. However, to date, sales of OPVEE have been limited. Also, in 2019, we launched commercial sales of PERSERIS, once-monthly subcutaneous extended-release injectable suspension of risperidone indicated for the treatment of schizophrenia in adults. However, on July 9, 2024 we announced that we would cease marketing PERSERIS.

Our oral buprenorphine products, including SUBOXONE Film, SUBOXONE Tablets, and SUBUTEX Tablets, are subject to substantial competition. Revenues from film and tablet products are declining. Further, we agreed in the Resolution Agreement to not employ a sales force to promote or sell SUBOXONE Film in the U.S., and we do not sell SUBOXONE or SUBUTEX Tablets in the U.S. As a result, sales of SUBLOCADE have become increasingly important to our revenue growth and financial results.

Our operating plan assumes that SUBLOCADE, SUBOXONE Film, SUBOXONE Tablets, and SUBUTEX Tablets will remain the treatment of choice for OUD patients who can benefit from MAT in the countries where we sell these products. There is no guarantee that we can maintain sales at or near historical levels, or that sales will continue to grow. In this regard, our ability to maintain or increase sales are subject to a number of risks and uncertainties including (i) competition from the introduction of branded competition or generic versions of our products; (ii) pricing pressure from, changes in policies by, or restrictions on reimbursement imposed by, third-party payors, including governments, and our ability to maintain adequate coverage and reimbursement for our products; (iii) increased rebates required to maintain access to our products; (iv) challenges to our intellectual property around SUBLOCADE; and (v) continued acceptance of SUBLOCADE by physicians and patients. In addition, Congress continues to consider various policy proposals that may result in pressure on the prices of prescription drugs in government healthcare programs in efforts to decrease government spending. See "Congressional action to reduce spending may result in cuts to Medicaid which in turn might impair access to our products in the U.S., thereby adversely affecting our revenues and results of operations," above. Further, as organized health systems consolidate, in part due to private equity activity, we may be required to increase rebates, which would reduce the profitability of our products. Any significant negative developments relating to these risks could have a material adverse effect on our revenues from these products and, in turn, on our business, financial condition, cash flows and results of operations and the market price of our ordinary shares.

Further, the biopharmaceutical and biotechnology industries are characterized by rapidly advancing technologies. Our future success will depend in part on our ability to maintain a competitive position. If we fail to stay at the forefront of technological change to create and develop product candidates, we may be unable to compete effectively. Our competitors or technological change may limit the commercial value of our products or product candidates by advances in existing technological approaches or the development of new or different approaches, potentially eliminating the advantages of our proprietary products and product candidates.

Our ability to generate revenues from our products is subject to attaining significant market acceptance among physicians, other qualified HCPs, patients, specialty distributors, and healthcare payors and our ability to successfully develop and execute commercialization strategies for each of our products. Failure to do so would adversely impact our financial condition and prospects.

A substantial majority of our resources are focused on the commercialization of our current products. Our current products, and other products or product candidates that we may develop or acquire, may not attain market acceptance among physicians and other HCPs to administer our products, patients, specialty distributor, healthcare payors or the medical community. If any of our commercial strategies are unsuccessful or we fail to successfully modify our strategies over time due to changing market conditions, our ability to increase market share for our products, grow revenues and sustain profitability will be harmed.

Our success will also depend in large part on our ability to continue to successfully manufacture and commercialize new products in the complex markets into which they are sold.

For example, SUBLOCADE, approved in 2017 as the first once-monthly subcutaneous extended-release injectable suspension of buprenorphine. We initiated commercial sales of SUBLOCADE in 2018. It took us until 2020 before we reached $100 million in annual net revenues for SUBLOCADE. In the U.S., a competitor introduced its own subcutaneous extended-release injectable suspension of buprenorphine in 2023.

We believe the degree of market acceptance and our ability to generate revenues from our products depends on several factors, including:

• the timing of market introduction of our products as well as competitive products;
• our ability to manufacture in sufficient quantities in compliance with requirements of regulatory agencies and at acceptable quality and pricing levels in order to meet commercial demand and where applicable demand for samples;
• our ability to secure formulary approvals for products at a substantial number of targeted hospitals and Organized Health Systems (“OHSs”) and criminal justice systems (“CJSs”);
• our ability to implement and maintain agreements with wholesalers and distributors on commercially reasonable terms, and their performance, over which we have limited control;
• our ability to receive adequate levels of coverage and reimbursement for products from commercial health plans and government health programs;
• our ability to train, deploy and support qualified customer-facing field teams which include a sales force, a managed care team, account teams that target OHS and CJS, as well as a channel team;
• market demand for our products through our marketing and sales activities and other arrangements established for their promotion;
• the efficacy and safety of our products;
• potential or perceived advantages or disadvantages of our products over alternative treatments, including the cost of treatment and relative convenience and ease of administration;
• the prevalence of the disease or condition for which the product is approved and the projected growth of the markets in which our products compete;
• the effect of current and future healthcare laws and legislation and regulation controlling the conditions of treatment and the distribution of the products for OUD and overdose reversal treatments;
• our ability to increase overall public awareness of the opioid epidemic and approved treatments, as well as increasing access to BMAT treatments for patients via regulatory and legislative actions to increase access;
• the extent to which physicians diagnose and treat the conditions that our products are approved to treat, physicians’ willingness to prescribe the product, and our ability to educate physicians with respect to new products;
• the prevalence and severity of any side effects;
• the price of our products, both in absolute terms and relative to alternative treatments, including the impact of past or expected future product price increases;
• the extent to which physicians and patients delay visits or writing or filling prescriptions for our products and the extent to which operations of healthcare facilities, including infusion centers, are reduced;
• product labeling or product insert requirements of the FDA or other regulatory authorities;
• the nature of any post-approval risk management plans mandated by regulatory authorities; see “We are subject to additional risks because we import, manufacture, and distribute controlled substances,” above, and
• the convenience of prescribing, administrating and initiating patients on the product.

We have also had commercial products that have not yet been successful. For example, the FDA approved PERSERIS as the first once-monthly subcutaneous extended-release injectable suspension of risperidone indicated for the treatment of schizophrenia in adults in 2018. We launched commercial sales of PERSERIS in the U.S. in 2019. PERSERIS then faced increased competition four years later from a new competitor and a number of well-established competitors and could face additional competition in the future. On July 9, 2024, we announced that the Company would cease all sales and marketing activities related to PERSERIS. The decision was based on expectations regarding future pricing that suggested that PERSERIS would no longer be financially viable. As a result, we incurred charges for severance related to reduced headcount, manufacturing contract termination fees, and write-downs of inventory and equipment.

As for a product that is still relatively new in its launch, we recently devoted significant resources to acquire Opiant Pharmaceuticals, Inc. and its product, OPVEE, which the FDA approved in 2023. However, because most of the potential customers for OPVEE are incremental to the customers for our current OUD products, we may face challenges building a sales force and delivery network to serve these new customers. Our ability to realize the benefits from our acquisition of Opiant depends on our ability to successfully commercialize OPVEE. We launched OPVEE in October 2023 and to date have had only limited sales. If we are unsuccessful at convincing State authorities and first responders to increase their rate of adoption of OPVEE, our results of operations could suffer.

Any factors preventing or limiting the market acceptance or commercialization of our products could cause us to recognize charges as we did with PERSERIS and could have a material adverse effect on their sales and hence our business, results of operations and financial condition.

Revenues generated by sales of our products depend on the availability from third-party payors for reimbursement for our products and the extent of cost-sharing arrangements for patients (e.g., patient co-payment, co-insurance, and deductible obligations) and cost-control measures imposed, and any reductions in payment rate or reimbursement or increases in our or in patients’ financial obligation to payors could result in decreased sales of our products and/or decreased revenues.

In both U.S. and non-U.S. markets, sales of our products depend, in part, on the availability of reimbursement from third-party payors such as state and federal governments, including Medicare and Medicaid in the U.S. and similar programs in other countries, managed care providers and private insurance plans. Deterioration in the timeliness, certainty and amount of reimbursement for our products, the existence of barriers to coverage of our products, increases in our financial obligation to payors, including government payors, limitations by healthcare providers on how much, or under what circumstances, they will prescribe or administer our products or unwillingness by patients to pay any required co-payments, or deductible amounts, could reduce the use of, and revenues generated from, our products and could have a material adverse effect on our business, financial condition, cash flows and results of operations.

The U.S. federal and state governments and private payors are under intense pressure to control healthcare spending even more tightly than in the past. Cost cutting is a key initiative of the current Administration and Congress is considering various proposals to reduce funding for the Medicare and Medicaid programs. These pressures are further compounded by consolidation among distributors, retailers, private insurers, managed care organizations, and other private payors, resulting in an increase in their negotiating power, particularly with respect to our products. In addition, these pressures are intensified by increased, adverse publicity about pricing for pharmaceuticals. These prices are sometimes characterized as excessive, leading to government investigations and legal proceedings regarding pharmaceutical pricing practices.

In the U.S., federal and state legislatures, health agencies and third-party payors continue to focus on containing the cost of healthcare, including by comparing the effectiveness, benefits and costs of similar treatments. Any adverse findings for our products may reduce the extent of reimbursement for our products. Economic pressure on state budgets may also result in states increasingly seeking to limit coverage or payment for drugs, including but not limited to price control initiatives, discounts and other pricing-related actions. Over the past several years, several states have enacted drug pricing transparency laws that require companies to report on drug price increases and justify how drug prices were set, and we expect additional state or federal drug pricing initiatives to be proposed and enacted in the future. In addition, state Medicaid programs are increasingly requesting that manufacturers pay supplemental rebates and require prior authorization by the state program for use of any drug.

For example, in the U.S. market, when generic versions of a product are available, payors may impose access restrictions on the branded product, such as requiring prior authorization, imposing high patient co-pays, or precluding coverage altogether. In some cases, similar restrictions might apply when a therapeutic alternative is available. In addition, when a new product is approved, the availability of government and private reimbursement, any applicable coverage restrictions and the amount of reimbursement are all uncertain. The prices for certain of our products, when commercialized, may be high compared to other pharmaceutical products. As a result, we may encounter difficulty in obtaining satisfactory pricing and reimbursement for our new products. The failure to obtain and maintain pricing and reimbursement at satisfactory levels for our products may adversely affect our results of operations and prospects.

We may also be adversely affected by disenrollments from government benefit programs such as Medicaid. At the start of the COVID-19 public health emergency (PHE), Congress enacted the Families First Coronavirus Response Act (FFCRA), which included a requirement that Medicaid programs keep people continuously enrolled through the end of the PHI, in exchange for enhanced federal funding. Primarily due to the continuous enrollment provision, Medicaid enrollment grew substantially compared to before the pandemic and the uninsured rate has dropped. However, as part of the Consolidated Appropriations Act (CAA), signed into law in December 2022, Congress de-linked the continuous enrollment provision from the PHE thus ending continuous enrollment on March 31, 2023. During the unwinding of the continuous enrollment provision, millions of people lost Medicaid which could reverse recent gains in coverage, which we believe impacted sales of SUBLOCADE in 2024, though not everyone who loses Medicaid will become uninsured and some persons will be eligible for re-enrollment. The new Congress, sworn in January 3, 2025, is considering various changes to Medicaid financing to reduce costs, which could lead to more individuals losing coverage. These proposals include including lowering the minimum 50% Federal Medical Assistance Percentage (FMAP) match rate, reducing Medicaid expansion matching rates, implementing Medicaid per capita caps, and imposing work requirements.

Managed care organizations continue to seek price discounts and, in some cases, impose restrictions on the coverage of particular drugs. Government efforts to reduce Medicaid expenses may lead to increased use of managed care organizations by Medicaid programs, which may in turn result in managed care organizations influencing prescription decisions for a larger segment of the population and a corresponding constraint on prices and reimbursement for our products. Further, the Inflation Reduction Act of 2022, or IRA, which, among other things, requires the HHS Secretary to negotiate, with respect to Medicare units and subject to a specified cap, the price of a set number of certain high-spend drugs and biologicals per year starting in 2026, penalizes manufacturers of certain Medicare Parts B and D drugs for price increases above inflation, and makes several changes to the Medicare Part D benefit, including a limit on annual out-of-pocket costs, and a change in manufacturer liability under the program that could negatively affect us. Indirect effects of the IRA impacted market pricing of PERSERIS, our once-monthly subcutaneous extended-release injectable suspension of risperidone indicated for the treatment of schizophrenia in adults which was a contributing factor that led to our decision announced on July 9, 2024 to discontinue marketing of PERSERIS and eliminate its sales force. Congress and the Administration continue to examine various policy proposals that may result in pressure on the prices of prescription drugs in government health programs.

Reimbursement guidelines and incentives provided to prescribing physicians by third party payors may have a significant impact on the prescribing physicians’ willingness and ability to prescribe our products.

The demand for, and the profitability of, our products could be materially harmed if state Medicaid programs, the Medicare program, other healthcare programs in the U.S. or elsewhere, or third party commercial payors in the U.S. or elsewhere deny reimbursement for our products, limit the indications for which our products will be reimbursed, or provide reimbursement only on unfavorable terms.

As part of the overall trend toward cost containment, third party payors often require prior authorization for, and require reauthorization for continuation of, prescription products or impose step edits, which require prior use of another medication, usually a generic or preferred brand, prior to approving coverage for a new or more expensive product. Such restrictive conditions for reimbursement and an increase in reimbursement-related activities can extend the time required to fill prescriptions and may discourage patients from seeking treatment. We cannot predict actions that third party payors may take, or whether they will limit the access and level of reimbursement for our products or refuse to provide any approvals or coverage. From time to time, third party payors have declined to provide reimbursement for our products, and others may do so in the future.

Third party payors increasingly examine the cost-effectiveness of pharmaceutical products, in addition to their safety and efficacy, when making coverage and reimbursement decisions. We may need to conduct expensive pharmacoeconomic and/or clinical studies in order to demonstrate the cost-effectiveness of our products, and we are developing real-world evidence about the use of our products to provide information about the safety, effectiveness, of our products. If our competitors offer their products at prices that provide purportedly lower treatment costs than our products, or otherwise suggest that their products are safer, more effective or more cost-effective than our products, this may result in a greater level of access for their products relative to our products, which would reduce our sales and harm our results of operations. In some cases, for example, third party payors try to encourage the use of less expensive generic products through their prescription benefit coverage and reimbursement and co-pay policies. Because some of our products compete in a market with both branded and generic products, obtaining and maintaining access and reimbursement coverage for our products may be more challenging than for products that are new chemical entities for which no therapeutic alternatives exist.

Third party pharmacy benefit managers, or PBMs, other similar organizations and payors can limit coverage to specific products on an approved list, or formulary, which might not include all of the approved products for a particular indication, and to exclude drugs from their formularies in favor of competitor drugs or alternative treatments, or place drugs on formulary tiers with higher patient co-pay obligations, and/or to mandate stricter utilization criteria. Formulary exclusion effectively encourages patients and providers to seek alternative treatments, make a complex and time-intensive request for medical exemptions, or pay 100% of the cost of a drug. In addition, we engage with certain PBMs, other similar organizations and third party payors may exert negotiating leverage by requiring incremental rebates, discounts or other concessions from manufacturers in order to maintain formulary positions, which could continue to result in higher gross-to-net deductions for affected products to ensure patients have access to our products. Payors could decide to exclude our products from formulary coverage lists, impose step edits that require patients to try alternative, including generic, treatments before authorizing payment for our products, limit the types of diagnoses for which coverage will be provided or impose a moratorium on coverage for products while the payor makes a coverage decision. An inability to maintain adequate formulary positions could increase patient cost-sharing for our products and cause some patients to determine not to use our products. Any delays or unforeseen difficulties in reimbursement approvals could limit patient access, depress therapy adherence rates, and adversely impact our ability to successfully commercialize our products. If we are unsuccessful in maintaining broad coverage for our products, our anticipated revenue from and growth prospects for our products could be negatively affected.

In many countries outside the U.S., procedures to obtain price approvals, coverage and reimbursement can take considerable time after the receipt of marketing authorization. Many European countries periodically review their reimbursement of medicinal products, which could have an adverse impact on reimbursement status. In addition, we expect that legislators, policymakers and healthcare insurance funds in the EU member states will continue to propose and implement cost-containing measures, such as lower maximum prices, lower or lack of reimbursement coverage and incentives to use cheaper, usually generic, products as an alternative to branded products, and/or branded products available through parallel import to keep healthcare costs down.

In Europe and many other countries, government-sponsored healthcare systems are the primary payors for healthcare expenditures, including payment for drugs. We expect that these countries will continue to act to reduce expenditure on drugs, including mandatory price reductions, patient access restrictions, suspensions of price increases, increased mandatory discounts or rebates, preference for generic products, reduction in the amount of reimbursement and greater importation of drugs from lower-cost countries. Any such cost-control measures would likely reduce our revenues. In addition, certain countries set prices by reference to the prices in other countries where our products are marketed. Thus, the inability to secure adequate prices in a particular country may not only limit the marketing of products within that country, but may also adversely affect the ability to obtain acceptable prices in other markets.

There can be no assurance that our products will obtain favorable reimbursement status in any country. The failure to obtain and maintain reimbursement, or an adequate level of reimbursement, for our products may have a material adverse effect on our business, prospects, results of operations and financial condition. See also Item 1A. Risk Factors—“The pharmaceutical sector is facing increased government scrutiny from competition and pricing authorities around the world, and any failure to comply, may expose us to significant damages and commercial restrictions that can materially and adversely affect our business.”

Our revenues may grow at a slower than expected rate or decrease due to many factors.

We cannot be assured that we will be able to maintain or increase sales of our products. Factors that may cause revenues from our products to grow at a slower than expected rate, decrease or cease altogether, include, among others:

• potential changes to government funding at the federal, state, and local levels;
• the perception of physicians and other members of the healthcare community as to our products’ safety and efficacy relative to that of competing products and the willingness or ability of physicians and other members of the healthcare community to prescribe, dispense and/or administer, and patients to use, our products;
• unfavorable publicity concerning us, our products, similar classes of drugs or the industry generally;
• the cost-effectiveness of our products, the impact of price changes in the market, and the reimbursement policies of government and third-party payors;
• the cost and availability of raw materials necessary for the manufacture of our products;
• the successful manufacture of our products on a timely and cost-effective basis;
• the size of the markets for our products, and patient and physician satisfaction with our products;
• significant changes in the competitive landscape for our products, including any approval of generic versions of our products or other branded products that may compete with our products;
• adverse event information relating to our products or to similar classes of drugs;
• changes to the labels of our products, or of products within the same drug classes, to add significant warnings or restrictions on use;
• regulatory developments and actions related to the manufacture, commercialization or continued use of our products, including FDA actions such as the issuance of a REMS or warning letter, or conduct of an audit by the FDA or another regulatory authority in which a manufacturing or quality deficiency is identified;
• the extent and effectiveness of the sales, marketing and distribution support for our products, including our licensees’ decisions as to the timing and volume of product orders and shipments, the timing of product launches, and product pricing and discounting;
• exchange rate valuations and fluctuations;
• U.S. and global political changes and/or instability, and any related changes in applicable laws and regulations, that may impact resources and markets for our products; and
• the potential negative impact of current and future healthcare laws and legislation and regulation controlling the conditions of treatment and the distribution of the product including, with respect to OUD or overdose reversal treatments, new governmental or regulatory guidelines or policies limiting the prescription of opioids to patients.

We operate in a highly competitive industry, which includes companies with greater resources, including larger R&D and sales organizations, and more experience working with large and diverse product portfolios, than us. The approval and launch of generic or branded products that compete with SUBLOCADE, SUBOXONE Film, SUBOXONE Tablet, and SUBUTEX Tablet could have a material adverse effect on our business, prospects, results of operations and financial condition.

The manufacture and sale of pharmaceuticals are highly competitive. We face competition from a number of sources, some of which may target the same indications as do our products and product candidates. As our competitors develop or market alternatives for the treatment of our target indications, our commercial opportunities may be reduced or eliminated.

Our competitors may have substantially greater financial, operational and human resources than we do. Companies with more extensive resources and larger research and development expenditures have a greater ability to fund clinical trials and other development work necessary for regulatory applications. There is also a risk that our competitors may launch competing products before we are able to complete all of the regulatory milestones required to launch our own product. Competitors may also have a greater ability to offer higher rebates, discounts, chargebacks or other incentives to gain commercial advantage, and may be more successful than us in acquiring or licensing new products for development and commercialization. Smaller or earlier-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies.

If any product that competes with one of our products or product candidates is approved, our sales of that product could decrease, the effect of which would be heightened by our product and geographic concentration, which could have an adverse impact on our business, prospects, results of operations and financial condition. For example, SUBLOCADE now faces competition from BRIXADI in the U.S., and OPVEE competes with Narcan® and other generic products and other types of overdose reversal drugs, discussed below. Our products also compete with various alternatives including oral buprenorphine, methadone, and other drugs indicated for OUD, and intravenous overdose reversal agents.

In addition, many pharmaceutical companies are able to deploy more personnel to market and sell their products than us. Each of our sales representatives is responsible for a territory of significant size. The continued growth of our current products and the launch of any future products may require the expansion of our sales force and sales support organization internationally and we may need to commit significant additional funds, management and other resources to the growth of our field organization. We may not be able to achieve any such necessary growth in a timely or cost-effective manner or at all or realize a positive return on our investment. Likewise, if our R&D organization is not appropriately sized to effectively develop our current pipeline and future pipeline projects, the commercial net present value of our current pipeline and any future pipeline projects may be diminished. This in turn could materially and adversely affect our business prospects, results of operations, and financial position. Critically, investment in a novel asset pipeline is required to ensure the sustainability of Indivior through the launch of new medicines as our existing products face increasing competition through generics and alternatives.

The pharmaceutical and biotechnology industries are also characterized by continuous product development and technological change. Our products could, therefore, be rendered obsolete or uneconomic through the development of new products with unique advantages (including, e.g., new chemical entities that may be safer, more effective or more convenient than our products) or by technological advances in manufacturing or production by our competitors. In particular, several of our branded products face competition from generic products in key markets as well as competition from alternative products or treatments. Among other things, competition could continue to require us to increase further the level of rebates and other offsets to gross revenues, particularly in our U.S. operations, and could impact potential volume growth of any particular product, which could reduce our net revenues and therefore our results of operations in future periods.

Branded Products

The introduction of branded products that compete with our products may lead to a loss of sales of our products and/or a decrease in the price at which our products can be sold. For example, SUBLOCADE is distributed primarily in the U.S., Australia, Canada, Finland, Israel, and Sweden. However, Camurus, in partnership with Braeburn Pharmaceuticals, Inc., in 2023 obtained FDA approval of its LAI buprenorphine product which now competes with SUBLOCADE in the U.S. Additionally, we expect that Camurus may eventually seek approval in Canada. Camurus’ product is already well established in Sweden, Finland, Norway, and Australia, and is available in additional countries. We are seeing more dual prescribing HCPs, and we believe this trend will continue as HCPs obtain familiarity with both medications. Any of the foregoing competitive developments could have a material adverse effect on our business, prospects, results of operations and financial condition. Among other things, developments of this nature have in the past, and could in the future, require the Company to increase further the level of rebates and discounts and other offsets to gross revenues, particularly in its U.S. operations, as well as impact potential volume growth of any affected products, which, in turn, could reduce net revenues and, therefore, its results in future periods.

