Indivior PLC: A Turnaround Opportunity for Value Investors

Indivior PLC (LON:INDV) has had a challenging year, with its stock price declining by 23% over the previous year. However, this presents an opportunity for value investors to capitalize on the current situation. In this article, we will explore the factors contributing to the stock price decline, the opportunities available to value investors, and the risks they should be aware of.

Factors Contributing to the Stock Price Decline

1. Sales Weakness for Sublocade: Indivior's primary product, Sublocade, has faced competition from Swedish pharmaceutical firm Camurus' competing drug Brixadi. This has led to weak sales for Sublocade, resulting in two profit and revenue warnings in the span of three months. (Source: Reuters, October 2023)
2. Pressure from Oaktree Capital: Indivior has been engaged in conversations with Oaktree Capital, its second-largest shareholder, following the investment fund's repeated calls for the drugmaker to refresh its board and take strategic actions to recover its falling market share. These discussions led to changes in the board composition, including the resignation of the finance chief Ryan Preblick. (Source: Reuters, November 2023)

Opportunities for Value Investors

1. Undervalued Stock: Given the significant decline in Indivior's stock price, value investors may find the stock undervalued, presenting an opportunity to buy at a discount. The company's market capitalization has decreased substantially, indicating a potential mispricing of the stock.
2. Turnaround Potential: Indivior is currently facing challenges, but there is potential for a turnaround. The company is engaged in conversations with Oaktree Capital to refresh its board and take strategic actions to recover its falling market share. If these efforts are successful, the stock could rebound, providing significant returns for investors who enter at the current low price.
3. Dividend Yield: Although not explicitly stated in the provided information, Indivior may offer an attractive dividend yield due to its lower stock price. A higher dividend yield can provide a source of income for investors while they wait for the stock price to recover.

Risks to Consider

1. Operational Challenges: Indivior is facing operational challenges, as evidenced by its recent profit and revenue warnings. These issues may persist, negatively impacting the company's financial performance and stock price.
2. Competition: The company's primary product, Sublocade, is facing competition from Swedish pharmaceutical firm Camurus' competing drug Brixadi. If Camurus' product gains market share, Indivior's financial performance may suffer.
3. Regulatory Risks: The pharmaceutical industry is subject to regulatory risks, such as changes in drug approval processes or reimbursement policies. These risks could impact Indivior's ability to maintain or grow its market share.
4. Board Changes and Uncertainty: The recent resignation of Indivior's CFO and the ongoing discussions with Oaktree Capital may introduce uncertainty and potential disruption to the company's operations. Investors should monitor these developments closely to assess their impact on the company's performance.



In conclusion, value investors may find opportunities in Indivior's undervalued stock and turnaround potential. However, they should also be aware of the operational challenges, competition, regulatory risks, and board changes that could impact the company's performance. By carefully evaluating these factors and monitoring the situation, value investors can make informed decisions about whether to invest in Indivior at the current time.