Strong Expansion Despite Challenges: SUBLOCADE in Focus

The company recorded a pleasing expansion in the second quarter with approximately 120 new justice units, leading to increased patient care. CEO Mark Crossley expressed optimism about the company's financial future despite recent profit warnings. Market volatility results from intensified competition, variable financing, and inventory levels. Crossley emphasized that these experiences have been incorporated into current forecasts, strengthening confidence in achieving the targeted revenue peak of $1.5 billion for SUBLOCADE, although the specific timing remains open. The expected declines in SUBLOCADE revenues in the fourth quarter are primarily attributed to increased competition and financing dynamics within the criminal justice system. Approximately $10 million of the declines are further linked to inventory dynamics, while the remainder is equally distributed between competition and financing issues. Regarding Medicaid disenrollments, the process is largely proceeding as planned, with most states having completed it and the remaining expected to follow by next year. These developments have been taken into account in the company's forecast. In terms of competition with Brixadi and its smaller needles, Crossley does not see a significant impact on the patient experience compared to SUBLOCADE. Market dynamics are expected to stabilize as early adopters of Brixadi return to SUBLOCADE, solidifying its market-leading position. Strategically, the company relies on the efficacy and unique profile of SUBLOCADE to support growth and counter competition. Efficiency improvements in capital allocation are also planned to secure growth and margins.