In addition, we could face competition even where we have patent protection. As noted above, Camurus developed an alternative to our product that ostensibly uses technology which does not infringe our patents. Alternatively, a competitor might seek to compete by asserting that our patent is either invalid, not infringed by their product, or not enforceable. Patients and HCPs may also use alternatives to our products, such as methadone.

Similarly, OPVEE (nalmefene) nasal spray competes against branded and generic naloxone nasal sprays, including Narcan® (naloxone HCI) Nasal Spray 4 mg (which is available without a prescription), along with 4 mg naloxone generic equivalents, and Kloxxado® (naloxone HCI) Nasal Spray 8 mg, as well as naloxone or nalmefene administered by syringe.

Generic Products

The introduction of generic products typically leads to a loss of sales of the branded product and/or a decrease in the price at which branded products can be sold, particularly when there is more than one generic product available in the market. In addition, legislation enacted in the U.S. allows for the dispensing of generic products and, in some instances, the dispensing of generic products rather than branded products may be required (in the absence of specific instructions from the prescribing physician). If we fail to obtain or maintain adequate patent protection, we may not be able to prevent third parties from launching generic or biosimilar versions of SUBLOCADE.

Our SUBOXONE Film product has faced four generic competitors in the U.S. for some time, and we expect a fifth competitor in early 2025. We have seen our market share of film decline from greater than 50% in 2018 to an average share of 16% in 2024 and expect further declines as other competing products become available or if existing participants choose to disrupt the market in line with industry analogs. Additionally, we no longer promote SUBOXONE Film in the U.S. and no longer sell or market our SUBUTEX Tablets and SUBOXONE Tablets in the U.S. Where we sell out tablet products globally, we generally face generic competition. For a detailed discussion of the competition that we face with respect to our current marketed products, technology platforms and product indications, please see the section entitled

“Competition” in “Item 1. Business” in this annual report. If we are unable to compete successfully in this highly competitive industry, our business, financial condition, cash flows and results of operations could be materially adversely affected.

Most of our pharmaceutical pipeline relies on collaborations with third parties, which may adversely affect the development and sale of our products.

We depend on alliances with other companies, including pharmaceutical and biotechnology companies, vendors and service providers, for the development of a portion of the products in our pharmaceutical pipeline and for the commercialization and sales of certain of our commercial products. For example, we have collaborations with third parties under which we share development rights, obligations and costs and/or commercial rights and obligations. See “Item 1. Business Overview—Pipeline.”

Our agreements with development partners typically require substantial up-front investments, potential milestone or option payments, and royalties on net sales to the development partner. For example, through our agreements with multiple collaboration partners, we have aggregate potential financial obligations of up to approximately $98 million upon the completion of all development milestones and additional potential financial obligations of an aggregate of $252 million if all sales milestones are met. Development milestones generally are payable upon the attainment of certain milestones towards and including the approval of a new product and by definition would be triggered if at all prior to the sale of such products. Sales milestones are payable upon the attainment of specified commercial sales levels. Similarly, we have potential obligations of up to $68 million in connection with a Contingent Value Agreement entered into in connection with the acquisition of Opiant Pharmaceuticals, Inc., a Delaware corporation (“Opiant”) based upon future sales of OPVEE reaching certain levels. See “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—B. Liquidity and Capital Resources,” at the caption “CVR Agreement.” While these payments, if triggered, would require substantial resources, at the same time they reflect increased value of products or potential products as development or sales milestones are attained.

Also, failures by these parties to meet their contractual, regulatory, or other obligations to us or any disruption in the relationships between us and these third parties, could have a material adverse effect on our pharmaceutical pipeline and business. In addition, our collaborative relationships for R&D and/or commercialization and sales often extend for many years and have given, and may in the future give, rise to disputes regarding the relative rights, obligations and revenues of us and our collaboration partners, including the ownership or prosecution of intellectual property and associated rights and obligations. This could result in the loss of intellectual property rights or protection, delay the development and sale of potential pharmaceutical products, affect the effective sale and delivery of our commercialized products and lead to lengthy and expensive litigation, administrative proceedings or arbitration.

There is also a trend in the specialty pharmaceutical industry of seeking to “outsource” drug development by acquiring companies with promising drug candidates. We face substantial competition from historically innovative companies, as well as companies with greater financial resources than us, for such acquisition targets.

In addition, we rely on contract research organizations and other third parties to assist in managing, monitoring and otherwise carrying out our clinical trials, including with respect to site selection, contract negotiation and data management. We do not control these third parties and, as a result, may not be able to prevent delays, interruptions, or other issues with respect to the clinical trials conducted by such third parties. They may fail to perform their contractual duties, comply with regulations or meet expected deadlines. If we, contract research organizations, our clinical investigators, or other third parties assisting us or our study sites fail to comply with applicable GCP requirements, the clinical data generated in the relevant clinical trials may be deemed unreliable and the FDA or its non-U.S. counterparts may require us to perform additional clinical trials before approving our marketing applications.

Clinical trials must be conducted with products manufactured, labeled and supplied under the FDA’s and non-U.S. regulatory agencies’ cGMP regulations and in strict compliance with local regulatory requirements (e.g., compliance with Investigational New Drug (IND) application in the U.S. and Clinical Trial Application (CTA) in Europe. Our failure, or the failure of third parties conducting clinical trials on our behalf, to comply with these regulations may require us to repeat or redesign clinical trials, which would delay the regulatory approval process or expose us to regulatory sanctions.

If our clinical trials do not meet regulatory requirements, or if the third parties conducting our clinical trials need to be replaced, our clinical trials may be extended, delayed, suspended or terminated. In addition, any delay or interruption in the supply of clinical trial supplies could delay the completion of clinical trials, increase the costs associated with maintaining clinical trials, and, depending upon the period of delay, require us to commence new clinical trials at additional expense or terminate clinical trials completely. If any of these events occur, we may not be able to obtain regulatory approval for our product candidates or succeed in our efforts to create approved line extensions for our existing products or generate additional useful clinical data in support of these products, which would adversely affect our business, prospects, results of operations and financial condition.

See also Item 1A. Risk Factors—“If we fail to develop or acquire other new products or compounds for development, our business, prospects, results of operations and financial condition could be materially adversely affected.”

Clinical trials for the development of products, including our key pipeline products, may be unsuccessful and our product candidates may not receive authorization for manufacture and sale.

Before obtaining regulatory approvals for the commercial sale of each product under development, we must demonstrate, through pre-clinical, clinical and other studies, that the product is safe and effective for the claimed use or uses, and also demonstrate that the product is of appropriate quality. No assurance can be provided that a clinical study will demonstrate that a particular product candidate safely provided hypothesized benefits.

Our lead development products are INDV-2000 (selective orexin-1 receptor antagonist) for which two Phase 1 clinical trials (single and multiple ascending dose studies) have been completed and for which we initiated a clinical Phase 2 proof-of-concept study in the second quarter of 2024; and INDV-6001 (buprenorphine based LAI) for which we initiated a multiple-dose pharmacokinetic Phase 2 clinical study in the third quarter of 2024. However, the results from early clinical trials may not be indicative of results obtained in later and larger clinical trials, and therefore these product candidates may fail to show the desired safety and efficacy in later clinical trials despite having progressed successfully through initial clinical testing. In that case, the FDA or the equivalent regulatory authority in jurisdictions outside the U.S. may determine that our data are not sufficiently compelling to warrant marketing approval and may require us to engage in additional clinical trials or provide further analysis which may be costly and time-consuming and substantially delay the receipt of such regulatory approval, which may delay the launch of any potential product or ultimately decline to provide approval.

Also, the development process takes many years and can be very expensive. Many companies in the pharmaceutical industry have suffered significant setbacks in drug development and there can be no guarantee that FDA approval will ultimately be obtained for any given product. The number and duration of pre-clinical studies and clinical trials that are required vary depending on the product candidate, the indication being evaluated, the trial results and the regulations applicable to the particular product candidate. Such clinical and other studies can be delayed or halted for a variety of reasons, including:

• challenges in identifying clinical development pathways, including appropriate clinical trial protocol design, particularly where there is no regulatory precedent;
• delays or failures in obtaining regulatory authorization to commence a trial because of safety concerns of regulators relating to our product candidates or similar product candidates of our competitors or failure to follow regulatory guidelines;
• delays or failures in obtaining clinical materials and sufficient quantities of the product candidate for use in trials;
• delays or failures in reaching an agreement on acceptable terms with prospective study sites;
• delays or failures in obtaining approval of our clinical trial protocol from an institutional review board or ethics committees to conduct a clinical trial at a prospective study site;
• delays in identifying, recruiting, or enrolling patients to participate in a clinical trial;
• failure of clinical investigators to comply with FDA and other regulatory agencies’ good clinical practice (“GCP”) requirements;
• unforeseen safety issues, including negative results from ongoing pre-clinical studies and adverse events associated with product candidates;
• inability to monitor patients at multiple study sites adequately during or after treatment;
• disagreements with collaborative partners on the planning and execution of product development; or
• insufficient funds to complete the trials.

For example, regulatory approval to conduct clinical studies for one of our non-opioid OUD treatments was delayed due to a clinical hold originating with FDA’s concerns related to a third-party’s product, rather than our own product. Also, in September 2024, following a Phase II clinical trial that failed to meet its primary endpoint, we made the decision to not exercise our option for AEF0117, a synthetic CB1-specific signaling inhibitor, which we had acquired in June 2021 from the French company Aelis Farma.

We rely on clinical investigators and clinical sites to enroll patients and sometimes third parties to manage our trials and to perform related data collection and analysis. However, while we can set certain contractual expectations, we may be unable to control the amount and timing of resources that the clinical sites which conduct the clinical testing may devote to our clinical trials.

Our clinical trials also may be delayed or terminated due to the inability of our clinical investigators to enroll enough qualified patients. Patient enrollment depends on many factors, including the size of the patient population, the nature of the trial protocol, the proximity of patients to clinical sites and the eligibility criteria for the trial. If our clinical investigators and clinical sites fail to enroll a sufficient number of patients in our clinical trials or fail to enroll them on our planned schedule, we may face increased costs, delays or termination of the trials, which could delay or prevent us from obtaining regulatory approvals for our product candidates.

Our agreements with clinical investigators and clinical sites for clinical testing and for trial management services place substantial responsibilities on these parties, which could result in delays in, or termination of, our clinical trials if these parties fail to perform as expected. For example, if any of our clinical trial sites fail to comply with FDA-approved GCPs, we may be unable to use the data gathered at those sites. If these clinical investigators, clinical sites or other third parties do not carry out their contractual duties or obligations or fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to their failure to adhere to our clinical protocols or for other reasons, our clinical trials may be extended, delayed or terminated, and we may be unable to obtain regulatory approval for, or successfully commercialize, our product candidates.

The clinical study or commercial use of our products may cause unintended side effects or adverse reactions, or incidents of misuse may occur, which could adversely affect our products, business and share price.

The administration of drugs to humans carries the inherent risk of product liability claims whether or not the drugs are actually the cause of an injury. Our products may cause, or may be perceived to have caused, injury or clinically significant drug interactions or may produce undesirable or unintended side effects, and we may not learn about or understand those effects until the products have been administered to study participants or patients for a prolonged period of time. Additionally, incidents of product misuse may occur. We cannot be certain that the clinical or commercial use of our products will not produce undesirable or unintended side effects that have not been evident in the use of, or in clinical trials conducted for, such products to date. Risks can vary widely based on individual health conditions, demographics, and concurrent medications. Indivior follows strict regulatory guidelines and quality standards to ensure the safety and efficacy of our products via ongoing monitoring, including post-marketing safety surveillance.

For example, the Company has been named as a defendant in numerous lawsuits alleging that SUBOXONE Film was defectively designed and caused dental injury, and that the Company failed to properly warn of the risks of such injuries. See Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 16. Commitments and Contingencies. Product liability cases such as these typically involve issues relating to medical causation, label warnings and reliance on those warnings, scientific evidence and findings, actual/provable injury and other matters. These lawsuits and claims followed required revision in the U.S. to the Prescribing Information and Patient Medication Guide about dental problems reported in connection with buprenorphine medicines dissolved in the mouth to treat opioid use disorder. This revision was required by the FDA of all manufacturers of these products. See Item 1A. Risk Factors—“The FDA, the DEA, or other regulatory agencies may impose limitations or post-approval requirements on approvals for our products” and "Product liability and product recalls could have a material adverse effect on us," below.

Additionally, simply sponsoring a clinical trial carries with it exposure for other tort liability. It is possible that an unrelated product or procedure required to be performed as part of the protocol for our clinical trial could cause harm or be perceived to cause harm to a subject, due to an adverse reaction or otherwise. In that case, we could be seen as being at fault because we sponsored the clinical trial and designed the protocol that required that the product be used or procedure be done.

These events, among others, could result in product recalls or additional regulatory controls (including additional regulatory scrutiny and requirements for additional labeling or risk mitigation measures) or product liability claims. If there is a liability finding, various factors could affect reimbursement of payment by insurers, including (i) the scope of the insurers’ purported defenses and exclusions to avoid coverage, (ii) the outcome of negotiations with insurers, (iii) delays in or avoidance of payment by insurers and (iv) the extent to which insurers may become insolvent in the future. Additionally our product liability insurance coverage may be inadequate to satisfy liabilities that arise and we may be unable to obtain adequate coverage at an acceptable cost. This could prevent or limit the development or commercialization of our products. In addition, the reporting of adverse drug reactions and product quality complaints involving our products, including instances of product misuse, and public rumors about such events could cause our product sales or share price to decline or experience periods of volatility. These types of events could have a material adverse effect on our business, financial condition, cash flows and results of operations.

We face additional risks as a manufacturer that manufactures pharmaceutical products for others and, in the future, for ourselves.

With the 2023 purchase of our Raleigh Manufacturing Facility, we assumed obligations to manufacture drugs and other products for third parties. We purchased the Raleigh Manufacturing Facility with a view towards eventually manufacturing some of our products there in order to ensure supply security. There may also be potential to improve manufacturing costs. However, before doing so, we will need to (i) perform our obligation under existing contracts and meet related regulatory requirements with respect to those products, and (ii) invest in additional capital equipment and testing before we can secure our long-term supply. As a result, we face additional risks, and the risks discussed in this report may apply to both our business as well as our activities as a contract manufacturer of products for others.

a. Onerous contracts. In connection with our acquisition of the Raleigh Manufacturing Facility, the Company assumed onerous contracts and carries a provision of $6 million. The facility continues to manufacture products for customers based on the terms of contracts that existed pre-acquisition and the expected costs to fulfill these contracts are in excess of the economic benefits expected to be received by the Company. We expect the minimum performance period in the onerous contracts to have ended by June 30, 2025.

b. Expected operating losses. In addition to the provision for onerous contracts which we recognized at the time of acquisition, we expect to incur incremental operating costs over the next year for items such as depreciation of excess capacity, incremental compensation expense from additional headcount, and incremental information technology and other expenses, resulting in expected operating losses for the Raleigh Manufacturing Facility.

c. Expected investment in capital equipment. In order to produce Indivior products at the Raleigh Manufacturing Facility, we will need to invest in the build-out of an aseptic syringe filling suite with supporting manufacturing process equipment and warehouse expansion that will need to be qualified, followed by the technology transfer of our manufacturing process to be validated for regulatory approval. We expect to make capital expenditures of approximately $50 million to $70 million in 2025, primarily to establish and scale manufacturing of SUBLOCADE at the Raleigh Manufacturing Facility. Any changes to our cost estimates or delays in obtaining regulatory approval of our manufacturing site may increase our expenses or delay our ability to manufacture our own products at the Raleigh Manufacturing Facility and correspondingly delay expected cost savings.

d. Quality Control and Product Safety. As a manufacturer of pharmaceutical products for third parties, we are responsible for ensuring the quality, safety, and efficacy of the pharmaceutical products we manufacture. Any deviations from quality standards or safety concerns could result in FDA enforcement actions, product recalls, legal liabilities, damage to our reputation, and financial losses.

e. Product Liability and Litigation. The pharmaceutical industry is susceptible to product liability claims and lawsuits. Any adverse events, side effects, or alleged defects in the pharmaceutical products we manufacture could result in litigation, regulatory actions, and financial liabilities.

f. Data Integrity and Record Keeping. Accurate and compliant recordkeeping is crucial in the pharmaceutical industry. Any issues related to data integrity or recordkeeping practices may result in regulatory actions, warning letters, or sanctions by the FDA.

g. Regulatory Changes and Uncertainties. Our operations are subject to evolving regulatory requirements, policies, and interpretations by the FDA. Changes in regulations or guidelines could require us to modify our manufacturing processes, quality control measures, or documentation practices, which may result in additional costs or delays.

h. FDA Inspections and Audits. We are regularly subject to inspections and audits of our manufacturing facilities by the FDA and other regulators to assess compliance with current Good Manufacturing Practices (cGMPs) and other regulatory standards. Any deficiencies or non-compliance identified during these inspections could lead to warning letters, import bans, product recalls, or delays in approvals, which could adversely affect our business and reputation. See Item 1A. Risk Factors—"We are subject to ongoing obligations and continued regulatory inspection by the FDA and equivalent foreign regulatory agencies, and we may be subject to penalties and litigation and large incremental expenses if we fail to comply with regulatory requirements or experience problems with our products," below.

i. Ability to Secure Supply. Whether we can achieve our goals of enhancing supply security will depend on whether we can successfully integrate the Raleigh Manufacturing Facility and its workforce into our operations, our ability to install, validate, and secure FDA approval of a new manufacturing line, and our ability to operate the facility efficiently.

If we fail to develop or acquire other new products or compounds for development, our business, prospects, results of operations and financial condition could be materially adversely affected.

A key element of our long-term strategy is to develop or acquire and commercialize a portfolio of other products or product candidates in addition to our current products, through business or product acquisitions. Because we dedicate only a small portion of our own resources towards proprietary drug discovery, the success of this strategy depends in large part upon the combination of our regulatory, development and commercial capabilities and expertise and our ability to identify, select and acquire approved or clinically enabled product candidates for therapeutic indications that complement or augment our current products, or that otherwise fit into our development or strategic plans on terms that are acceptable to us. For example,

• We are developing INDV-6001 (buprenorphine-based LAI) for the treatment of OUD in collaboration with Alar Pharmaceuticals Inc.
• We are developing INDV-2000 (Selective Orexin-1 Receptor Antagonist), a non-opioid treatment for moderate to severe opioid use disorder.
• In 2023, we completed the acquisition of Opiant, a specialty pharmaceutical company that developed OPVEE for opioid overdose reversal.

See “Item 1.Business —Pipeline,” for more information.

Identifying, selecting and acquiring promising products or product candidates requires substantial technical, financial and human resources expertise. Efforts to do so may not result in the actual acquisition or license of a particular product or product candidate, potentially resulting in a diversion of our management’s time and the expenditure of our resources with no resulting benefit. In addition, we face substantial competition from historically innovative companies, as well as companies with greater financial resources than us, for such acquisition targets. If we are unable to identify, select and acquire suitable products or product candidates from third parties or acquire businesses at valuations and on other terms acceptable to us, or if we are unable to raise the capital required to acquire businesses or new products, our business and prospects will be limited.

In addition, any growth through business development will depend upon us identifying and obtaining product candidates, our ability to develop those product candidates and the availability of funding to acquire, complete the development of, obtain regulatory approval for and commercialize these product candidates. Doing so is complex and we may not be able to successfully manage the risks or other anticipated and unanticipated problems in connection with an acquisition or in-licensing, and may not be able to realize the anticipated benefits of any acquisition or in-licensing for a variety of reasons, including the possibility that a product candidate proves not to be safe or effective in later clinical trials, a product fails to reach its forecast commercial potential or the integration of a product or product candidate gives rise to unforeseen difficulties and expenditures. It is common for multiple products and product candidates to be evaluated for the same indication by multiple parties at the same time, and we cannot predict whether the expected commercial potential for our products will come to fruition. Any failure in identifying and managing these risks and uncertainties effectively would have a material adverse effect on our business, prospects, results of operations and financial condition.

To continue to grow our business over the longer term, we plan to commit resources to product acquisition and in-licensing, product development, clinical trials of product candidates and expansion of our commercial, development, manufacturing and other operations. Acquisition opportunities that we pursue could materially affect our liquidity and capital resources and may require us to incur additional indebtedness, seek equity capital or both. Our ability to raise additional capital may be adversely impacted by worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the U.S. and worldwide resulting from the effects of inflationary pressures, potential future bank failures or otherwise. In addition, under U.K. law we must have authority from our shareholders to issue any ordinary shares, including ordinary shares that are part of our authorized but unissued share capital, and we currently have such authorization until May 2025. An inability to borrow or raise additional capital in a timely manner and on attractive terms could prevent us from expanding our business or taking advantage of acquisition opportunities and could otherwise have a material adverse effect on our business and growth prospects. In addition, if we use a substantial amount of our funds to acquire or in-license products or product candidates, we may not have sufficient additional funds to conduct all of our operations in the manner we would otherwise choose.

Moreover, any product candidate we acquire may require additional, time-consuming development or regulatory efforts prior to commercial sale or prior to expansion into other indications, including pre-clinical studies if applicable, and extensive clinical testing and approval by the FDA and applicable foreign regulatory authorities. All product candidates are prone to the risk of failure that is inherent in pharmaceutical product development, including the possibility that the product candidate will not be shown to be sufficiently safe and/or effective for approval by regulatory authorities. In addition, we cannot assure that any such products that are approved will be manufactured or produced economically, successfully commercialized or widely accepted in the marketplace or be more effective or desired than other commercially available alternatives. Any failure in identifying and managing these risks and uncertainties effectively would have a material adverse effect on our business, prospects, results of operations and financial condition, and any unsuccessful effort may require us to write down prior investments.

See also Item 1A. Risk Factors—“We receive substantial revenue from our key proprietary products and our success depends on our ability to successfully commercialize new products.”

Acquisitions, partnerships, joint ventures, dispositions, and other business combinations or strategic transactions involve several inherent risks, any of which could result in the benefits anticipated not being realized and could have an adverse effect on our business, financial condition, and results of operations.

Acquisitions are an important part of our growth model and we regularly consider and enter into strategic transactions, including mergers, acquisitions, investments and other growth, market and geographic expansion strategies, with the expectation that these transactions will result in increases in sales, cost savings, synergies and various other benefits. For example, in March 2023 we acquired Opiant Pharmaceuticals in exchange for $146 million in cash and potential future payments of up to $68 million upon the completion of certain sales milestones pursuant to a contingent value rights agreement. See Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 18. Asset Acquisitions. We also made a number of smaller acquisitions in 2023.

In the future, our ability to acquire additional companies or products synergistic with our current businesses may be limited by antitrust regulators who may be particularly vigilant in our markets because we serve at-risk populations and because we already market several products in the space.

We may fail to realize anticipated benefits from such transactions or partnerships, or any future ones, we may be exposed to additional liabilities or compliance violations of any acquired business or joint venture and we may be exposed to litigation in connection with any transaction. Furthermore, we may have trouble identifying suitable acquisition targets in the future. Our ability to deliver the expected benefits from any strategic transactions is subject to numerous uncertainties and risks, including our acquisition assumptions; our ability to integrate personnel, labor models, financial, supply chain and logistics, IT and other systems successfully; disruption of our ongoing business and diversion of management time; the need to hire additional management and other critical personnel; and increasing the scope, geographic breadth and complexity of our operations.

In addition, the integration of acquired businesses may create complexity in our financial systems and internal controls and make them more difficult to manage or cause us to fail to meet our financial reporting obligations. Any impairment of goodwill or other assets acquired in a strategic transaction or charges to earnings associated with any strategic transaction as well as any failure by the acquired business to produce the expected margins or cash flows, may materially reduce our profitability. Furthermore, we may finance these strategic transactions by incurring additional debt or raising equity, which could increase leverage or impact our ability to access capital in the future.

We may be subject to adverse public opinion.

The pharmaceutical industry is frequently subject to adverse publicity on many topics, including product recalls and research and discovery methods, as well as political controversy over pharmaceutical pricing, and the impact of novel techniques and therapies on humans, animals, and the environment, among others. Among our products, we manufacture and market buprenorphine-based medications for the treatment of moderate-to-severe opioid use disorder. While these medications are indicated to treat opioid use disorder, they are opioids and may be viewed negatively by the public. Negative publicity about us or our products, about the medications for the treatment of opioid use disorder, or about the industry as a whole, may adversely affect our corporate reputation, which could impact our operations, impair our ability to gain market acceptance for our products or lead to government intervention, which in turn could have an adverse impact on our business, prospects, results of operations and financial condition.

For example, our 2020 settlement with the DOJ created substantial adverse publicity and may have made it more difficult for some to distinguish our company, which works to address the opioid crisis, from those companies that created or exacerbated the opioid crisis. See “Item 1: Business — Overview.” In announcing the settlement, the DOJ made a point to note that our medicines are opioids. This and other potential adverse publicity may reduce the willingness of third parties to do business with us, including credit providers and other investors, technology licensors, advocacy organizations, or potential employees, and may harm our ability to engage with policymakers on public policy issues critical to our business. For instance, in recent years, some state and federal officials were unwilling to meet with us to discuss policy issues while we were under government investigation, as were some third party groups.

Failure to retain key personnel or attract new personnel could have a material adverse effect on us.

We rely upon several key executives and employees who have an in-depth and long-term understanding of the industry and the disease space and our technologies, products, programs, collaborative relationships and strategic goals. Key personnel include experienced employees with specific expertise and the ability to compliantly interact with healthcare providers, key opinion leaders, and key decision makers across the healthcare industry.

On February 27, 2024, we announced that the Company has appointed Joe Ciaffoni, currently an Independent Non-Executive Director of the Company, as Chief Executive Officer. The terms of his appointment are subject to, and effective upon, the approval by shareholders of a new remuneration policy at the Company’s AGM in May 2025, and there is no assurance that such approval will be obtained. By mutual agreement, Mark Crossley will be stepping down as Chief Executive Officer and as a Board Director and is expected to remain as CEO until at least the date of the Company’s AGM in May 2025. If shareholders fail to approve the remuneration policy at the Company’s AGM, there is no assurance that we would be able to secure the services of Mr. Ciaffoni or others with similar qualifications, which could have a material adverse impact on the business.

In particular, we must compete with other pharmaceutical and life sciences companies to recruit, hire, train and retain sales and marketing personnel as well as research and development personnel. Competition for such personnel in the pharmaceutical and biotechnology industries is intense, and there can be no assurance that we will be able to recruit or retain such personnel. If our sales force and sales organization are not appropriately sized to promote any current or potential future products adequately, the commercial potential of our current products and any future products may be diminished.

We do not carry “key person” insurance. The loss of the services of any of our key executives or employees could delay or prevent the successful completion of some of our vital activities. Any employee may terminate his or her employment at any time without notice or with only short notice and without cause or good reason. The resulting loss of institutional knowledge may have a material adverse effect on our operations and future growth.

As a result of the above factors, any failure to retain key personnel or attract new personnel could have a material adverse effect on our business, prospects, results of operations and financial condition.

We use hazardous materials in our manufacturing facilities, and any claims relating to the improper handling, storage, release or disposal of these materials could be time-consuming and expensive.

Our operations are subject to complex and increasingly stringent environmental, health and safety laws and regulations in the countries where we operate and, in particular, in the U.K. and U.S. where we have manufacturing and R&D facilities. The costs of compliance with environmental, health and safety laws and regulations are significant. If an accident or contamination involving pollutants or hazardous substances occurs, an injured party could seek to hold us liable for any damages that result, and any liability could exceed the limits or fall outside the coverage of our insurance. We may not be able to maintain insurance with sufficient coverage on acceptable terms, or at all. Costs, damages and/or fines may result from the presence, investigation and remediation of such contamination at properties currently or formerly owned, leased or operated by us or at off-site locations, including where we have arranged for the disposal of hazardous substances or waste. In addition, we may be subject to third-party claims, including for natural resource damages, personal injury and property damage, in connection with such contamination, or in some cases for contamination or pollutants at properties we own caused by prior owners. We have developed and implemented a proprietary risk mitigation program to preemptively identify and address environmental, health, safety and security risks; however, there can be no assurance that a violation of current or future environmental, health or safety laws or regulations will not occur. Any violations, even if inadvertent or accidental, or the cost of compliance with any resulting order, fine or liability that may be imposed, could materially adversely affect our business, financial condition, cash flows and results of operations.

Risks Related to Intellectual Property

We may incur substantial costs as a result of litigation or other proceedings relating to patents and other intellectual property rights, and we may be unable to protect our rights to, or commercialize our products.

Litigation and other similar proceedings, such as inter partes reviews in the U.S. (which are initiated by third parties to challenge the validity of a patent) relating to infringement, validity or misappropriation of patent and other intellectual property rights in the pharmaceutical and life sciences industry are common. We may receive notifications of challenges to the validity of our patents or alleged infringement of patents owned by third parties. For example, we incurred significant costs in connection with the ANDA proceedings relating to SUBOXONE Film in the U.S. from 2013 through 2023 and were ultimately unable to enforce our patents against two of the challengers. If we choose to go to court to prevent a third party from infringing our patents, our licensed patents or our partners’ patents (where we have the right to do so), that allegedly infringing third-party has the right to ask the court to rule that these patents are invalid and/or should not be enforced against that third-party.

Separately, other third parties may allege that patents on our other products or product candidates are not valid. These lawsuits are expensive and, as with the SUBOXONE ANDA litigation, could cost the Company several million dollars per year. They are time-consuming and could divert management’s attention from the day-to-day operation of our business. In addition, there is a risk that a court will decide that these patents are not valid or not infringed and that we do not have the right to prevent the other party from using the patented subject matter. There can be no assurance that these, or other litigation that we may file in the future, will be successful in preventing the infringement of our patents, that we will be able to successfully defend the validity of our patents, that any such litigation will be cost-effective, or that the litigation will have a satisfactory result for us. In addition, such litigation diverts the attention of management and development personnel. Failure to stop infringement of our patents or an unsatisfactory result in litigation would adversely affect our business and results of operations.

Additionally, when enforcing such patents, we risk being subject to potential liability as a result of counterclaims and related damages, including potential antitrust violations, among other things. For example, Dr. Reddy’s Laboratories (“DRL”) and Alvogen pursued claims for wrongful injunction damages, and further asserted antitrust counterclaims against the Company, after the Company sought to enforce particular patent claims against DRL and Alvogen. The Company reached settlements with DRL and

Alvogen in 2022 and 2023, respectively. See Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 11. Accrued Litigation Settlement Expenses.

A third-party may claim that we or our manufacturing or commercialization partners are using inventions covered by the third-party’s patent rights, or that we or such partners are infringing, misappropriating or otherwise violating other intellectual property rights, and may go to court to stop us from engaging in our ordinary course operations and activities, including manufacturing or selling our products. There is a risk that a court could decide that we or our partners are infringing, misappropriating or otherwise violating third-party patents or other intellectual property rights, which could have a material adverse effect on our business and results of operations. In addition, such litigation diverts the attention of management and development personnel.

We may initiate or defend legal proceedings relating to our patents alongside a collaborator or third-party with an interest or right in the relevant patents. In this scenario, our strategy for asserting or defending our rights might be impacted by that of our co-claimant or co-defendant which, in turn, may have an adverse impact on our existing commercial relationship.

In the pharmaceutical and life sciences industry, like other industries, it is not always clear to industry participants, including the Company, which patents cover various types of products or methods. The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform. If we are sued for patent infringement, we would need to demonstrate that our products or methods do not infringe the patent claims of the relevant patent and/or that the patent claims are invalid or unenforceable, which we may not be able to do, and which could in turn result in our being required to pay substantial sums. These sums potentially include damages, legal fees, and increased damages if we are found to have infringed such rights willfully. Further, if a patent infringement suit is brought against us, our research, development, manufacturing, or sales activities relating to the product or product candidate that is the subject of the suit may be delayed, materially affected, or terminated by the grant of an injunction against us.

We cannot be certain that others have not filed patent applications for inventions covered by our licensors’ or our issued patents or pending applications, or that we or our licensors were the first inventors. Our competitors may have filed, and may in the future file, patent applications covering subject matter similar to those of the Company. Any such patent application may have priority over our or our licensors’ patents or applications and could further require us to obtain rights to patent rights covering such subject matter. In the U.S., if another party has filed a patent application on inventions similar to those of the Company, we may have to participate in an interference or deviation proceeding declared by the USPTO to determine the priority of invention in the U.S. The costs of these proceedings could be substantial, and it is possible that such efforts would be unsuccessful, resulting in a loss of our U.S. patent position with respect to such inventions.

As a result of patent infringement claims, or in order to avoid potential infringement claims, we or our collaborators may choose to seek, or be required to seek, a license from the third-party, which would be likely to include a requirement to pay license fees or royalties or both. These licenses may not be available on acceptable terms, or at all. Even if a license can be obtained on acceptable terms, the rights may be non-exclusive, which would potentially give our competitors access to the same intellectual property rights. If we are unable to enter into a license on acceptable terms, we, or our collaborators, could be prevented from commercializing one or more of our product candidates, or forced to modify such product candidates, or cease some aspect of our business operations, which could adversely affect our business, prospects, results of operations or financial condition.

The cost to us of any patent litigation or other proceedings, even if resolved in our favor, could be substantial. Some of our competitors may be able to sustain the costs of complex patent and other intellectual property litigation more effectively than we can because they have substantially greater resources than the Company. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue its operations.

Any of the foregoing could have a material adverse effect on our business, prospects, results of operations and financial condition.

We may not be able to protect our intellectual property rights throughout the world which could have an adverse effect on our business, results of operations and financial condition.

Filing, prosecuting and defending patents relating to all of our product candidates and technologies throughout the world would be prohibitively expensive. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products, and further, may export otherwise infringing products to territories where we have patent protection but where enforcement is more difficult. These products may compete with our future products in jurisdictions where we do not have any issued patents and our patent claims or other intellectual property rights may not be effective or sufficient to prevent them from so competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, which could make it difficult for us to stop infringement of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert efforts and attention from other aspects of our business, which could adversely affect our operations and financial condition. Moreover, our patent rights can be challenged in post-grant or inter partes review. For example, our patents for SUBLOCADE were challenged in the EU patent office under two separate European opposition proceedings. However, both of those proceedings were dismissed.

Failure to obtain and maintain patents and protect other proprietary rights, including in-licenses of such rights from third parties, may adversely affect us.

Our success depends, in large part, on our ability to obtain and maintain patent and other intellectual property protection, particularly for our drug, compound, product, delivery, formulation and methods of treatment technologies and associated manufacturing processes in relation to both our products and our product candidates. The process of obtaining patents can be lengthy and expensive. We own, or in-license, several patent rights in the U.S. and other countries covering certain products and have also developed brand names and trademarks for other products. We will be able to protect our proprietary rights from unauthorized use by third parties only to the extent that our proprietary technologies and future products are covered by valid and enforceable patents or are effectively maintained as trade secrets or confidential information within the Company. Our existing patents, and any future patents we obtain, may not be sufficiently broad to prevent others from using our technologies or from developing competing products and technologies. If third parties disclose or misappropriate our proprietary rights, it may materially and adversely impact our business, prospects, results of operations and financial condition. Moreover, our ability to obtain and enforce patents and other proprietary rights is critical to our business strategy and success.

The patent positions of many pharmaceutical and life sciences companies are highly uncertain and involve complex legal and factual questions. In some cases, the legal principles that apply to these cases may be changing or unresolved. As a result, the validity and enforceability of our patents cannot be predicted with certainty. In addition, we cannot guarantee that:

• we were the first to make the inventions covered by each of our issued patents and pending patent applications;
• we were the first to file patent applications for these inventions;
• patents will be granted in connection with any of our currently pending or future applications;
• other companies will not independently develop similar or alternative technologies or duplicate any of our technologies by inventing around our claims;
• a third-party will not challenge our proprietary rights, and if challenged that a court will hold that our patents are valid and enforceable;
• any patents issued to us or our collaboration partners will cover our products as ultimately developed, or provide us with any competitive advantages, or will not be challenged by third parties;
• we will develop additional proprietary technologies that are patentable; or
• the patents of others will not have an adverse effect on our business.

We also rely on trade secrets and other unpatented confidential information to maintain our competitive position but there can be no assurance that others may not independently develop the same or similar products or technologies, and may also obtain patents and other intellectual property protection for them. We have sought to protect trade secrets and confidential information, in some cases through the provisions of confidentiality and non-use agreements with our employees, consultants, advisers and partners.

Nevertheless, it may not always be possible to prevent the disclosure of our trade secrets and other confidential information and for us to obtain an adequate remedy in the event of unauthorized disclosure or use of such information. In addition, if our employees, consultants or partners develop inventions or processes independently that may be applicable to our products or technologies under development, such inventions and processes will not necessarily become our property, but may remain the property of those persons or their employers or the persons may be entitled to compensation in respect of those inventions. Protracted and costly litigation could be necessary to enforce and determine the scope of our proprietary rights.

We have entered into several collaborative arrangements for the development and commercialization of products including with Aquestive for the production of SUBOXONE Film and with Curia for the production of SUBLOCADE. In connection with such arrangements, we have shared certain of our proprietary knowledge with our partners, and it may not be possible or practical to prevent our partners from developing similar or functionally equivalent products. Any disputes between us and such partners may threaten our ability to continue using such proprietary knowledge and, in turn, could impact our ability to market our products. We have also engaged in collaborations, sponsored research agreements and other arrangements with academic researchers and institutions, some of which have received and may receive funding from government agencies. Although we have sought to retain ownership of all intellectual property rights pertaining to inventions that may result from such collaborations, there can be no assurance that governments, institutions, researchers or other third parties will not also attempt to claim certain rights to such inventions.

If we fail to obtain and maintain sufficient intellectual property protection for our current and future products and technologies and if third parties disclose or misappropriate our proprietary rights, our ability to successfully and fully exploit these products and technologies could be adversely affected, which in turn would adversely affect our business, prospects, results of operation and financial condition.

We may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.

As is common in the pharmaceutical industry, we employ individuals who were previously employed at other pharmaceutical, biotechnology, or medical device companies, including our competitors or potential competitors. Although no such claims against us are currently pending, we may be subject to claims that these employees or we have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.

Risks Related to Regulatory or Legal Matters

The regulatory approval process is expensive, time-consuming, and uncertain and may prevent us or our partners from obtaining approvals for the commercialization of some or all of our product candidates. Further, the FDA or other regulatory agencies may not agree with our regulatory approval strategies or components of our filings for our products and may not approve, or may delay the approval of, our products.

The research, development, testing, manufacturing, approval, labeling, advertising and promotion, distribution and import and export of pharmaceutical products are subject to extensive regulation, and regulations differ from country to country. We must obtain government approvals before marketing or selling our products. Approval in one jurisdiction does not ensure approval in other jurisdictions. The regulatory approval process is lengthy, expensive and uncertain, and we may be unable to obtain approval for our product candidates. The FDA in the U.S., and comparable regulatory agencies in other jurisdictions, impose substantial and rigorous requirements for the development, manufacture and commercialization of products, the satisfaction of which can take a significant number of years and can vary substantially based upon the type, complexity and novelty of the product.

For example, in the U.S., the process for obtaining marketing approval for a drug or biologic product candidate generally includes (a) conducting preclinical laboratory and animal testing and submitting the results to the FDA in an investigational new drug application (IND) requesting approval to test the product candidate in human clinical trials; (b) conducting adequate and well-controlled human clinical trials to establish the safety and efficacy of the product candidate in the desired indication; (c) submitting an NDA, biologics license application (BLA), or supplemental NDA/BLA, as appropriate, and (d) completing inspections by the FDA of the facilities where the product candidate is manufactured, analyzed and stored to demonstrate compliance with cGMP, and any requested FDA audits of the clinical trial sites that generated the data supporting the application.

In addition, regulation is not static, and regulatory agencies, including the FDA, evolve in their staff, interpretations, and practices and may impose more stringent requirements than currently in effect, which may adversely affect our plans for product development, approval, manufacture and/or commercialization. The approval procedure and the time required to obtain approval also vary among countries. Regulatory agencies may have varying interpretations of the same data, and approval by one regulatory agency does not ensure approval by regulatory agencies in other jurisdictions. In addition, the ultimate decision by the FDA or other regulatory agencies regarding drug approval may not be consistent with prior communications due to the evolution of new information or changes in clinical practice during the development and registration processes.

The product approval process can last many years, be very costly and still be unsuccessful. For example, the development of SUBLOCADE from concept to commercial launch took approximately eight years. Regulatory approval by the FDA or other regulatory agencies can be delayed, limited or not granted at all. A product may fail to demonstrate safety and efficacy for each target indication in accordance with applicable regulatory agencies’ standards for many reasons, including:

• data from preclinical testing and clinical trials may be interpreted by applicable regulatory agencies in ways different from how we or our licensees interpret it;
• regulatory agencies may not agree with our or our licensees’ regulatory approval strategies, plans for accelerated development timelines, components of our or our licensees’ filings such as clinical trial designs, conduct and methodologies, or the sufficiency of our or our licensees’ submitted data to meet their requirements for product approval;
• regulatory agencies might not approve our or our licensees’ manufacturing processes or facilities, or those of the contract research organizations (CROs) and contract manufacturing organizations who conduct research or manufacturing work on our or our licensees’ behalf;
• failure by our clinical investigational sites and the records kept at such sites, including any clinical trial data, to be in compliance with the FDA’s good clinical practices (GCP), or other applicable legislation governing GCP, or to pass FDA, European Medicines Agency or other relevant regulatory agency’s inspections of clinical trials;
• regulatory agencies may change their requirements for approval or post-approval marketing; and
• adverse medical events during the trials could lead to requirements that trials be repeated or extended, or that a program be terminated or placed on clinical hold, even if other studies or trials relating to the program are successful.

In addition, disruptions at the FDA and other regulatory agencies that are unrelated to our Company or our products could cause delays to the regulatory approval process for our products. For example, if a prolonged U.S. government shutdown occurs as a result of political or economic conditions or if a future pandemic were to be more severe, the FDA’s ability to timely review and process regulatory submissions could be significantly impacted. Similarly, recent actions by the current administration have reduced headcount in some agencies, which may cause delays.

Further, any adverse events or other data generated during the course of clinical trials of our product candidates and/or our currently marketed products could result in action by FDA or an equivalent regulatory authority. Such safety findings may restrict our ability to sell or adversely affect the commercialization of currently marketed products. Specifically, clinical trial safety data could result in FDA requiring changes to the clinical development program, labeling, including additional warnings or additional boxed warnings, or requiring us to take other actions that could have an adverse effect on patient and prescriber acceptance of our products. See also Item 1A. Risk Factors—“We are subject to ongoing obligations and continued regulatory review by the FDA and equivalent foreign regulatory agencies, and we may be subject to penalties and litigation and large incremental expenses if we fail to comply with regulatory requirements or experience problems with our products.”

Any failure to obtain, or delay in obtaining, regulatory approval for our products will prevent or delay their commercialization and could have a material adverse effect on our business, financial condition, cash flows and results of operations. In addition, any failure to obtain, or delay in obtaining, approval for our products could have a material impact on our shareholders’ confidence in the strength of our development capabilities and/or our ability to generate significant revenue from our development program and could result in a significant decline in our share price. Further, even product candidates that receive regulatory approval may face additional regulatory hurdles or otherwise be unable to achieve expected market acceptance. See Item 1A. Risk Factors—“The FDA, the DEA, or other regulatory agencies may impose limitations or post-approval requirements on approvals for our products” and “Our ability to generate revenues from our products is subject to attaining significant market acceptance among physicians, patients, and healthcare payors.”

The FDA, the DEA, or other regulatory agencies may impose limitations or post-approval requirements on approvals for our products.

Even if regulatory approval to market a product is granted by the FDA or other regulatory agencies, the approved label for the product may not be consistent with our initial expectations or commercial plans because of limitations on what can be discussed or limitations or requirements related to the labelling or indication. The FDA or other regulatory agencies may also impose limitations on the clinical data that may be included in the label for the product or the indicated uses for which, or the manner in which, the product may be marketed, or may impose additional post-approval requirements. Our business could be materially adversely affected if we do not complete these post-approval requirements and, as a result, the FDA or other regulatory agencies require us to change the label for such product or if there are limitations or requirements on such label, or if such post-approval requirements significantly restrict the marketing, sale or use of such product.

For example, in January 2022 the FDA issued a warning about dental problems associated with buprenorphine medicines dissolved in the mouth to treat opioid use disorder and required that all manufacturers of these products provide a warning in their prescribing label and their patient Medication Guide. Following such change, the Company has been named as a defendant in lawsuits filed in the Northern District of Ohio and other courts in which individual plaintiffs claim that SUBOXONE caused them to suffer dental cavities, tooth loss, or other damage to their teeth. See Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 16. Commitments and Contingencies. Other regulatory agencies may follow the FDA on this change; for example, Health Canada required similar changes in 2023.

We may be required to include, as part of an NDA, a proposed REMS the goal of which is to mitigate potential risks that may be associated with the use of a product and to inform patients and prescribers of those risks. We may also be required to include a plan for communication with healthcare providers, restrictions on a drug’s distribution, or a medication guide to provide information to consumers about the drug’s risks and benefits. For example, the FDA requires separate REMS for SUBLOCADE and SUBOXONE Film because they have distinct REMS goals. The goal of the REMS program for SUBLOCADE is to mitigate the risk of serious harm or death that could result from intravenous self-administration by a patient, whereas the goals for the shared Buprenorphine Transmucosal Products of Opioid Dependence (BTOD) REMS for which SUBOXONE is a part of are to (1) mitigate the risks of accidental overdose, misuse and abuse and (2) inform prescribers, pharmacists and patients of the serious risks associated with buprenorphine-containing products. Other products that we sell in the future may become subject to a REMS specific to the product or shared with other products in the same class of drug. Depending on the nature of the REMS, the cost to implement the REMS may be high, and the impact to the business may be significant.

FDA and other regulatory agencies may require post-approval or post-marketing studies as a condition for approval. For example, we were required to conduct seven post-marketing requirement studies and three post-marketing commitment studies in connection with the approval of SUBLOCADE. Likewise for OPVEE, Indivior is required to carry out four pediatric assessment studies and four post-marketing requirement studies to assess the risks of dodecyl maltoside (DDM).

In the EU or U.K., we may be required to adopt a risk management plan, and our products could be subject to specific risk minimization measures, such as restrictions on prescription or supply, the conduct of post-marketing safety or efficacy studies, or the distribution of patient and/or prescriber educational materials.

In addition, post-marketing obligations in the form of further clinical trials may be imposed to further expand on the evaluation of the risk/benefit profile of the product relative to any potential safety concerns. These trials typically occur after approval and according to pre-specified timelines set by regulatory authorities. Depending on the nature of the post-marketing commitment, trial completion can be a lengthy and expensive process. Failure to comply with any of these requirements may potentially lead to suspension of the marketing authorization for the product and other penalties. The costs and other consequences of non-compliance with any of the post-approval obligations described above could have an adverse impact on its business, prospects, results of operations and financial condition.

Further, if a product for which we obtain regulatory approval is a controlled substance or has been shown to have a drug abuse liability, such as INDV-6001, it will not become commercially available until after the DEA (or other applicable regulatory authority) provides its final schedule designation for the product, and may take longer and may be more restrictive than we expect or may change after its initial designation. In addition, a final designation that is more restrictive than we expect could adversely affect our ability to commercialize such product and could materially adversely affect our business, financial condition, cash flows and results of operations.

In addition, legislation and regulatory policies relating to post-approval requirements and restrictions on promotional activities for pharmaceutical products, or FDA, DEA or other regulatory agency regulations, guidance or interpretations with respect to such legislation or regulatory policy, may change, which may impact the development and commercialization of our products.

We are subject to ongoing obligations and continued regulatory inspection by the FDA and equivalent foreign regulatory agencies, and we may be subject to penalties and litigation and large incremental expenses if we fail to comply with regulatory requirements or experience problems with our products.

The FDA and other regulatory authorities track information on side effects and adverse events reported during clinical studies and after marketing approval. We are required to file periodic safety update reports with the authorities concerning adverse events. If, upon review, an authority determines that any events and/or reports indicate a trend or signal, they can require a change in a product label, restrict sales and marketing, require post-approval safety studies, require a labor-intensive collection of data regarding the risks and benefits of marketed products and ongoing assessments of those risks and benefits, and/or require other actions. Such safety findings could potentially lead to the withdrawal or suspension of the product from the market. The FDA also periodically inspects our records related to safety reporting. Following such inspections, the FDA may issue non-compliance notices on FDA Form 483 and warning letters that could cause us to modify certain activities. An FDA Form 483 notice, if issued, can list conditions FDA investigators believe may have violated relevant FDA standards. Failure to adequately and promptly correct the observations can result in a warning letter or other regulatory enforcement action. See also Item 1A. Risk Factors—“We are subject to risks related to the manufacture and distribution of our products globally and must meet stringent current Good Manufacturing Practices.”

The FDA also regulates advertising and promotional activities for products in the U.S., requiring advertising, promotional materials and labeling to be truthful and not misleading, and products to be marketed only for their approved indications and in accordance with the provisions of the approved label. The FDA actively investigates allegations of pre-approval and off-label promotion in order to enforce regulations prohibiting these types of activities. The FDA routinely issues informal and more formal communications such as untitled letters or warning letters regarding companies’ activities.

The manufacture, quality control, labeling, packaging, safety surveillance, adverse event reporting, storage, advertising, promotion and record-keeping for products are subject to extensive and ongoing regulatory requirements which are becoming increasingly stringent. If we become aware of previously unknown problems or potential new safety risks associated with any of our products, a regulatory agency may impose restrictions on our products, our contract manufacturers or on us. If we, our products and product candidates, or the manufacturing facilities for our products and product candidates, fail to comply with applicable regulatory requirements, regulatory agencies have wide-ranging powers of enforcement, including the power to impose monetary penalties. In such instances, we could experience a significant drop in the sales of the affected products, our product revenues and reputation in the marketplace may suffer, and we could become the target of lawsuits, each of which could have a material adverse effect on our business, prospects, results of operations and financial condition.

The regulations, policies or guidance of regulatory agencies may change, and new or additional statutes or government regulations may be enacted that could prevent or delay regulatory approval of our product candidates or further restrict or regulate post-approval activities.

As a result of the breadth of these laws and regulations and the lack of definitive legal guidance in certain areas, it is possible that some of our business activities could be subject to challenge. Such challenges, irrespective of the underlying merit or the ultimate outcome of the matter, could have a material adverse effect on our business, prospects, reputation, results of operations and financial condition. Similarly, if we are unable to achieve and maintain regulatory compliance, we will not be permitted to market our drugs, which would materially adversely affect our business, results of operations and financial condition.

Guidelines and coverage determinations published by the government, professional societies, insurance carriers, physician groups, science foundations, and other organizations may affect the use of the Company’s products.

Government agencies promulgate regulations and guidelines directly applicable to us and to our products. In addition, professional societies, practice management groups, insurance carriers, physicians’ groups, private health and science foundations, and organizations involved in various diseases also publish guidelines and recommendations to healthcare providers, administrators and payers, as well as patient communities. Recommendations by government agencies or other groups and organizations may relate to such matters as usage, dosage, route of administration and use of related therapies.

In the U.S., for example, a growing number of organizations are providing assessments of the value and pricing of biopharmaceutical products, and even organizations whose guidelines have historically been focused on clinical matters have begun to incorporate analyses of the cost effectiveness of various treatments into their treatment guidelines and recommendations. In addition, value assessments may come from private organizations that publish their findings and offer recommendations relating to the reimbursement of products by government and private payers. Some companies and payers have announced pricing and payment decisions based in part on the assessments of private organizations. In addition, government health technology assessment organizations in many countries make reimbursement recommendations to payers in their jurisdictions based on the clinical effectiveness, cost-effectiveness and service effects of new, emerging and existing medicines and treatments. Such recommendations have included and may in the future include reimbursement for certain of our products for a narrower indication than was approved by applicable regulatory agencies or may include recommending against reimbursement entirely.

Also, harm reduction advocates have advocated against OPVEE based on their narrow view that there is no need for OPVEE versus other products such as NARCAN and generic naloxone, by raising concerns about the relative likelihood or duration of precipitated withdrawal that OPVEE may have. Some states have taken action to limit or restrict access to OPVEE based on this pressure, and even where OPVEE remains available for prescribing by HCPs, their efforts may discourage state Medical Directors to add OPVEE to existing standing orders or protocols where it could be used in community settings. Further, some states' standing orders and protocols specify NARCAN by name, rather than as an opioid overdose reversal agent, which if left unchanged effectively blocks the sale of OPVEE in that state.

Such recommendations or guidelines may affect our reputation, and any recommendations or guidelines that result in decreased use, dosage or reimbursement of our products could have a material adverse effect on our product sales, business and results of operations.

Product liability and product recalls could have a material adverse effect on us.

The testing, manufacturing, marketing and sale of pharmaceutical products entail a risk of product liability claims, product recalls, litigation and associated adverse publicity. Unanticipated side effects of, or manufacturing defects in, our products could exacerbate a patient’s condition or could result in serious injury or impairments or even death. This could result in product liability claims and/or recalls of one or more of our products. In many countries, including in EU member states and the U.K., national laws provide for strict (no-fault) liability.

Product liability claims may be brought by individuals seeking relief for themselves, or by or on behalf of groups seeking to represent a class of injured patients. Further, third-party payors, either individually or as a putative class or group action, may bring actions seeking to recover monies spent on products. The risk of product liability claims may also increase if we are subject to regulatory action by the FDA, the European Medicines Agency (the “EMA”), the U.K. Medicines and Health products Regulatory Agency (“MHRA”), or other competent authorities, or following a product recall. The cost of defending such claims is expensive even when the claims are without merit. A successful product liability claim against us could require us to pay a substantial monetary award. Moreover, an adverse judgment in a product liability suit, even if insured or eventually overturned on appeal, could generate substantial negative publicity about our products and business and inhibit or prevent the commercialization of other products.

For example, the Company has been named as a defendant in a large number of cases in the U.S., and a case in Canada purporting to represent a class of plaintiffs, which claim that SUBOXONE caused them to suffer dental cavities, tooth loss, or other damage to their teeth. The plaintiffs generally allege that the Company failed to properly warn physicians of the risk of dental injury, and further allege that SUBOXONE products were defectively designed. The plaintiffs generally seek compensatory damages, as well as punitive damages and attorneys’ fees and costs. Product liability cases such as these typically involve issues relating to medical causation, label warnings and reliance on those warnings, scientific evidence and findings, actual, provable injury and other matters. These cases are in their preliminary stages. See Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 16. Commitments and Contingencies.

The Company has been informed by its primary insurance carrier that defense costs for this matter should begin to be reimbursed now that the Company's self-insurance retention has been exhausted but has issued a reservation of rights against payment of any liability costs. In the event of a liability finding, various factors could affect reimbursement or payment by insurers, if any, including (i) the scope of the insurers' purported defenses and exclusions to avoid coverage, (ii) the outcome of negotiations with insurers, (iii) delays in or avoidance of payment by insurers, and (iv) the extent to which insurers may become insolvent in the future. Moreover, although we carry product liability insurance, current coverage may not be adequate or may not be available at all or in part. Further, product liability insurance is difficult to obtain and may not be available in the future on acceptable terms or at all.

Product recalls may be issued at our discretion or at the discretion of our suppliers, government agencies, clients for whom we manufacture, and other entities that have regulatory authority over pharmaceutical sales. Any recall of our products could materially adversely affect our business by rendering us unable to sell that product for some time and by adversely affecting our reputation. In addition, product liability claims, product complaints or product quality issues reported by us (or others) to authorities as required by local regulations could result in an investigation (conducted by the FDA, the EMA, or the competent authorities of EU member states or other national authorities) into the safety or efficacy of our products, our manufacturing processes and facilities, or our marketing programs. An investigation could potentially lead to a recall of our products or more serious enforcement actions including seizure, injunction or criminal charges, proposed changes to the indications for which they may be used or suspension or withdrawal of approval. The Company has no insurance coverage for product recalls. Any of the foregoing could have a material adverse effect on our business, prospects, results of operations and financial condition. Further, product liability insurance may not be available for many claims relating to our opioid drug products due to contractual exclusions in our insurance policies.

We are subject to federal, state and foreign healthcare laws and regulations and implementation or changes to such healthcare laws and regulations could adversely affect our business and results of operations.

We are subject to extensive federal, state and foreign healthcare regulation. The healthcare system is highly regulated in the U.S., the EU, the U.K. and other countries where we operate and, as a pharmaceutical company that participates in government-regulated healthcare programs, we are subject to complex laws and regulations. Violation of the healthcare laws that we are subject to, or any other federal, state or foreign regulations, may subject us to significant administrative, civil and/or criminal penalties, damages, disgorgement, fines, exclusion, imprisonment, additional reporting requirements, and/or oversight from federal or other healthcare programs that could require the restructuring of our operations. Any of these could have a material adverse effect on our business and financial results. Any action against us for violation of these laws, even if we ultimately are successful in our defense, will cause us to incur significant legal expenses and divert our management’s attention away from the operation of our business.

The U.S. and some foreign jurisdictions are considering or have enacted several legislative and regulatory proposals that change the healthcare system in ways that could impact our profitability. In the U.S. and abroad there is significant interest in implementing regulations and legislation with the stated goals of containing healthcare costs, improving quality, and/or expanding access. The pharmaceutical industry has been a focus of these efforts and has been significantly affected by major legislative initiatives, particularly in the U.S.

For example, the Affordable Care Act substantially changed the way healthcare is financed by both governmental and private insurers, and continues to significantly impact the U.S. pharmaceutical industry. In addition, drug pricing by pharmaceutical companies in the U.S. has come under increased scrutiny. Specifically, there have been state and U.S. congressional inquiries into pricing practices by pharmaceutical companies. For example, Congress launched an inquiry into pharmacy benefit managers and their practices which are believed by some to have led to consolidation, lack of transparency, and spread pricing. U.S. policymakers have also studied the impact rebates (i.e., the return of part of the purchase price of a prescription drug in exchange for favorable formulary placement) may play in driving up overall drug prices. Significant developments that may adversely affect pricing in the U.S. include drug pricing and Medicare reforms by Congress, regulatory changes to Medicare Part B (physician-administered drugs) and Medicare Part D (prescription drug benefit), additional changes relating to the Affordable Care Act, and trends in the practices of managed care groups and institutional and governmental purchasers. The Affordable Care Act tax credits expire at the end of 2025 and, if not extended by Congress, the number of uninsured individuals could increase.

The pharmaceutical industry also faces uncertainty regarding the continuation of current drug pricing policy. For example, on November 20, 2020, HHS finalized the “rebate rule” by publishing regulations removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Medicare Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law. The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers. However, the Inflation Reduction Act extended the moratorium on implementation, administration, or enforcement of this final rule until January 1, 2032.

The Inflation Reduction Act requires the HHS Secretary to negotiate, with respect to Medicare units and subject to a specified cap, the price of a set number of certain high Medicare spend drugs and biologicals per year starting in 2026, penalizes manufacturers of certain Medicare Parts B and D drugs for price increases above inflation, and makes several changes to the Medicare Part D benefit, including a limit on annual out-of-pocket drug costs starting at $2,000 in 2025, a $35 monthly cap on insulin payments, and a change in manufacturer liability under the program that could negatively affect us. Congress and the Administration may seek new legislative and/or administrative measures to control drug costs.

Governments across the world continue to consider and take action to lower drug prices. In the U.S., there is bi-partisan support for drug pricing reforms at both federal and state levels, which include potential legislative and regulatory actions to encourage the import of drugs, to price drugs according to a defined international pricing reference, to encourage more competition, and to undertake other initiatives. These, together with federal and state government fiscal constraints resulting from the COVID-19 pandemic which constrain public benefit health programs, pose direct and indirect downward pressure risk on drug prices. The Company continues to monitor potential legislative and regulatory changes and their impacts, advocating for the Company’s products based on scientific studies and patient-centered outcomes. However, certain potential legislative and regulatory drug pricing changes could have an adverse impact on the Company’s financial performance and results in the future.

In Europe, legislators, policymakers, and healthcare insurance funds continue to propose and implement cost-containing measures to keep healthcare costs down, due in part to the attention being paid to healthcare cost containment in Europe. Certain of these changes could impose limitations on the prices we will be able to charge for our products and any approved product candidates or the amounts of reimbursement available for these products from governmental agencies or third-party payers, which may increase the tax obligations on pharmaceutical companies such as ours, or may facilitate the introduction of generic competition with respect to our products.

With the intent of lowering prescription drug prices in the U.S., federal and state governments in the U.S. have enacted and continue to consider additional legislation and regulation applying international reference pricing to prescription drugs, otherwise limiting the pricing of prescription drugs, and authorizing the importation of drugs from countries outside the U.S. Such measures could have a material effect on our business, results of operations and financial condition.

The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, maintain profitability, or commercialize our current products and/or those for which we may receive regulatory approval in the future.

Failure to comply with payment and reporting obligations under the Medicaid Drug Rebate program or other governmental pricing programs in the U.S. could result in additional reimbursement requirements, penalties, sanctions and fines.

In the U.S., we participate in the Medicaid Drug Rebate and Medicare Part D programs and, by virtue of such participation, are also required by federal law to participate in the 340B Program and Federal Supply Schedule pricing program. These programs require us to pay certain rebates based on pricing data, such as (among others) average manufacturer price and best price, reported by us to the various federal agencies administering the programs.

Pricing and rebate calculations vary among products and programs. The calculations are complex and the calculation methodology is often subject to interpretation by us, governmental or regulatory agencies and the courts. If we become aware that our reporting for a prior period was incorrect or has changed as a result of the recalculation of the pricing data, we are obliged to resubmit the corrected data. Such restatements and recalculations can increase our costs for complying with the laws and regulations governing the various programs. Any corrections to our rebate calculations could result in either additional or reduced rebate liability for past periods, depending on the nature of the correction. Price recalculations may also affect the ceiling price at which we are required to offer our products to certain covered healthcare entities, such as safety-net providers under the 340B Program, as well as the prices under which our products are made available to federal government purchasers such as the U.S. Department of Veterans Affairs and the Department of Defense under the Veterans Health Care Act of 1992, as amended (“VHCA”).

We are liable for errors associated with our submission of pricing data. In addition to retroactive rebates and the potential for 340B Program and VHCA refunds, if we are found to have knowingly submitted any false price or product information to the government, we may be liable for civil monetary penalties. Any failure to submit data on a timely basis could result in a civil monetary penalty for each day the information is late beyond the due date. We are currently defending such allegations, which we deny, in the matter United States ex rel. Miller v. Reckitt Benckiser Group PLC et al. See Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 16. Commitments and Contingencies. In the case of the Medicaid Drug Rebate program, such failure could also be grounds for CMS to terminate our Medicaid drug rebate agreement, pursuant to which we participate in the Medicaid program. In the event that CMS terminates our rebate agreement, no federal payments would be available under Medicaid or Medicare Part B for our covered outpatient drugs. As another example, we can be subjected to civil monetary penalties under, or termination from, the 340B Program if we knowingly and intentionally overcharge covered entities.

CMS and HHS-OIG have previously indicated that they intend to pursue more aggressively companies that fail to report pricing data to the government in a timely manner. Governmental agencies may also make changes in program interpretations or requirements or conditions of participation, some of which may have implications for amounts that we previously estimated or paid. There can be no assurance CMS or any other government agency will find that our submissions are complete and correct.

Any of the foregoing could have a material adverse effect on our business, prospects, results of operations and financial condition.

We are subject, directly or indirectly, to a variety of U.S. and international laws and regulations related to fraud and abuse and transparency. Enforcement actions under such laws have increased in recent years. If we fail to comply, or have not fully complied, with such laws, we could face substantial penalties.

In the U.S., we are subject, directly or indirectly through our customers and other third parties, to various federal, state and local fraud and abuse and transparency laws. Our sales, marketing, patient support and medical activities may be subject to scrutiny under these laws. The U.S. federal healthcare program Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving anything of value to induce (or in return for) the referral of business, including the purchase, recommendation or prescription of a particular drug reimbursable under Medicare, Medicaid or other federally financed healthcare programs. The statute has been interpreted to apply to arrangements between pharmaceutical companies on one hand and patients, prescribers, purchasers and formulary managers on the other. Although there are several statutory exemptions and regulatory safe harbors protecting certain common manufacturer business arrangements and activities from prosecution and administrative sanction, the exemptions and safe harbors are drawn narrowly and are subject to regulatory revision or changes in interpretation by the DOJ and HHS-OIG. Practices or arrangements that involve remuneration may be subject to scrutiny if they do not qualify for an exemption or safe harbor. Violations of the federal Anti-Kickback Statute may be established without providing specific intent to violate the statute. Several courts have interpreted the statute’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the statute has been violated. Violations of the Anti-Kickback Statute may be punishable by civil, criminal, and administrative fines and penalties, damages, imprisonment, and/or exclusion from participation in federal healthcare programs. For example, in August 2018 the U.S. District Court for the Western District of Virginia unsealed a declined qui tam complaint alleging causes of action under the federal and state False Claims Acts against certain entities within the Company predicated on best price issues and claims of retaliation. See Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 16. Commitments and Contingencies.

The federal civil False Claims Act prohibits, among other things, any person from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment of federal funds, or knowingly making, or causing to be made, a false statement to get a false claim paid. A claim resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim. The False Claims Act also permits a private individual acting as a “whistleblower” to bring actions on behalf of themselves and the federal government alleging violations of the statute and to share in any monetary recovery. Violations of the False Claims Act may result in significant financial penalties (including mandatory penalties on a per claim or statement basis), treble damages and exclusion from participation in federal healthcare programs.

Pharmaceutical companies are subject to other federal false claims and statements laws, some of which extend to non-government health benefit programs. For example, the healthcare fraud provisions under the Health Insurance Portability and Accountability Act of 1996 and its implementing regulations, or HIPAA, impose criminal liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third party payors, or falsifying or covering up a material fact or making any materially false or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Violations of HIPAA fraud provisions may result in criminal, civil and administrative penalties, fines and damages, including exclusion from participation in federal healthcare programs.

The majority of individual states also have statutes or regulations similar to the federal anti-kickback law and the False Claims Act, which apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor. Other states restrict whether and when pharmaceutical companies may provide meals or other items of value to healthcare professionals or engage in other marketing-related activities, and certain states and cities require the identification or licensing of sales representatives.

The Physician Payment Sunshine Act requires tracking of payments and transfers of value to physicians and teaching hospitals and ownership interests held by physicians and their families, and reporting to the federal government and public disclosure of these data. Since 2022, reporting is also required regarding payments and transfers of value provided to physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified nurse-midwives. A number of states now require pharmaceutical companies to report expenses relating to the marketing and promotion of pharmaceutical products and to report gifts and payments to healthcare providers in the states. Government agencies and private entities may inquire about our marketing practices or pursue other enforcement activities based on the disclosures in those public reports.

We are further subject in a similar manner to federal and state data privacy and security laws, such as HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, the Confidentiality of Substance Use Disorder Patient Records, codified at 42 C.F.R. Part 2 (Part 2), state consumer privacy laws, and state breach reporting requirements. Collectively, these laws may affect, among other things, our current and proposed research, sales, marketing and educational programs, as well as other possible relationships with customers, pharmacies, physicians, payers, and patients. We are subject to similar data privacy and security laws in Europe and other countries, including the EU General Data Protection Regulation (2016/679), or GDPR, under which fines of up to €20.0 million or up to 4% of the annual global revenue of the infringer, whichever is greater, could be imposed for significant non-compliance. We are also subject to qui tam, or whistleblower lawsuits, under the False Claims Act. Compliance with these laws, including the development of a comprehensive compliance program, is difficult, costly and time-consuming.

Because of the breadth and evolving interpretations and requirements of these laws, the narrowness of available statutory and regulatory exemptions, and the wide array of U.S. and international authorities with overlapping regulatory jurisdiction, it is possible that some of our business activities could be subject to challenge under one or more of such laws. Any action against us alleging violation of these laws, whether brought by law enforcement, regulatory agencies or private qui tam actions brought by individual whistleblowers in the name of the government, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business, even if we successfully defend against those actions. If any enforcement actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have an impact on our business, including the imposition of significant civil, criminal and administrative sanctions, damages, disgorgement, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, imprisonment, integrity oversight and reporting obligations, contractual damages, reputational harm, diminished profits and future earnings, and curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

We have mechanisms in place to procure compliance with rules and regulations, and applicable self-regulatory industry codes by region that the Company has committed to follow. However, there can be no assurance that our policies and procedures will be followed at all times or will effectively detect and/or prevent violations of applicable compliance regimes by our employees and other relevant persons.

Failure to comply with anti-corruption laws and regulations, anti-money laundering laws and regulations, and/or economic sanctions could result in us becoming subject to fines or penalties.

We are subject to various federal and foreign laws and regulations regarding anti-bribery, anti-corruption, anti-money laundering, and economic sanctions. These include the U.K. Bribery Act of 2010 and the U.S. Foreign Corrupt Practices Act of 1977, as amended, which prohibits, among other things, payments, offers, or promises made for the purpose of improperly influencing any act or decision of a foreign official. The nature of our business means that we engage in significant interactions with foreign officials. We are also subject to economic sanctions and export controls rules and regulations imposed by, amongst others, the U.S. Department of the Treasury’s Office of Foreign Assets Control, the U.S. Department of Commerce, other agencies of the U.S. government, HM Treasury and other agencies of the U.K. government, the European Union, and the United Nations. Any expansion, broadened or changed interpretation, variation, or addition to these rules and regulations could impose significant compliance costs on us.

We have mechanisms in place to procure compliance with applicable anti-corruption, anti-money laundering, and economic sanctions rules and regulations, and applicable self-regulatory industry codes by region that the Company has committed to follow. However, there can be no assurance that our policies and procedures will be followed at all times or will effectively detect and/or prevent violations of applicable compliance regimes by our employees, consultants, sub-contractors, agents and partners. As a result, in the event of non-compliance, we could be subject to legal proceedings, fines and/or civil or criminal penalties, the disgorgement of profits, damage to our reputation and resulting loss of revenue and profits, which could have a material adverse impact on our business, financial conditions and operations.

The pharmaceutical sector is facing increased government scrutiny from competition and pricing authorities around the world, and any failure to comply, may expose us to significant damages and commercial restrictions that can materially and adversely affect our business.

We are required to comply with competition laws in the territories where we do business around the world. Compliance with these laws has been the subject of increasing focus and activity by regulatory authorities (and private plaintiffs, where they have enforcement rights under the law), both in the U.S. and Europe, in recent years. Violations of such laws may have a material adverse effect on our reputation, business, financial condition, and results of operations. Our company has faced and may in the future face investigations and/or legal proceedings alleging that actions purportedly taken by our company violated such laws. For example, we were a party to civil claims settled in 2023 brought by state officials and private plaintiffs alleging that we violated U.S. federal and/or state antitrust and consumer protection laws. See Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 16. Commitments and Contingencies. We may face additional claims from state officials and private plaintiffs in the future, and any such claims could materially and adversely affect our business. Also, on November 20, 2020, we entered into a Stipulated Order for Permanent Injunction and Equitable Monetary Relief in the U.S. District Court for the Western District of Virginia, Abingdon Division, with the FTC. As part of the resolution with the FTC, for a ten-year period ending in 2030, Indivior Inc. is required to make specified disclosures to the FTC and is prohibited from certain conduct. We reached a similar settlement with the Attorneys General of 41 States and the District of Columbia on June 13, 2023 related to the civil claims settlement discussed above, which also expires in 2030.

Companies operating in the pharmaceutical industry also face challenges to the validity or enforceability of listed patents and frequently agree to settlements of patent litigation. Regulatory authorities in the U.S. and Europe, including the FTC and the European Commission, increasingly scrutinize patent settlements. Additionally, competition law authorities may send formal or informal requests for information about particular settlement agreements, and there is a risk that governmental authorities, customers, other downstream purchasers or others may commence actions alleging violations of antitrust laws based on our settlement agreements.

The U.S. Congress and certain state legislatures in the U.S. have also passed, or proposed passing, legislation that could adversely impact the ability to settle patent litigation. For example, the State of California has enacted legislation that prohibits, with certain exceptions and safe harbors, various types of patent litigation settlements, and imposes substantial monetary penalties on companies and individuals who do not comply.

Following calls in recent years from policymakers and other stakeholders in many countries for governmental intervention to address the high prices of certain pharmaceutical products, we may become, from time to time, subject to governmental investigations, claims or other legal or regulatory actions regarding our pricing and/or other alleged exclusionary practices. It is not possible to predict the ultimate outcome of any such investigations, claims or proceedings or what other investigations or lawsuits or regulatory responses may result from such assertions, which could have a material adverse effect on our reputation, business, financial condition, and results of operations.

Risks Related to our Financial Condition and Tax Matters

Recently proposed tariffs on pharmaceutical products, and potential reciprocal responses by other countries, may adversely affect our revenues or profitability.

On February 18, 2025, President Trump said he was considering tariffs of 25% or more on pharmaceutical and other products. He indicated that such tariff rates might increase substantially over the course of the year to allow manufactures a phase-in period to allow potential on-shoring of manufacturing. It is unclear at this time whether and to what extent such tariffs will take place, or how affected countries may react. On the one hand, the administration has signaled that the tariffs are likely to take effect on April 1, 2025, but on the other hand, Trump Administration officials are meeting with trade representatives of affected countries and indicated that countries may be able to negotiate for lower tariffs. At this time, few details are available, and any impact on Indivior would depend on the terms of the tariff.

We import certain raw ingredients or intermediate products from the U.K., EU, and Australia. If implemented, we expect these tariffs to be applied by the U.S. to impact both SUBLOCADE and SUBOXONE Film as we manufacture the active pharmaceutical ingredient (API) for these products at our plant in the U.K. Additionally, our products move through various countries at various stages of the production cycle, and goods may move through multiple European countries, which could be subject to tariffs applied by the U.S.

In the event the U.S. implements tariffs, we may face retaliatory tariffs levied by impacted countries. We export a significant amount of our finished products from the U.S. to Canada, Australia, the U.K., and the EU.

We have limited ability to avoid any applicable tariffs in the short or medium term due to existing manufacturing commitments and the time needed to transfer technology and have a new manufacturing site validated by the FDA and other regulators. Our current plans to manufacture some of our requirements for SUBLOCADE at our Raleigh Manufacturing Facility beginning in late 2026 contemplate that the API would be provided by our existing U.K. plant.

We have limited capacity to raise prices to recover costs of tariffs because, for example, the federal Inflation Reduction Act limits US pharma price increases to no greater than a certain inflation rate, and increases in excess of inflation trigger a 100% excise tax.

Weakness in the economy, geopolitics, market trends, disruptions in our supply chain, uncertainty and other conditions in the markets in which we operate, particularly in the U.S., may adversely affect the profitability and financial stability of our customers, and could negatively impact our sales growth and results of operations.

Our financial performance depends in part on general economic and geopolitical conditions in the geographic markets in which we operate, particularly in the U.S., where we generated 85% our revenue in fiscal 2024. Further, as a global business, we are also subject to changes in economic conditions and cost inflation, interest rates, credit and capital markets, foreign exchange rates, political conditions, and tax policies. For example, in 2022, the U.S. experienced price inflation at its highest levels in 40 years, and inflation rates globally have been elevated. Global supply chain challenges continue to challenge all industries. Armed conflicts may compound supply chain challenges, possibly including shortages of materials and labor, increased demand for goods and services, constricted logistics capacity, and rising commodity and energy prices. Our agreements with some customers and government purchasers may limit our ability to raise prices commensurate with these cost increases. The Company has noted lead time extension, constricted capacity and minor disruption in some supply components. Numerous industries have suffered from supply chain disruptions or labor shortages that may affect us in unexpected ways. If major delays or shortages occur, the delivery of products to our patients could be disrupted and impact the Company’s short-term financial performance. Any of these geopolitical or macroeconomic trends may have an adverse effect on our profitability, ability to generate revenue or fund operations, and ability to raise capital, which in turn could have a material adverse effect on our business, financial condition, and results of operations.

We may also be affected by other factors which ultimately might reduce demand for our products. While OUD rates remain high in the U.S., our largest market, recent data shows a reduction in overdose deaths. Further, authorities report increased abuse of other drugs including sedatives and anesthetics such as xylazine (also known as ‘tranq’) and ketamine, and amphetamines and stimulants such as methamphetamine, and our addiction and overdose recovery products are not indicated to treat the abuse of such drugs. Also, OUD rates might also be affected by the actions of governments to better restrict the manufacture of opioids outside the U.S. and the illegal import of such drugs into the U.S.

Our balance sheet is leveraged, and any reduction in annual sales may adversely affect our liquidity.

Our current liabilities exceed our current assets by over $100 million and total liabilities exceed our total assets by over $300 million. Any material change in net revenues, the timing of collections, and rebate payments may impact our liquidity in the near-term and our ability to meet our obligations in the long term.

For example, the Company offers rebates to healthcare authorities and under contractual arrangements with certain customers. The amount of the rebate varies based on sales channel and payor but can be significant. At December 31, 2024, the liability for returns and rebates was $565 million See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates - Returns, incentives and rebates. Generally, we are paid in full shortly after delivery and accrue an estimate of our liability for rebates. Several months may pass between the original estimate of rebates due, confirmation of the amount, and subsequent payment of the liability. Until the final amount of the rebate or incentive is determined and paid, we benefit from the use of this cash. If our annual sales were to decline, the corresponding reduction of rebates payable would negatively impact our liquidity. We provided guidance on February 20, 2025 that we expect an accelerated decline in net revenues from SUBOXONE Film in 2025 due to increased generic competitive activity and the potential impact from a fifth buprenorphine/naloxone sublingual film generic in the U.S. market.

Any future pandemic, and governmental and societal responses thereto, may harm our business, results of operations, and financial condition.

The COVID-19 pandemic had a significant impact on the global healthcare delivery system. Many healthcare systems had to restructure operations to prioritize caring for COVID-19 patients and limit or cease other activities. Many governments, including in the U.S., U.K., and Canada, imposed stringent restrictions to seek to mitigate, or slow, the spread of COVID-19, including restrictions on international and local travel, public gatherings and participation in business meetings, as well as closures of workplaces, churches, schools, and other public sites.

Possible future pandemics may negatively affect us in a variety of ways, including restrictions on access to HCPs by our sales force, disruptions to the supply of our products to patients if we experience either a significant absence of our employees and/or employees at our contract manufacturing organizations, vendors and service providers due to infection and/or government containment measures, and/or capacity issues at our airfreight and road logistics providers. In addition, possible future pandemics may result in overall fewer patient visits to healthcare provider offices for non-pandemic reasons or essential treatments, as patients become unable or unwilling to make visits due to overburdened healthcare systems, safety concerns, quarantines and other travel restrictions, or elect to have remote consultations with their providers. In the past, this also impaired our ability to enroll new patients in clinical trials and the development of real-world evidence for our existing products that are used for regulatory submissions and to supplement our label. Any of the above factors could have a material adverse effect on our business, financial condition, and results of operations.

Our insurance coverage may not be adequate.

Our business exposes us to potential product liability and professional indemnity claims and other risks which are inherent in the research, pre-clinical and clinical evaluation, manufacturing, sales and marketing and use of pharmaceutical products. We have public liability (general liability) and product liability insurance. However, product liability insurance may be unavailable for many claims involving our opioid drug products due to contractual exclusions in our insurance policies. We also have insurance covering losses from property damage and business interruption, third-party named suppliers, marine and cargo, directors’ and officers’ liability, clinical trials, automobile (fleet vehicles), employers’ liability, personal accident and travel, and cybersecurity.

We believe the insurance coverage currently in place generally is appropriate for a business of our current size, nature and financial position. However, coverage limits and indemnity provisions may not be adequate to cover all potential claims that could arise against us in the conduct of our business nor that claims will arise from insurable risks or that in the future we will be able to obtain coverage that is appropriate due to cost, risk or otherwise. There are additional factors that could affect reimbursement of payment by insurers, including (i) the scope of the insurers’ purported defenses and exclusions to avoid coverage, (ii) the outcome of negotiations with insurers, (iii) delays in or avoidance of payment by insurers and (iv) the extent to which insurers may become insolvent in the future. In addition, areas where insurance coverage, while potentially available, may carry premiums that are not commercially reasonable and/or may be difficult to obtain or maintain on commercially reasonable terms. Product liability insurance, particularly for buprenorphine products, is difficult to obtain and may not be available in the future on acceptable terms or at all. A successful claim or claims against us in excess of or outside of our insurance coverage may have a material adverse effect on our business, prospects, results of operations and financial condition.

Our term loan contains certain covenants that could limit our ability to plan for or respond to changes in our business.

The Company has a $350 million term loan extended pursuant to a Note Purchase Agreement, which includes two financial covenants. The first requires that the Total Leverage Ratio of the consolidated borrower group to be less than 3.0 to 1.0 (through September 30, 2026), and then less than 2.50 to 1.0 from December 31, 2026 and thereafter. The Total Leverage Ratio is generally defined as the ratio of (i) total debt less cash and cash equivalents (up to $50 million) to (ii) Adjusted EBITDA for the preceding 12-month period. (See Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 12. Debt for explanation of Adjusted EBITDA). The second requires that the Interest Coverage Ratio of the consolidated borrower group to be at least 2.50 to 1.00. The Interest Coverage Ratio generally is defined as the ratio of Adjusted EBITDA to interest expense for the preceding 12-month period.

The Note Purchase Agreement also has several other affirmative covenants and generally subjects the Company to negative covenants customary for facilities of this nature, including a limitation on disposal of assets, a limitation on prepayments and redemptions of certain indebtedness, a limitation on further indebtedness, a limitation on liens, a limitation on further negative pledges, limitations on share buybacks and redemptions, dividends and other “restricted payments,” a limitation on subsidiary distributions, limitations on investments, a limitation on mergers and acquisitions and other fundamental changes, limitations on sale and lease-back transactions, a restriction on changes to any material line of business (including the business of the restricted subsidiaries of the Borrower), restrictions on modifying the terms of certain debt and general restrictions on the organizational documents and fiscal year of the Borrower. These negative covenants are subject to various carve-outs, grace periods and qualifications and, in some instances, are also applicable to most subsidiaries of Indivior PLC.

We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness.

We have a $350 million term loan, future contractual interest payments on this loan of approximately $174 million, and approximately $696 million of other contractual liabilities, mostly related to the settlement of prior litigation. See Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 11. Accrued Litigation Settlement Expenses.

Our ability to make scheduled payments on our indebtedness or our other obligations or to refinance our indebtedness depends on our financial condition and operating performance and our ability to generate cash, which is subject to prevailing economic, industry and competitive conditions and to certain financial, business and other factors discussed in these “Risk Factors,” many of which are beyond our control. In addition, we may elect to prepay some of our contractual liabilities due to governmental parties in order to reduce reporting and other requirements associated with such settlements. Any such prepayment would use a substantial portion of our cash and further reduce our ability to make scheduled payment on our other indebtedness.

The term loan matures on November 4, 2030 and there can be no assurance that we will be able to refinance our existing term loan at maturity, or obtain other or additional financing on attractive terms, if at all. At the maturity of our term loan and any other debt which we incur, if we do not have sufficient cash flows from operations and other capital resources to pay our debt obligations, or to fund our other liquidity needs, or if we are otherwise restricted from doing so due to corporate, tax or contractual limitations, we may be required to refinance our indebtedness. Our involvement in the opioid industry has in the past, and may in the future, limit the number of business partners willing to lend to us. If we are unable to refinance all or a portion of our indebtedness or obtain such refinancing on terms acceptable to us, we may be forced to reduce or delay our business activities or capital expenditures, sell assets or raise additional debt or equity financing in amounts that could be substantial. The type, timing and terms of any future financing will depend on our cash needs and the prevailing conditions in the financial markets. We can provide no assurance that we will be able to accomplish any of these measures in a timely manner or on commercially reasonable terms, if at all.

Our ability to restructure or refinance our debt will depend in part on our financial condition at such time. Any refinancing of our debt could be at higher interest rates than our current debt and may require us to comply with more onerous covenants, which could further restrict our business operations. The terms of existing or future debt instruments may restrict us from adopting some of these alternatives. Furthermore, we may be unable to find alternative financing, and even if we could obtain alternative financing, it might not be on terms that are favorable or acceptable to us. If we are not able to refinance our debt, obtain additional financing or sell assets on commercially reasonable terms or at all, we may not be able to satisfy our debt obligations. In that event, borrowings under other debt agreements or instruments that contain cross-default or cross-acceleration provisions may become payable on demand, and we may not have sufficient funds to repay all our debts, including the term loan.

If our cash flows and capital resources are insufficient to fund payments of interest or principal on our outstanding debt or our obligations, we could face substantial liquidity problems and might be required to reduce or delay capital expenditures, sell assets or business operations, seek additional capital or restructure or refinance our term loan. We cannot ensure that we would be able to take any of these actions, that these actions would be successful and permit us to meet our scheduled obligations or that these actions would be permitted under the terms of existing or future debt agreements, including the agreement governing our term loan. In addition, any failure to make payments of interest and principal on our outstanding term loan on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness.

Our effective tax rate may increase, and changes in tax rules and regulations, or interpretations thereof, may adversely affect our financial condition.

As a global biopharmaceutical company, we are subject to taxation in several different jurisdictions. As a result, our effective tax rate is derived from a combination of applicable tax rates in the various places where we operate. In preparing our financial statements, we estimate the amount of tax that will become payable in each of these places. Our effective tax rate may fluctuate depending on several factors, including, but not limited to, the distribution of our earnings or losses between the jurisdictions where we operate and differences in the interpretation of tax laws. In addition, the tax laws of any jurisdiction in which we operate may change in the future, which could impact our effective tax rate. Tax authorities in the jurisdictions in which we operate may audit us. If we are unsuccessful in defending any tax positions adopted in our submitted tax returns, we may be required to pay taxes for prior periods, interest, fines or penalties, and may be obligated to pay increased taxes in the future, any of which could have a material adverse effect on our business, financial condition, cash flows and results of operations.

Our effective tax rates could be affected by numerous factors, such as changes in tax laws, regulations, administrative practices, principles and interpretations, the mix and level of earnings in a given taxing jurisdiction or our ownership or capital structures. Any current or future proposed changes to the tax rules that apply to corporations could materially affect our tax obligations and effective tax rate. In addition, the Organisation for Economic Co-operation and Development (OECD) has achieved widespread political agreement to work towards the implementation of a global minimum tax. As a result, it is possible that the Company’s consolidated effective tax rate will increase in the short term. It is difficult to predict whether and when tax law changes will be enacted that would have a material adverse effect on our business, financial condition, results of operations and cash flows.

The application of tax law is subject to interpretation and is subject to audit by taxing authorities. Additionally, administrative guidance can be incomplete or vary from legislative intent, and therefore the application of the tax law is uncertain. While we believe the positions taken by the Company comply with relevant tax laws and regulations, taxing authorities could interpret our application of certain laws and regulations differently. Future tax controversy matters may result in previously unrecorded tax expenses, higher future tax expenses, or the assessment of interest and penalties.

Our deferred tax assets may not be realized.

On December 31, 2024 we had $280 million of deferred tax assets, net of valuation allowance, consisting of $135 million of net deferred tax assets in the U.S. and $142 million of net deferred tax assets in the U.K., respectively. It is possible that some or all of such deferred tax assets will not be realized, especially if we incur losses in either the U.S. or the U.K. in the future. Losses may arise from unforeseen operating events. Unless we are able to generate sufficient taxable income in the future, a substantial reduction in the carrying value of either our U.S. or U.K. deferred tax assets may be required, which would materially increase our expenses in the period the reduction is recognized and materially adversely affect our business, financial condition, and results of operations.

If a U.S. person is treated as owning at least 10% of our ordinary shares, such holder may be subject to adverse U.S. federal income tax consequences.

If a U.S. person is treated as owning (directly, indirectly, or constructively) at least 10% of the value or voting power of our ordinary shares, such person may be treated as a “U.S. shareholder” with respect to each “controlled foreign corporation” in our group. Because our group includes one or more U.S. subsidiaries, certain of our non-U.S. subsidiaries could be treated as controlled foreign corporations (regardless of whether or not we are treated as a controlled foreign corporation). A U.S. shareholder of a controlled foreign corporation may be required to report annually and include in its U.S. taxable income its pro rata share of “Subpart F income,” “global intangible low-taxed income,” and investments in U.S. property by controlled foreign corporations, regardless of whether we make any distributions. An individual that is a U.S. shareholder with respect to a controlled foreign corporation generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a U.S. corporation that is a U.S. shareholder with respect to a controlled foreign corporation. Failure to comply with these reporting and tax payment obligations may subject a U.S. shareholder to significant monetary penalties and may prevent the statute of limitations from starting with respect to such shareholder’s U.S. federal income tax return for the year for which reporting was due. We cannot provide any assurances that we will assist investors in determining whether any of our non-U.S. subsidiaries is treated as a controlled foreign corporation or whether any investor is treated as a U.S. shareholder with respect to any such controlled foreign corporation or furnish to any U.S. shareholders information that may be necessary to comply with the aforementioned reporting and tax paying obligations. A U.S. investor should consult its advisors regarding the potential application of these rules to an investment in our ordinary shares.

Risks Related to Our Ordinary Shares

Our ordinary shares are subject to market price volatility and the market price may decline disproportionately in response to developments that are unrelated to our operating performance.

The market price of our ordinary shares has been, and in the future may be, volatile and subject to wide fluctuations as a result of a variety of factors including, but not limited to general economic conditions, developments with our pending litigation, period to period variations in operating results or changes in revenue or earning estimates by us, market and industry participants, and/or financial analysts, our failure to meet our stated guidance, our failure to comply with the rules under the Sarbanes-Oxley Act related to accounting controls and procedures, the discovery of material weaknesses and other deficiencies in our internal control and accounting procedures, and the other factors discussed in these risk factors. The market price could also be adversely affected by developments unrelated to our operating performance, such as the operating and share price performance of other companies that investors may consider comparable to us, speculation about us in the press and/or the investment community, unfavorable press, strategic actions by competitors (including acquisitions and restructurings, new competing products, and new generic products), changes in market conditions, regulatory changes and broader market volatility and movements. Any or all of these factors could result in material fluctuations in the price of our ordinary shares, which could result in investors getting back less than they invested or a total loss of their investment.

In addition, where the market price of a company’s shares has been volatile, the shareholders of such company may file securities class action litigation against that company based on various claims, such as securities fraud and other violations of securities laws. For example, an amended purported securities class action lawsuit was filed against Indivior PLC, Mark Crossley (the CEO of the Company), Ryan Preblick (the CFO of the Company), and Richard Simkin (the Chief Commercial Officer of the Company) on December 5, 2024, alleging violations of certain U.S. federal securities laws following a sudden drop in the market price of the Company’s ordinary shares. See Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 16. Commitments and Contingencies. See also the discussion of similar, but less common, U.K. litigation under the caption “ U.K. shareholder claims” in Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 16. Commitments and Contingencies.

Our operating results may fluctuate significantly.

We expect that any potential growth in revenue may fluctuate from quarter to quarter and year to year as a result of many factors, including the factors discussed in these Risk Factors. The results of any prior quarterly period should not be relied upon as an indication of our future operating performance. If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our ordinary shares could decline substantially. Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our stock to fluctuate substantially.

Our ordinary shares are listed to trade on more than one stock exchange, and this may result in price variations.

Our ordinary shares are listed on both the Nasdaq and the LSE. From time to time, dual-listing may result in price variations between the exchanges due to a number of factors. Our ordinary shares trade in U.S. dollars on Nasdaq and in GBP on the LSE. In addition, the exchanges are open for trading at different times of the day and the two exchanges also have differing holiday schedules. Differences in the trading schedules, as well as volatility in the exchange rate of the two currencies, among other factors, may result in different trading prices for our ordinary shares on the two exchanges. Other external influences may have different effects on the trading price of our ordinary shares on the two exchanges.

We face a number of risks associated resulting from the relocation of our primary listing.

Effective June 27, 2024, we transitioned our primary stock exchange listing to Nasdaq from the LSE. We continue to have a secondary listing on the LSE where our ordinary shares trade on the Equity Shares (Transition) category. Accordingly our ordinary shares are now listed on both exchanges. As a result of the relocation of our primary listing we have ceased to be eligible for inclusion in certain U.K. and European equity indices. However, we are currently ineligible for inclusion in many U.S. equity indices, including the S&P 600, Russell 2000, and CRSP. Further, we may fail to satisfy the criteria to become eligible for consideration for inclusion in such indices, and even if we do inclusion in any index is at the discretion of the index provider. The price and liquidity of our ordinary shares may be adversely affected until we are included in U.S. equity indices.

The rights afforded to our shareholders are governed by English law. Not all rights available to shareholders under U.S. law will be available to holders of our ordinary shares.

Indivior PLC is organized under the laws of England and Wales. The rights of holders of our ordinary shares are governed by English law and our articles of association (the “Articles”), and these may not provide the level of legal certainty and transparency afforded by incorporation in a U.S. state. There can be no assurance that English law will not change in the future or that it will serve to protect investors in a similar fashion afforded under corporate law principles in the U.S., which could adversely affect the rights of investors. Rights afforded to shareholders under English law differ in certain respects from the rights of shareholders in typical U.S. companies. In particular, English law currently significantly limits the circumstances in which the shareholders of English companies may bring derivative actions (i.e., legal actions brought by a shareholder on behalf of a company against a third-party). Under English law, in most cases, only Indivior PLC may be the proper plaintiff for the purposes of maintaining proceedings in respect of wrongful acts committed against it and, generally, neither an individual shareholder, nor any group of shareholders, has any right of action in such circumstances. In addition, English law does not afford appraisal rights to dissenting shareholders in the form typically available to shareholders in a U.S. company. It may not be possible for shareholders outside the U.K. to enforce any judgments in civil or commercial matters or any judgments in securities laws of countries other than the U.K. against some or all of the directors or executive officers of Indivior PLC who are resident in the U.K. or countries other than those in which judgment is made.

Provisions of our Note Purchase Agreement and the U.K. City Code on Takeovers and Mergers may deter or prevent an otherwise beneficial takeover attempt of us.

Provisions of the Note Purchase Agreement could deter or prevent an otherwise beneficial takeover attempt of us. For example, a change of control constitutes an Event of Default under the Note Purchase Agreement. The Note Purchase Agreement generally defines a Change of Control to mean (i) the acquisition by any Person or group of Capital Stock representing more than 35% of the total voting power of all of the outstanding voting stock of Indivior PLC, or (ii) the occupation of a majority of the seats on the board of directors of Indivior PLC by persons who were not members of the board of directors of Indivior PLC when we entered into the Note Purchase Agreement and whose election to the board of directors of Indivior PLC was not approved by a majority of our Board. Because a Change of Control would trigger an Event of Default under the Note Purchase Agreement, otherwise beneficial takeover attempts may be discouraged or delayed.

Similarly, protections found in provisions under the U.K. City Code on Takeovers and Mergers (the "Takeover Code") may discourage or delay a takeover attempt, including attempts that may be beneficial to holders of our ordinary shares. As a company incorporated in the United Kingdom with a listing on the Main Market of the London Stock Exchange, the Takeover Code currently applies to any takeover offer for us.

The Takeover Code provides a framework within which takeovers of certain companies organized in the United Kingdom are regulated and conducted. Accordingly, our shareholders are entitled to the protections afforded by the Takeover Code and the Takeover Panel, which operate principally to ensure that shareholders are treated fairly and are not denied an opportunity to decide on the merits of a takeover, and that shareholders of the same class are afforded equivalent treatment by an offeror. However, the framework within which takeover offers under the Takeover Code must be conducted may differ from the rules and practices that apply to takeover offers for publicly listed US corporations.

For example, under the Takeover Code, if following an approach by or on behalf of a potential bidder, the company is “the subject of rumor or speculation” or there is an “untoward movement” in the company’s share price, there is a requirement for the potential bidder to make a public announcement about a potential offer for the company or be forced to step away from a potential transaction for a period of time, or for the company to make a public announcement about its review of a potential offer. Due to the potential disclosure, some potential U.S bidders unfamiliar with the Takeover Code may chose not to make an offer or decide to not continue with a potential bid because they are concerned about this public announcement. Other requirements include that a mandatory cash offer to be made if either:

• a person acquires an interest in shares which, when taken together with the shares in which persons acting in concert with it are interested, increases the percentage of shares carrying voting rights in which it is interested to 30% or more; or
• a person, together with persons acting in concert with it, is interested in shares which in the aggregate carry not less than 30% of the voting rights of a company but does not hold shares carrying more than 50% of such voting rights and such person, or any person acting in concert with it, acquires an interest in any other shares which increases the percentage of shares carrying voting rights in which it is interested.

Our business strategy may involve future transactions that may harm the market price of our ordinary shares or require us to seek additional funds, and such funding may not be available on commercially favorable terms or at all and may cause dilution to our existing shareholders. The issuance of additional ordinary shares in connection with future acquisitions, any share incentive or share option plan, or otherwise, may dilute all other shareholdings.

In order to achieve our business strategy, we regularly review potential transactions related to technologies, products or product rights, and businesses that are complementary to our business, including mergers and acquisitions, licenses and collaborations, and development and supply, commercialization or co-promotion arrangements, among others. We may choose to enter into one or more of these or other transactions at any time, which may cause substantial fluctuations in the market price of our ordinary shares. Moreover, depending upon the nature of any transaction, we may experience a charge to earnings, which could also materially adversely affect our results of operations and could harm the market price of our ordinary shares.

In order to finance such transactions, we may require additional funds, and we may seek such funds through various sources, including debt and equity offerings, corporate collaborations, bank borrowings, arrangements relating to assets, monetization of royalty streams or other financing methods or structures. In particular, we may, for these and other purposes, issue additional equity or convertible equity securities which would cause our shareholders to suffer dilution to their percentage ownership of the Company, or the market price of our ordinary shares may be adversely affected. The source, timing and availability of any financings will depend on global economic conditions, credit and financial market conditions, interest rates and other factors. If we issue additional equity securities or securities convertible into equity securities, our shareholders will suffer dilution of their investment, and it may adversely affect the market price of our ordinary shares. If we issue additional debt securities, our existing debt service obligations will increase further. If we are unable to generate sufficient cash to meet these obligations and need to use existing cash or liquidate investments in order to fund our debt service obligations or to repay our debt, we may be forced to curtail our operations. We cannot be certain that additional financing will be available from any of these sources when needed or, if available, will be on acceptable terms. If we fail to obtain additional capital when we need it, we may not be able to execute our business strategy successfully and may have to give up rights to our product platforms, and/or products, or grant licenses on terms that may not be favorable to us.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our share price and trading volume could decline.

The trading market for our ordinary shares depends in part on the research and opinions that securities or industry analysts publish about us or our business which we do not control. If one or more of the analysts who cover us downgrade our rating, lower our price target, or publish inaccurate or unfavorable research about our business, our share price could decline. If one or more of these analysts cease coverage of our company or fail to publish reports on our company regularly, demand for our ordinary shares could decrease, which might cause our share price and trading volume to decline.

We may not pay dividends or repurchase our shares in the future. Our ability to pay dividends, repurchase our shares, or make other returns of capital in the future depends, among other things, on our financial performance.

There can be no guarantee that our historical performance will be repeated in the future, particularly given the competitive nature of the industry in which we operate, and our revenue, income and cash flow may significantly underperform market expectations. If our cash flow underperforms market expectations, then our capacity to pay a dividend, repurchase shares, or make other returns of capital may be adversely impacted. Any decision to declare and pay dividends or to make other returns of capital will be made at the discretion of the Board and will depend on, among other things, applicable law, regulation, restrictions (if any) on the payment of dividends and/or capital returns in our financing arrangements, our financial position, retained earnings, working capital requirements, finance costs, general economic conditions and other factors that the Board deems significant from time to time.

We last paid a dividend in July 2016. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future, including due to limitations that are currently imposed by our Note Purchase Agreement. Any return to shareholders therefore likely will be limited to the increase in the price of our ordinary shares, if any.

Similarly, while we have completed four share repurchase programs with an aggregate value of $400 million between July 2021 and January 2025, any future repurchase of shares is subject to the discretion of our Board and will depend on similar factors as those that affect decisions to pay dividends. There can be no assurance the Company will repurchase any additional shares beyond the programs already announced.

The Parent Company is a holding company with no business operations of its own and depends on its subsidiaries for cash, including in order to pay dividends or make share repurchases.

The Parent Company is a holding company with no independent operations and is dependent on earnings and distributions of funds from its operating subsidiaries for cash, including in order to pay dividends to its shareholders or make share repurchases. The Parent Company’s ability to pay dividends to its shareholders or make share repurchases therefore depends on the ability of its subsidiaries to distribute earnings or pay dividends to the Parent Company, general economic conditions, restrictions under our Note Purchase Agreement and other factors the Board deems significant from time to time. The Parent Company’s distributable reserves can be affected by reductions in profitability, impairment of assets and severe market turbulence.

Risks Related to Information Security and Data Privacy

Business interruptions or breaches of data security could disrupt our product sales and delay the development of our product candidates.

We are dependent on information technology systems and infrastructure, including mobile technologies, to operate our business. In the ordinary course of our business, we collect, store and transmit confidential information, including intellectual property, proprietary business information and personal information. It is critical that we do so in a secure manner to maintain the confidentiality and integrity of such confidential information. While we have implemented processes and controls to collect, store, and transmit such information in a secure manner, there can be no assurance that any measures we take will prevent potential cyber-attacks or other security breaches that could adversely affect the confidentiality and integrity of such confidential information.

Like many companies, we have experienced breaches of our data security, including phishing attacks and malware. To date, none have had a material effect on our business strategy, results of operations or financial condition. Were we to have a cybersecurity incident, it is reasonably likely that it could have a material adverse effect on our business and financial results. While we have taken a number of steps to prevent further cybersecurity incidents, we cannot estimate how likely any such incident would be.

We also use a number of third-party vendors who have or could have access to our confidential information. The size and complexity of our information technology systems, and those of third-party vendors with whom we contract, make such systems potentially vulnerable to breakdown, malicious intrusion, insider threat attacks, security breaches, ransomware, and other cyber-attacks, all of which would be costly to remedy. In addition, the use of mobile devices or cloud-based systems that access confidential information increases the risk of data security breaches, which could lead to the loss of confidential information, trade secrets or other proprietary information. Failures of or disruptions to our systems or the systems of third parties on whom we rely, particularly if prolonged, could result in breaches of data security and/or a loss of key data which would adversely affect our reputation, business and results of operations. While we have implemented security measures to protect our data security and information technology systems, our visibility into the data security processes and controls in place at our third party vendors is inherently limited and, as a result, such measures may not prevent the adverse effect of such events.

In addition, we may be impacted by data breaches or business interruptions occurring within our supply chain, with our customers, or their business partners. For example, in February 2024, a data breach occurred at a leading provider of revenue and payment cycle management that connects payers, providers, and patients within the U.S. healthcare system. Although we did not contract with this provider, the impact of this data breach significantly disrupted payers, providers and their patients which subsequently impacted SUBLOCADE's revenues in the first and second quarters of 2024, particularly affecting new patient and refill adjudications, which contributed to a decrease in SUBLOCADE's sequential dispense growth in the U.S. in the second quarter of 2024. For additional information regarding how we manage information resources and threats, see “Item 1.C. Cybersecurity.”

We are required to maintain the privacy and security of personal information in compliance with privacy and data protection regulations worldwide. Failure to meet the requirements could result in fines, penalties, or private actions, harm our business and damage our reputation with customers, suppliers, and associates.

We rely on systems, networks, products, and services, some of which are managed by third-party service providers to protect our information. Increased information security threats, more sophisticated cyber-attacks and a growing base of diversified threat actors continually pose a risk to all systems and data.

Additionally, we collect, store, and process personal information relating to many stakeholders, including our customers, suppliers, and associates. This information is increasingly subject to a variety of U.S. laws, including an increasing number of comprehensive and health-care-specific laws across various U.S. states, and other emerging privacy and cybersecurity laws internationally, at the federal level in the U.S., and across various U.S. states, that may carry significant potential penalties for noncompliance. We are also subject to a variety of international laws and regulations, such as the General Data Protection Regulation, as enacted in the European Union, the Data Protection Act in the U.K., Canada’s Personal Information Protection and Electronic Documents Act, the Australian Privacy Act 1988 and its amendments, that may carry significant potential penalties for noncompliance.

The FTC also sets expectations surrounding the privacy and security of consumers’ personal information. It asserts that failing to take appropriate steps to keep consumers’ personal information secure or failing to provide a level of security commensurate to promises made to individuals about the security of their personal information (such as in a privacy notice) may constitute unfair or deceptive acts or practices in violation of Section 5(a) of the Federal Trade Commission Act (“FTC Act”). The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities. Individually identifiable health information is considered sensitive data that merits stronger safeguards. With respect to privacy, the FTC also sets expectations that companies honor the privacy promises made to individuals about how a company handles consumers’ personal information; any failure to honor promises, such as the statements made in a privacy policy or on a website, may also constitute unfair or deceptive acts or practices in violation of the FTC Act. While we do not intend to engage in unfair or deceptive acts or practices, the FTC has the power to enforce promises as it interprets them, and events that we cannot fully control, such as data breaches, may result in FTC enforcement. Enforcement by the FTC under the FTC Act can result in civil penalties or enforcement actions.

These data privacy and data protection laws and regulations are typically intended to protect the privacy of personal information that is collected, processed, transmitted, and stored. In many cases, these laws apply not only to third-party transactions, but also to transfers of information between a company and its subsidiaries. While we have invested and continue to invest significant resources to comply with data privacy regulations, many of these regulations are new, complex, and subject to interpretation. Noncompliance with these laws could result in negative publicity, damage to our reputation, penalties, or significant legal liability. We could be adversely affected if legislation or regulations are revised or extended to require changes in our business practices or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our business. The landscape of federal and state laws regulating personal information is constantly evolving, and compliance with these laws requires a flexible privacy framework and substantial resources, and compliance efforts will likely be an increasing and substantial cost in the future.

Risks Related to Our International Status and Operations

We are subject to various risks related to the local and international nature of our business, including domestic and foreign laws, regulations, and standards. Failure to comply with such laws and regulations or the occurrence of unforeseen developments such as litigation could adversely affect our business.

Our business operates in several countries including the U.S., U.K., Canada, France, Germany, and Australia and our products are available in more than 30 countries worldwide. As a result, we are subject to specific risks of conducting business in different jurisdictions across these countries and other parts of the world. Our business is subject to a wide array of domestic and international laws, regulations and standards in jurisdictions where we operate, including advertising and marketing regulations, anti-bribery and corruption/money laundering laws, anti-competition regulations, data protection (including payment card industry data security standards) and cybersecurity requirements (including protection of information and incident responses), environmental protection laws, foreign exchange controls and cash repatriation restrictions, government business regulations applicable to us as a government contractor or supplier selling to governmental agencies, import and export requirements, intellectual property laws, labor laws, product compliance laws, supplier regulations regarding the sources of supplies or products, tax laws, zoning laws, unclaimed property laws and laws as well as regulations and standards applicable to other commercial matters. In particular, occupational health and safety or consumer product safety regulation may require that we take appropriate corrective action, including but not limited to product recall, in respect of products that we have distributed. Managing a product recall or other corrective action can be expensive and can divert the attention of management and other personnel for significant time periods. Moreover, we are also subject to audits and inquiries by government agencies in the normal course of business.

Failure to comply with any of these laws, regulations and standards could result in civil, criminal, monetary and non-monetary penalties as well as potential damage to the Company’s reputation. Changes in these laws, regulations and standards, or in their interpretation, could increase the cost of doing business, including, among other factors, as a result of increased investments in technology and the development of new operational processes. Furthermore, while we have implemented policies and procedures designed to facilitate compliance with these laws, regulations, and standards, and applicable self-regulatory industry codes by region that the Company has committed to follow, but there can be no assurance that neither we nor our associates, contractors or agents will not violate such laws inadvertently, regulations and standards or our policies. Any product recall or other corrective action may negatively affect customer confidence in the relevant products and the Company itself, regardless of whether it is successfully implemented. Any such failure to comply or violation could individually or in the aggregate materially adversely affect our business, financial condition, results of operations and cash flows.

We are exposed to risks related to currency exchange rates.

We are incorporated in England and Wales but present our financial statements in this report in U.S. dollars. Based on the country where sales originate, we derived 85%, 83%, and 81% of our net revenues from the U.S. in 2024, 2023, and 2022, respectively. We also conduct business in the U.K., Europe and Australia, among other places. Our agreements with customers outside the U.S. often involve payments denominated in currencies other than U.S. dollars, which creates foreign currency translation risk. Our operating results are therefore subject to currency fluctuations in translating revenues and costs from those foreign currencies to U.S. dollars. Additionally, if in the future we expand our sales and operations into new markets, different currencies could expose us to additional currency translation risks. These risks increase with the varying strength of the U.S. dollar.

We generally do not actively hedge exchange rate fluctuations, although we attempt to balance large non-U.S. dollar liabilities with a similarly sized monetary assets in the same currency, which is sometimes referred to as a natural hedge. To the extent that we do not hedge our exposure to foreign currency exchange rate fluctuations, or to the extent that such hedging is structured ineffectively or does not offset our exposure to exchange rate fluctuations, our business, financial condition, and results of operations could be materially adversely affected.

Exchange rate fluctuations between local currencies and the U.S. dollar also create risk in other ways, including but not limited to: (i) increasing the U.S. dollar cost of non-U.S. research and development expenses and the cost of sourced product components outside the U.S. (in the case of a weakening U.S. dollar); (ii) decreasing the value of our revenues denominated in other currencies (in the case of a strengthening U.S. dollar); (iii) distorting the value of non-U.S. dollar transactions and cash deposits; and (iv) affecting commercial pricing and gross margins of our products. These effects can have an adverse impact on our results of operations and financial condition and may also make it more difficult for investors to understand the relative strengths or weaknesses of our underlying business on a period-over-period comparative basis.

Risks Related to Being a Publicly-Traded Company in the U.S.

If we fail to maintain an effective system of internal control over financial reporting (“ICFR”), fail to comply with Section 404 of the Sarbanes-Oxley Act, or if we identify a material weakness, then we may not be able to accurately report our financial results or prevent fraud and, as a result, shareholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our ordinary shares and may cause other increases in operating costs.

We were first required to comply with the internal control evaluation and certification requirements of Section 404 of the Sarbanes-Oxley Act for our 2024 fiscal year. We have incurred, and expect that we may further incur, significant additional accounting, legal, and other expenses in connection with complying with the Sarbanes-Oxley Act. If we fail to maintain effective ICFR for any reason, such failure could harm our reputation, operations, financial reporting or financial results and could result in our conclusion that our ICFR is not effective. In addition, if it is determined that we are not in compliance with Section 404, we may be required to implement new internal control procedures and re-evaluate our financial reporting.

Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. In addition, any testing by us, as and when required, conducted in connection with Section 404 or any subsequent testing by our independent registered public accounting firm, as and when required, may reveal deficiencies in our ICFR that may be deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement. Inferior ICFR could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our ordinary shares.

A material weakness is a deficiency, or a combination of deficiencies, in ICFR, such that a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. In other words, a material weakness means there is an unmitigated risk the financial information we report contains material errors, or that we might be unable to detect fraud. Any system of internal controls, however well-designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met. If we cannot conclude that we have effective ICFR, investors could lose confidence in the reliability of our financial statements, which could lead to a decline in the trading price of our ordinary shares. Failure to comply with reporting requirements could also subject us to sanctions and/or investigations by Nasdaq or the SEC or other regulatory authorities.

We are a foreign private issuer. Should we no longer qualify as a foreign private issuer in the future, we may incur significant additional expenses. Also, as a foreign private issuer, we are not subject to SEC proxy rules. As a foreign private issuer, we are permitted to follow certain home country corporate governance practices in lieu of certain requirements applicable to domestic U.S. issuers. This may afford less protection to holders of our ordinary shares.

As of June 30, 2024, 63,953,605 shares were held for the benefit of 1,869 shareholders who were U.S. residents, comprising approximately 48% of our issued share capital. Because not more than 50% of our ordinary shares were held by shareholders resident in the U.S., we qualify as a “foreign private issuer” within the meaning of Rule 405 of the Securities Act, as amended (the “Securities Act”) and Rule 3b-4 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We thus are exempt from certain provisions of the Exchange Act that are applicable to U.S. public companies, including: (i) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; (ii) the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and (iii) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events, although commencing with this filing we intend to voluntarily file such quarterly and current reports. Foreign private issuers are also exempt from compliance with Regulation Fair Disclosure, which is aimed at preventing issuers from making selective disclosures of material information.

The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second financial quarter. Accordingly, we will next make a determination with respect to our foreign private issuer status on June 30, 2025.

We will lose our foreign private issuer status if more than 50% of our issued ordinary share capital is held by U.S. residents as of June 30, 2025. If we lose our foreign private issuer status, the regulatory and compliance costs to us under U.S. securities laws as a U.S. domestic issuer will be significantly greater than the costs incurred as a foreign private issuer, and we have already begun to incur some of those costs.

In addition, as a foreign private issuer whose shares are listed on Nasdaq, we are permitted to follow certain home country corporate governance practices in lieu of certain Nasdaq requirements. As a company incorporated in the U.K. and which has a secondary listing on the Equity Shares (Transition) category of the LSE, we may follow our home country's practice with respect to, among other things, Nasdaq rules requiring shareholders to approve equity compensation plans and material revisions thereto. We discuss these below at Item 10., "Directors, Executive Officers and Corporate Governance—Board Practices." As a result, shareholders may not have the same protections afforded to shareholders of companies that are not foreign private issuers.

We have changed the financial reporting standards that we apply to our financial statements from IFRS to U.S. GAAP and, as a result, some of our financial data may not be easily comparable to historical financial results.

We have transitioned from IFRS to U.S. GAAP, and we will report our financial statements in the U.S. under U.S. GAAP for future periods. As a U.K. company, Indivior will also continue to comply with applicable U.K. legal requirements relating to the publication of financial reports and accounts under IFRS at the half-year and year end. In connection with this transition, we have invested significant resources and time to convert historical financial statements prepared under IFRS from prior fiscal years into U.S. GAAP financial statements. There have been and there may in the future be significant differences between U.S. GAAP and IFRS, including differences related to acquired in-process research and development costs, intangible assets, capitalized development costs, lease accounting, and income tax. As a result, our financial information and reported earnings for future periods within a fiscal year or any interim period could be significantly different. Consequently, one may not be able to meaningfully compare our financial statements under U.S. GAAP with our current or historical financial statements under IFRS.

Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters, could significantly affect our financial results or financial condition.

Accounting standards, including both U.S. GAAP and IFRS, and related accounting pronouncements, implementation guidelines and interpretations with regard to a wide range of matters that are relevant to our business, such as revenue recognition, asset impairment, inventories, lease obligations, self-insurance, tax matters, pensions and litigation, and impairment of goodwill and other intangible assets are complex and involve many subjective assumptions, estimates and judgments. See, for example, “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—E. Critical Accounting Estimates.” These estimates may be more sensitive, particularly regarding assumptions pertaining to the difference between gross revenue and net revenue, than others in our industry or in other industries. Changes in accounting standards or their interpretation or changes in underlying assumptions and estimates or judgments could significantly change our reported or expected financial performance or financial condition.

The obligations associated with being a company publicly traded in the U.S. require significant resources and management attention, and changing laws, regulations and standards are creating uncertainty for U.S. public companies.

As a company publicly traded in the U.S., we incur legal, accounting and other expenses that we did not previously incur. We are subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”) which contain certain exemptions for FPIs, the listing requirements of Nasdaq, and other applicable securities rules and regulations. The Exchange Act requires that we file annual and other reports with respect to our business, financial condition, and results of operations. The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective ICFR. Furthermore, the establishment and the maintenance of the corporate infrastructure demanded of a company publicly traded in the U.S. may, in certain circumstances, divert management’s attention from implementing our growth strategy, which could prevent us from improving our business, financial condition, and results of operations. We have made, and will continue to make, enhancements to our ICFR and accounting systems in order to meet our reporting obligations as a company publicly traded in the U.S. However, the measures we take may not satisfy these obligations. In addition, compliance with these rules and regulations has increased our legal and financial compliance costs and has made some activities more time-consuming and costly. These additional obligations may have a material adverse impact on our business, financial condition, results of operations and cash flow.

In addition, changing laws, regulations and standards relating to corporate governance, ESG matters, and public disclosure create uncertainty for public companies in the U.S., increasing legal and financial compliance costs and making some activities more time-consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We have invested, and expect to continue to invest, resources to comply with evolving laws, regulations and standards, and this investment may result in increased operating expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business, financial condition, results of operations and cash flow could be adversely affected.

In addition, as a company publicly traded in the U.S., our shareholders may file securities class action litigation against that company based on various claims such as securities fraud and other violations of securities laws when the market price of a company’s shares has been volatile. For example, an amended, purported securities class action lawsuit was filed against Indivior PLC, Mark Crossley (the CEO of the Company), Ryan Preblick (the CFO of the Company), and Richard Simkin (the Chief Commercial Officer of the Company) on December 5, 2024, alleging violations of certain U.S. federal securities laws following a sudden drop in the market price of the Company’s ordinary shares. See 16. Commitments and Contingencies. The defense and disposition of litigation of this type could result in substantial costs and divert resources and the time and attention of our management, which could materially and adversely affect our business or financial condition. See also the discussion of similar, but less common, U.K. litigation under the caption “ U.K. shareholder claims” in Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 16. Commitments and Contingencies.”

Risk management and strategy

The Company recognizes the increasing sophistication of cyber threats, including phishing, malware attacks, and ransomware, affecting industries worldwide. Because we collect, store and transmit confidential information, including intellectual property, proprietary business information, and personal information in the ordinary course of our business, we are often the subject of various cyber-attacks. We may also be targeted by organized crime because of the nature of our products. Therefore, the Company has a number of processes for assessing, identifying, and managing material risks from cybersecurity threats as outlined below. In particular, the Company’s cybersecurity risk management and strategy efforts encompass various measures, including:

a. Risk Assessment Framework: The Company endeavors to assess cyber risks in an ever-evolving cybersecurity threat landscape and seeks to grow the maturity of its infrastructure to defend against these ever-evolving cybersecurity threats. The Company uses a risk assessment framework as part of its risk management process related to cybersecurity, which includes the evaluation of potential vulnerabilities, threats, and impacts on the organization's information systems and data. This includes assessing the likelihood and potential consequences of identified cyber risks and threats to the enterprise.

b. Business Operating Standards: The Company has established business operating standards, monitoring processes, and a business resilience program to support the continuity of operations in the face of potential disruptions.

c. IT Strategy and Governance: The Company maintains IT strategies, governance frameworks, policies, processes, and disaster recovery plans which are aligned with overall business continuity objectives.

d. Incident Response Plan: The Company maintains an incident response plan that outlines specific steps to be taken in the event of a cybersecurity incident. This plan includes procedures for containing the incident, mitigating its impact, and recovering affected systems and data.

e. Security Measures: The Company deploys a large number of processes and tools to attempt to secure its systems and protect sensitive data. Indivior’s information security program is aligned with the NIST 800-53 CSF framework.

f. Employee Training and Awareness: The Company actively works to promote a culture of security awareness including by investing in ongoing employee training and awareness programs. The Company conducts security exercises and provides training modules that cover topics like recognizing phishing attempts and maintaining strong password practices.

g. Third-Party Risk Management: We also use a number of third-party vendors who have or could have access to our confidential information. The Company has established processes to evaluate and manage cybersecurity threats associated with certain third-party service providers. The Company continues to evolve its third-party risk review processes for new and existing, critical third-party service providers.

h. Regular Audits and Assessments: Periodic internal and external audits and assessments are conducted periodically to evaluate the effectiveness of the cybersecurity measures in place. These audits help in identifying areas for improvement and compliance with industry standards and regulations.

i. Incident Simulations: The Company conducts periodic incident simulation exercises to test the effectiveness of its incident response plans and the readiness of personnel to contain, remediate and minimize the impact in the event of a cybersecurity incident. These exercises help in refining response strategies and improving preparedness.

j. Use of Experts: From time to time, the Company engages a variety of third parties with expertise in cybersecurity to conduct independent assessments and provide recommendations for enhancing its cybersecurity posture.

k. ERM Integration: The Company integrates the results of the Company’s cyber risk assessment into its Enterprise Risk Management process, which is designed to identify, assess, manage, report, and monitor risks and opportunities affecting the achievement of the Company's strategy and objectives.

Following a cybersecurity incident, and during its investigation and the formulation of a response, our processes also envision measures designed to contain and/or eradicate the incident and prevent further effects. Once it is determined that the incident has been resolved, we then work to establish appropriate controls (if applicable) to address similar future events and/or prevent another similar event from occurring in the future. To date, we have not experienced any previous cybersecurity incidents that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition.

Governance

The Audit & Risk Committee of the Board oversees the Company’s cybersecurity efforts. The Company's cybersecurity efforts are managed by the Chief Information Security Officer (“CISO”) who has over 20 years of experience as a security professional in the pharmaceutical industry.

The CISO reports directly to the Chief Information and Innovation Officer (“CIIO”), who has over 30 years of experience as an Information Technology (“IT”) professional including 15 years in leadership roles in the pharmaceutical, medical device and diagnostics industry, and was formerly Chief Information Officer and VP Global Supply Chain, Immucor, VP Global Information Services, Smith & Nephew, Sr. IT Director, Medtronic, and Sr. Manager, Deloitte Consulting.

The Audit & Risk Committee receives updates on an annual basis from the CIIO and CISO on the Company’s Cybersecurity strategy approach to IT and cybersecurity, including on the prevention, detection, mitigation, and remediation of cybersecurity incidents. The Audit & Risk Committee also receives briefings as necessary on cyber risks and current threats directly from external cybersecurity experts. The CISO oversees the Company’s governance programs, tests compliance with standards, works to remediate known risks, and leads our employee training program.

The CISO is informed and monitors the latest developments in cybersecurity, including potential threats and innovative risk management techniques. In the event of a cybersecurity incident, the CISO is equipped with a specific incident response plan. This plan includes immediate actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents. As is necessary, the CISO and the CIIO, working at the direction of the Chief Legal Officer and outside counsel, inform the Audit & Risk Committee of any cybersecurity incidents and inform the Board directly of any material cybersecurity incidents. See also “Item 1A. Risk Factors—Business interruptions or breaches of data security could disrupt our product sales and delay the development of our product candidates.”

The following table contains information regarding Company's principal physical properties.

(1) The Hull, England property is leased for 150 years and accounted for as owned.

The descriptions of our litigation and regulatory matters, and other matters, contained in Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 16. Commitments and Contingencies to our financial statements are incorporated herein by reference.

The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and the related notes in Item 8. Financial Statements—Audited Consolidated Financial Statements. Historically, we prepared our consolidated financial statements in accordance with International Financial Reporting Standards. As part of the Company’s efforts to align with industry peers and prepare for the expected loss of foreign private issuer status, the Company elected to file its 2024 annual report on Form 10-K, including presentation of its consolidated financial statements in accordance with U.S. GAAP. The transition to US GAAP is reflected retrospectively for all periods from the Company’s inception. The following discussion is based on our financial information prepared in accordance with U.S. GAAP and regulations of the SEC. Some of the information contained in this discussion and analysis or set forth elsewhere in this annual report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. Item 1A. Risk Factors includes a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis, as well as Important Cautionary Note Regarding Forward-Looking Statements.

Overview

Indivior is a global pharmaceutical company working to help change patients’ lives by pioneering life-transforming treatment for addiction, including SUBLOCADE (buprenorphine extended-release) injection for subcutaneous use, a long-acting injectable for opioid use disorder and OPVEE (Nalmefene) nasal spray for opioid overdose recovery.

References below to “2024,” “2023,” and “2022” are for the financial years ended December 31, 2024, 2023, and 2022, respectively.

Operating Results

The following table summarizes our key measures of financial condition and results of operations for the periods under review:

(in millions, except per share data)

(1) On October 10, 2022, Indivior PLC completed a 5:1 share consolidation. The Company’s basic and diluted weighted average number of shares outstanding, basic earnings (loss) per share, and diluted earnings (loss) per share reflect the share consolidation for all periods presented.

For the periods presented, the Company operated as one business segment, which is predominantly the development, manufacture and sale of buprenorphine-based prescription drugs for the treatment of opioid dependence and related disorders, and nalmefene nasal spray for emergency opioid overdose reversal. Substantially all our net revenue for such periods were derived from sales of SUBLOCADE and other buprenorphine-based sublingual products (including SUBOXONE Film and SUBOXONE Tablet). SUBLOCADE accounted for 64%, 58%, and 45% of our net revenue in 2024, 2023, and 2022, respectively. Other buprenorphine-based sublingual products accounted for 32%, 38%, and 52% of our net revenue in 2024, 2023, and 2022, respectively. In the U.S. market for buprenorphine-based treatments for opioid dependence, SUBOXONE Film had an average market share of 16%, 19% and 20% in 2024, 2023, and 2022, respectively, according to data from IQVIA.

The U.S. market is the largest contributor to our net revenue. The following table sets out a breakdown of net revenue as between the U.S. and the Most of World.

(in millions)

Key factors affecting operating results

Market growth

Our net revenue is impacted by the overall growth of the markets where we operate. Market growth is impacted by increased treatment penetration, which is a function of patient awareness and desire to seek treatment, as well as the number of certified physicians available to deliver treatment. Competitive pressures can drive pricing and can also influence decisions of third-party payors regarding inclusion of products on their list of approved drugs covered by insurance. To increase access to treatment for patients, we engage with government agencies, key opinion leaders in addiction and healthcare professionals to bring patient outcomes to the forefront of decision making. Additionally, we engage in non-branded marketing to increase awareness for patients and families impacted by addiction on a country-by-country basis as allowed by local regulations.

In 2024, the volume of U.S. buprenorphine medication-assisted treatments (BMAT) grew in mid-single digits. Market growth was adversely impacted by transitory items including Medicaid re-enrollment in many large states and an issue impacting patient coverage approvals with one of the largest pharmacy benefit managers. The Company continues to expect long-term U.S. growth to be sustained in the mid- to high-single digit percentage range due to increased overall public awareness of the opioid epidemic and approved treatments, together with regulatory and legislative actions to increase access to BMAT treatments. In 2024, the Company's share of the market growth was impacted by both competition in the LAI category, which we expect to continue, as well as competition in the oral category.

Distribution channels

In the U.S., we have distribution agreements with the three largest wholesalers, which accounted for 55%, 54%, and 55% of our global net revenue in 2024, 2023, and 2022, respectively. These wholesalers, in turn, distribute our products through various channels including the following:

• Commercial managed care. This category comprises insurance programs intended to reduce the cost of providing health benefits and improve the quality of care to their members. One of the most common forms of managed care is the use of a panel or network of healthcare providers that provide care to enrollees. Also within commercial managed care is the Medicare Part D Program, a social insurance program administered by the U.S. government.
• Medicaid. Medicaid is a jointly funded, Federal-State health insurance program that covers children, the aged, blind, and/or disabled and other people who are eligible to receive federally assisted income maintenance payments, including prescription drugs. We are obligated to offer “Best Price” under Medicaid, being the lowest price at which the manufacturer sells a drug to any purchaser in any pricing structure (inclusive of discounts and rebates).
• Federal. This channel encompasses the provision of outpatient drugs to federal government purchasers, including the U.S. Department of Veterans Affairs and the Department of Defense, or under the 340B Program. Pricing discounts are provided separately for drugs provided under these programs.
• Pharmacy. This channel covers end customers paying cash directly at the pharmacy. Often, we provide discount coupons to customers where cash is used for payment.

Our fourth largest customer in the U.S. is a specialty pharmacy group which primarily purchases SUBLOCADE and dispenses product to patients through the various channels listed above.

In the Most of World, distribution channels differ by country. For example, in France, we engage with different wholesalers, hospitals, pharmacies and individuals, while in Australia, we engage with a single pre-wholesaler that negotiates the import and onward distribution of the products across the country.

Pricing

We offer various types of price reductions for our products, particularly in the U.S., which are reflected in net revenue. In the U.S., we primarily offer:

• Medicaid, Medicare Part D, and Commercial rebates. These are rebates granted to Medicaid, U.S. federal agencies and commercial managed care providers that purchase products from us. The level of these rebates varies by channel and product. Patients covered by commercial insurance often benefit from coupons to reduce any out-of-pocket payments they would otherwise be required to make.
• Fees under distribution agreements. Wholesalers, specialty pharmacies and specialty distributors of the Company’s products are generally offered various forms of consideration, including allowances/discounts, service fees and prompt payment discounts, for distributing the products. Wholesaler and specialty distributor allowances and service fees arise from contractual agreements and are estimated as a percentage of the price at which the Company sells product to them. In addition, customers are offered a prompt pay discount for payment within a specified contractual period.
• Chargebacks. Discounts that occur when contracted indirect customers purchase directly from wholesalers and specialty distributors. Contracted customers generally purchase a product at its contracted price. The wholesaler or specialty distributor, in turn, then generally charges back to the Company the difference between the wholesale acquisition cost and the contracted price paid to the wholesaler or specialty distributor by the customer.
• Returns. Returns are generally made if the product is damaged, defective, or otherwise cannot be used by the customer. In the U.S., the Company typically permits returns six months prior to and up to twelve months after the product expiration date. Outside the U.S., returns are only allowed in certain countries on a limited basis.

In Europe, changes to government policy or practices could adversely affect the level of reimbursement through government programs. In the U.S., proposals by legislators at both federal and state levels, regulators, and third-party payors continue to emerge with the aim of keeping healthcare costs down while expanding healthcare benefits. Similarly, in Europe, legislators, policymakers and healthcare insurance funds continue to propose and implement cost-containing measures to keep healthcare costs down, due in part to the attention being paid to healthcare cost containment and other austerity measures in Europe. Certain of these changes could impose limitations on the prices that the Company will be able to charge for its products and any approved product candidates. Further, an increasing number of EU member states and other foreign countries use prices for products established in other countries as “reference prices” to help determine the price of the product in their own territory. Consequently, a downward trend in prices of products in some countries could contribute to similar downward trends elsewhere.

Legal proceedings

The Company is involved in various lawsuits, claims, and other legal proceedings that arise in the ordinary course of business. These proceedings may involve compliance and trade practices, antitrust, commercial claims, product liability claims, intellectual property rights and securities, among others.

The Company records accruals for loss contingencies associated with these legal matters when it is probable that a liability will be incurred, and the amount of the loss can be reasonably estimated. The Company has accrued for these matters and will continue to monitor each related legal issue and adjust accruals as might be warranted based on new information and further developments in accordance with ASC 450-20-25, Contingencies. Developments in legal proceedings and other matters that could cause changes in the amounts previously accrued are evaluated each reporting period. Amounts accrued for legal contingencies often result from a complex series of judgments about future events and uncertainties that rely heavily on estimates and assumptions including timing of related payments.

Where the amount and timing of the payment is fixed, the obligation is not interest-bearing and the impact of discounting is significant, these obligations are recorded at their present value, generally using a discount rate appropriate to the obligation or approximating the risk-free rate at the time the Company entered into the obligation.

For further information regarding accrued litigation settlement expenses and other legal proceedings, refer to Item 8. Financial Statements—Audited Consolidated Financial Statements—Note 11. Accrued Litigation Settlement Expenses and Note 16. Commitments and Contingencies.

Discontinuation of marketing and promotion of PERSERIS (2024)

In July 2024, the Company discontinued the marketing and promotion of PERSERIS due to impending market changes that would make the product no longer financially viable. The Company has continued to supply PERSERIS to avoid disruption to patient care but no longer deploys a dedicated sales force.

Asset Acquisitions and Business Combinations (2023)

On March 2, 2023, the Company acquired 100% of the share capital of Opiant, which at the time was a publicly traded company in the U.S., for upfront cash consideration of $146 million and an additional amount to be potentially paid upon achievement of net sales milestones. Opiant was a specialty pharmaceutical company focusing on developing drugs for addictions and drug overdose. As a result of the acquisition, the Company added OPVEE, formerly the pipeline product OPNT003, an opioid overdose treatment well-suited to confront illicit synthetic opioids like fentanyl, to its portfolio. OPVEE was approved by the FDA in May 2023 and launched in October 2023.

The Consolidated Financial Statements for the year ended December 31, 2023 include the results of operations of the acquisition of Opiant since the acquisition date. As substantially all of the fair value of the gross assets acquired was concentrated in the value of the OPVEE in-process research and development asset, the acquisition was accounted for as an asset acquisition and total purchase consideration was allocated to the assets acquired and liabilities assumed based on their relative fair values as of the date of acquisition. The Company recorded a charge for in-process research and development associated with OPVEE for $120 million. As part of the acquisition, a subsidiary of Indivior issued Contingent Value Rights (“CVRs”) to the shareholders of Opiant. Total potential payments could be up to a maximum of $68 million over a period through September 30, 2030.

On July 31, 2023, the Company acquired full rights to the patents and other assets underlying INDV-2000 (oral Orexin-1 receptor antagonist) from C4X Discovery for $21 million, which was expensed as in-process research and development. As a result, the Company no longer has any obligation to pay future development or sales milestones or a royalty on net sales of this product candidate.

On October 11, 2023, the Company secured global rights to develop, manufacture, and commercialize Alar Pharmaceuticals Inc.’s (“Alar”) portfolio of buprenorphine-based ultra long-acting injectables, including lead asset ALA-1000 (now INDV-6001), which is potentially the first three-month LAI for OUD. The Company made an option payment of $5 million and an upfront payment of $10 million, each of which was expensed as in-process research and development. Alar is entitled to potential milestone payments if various developmental, regulatory, and commercial goals are achieved, and royalties in the low double digit to mid-teens as a percentage of net revenue.

On November 1, 2023, the Company acquired an aseptic manufacturing facility in the U.S. for upfront consideration of $5 million in cash and assumption of certain contract manufacturing obligations. The facility will be further developed to secure the long-term production and supply of SUBLOCADE.

The acquisition of the manufacturing facility has been accounted for as a business combination using the acquisition method of accounting. The assets acquired and liabilities assumed were recorded at fair value, with the excess of the purchase price over the fair value of the identifiable assets and liabilities recognized as $5 million of goodwill. A liability was recorded at fair value to reflect the present value of the expected losses from assumed contractual manufacturing obligations. Net operating losses attributable to these contractual obligations will be recorded against the liability from the date of acquisition through fulfillment of the contracts in late 2025.

See Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 18. Asset Acquisitions and Note 19. Business Combinations for more information on these transactions.

Results of operations

Comparison of the years ended December 31, 2024 and December 31, 2023:

(in millions)

(1) See Item 8. Financial Statements—Audited Consolidated Financial Statements—Note 11. Accrued Litigation Settlement Expenses.

Net revenue. Our 2024 and 2023 net revenue was driven by sales of SUBLOCADE and other buprenorphine-based sublingual products (including SUBOXONE Film and SUBOXONE Tablet). In 2024 and 2023, SUBLOCADE accounted for 64% and 58% of our net revenue, other buprenorphine-based sublingual products accounted for 32% and 38%, and PERSERIS accounted for 3% and 4%, respectively. SUBLOCADE volume growth was the primary driver of the increase in 2024 net revenue as compared to 2023. In 2024, the first OPVEE orders from BARDA were fulfilled. Price changes were not a significant driver of the increase in net revenue.

The following table shows the Company’s net revenue by major product line:

(in millions)

Total net revenue increased by $95 million, or 9%, to $1,188 million in 2024 from $1,093 million in 2023. The increase was primarily driven by double-digit year-over-year SUBLOCADE volume growth and the fulfillment of OPVEE orders from BARDA. Pricing was not material to net revenue growth. Higher net revenue from SUBLOCADE, which increased by $126 million, or 20%, from 2023 reflected further organized health system (OHS) channel penetration in the U.S. and increased new U.S. patient enrollments. 2024 SUBLOCADE growth was impacted by competition in the US LAI category and transitory items including Medicaid re-enrollment in many large states and an issue impacting patient coverage approvals with one of the largest pharmacy benefit managers. SUBOXONE Film net revenue declined 10% in 2024 and Film share averaged 16% and 19% in 2024 and 2023 and was 15% and 18% as of December 31, 2024 and 2023, respectively. In 2024, total net revenue from PERSERIS was $40 million, representing a 5% decrease from 2023 due to a decline in volume and the impact of discontinuation of PERSERIS in the second half of 2024.

The U.S. market is the largest contributor to our net revenue. Sales rebates, discounts and returns and other offsets to gross revenues are reflected in net revenue. The following table sets out a breakdown of net revenue between the U.S. and Most of World.

(in millions)

In 2024, U.S. net revenue increased by 11% to $1,008 million as compared to $912 million in 2023, primarily due to strong SUBLOCADE volume growth, supported by favorable mix between commercial and governmental channels for SUBOXONE and SUBLOCADE. Fulfillment of OPVEE orders from BARDA also contributed, offset by lower SUBOXONE revenue.

In 2024, net revenue attributable to Most of World decreased slightly from 2023 to $179 million. In 2024 and 2023, positive contributions from newer products (SUBLOCADE / SUBUTEX® Prolonged Release and SUBOXONE Film) were more than offset by the ongoing generic erosion of the legacy tablet business. In 2024 and 2023, SUBLOCADE / SUBUTEX Prolonged Release net revenue in Most of World was $52 million and $41 million, respectively.

Competitive dynamics and near-term Justice Systems funding challenges are expected to offset potential LAI category growth, resulting in modest SUBLOCADE net revenue growth in 2025. Competitive pressures, including from a potential fifth generic Film entrant, are expected to adversely impact both pricing and volume, resulting in an accelerated decline in Film net revenue in 2025. We also expect almost no revenues from PERSERIS in 2025 as a result of our decision to cease all marketing efforts in July 2024, although we continue to supply PERSERIS during a transition period. Together, these factors are expected to produce an overall decline in total net revenue and operating income in 2025 as compared to 2024.

We estimate provisions for rebates, discounts and returns based on contractual arrangements with customers or terms of the regulations and/or agreements applicable for transactions with healthcare authorities, and in some cases on assumptions about the attainment of targeted volumes. We recognize returns, discounts, incentives and rebates in the period in which we recognize the underlying sales, as a reduction of gross revenues and as current liabilities on our Consolidated Balance Sheets under trade and other payables or reductions of accounts receivable. The outstanding amounts are affected by changes in gross sales, the provision for net product sales deductions and timing of payments/credits. Estimates, assumptions and judgements applied to determine the provision for rebates, discounts and returns are set out in Item 8. Financial Statements—Audited Consolidated Financial Statements—Note 2. Summary of Significant Accounting Policies.”

The following table provides a summary of activities with respect to accrued rebates and product returns and prompt pay discounts for the years ended December 31, 2024 and 2023:

Accrued rebates and product returns includes chargebacks as these are paid by Indivior. Prompt pay discounts are recorded as offsets to accounts receivable as of December 31, 2024. Accrued rebates and product returns and prompt pay discounts increased to $565 million as of December 31, 2024 from $535 million as of December 31, 2023, primarily due to strong SUBLOCADE volume growth.

Cost of sales. Cost of sales increased by $57 million, or 32%, to $231 million in 2024 from $174 million in 2023. Cost of sales in 2024 includes $41 million of expenses related to the discontinuation of sales and marketing for PERSERIS and reflects the impact of cost inflation.

Gross margin, which we define as gross profit divided by net revenue, was 81% in 2024 as compared to 84% in 2023. The decrease in 2024 gross margin included the impact of $41 million of costs related to the discontinuation of sales and promotional activities for PERSERIS and cost inflation, partially offset by improved product mix from the continued growth of SUBLOCADE.

Selling, general and administrative expenses. Selling, general and administrative expenses increased by $49 million, or 9%, to $618 million in 2024 from $569 million in 2023. In 2024, selling, general and administrative costs reflect $12 million of costs related to the discontinuation of sales and marketing for PERSERIS and $12 million of severance costs. Higher sales and marketing investments related to SUBLOCADE and OPVEE and cost inflation were partially offset by lower sales and marketing costs due to discontinuation of PERSERIS. Prospectively, savings resulting from restructuring actions and discontinuation of PERSERIS marketing will be partially reinvested to support long-term SUBLOCADE growth.

Research and development expenses. Research and development expenses decreased by $9 million, or 8%, to $107 million in 2024 from $116 million in 2023. The decrease is primarily due to re-prioritization of pipeline activities on the Company's OUD assets as well as related cost savings.

Acquired in-process research and development expenses. Acquired in-process research and development expenses decreased by $161 million, or 99%, to $1 million in 2024 from $162 million in 2023. The decrease is primarily due to the 2023 acquisition of OPVEE and Orexin-1 receptor antagonist INDV-2000.

Litigation settlement expenses. Litigation settlement expenses decreased by $44 million, or 18%, to $195 million in 2024 from $239 million in 2023. The decrease is primarily due to variability in, and unpredictability of, the timing of settlements of major contingencies. See Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 11. Accrued Litigation Settlement Expenses.

Other operating expense (income), net. In 2024, net other operating expense was $4 million and in 2023 net other operating income was $9 million. In 2024, net other operating expense included $9 million mark-to-market adjustments related to the decline in value of an equity investment. In 2023, net other operating income included $3 million of income recognized in relation to a supply agreement.

Net interest (expense) income. Net interest expense was $18 million in 2024 as compared to net interest income of $8 million in 2023. The increase in net interest expense reflected a $4 million write-off of unamortized deferred financing costs due to early extinguishment of the previous term loan, a decrease in earned interest income on lower cash and investment balances and increased borrowings under the Company's new debt facility. We expect interest expense to continue to exceed investment income.

Income tax (expense) benefit. Income tax expense in 2024 was $11 million, resulting in an effective tax rate of 76.0%, on the Company's earnings for 2024. The income tax benefit of $20 million in 2023 reflected an effective tax rate of 13.2% on the Company’s earnings for 2023.

Comparison of the years ended December 31, 2023 and December 31, 2022

(in millions)

(1) The Company recognized provisions in 2023 and 2022 related to certain multi-district antitrust claims (refer to Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 16. Commitments and Contingencies) and an intellectual-property-related matter.

Net revenue. Substantially all of the Company's 2023 and 2022 net revenue was derived from sales of SUBLOCADE, PERSERIS and other buprenorphine-based sublingual products (including SUBOXONE Film and SUBOXONE Tablet). In 2023 and 2022, SUBLOCADE accounted for 58% and 45% of our net revenue, PERSERIS accounted for 4% and 3%, and other buprenorphine-based sublingual products accounted for 39% and 52%, respectively. SUBLOCADE volume growth was the primary driver of the increase in 2023 net revenue as compared to 2022. Price changes were not a significant driver of the increase in net revenue.

The following table shows the Company’s net revenue by major product line:

(in millions)

Total net revenue increased by $192 million, or 21%, to $1,093 million in 2023 from $901 million in 2022. The increase was primarily driven by strong year-over-year SUBLOCADE and PERSERIS volume growth, partly offset by a reduction in SUBOXONE Film share. Higher net revenue from SUBLOCADE, which increased by $222 million, or 54%, from 2022 reflected further organized health system (OHS) channel penetration in the U.S. and increased new U.S. patient enrollments. In 2023, total net revenue from PERSERIS was $42 million, representing a 50% increase from 2022 due to increasing awareness of the treatment across the U.S. healthcare system. SUBOXONE Film share averaged 19% and 20% and exited at 18% and 19% in 2023 and 2022, respectively.

The following table sets out a breakdown of net revenue as between the U.S. and the Most of World.

(in millions)

In 2023, U.S. net revenue increased by 25% to $912 million as compared to $732 million in 2022, primarily due to strong SUBLOCADE volume growth and underlying BMAT market growth.

In 2023, net revenue attributable to the Most of World increased 7% to $181 million from $169 million in 2022. In 2023, positive contributions from new products (SUBLOCADE / SUBUTEX® Prolonged Release and SUBOXONE Film) were partly offset by ongoing competitive pressure on legacy tablet products. In 2023 and 2022, SUBLOCADE / SUBUTEX Prolonged Release net revenue in the Most of World was $41 million and $27 million, respectively.

We estimate provisions for rebates, discounts and returns based on contractual arrangements with customers or terms of the regulations and/or agreements applicable for transactions with healthcare authorities, and in some cases on assumptions about the attainment of targeted volumes. We recognize returns, discounts, incentives and rebates in the period in which we recognize the underlying sales, as a reduction of gross revenues and as current liabilities on our Consolidated Balance Sheets under trade and other payables or reductions of accounts receivable. The outstanding amounts are affected by changes in gross sales, the provision for net product sales deductions and timing of payments/credits. Estimates, assumptions and judgements applied to determine the provision for rebates, discounts and returns are set out in Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 2. Summary of Significant Accounting Policies.

The following table provides a summary of activities with respect to accrued rebates and product returns, and prompt pay discounts for the years ended December 31, 2023 and 2022:

Accrued rebates and product returns and prompt pay discounts includes chargebacks as these are paid by Indivior. Accrued rebates and product returns and prompt pay discounts increased to $535 million in 2023 from $432 million in 2022, primarily due to strong SUBLOCADE volume growth.

Cost of sales. Cost of sales increased by $23 million, or 15%, to $174 million in 2023 from $151 million in 2022, driven by higher sales volumes in the U.S. and the impacts of cost inflation.

Gross margin, which we define as gross profit divided by net revenue, was 84% in 2023 as compared to 83% in 2022. The increase in 2023 gross margin reflected an improved product mix from the continued growth of SUBLOCADE, partly offset by cost inflation.

Selling, general and administrative expenses. Selling, general and administrative expenses increased by $100 million, or 21%, to $569 million in 2023 from $469 million in 2022. Approximately $22 million of this increase relates to acquisition-related and U.S. exchange listing costs. The remaining increase primarily reflects higher expenses related to increased SUBLOCADE commercial investments, the addition of the Opiant business and subsequent launch expenses for OPVEE, legacy legal defense costs and cost inflation.

Research and development expenses. Research and development expenses increased by $42 million, or 57%, to $116 million in 2023 from $74 million in 2022. The increase is primarily due to a greater activity level related to post-marketing studies for SUBLOCADE, process validation testing related to LAI capacity expansion and ongoing early-stage pipeline activities.

Acquired in-process research and development expenses. Acquired in-process research and development expenses increased to $162 million as a result of the acquisition of OPVEE, the Orexin-1 receptor antagonist INDV-2000, and the potential three-month LAI INDV-6001.

Litigation settlement expenses. Litigation settlement expenses increased primarily due to finalization of settlement negotiations with several anti-trust litigation parties. See Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 11. Accrued Litigation Settlement Expenses.

Other operating income, net. Net other operating income was $9 million in 2023 and $8 million in 2022. In 2023, net other operating income included $3 million of income recognized in relation to a supply agreement. In 2022, net other operating income included a $5 million benefit related to an aged Directors' & Officers' insurance claim settlement.

Net interest income (expense). Net interest income was $8 million in 2023 as compared to net interest expense of $8 million in 2022. The change in net interest reflected higher interest rates earned on the Company's investments.

Income tax benefit. Income tax benefit in 2023 was $20 million, resulting in an effective tax rate of 13.2%. The income tax benefit of $44 million in 2022 reflected an effective tax rate of 49.3% on the Company’s earnings for 2022.

Liquidity and Capital Resources

Overview

The Company's financial condition is summarized as follows:

(In millions)

Cash flows

(in millions)

Operating activities

Net cash provided by operating activities was $36 million in 2024, an increase of $336 million, compared to net cash used in operating activities of $300 million in 2023. The increase was primarily due to 2023 litigation settlement outflows of $387 million, including the State, end payor and direct purchaser Antitrust MDL settlements. Net cash provided by operations in 2024 reflected ongoing operating performance partially offset by scheduled litigation settlement payments of $173 million. Refer to Item 8. Financial Statements—Audited Consolidated Financial Statements—Note 10. Accrued Litigation Expenses for additional details on the litigation-related settlement payments.

Net cash used in operating activities was $300 million in 2023 an increase of $296 million compared to the net cash used of $4 million in 2022. The additional outflow was primarily due to litigation settlement payments of $610 million, partially offset by increased accruals for government rebates and trade payables. The litigation settlement related outflows include the Antitrust MDL settlement payment of $103 million with States, transfer of $415 million into an escrow account for the settlement with the Antitrust MDL end payors and direct purchasers, and settlement payments of $24 million for intellectual property-related and other legal matters, in addition to the Group's previously scheduled litigation settlement payments totaling $68 million for the Department of Justice, Reckitt Benckiser and Dr. Reddy's Laboratories matters.

Investing activities

Net cash provided by investing activities was $69 million in 2024, an increase of $164 million, compared to net cash used in investing activities of $95 million in 2023. The prior year use of cash reflects a $129 million outflow for the Opiant acquisition, net of cash acquired. The current year inflows primarily reflect proceeds from maturity of debt investments, partly offset by capital expenditures.

Net cash used in investing activities was $95 million in 2023, $127 million less cash used as compared to net cash used of $222 million in 2022. Lower net cash outflows for investments in debt securities from

2022 to 2023 were partially offset by the acquisition of Opiant, net of cash acquired, for $129 million, and $45 million in IPR&D purchases in 2023.

We expect to spend approximately $50 million to $70 million on capital items in 2025, primarily to establish and scale manufacturing of SUBLOCADE at the Raleigh Manufacturing Facility (refer to Item 8. Financial Statements—Audited Consolidated Financial Statements—Note 19. Business Combinations), after which time we expect capital expenditures to revert to levels more in line with Indivior’s history.

The Company expects to continue investing in development stage assets from time to time but presently has no commitment to do so.

Financing activities

Net cash used in financing activities increased by $38 million, from $64 million in 2023 to $102 million in 2024. Net cash used in financing activities in the current period primarily reflects shares repurchased and canceled offset by net proceeds from the change in debt after issuing the new Note Purchase Agreement and repaying the previous Term Loan. Cash paid for net settlement of employee share awards, net of cash received was materially consistent with 2023.

Net cash used in financing activities decreased by $37 million, from $101 million in 2022 to $64 million in 2023. Net cash used in financing activities in 2023 reflects shares repurchased and canceled, the extinguishment of debt assumed in the Opiant acquisition, principal portion of lease payments and quarterly amortization of the Group’s term loan facility, partially offset by proceeds received from the issuance of shares for employee compensation agreements. In 2022, the outflow from financing activities primarily reflected shares repurchased and canceled.

Current Liabilities

Our current liabilities exceed our current assets by over $100 million and total liabilities exceed our total assets by over $300 million. Additionally, the Company could sustain negative working capital because of the timing of rebate payments relative to the collection of accounts receivable (see Item 1A Risk Factors, "Our balance sheet is leveraged, and any reduction in annual sales may adversely affect our liquidity.")

Debt

In November 2024, the Company refinanced its term loan, repaying in full the previous term loan and replacing it with a new Note Purchase Agreement with principal amount of $350 million that matures in November 2030 and a committed, revolving credit facility of $50 million. As of December 31, 2024, the revolver was undrawn. The Note Purchase Agreement contains financial and non-financial covenants customary for facilities of this nature, including a maximum leverage ratio, a minimum interest coverage ratio, a limitation on disposal of assets, prepayments and redemptions of certain indebtedness, further indebtedness, liens, negative pledges, and limits on share buybacks and redemptions, dividends and other “restricted payments,” subsidiary distributions, investments, mergers and acquisitions and other fundamental changes, sale and lease-back transactions, and a restriction on changes to any material line of business, most of which are subject to various carve-outs, grace periods and qualifications. The Company was in compliance with all covenants as of December 31, 2024. See Item 1A. Risk Factors at "Our term loan contains certain covenants that could limit our ability to plan for or respond to changes in our business." and Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 12. Debt for additional information. In addition, substantially all of the assets of the Company are pledged to secure this debt. The restrictions under the Note Purchase Agreement substantially limit our ability to obtain other financing, other than the $50 million revolving credit facility.

Capital Resources

The Company believes its existing cash and cash equivalents and investments together with cash generated from operations and debt will enable its anticipated cash needs to be met, including working capital, capital expenditures, litigation settlement payments, milestone payments, income taxes, repurchase of ordinary shares, debt repayments and other funding requirements, for at least the twelve-month period following the issuance of this Form 10-K. The Company will have to sustain sales volume performance with no material change in the timing of its collections and rebate payments to maintain necessary liquidity in the near term and to meet our obligations in the long term. The Company is also subject to contingent liabilities as described in Item 8. Financial Statements—Audited Consolidated Financial Statements—Note 16. Commitments and Contingencies.

Capital Expenditures

(in millions)

The Company’s capital expenditures for 2024 reflected the expansion of the Raleigh Manufacturing plant. Capital expenditures in 2023 and 2022 were primarily for equipment used in the manufacture of our products. The Company funded these expenditures from its existing cash balances.

IPR&D and intangible asset purchases for the years ended 2024, 2023 and 2022 were $2 million, $45 million, and $1 million, respectively, and were funded from existing cash balances. The 2023 cash paid includes $21 million for the acquisition of INDV-2000 (oral Orexin-1 receptor antagonist) from C4X Discovery and $15 million to secure the global rights to develop, manufacture, and commercialize Alar Pharmaceuticals Inc.’s portfolio of buprenorphine-based ultra LAI, including INDV-6001, the lead asset which is potentially the first three-month LAI for OUD.

Contractual Obligations

The table below sets forth the Company’s anticipated contractual cash flows including bank debt, legal settlement payments (including expected interest payments), share repurchase liabilities and lease liabilities on an undiscounted basis as of December 31, 2024.

(in millions)

Potential milestone and royalty payments

The Company is party to collaboration and license arrangements for the development of pharmaceutical and digital products. Milestone payments will be due if various developmental, regulatory and commercial goals are achieved and in certain cases royalties will be payable as a percentage of net revenue, although the Company generally has the right to terminate these agreements at no cost. The Company has no significant milestone payments expected in 2025.

Agreements for contract manufacturing and supply of materials

The Company is obligated to purchase specified amounts of goods or services under various contract manufacturing and material supply agreements over periods ranging from 1 to 6 years. These agreements could require us to pay approximately $210 million (before annual price index adjustments).

CVR Agreement

In connection with the acquisition of Opiant, a subsidiary of Indivior issued Contingent Value Rights (“CVRs”) to the shareholders of Opiant. Each CVR represents the obligation of Indivior Inc. to make cash payments upon achievement of certain worldwide net sales milestones during the period from October 1, 2023 to September 30, 2030.

Total potential payments could be up to a maximum of $68 million over a period of up to 7 years from the date of the first commercial sales of a new Opiant product. Refer to Item 8. Financial Statements—Audited Consolidated Financial Statements—Note 18. Asset Acquisitions for additional details on the CVR agreement.

Research and Development Expenses, Patents and Licenses, etc.

See “Item 1. Business—Research and Development,” “Item 1. Business—Intellectual Property,” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Operating Results.”

Trend Information

For a discussion of trend information, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Operating Results.”

Selected Quarterly Financial Data (Unaudited)

The Company adopted U.S. GAAP for the year ended December 31, 2024 and has presented all comparative periods in accordance with U.S. GAAP. Supplemental unaudited quarterly results of operations for 2024 is presented below:

Critical Accounting Estimates

Management makes several estimates and assumptions regarding the future and significant judgments in applying the Company’s accounting policies. Estimates and assumptions may affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. These estimates are based on the Company’s knowledge of the amount, events or actions; however, actual results may ultimately differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis and revisions to estimates are recognized prospectively. The key estimates and assumptions used in the financial statements are set out below.

Returns, incentives and rebates

The Company offers various types of reductions from list prices on its products. Products sold in the U.S. are covered by various programs (such as Medicare and Medicaid) under which products are sold at a discount. Rebates are granted to healthcare authorities, and under contractual arrangements with certain customers. Some wholesalers are entitled to chargeback incentives under specific contractual arrangements. Cash discounts may also be granted for prompt payment.

The discounts, incentives and rebates described above are estimated based on contractual arrangements with customers or terms of the relevant regulations and/or agreements applicable for transactions with healthcare authorities, and in some cases on assumptions about the attainment of targeted volumes. Several months may pass between the original estimate of rebates due and confirmation of the amount, which may increase the estimation risk. Please refer to the revenue accounting policy for further details.

Accruals for product returns are estimated based primarily on analysis of the Company’s historical product return patterns, expected future returns, and contractual agreement terms. Estimated returns are accrued in the period the related revenue is recognized.

During 2024 and 2022, net revenue was increased by $28 million and $14 million, respectively, from performance obligations satisfied in prior years, primarily relating to changes in payor mix and resolution of aged accruals for U.S. government programs. During 2023, net revenue was reduced by $9 million from performance obligations satisfied in prior years, primarily relating to differences between invoices received from U.S. government programs as compared to the respective accruals held for those years. The estimates for U.S. governmental and commercial end-payor accruals are also reasonably expected to vary due to shifts between U.S. governmental end-payor sales and U.S. commercial end-payor sales. A 1 percentage point shift between these channels would impact the accrual by $4 million. Due to the number of variables contributing to the accruals for returns, incentives and rebates, further meaningful sensitivity is not able to be provided. Accruals for returns, incentives and rebates are disclosed in Item 8. Financial Statements—Audited Consolidated Financial Statements—Balance Sheet.

Determination of income tax provision

Significant judgment is required in determining our provision for income taxes. These judgments and estimates occur in the calculation of tax credits, benefits, and deductions and in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes, as well as the interest and penalties related to uncertain tax positions. Changes to these estimates may result in a material increase or decrease in our tax provision in the current period or subsequent periods.

Recoverability of deferred tax assets

Also, we must assess the likelihood that we will be able to recover our deferred tax assets. If all or part of our deferred tax assets are not recoverable in the future, we must increase our provision for taxes and reduce our net deferred tax assets to the amount that is more likely than not to be recoverable. To recover deferred tax assets, we must be able to generate sufficient taxable income in the jurisdictions where the deferred tax assets are located. We consider forecasted income, including income that may be generated as a result of certain tax planning strategies, together with future reversals of existing taxable temporary differences, in determining the need for a valuation allowance. As of December 31, 2024, we believe our deferred tax assets are more likely than not to be recovered, with the exception of valuation allowance items as detailed in Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 4. Income Tax. Our ability to realize deferred tax assets could be reduced in the future if our estimates of future forecasted income do not support the realization of our deferred tax assets. Should there be a change in our ability to realize our deferred tax assets, our tax provision would be affected in the period in which such change takes place.

Ongoing litigation

The Company is involved in litigation, arbitration and other legal proceedings. These proceedings typically are related to compliance and trade practices, commercial claims, product liability claims, intellectual property rights, and employment and wrongful discharge claims. For each claim or grouping of similar claims, management makes judgments regarding the relative merits and risks within the claims. These judgments inform the Company’s defense strategies, whether a loss or settlement from the claims is probable and whether sufficient information exists to make a reliable estimate of he likely outcome of the claims. Provisions are recognized when the Company has a present legal or constructive obligation, an outflow of resource to settle the obligation when it is probable that a liability will be incurred, and the amount of loss can be reasonably estimated. Management has assessed as “contingent” matters that cannot be reliably estimated or are not considered probable at the current time. For more details of all the outstanding legal proceedings including those that have been deemed contingent, see Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 16. Commitments and Contingencies.

a. Quantitative Information about Market Risk

See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources. In addition to the risks inherent in our operations, we are exposed to a variety of financial risks, such as market risk (including foreign currency exchange, cash flow and interest rate risk), credit risk and liquidity risk.

b. Qualitative Information about Market Risk

We invest cash equivalents and investments with the primary objective to preserve principal while also maximizing the income that we receive. We invest in highly-rated corporate bonds, commercial paper, and U.S. Treasuries for purposes other than trading which are reported at fair value or amortized cost, which approximates fair value for the nature and duration of instruments we use. These securities are subject to interest rate risk and credit risk. See Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 13. Financial Instruments and Fair Value Measurements.

Interest on our Note Purchase Agreement is subject to fluctuation based on SOFR, which may impact future expense and cash flows. See Item 8. Financial Statements—Audited Consolidated Financial Statements - Note 12. Debt.

We operate in different territories around the world. Generally, the functional currency of our operations is that of the country in which it operates. One USD functional currency subsidiary has significant exposure to assets in Canadian Dollars and liabilities in British Pounds Sterling. The Canadian Dollar assets turn quickly and our strategy is to mitigate exposure to British Pounds with offsetting assets. However, we could be exposed to material foreign currency risk in these currencies.

Disclosure Controls and Procedures

Management with the participation of the Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of Indivior PLC’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that Indivior PLC’s disclosure controls and procedures were effective as of December 31, 2024.

Management’s Report on Internal Control over Financial Reporting

Management’s Report on Internal Control over Financial Reporting is included in Item 8. Financial Statements and Supplementary Data.

Changes in Internal Control over Financial Reporting

There was no change in the Company’s ICFR that occurred during the year ended December 31, 2024 that has materially affected, or is likely to materially affect, the Company’s ICFR.