The following discussion of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements included in Part I, Item 1 of this quarterly report on Form 10-Q and with our audited consolidated financial statements, including the accompanying notes, and Management's Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended December 31, 2025.
As the leader in long-acting injectable treatments for opioid use disorder (OUD), Indivior is singularly focused on delivering evidence-based treatment and advancing understanding of OUD as a chronic but treatable brain disease. For more than 25 years, Indivior has revolutionized the science of addiction medicine, developing treatments that help people move toward long-term recovery with independence and dignity. Building on this heritage, Indivior is ushering in a new era, renewing our commitment to individuals living with OUD and carrying forward what matters most: compassion, integrity, and science. Together – with science, people living with OUD, public health champions, and communities – we are powering recovery and renewing hope.
Operating Results
Overview
The Company operates as one business segment, which is predominantly the manufacture and sale of buprenorphine-based prescription drugs for the treatment of opioid dependence and OUD. Substantially all of our net revenue was derived from sales of SUBLOCADE and other buprenorphine-based sublingual products (including SUBOXONE Film, SUBOXONE Tablet and SUBUTEX Tablet). SUBLOCADE accounted for 74% and 74% of our net revenue for the three and six months ended June 30, 2026, respectively, and 69% and 68% for the three and six months ended June 30, 2025, respectively. Other buprenorphine-based sublingual products accounted for 25% and 25% of our net revenue for the three and six months ended June 30, 2026 and 27% and 29% of our net revenue for the three and six months ended June 30, 2025, respectively. SUBOXONE Film had an oral buprenorphine medically assisted treatment (BMAT) average share of approximately 14% and 15% in the three months ended June 30, 2026 and 2025, respectively, according to data from Symphony Health.
Recent developments
On August 1, 2026, the Company entered into an Agreement and Plan of Merger with Supernus. Pursuant to the Merger Agreement, and subject to approval of Indivior stockholders and Supernus stockholders and the satisfaction or waiver of other specified closing conditions, the Indivior and Supernus businesses will combine in an all-stock merger of equals. The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, the Company's wholly-owned subsidiary will merge with and into Supernus, with Supernus continuing as a wholly-owned subsidiary of Indivior (which will change its name to Supernus, Inc.) following the transaction. We expect the transaction to close during the fourth quarter of 2026. For additional discussion of this matter, see Note 15. Subsequent Events.
During the six months ended June 30, 2026, Indivior made the decision to cease Phase 3 development of INDV-6001 and not advance INDV-2000 internally. The Company is not currently pursuing any pipeline activities.
Corporate initiatives during the three months ended June 30, 2026 included the recognition of severance of approximately $6 million, including approximately $5 million associated with the decisions not to advance the two research and development pipeline programs.
In February 2026, the Company announced a share repurchase program of up to $400 million with a term of up to 18 months. During the three months ended March 31, 2026, the Company repurchased 3,974,153 shares of its common stock at an average price of $31.45 per share for total consideration of $125 million. During the three months ended June 30, 2026, the Company repurchased 4,664,540 shares
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of its common stock at an average price of $37.52 for total consideration of $175 million. Indivior has $100 million remaining under the share repurchase program which it intends to utilize opportunistically.
For a discussion of recent developments with respect to litigation, see Item 1. Financial Statements--Note 13. Commitments and Contingencies.
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Results of operations
Net revenue
Net revenue growth for the three and six months ended June 30, 2026 as compared to the same periods of 2025 was primarily driven by sales of SUBLOCADE in the U.S.
Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2026 2025 % Change 2026 2025 % Change
U.S.:
SUBLOCADE* 238 195 22 % 455 359 27 %
Film/other 57 52 10 % 107 107 — %
PERSERIS 5 8 (35) % 10 12 (19) %
Total U.S. 300 256 17 % 572 478 20 %
Rest of the World 43 46 (7) % 88 90 (2) %
Net revenue $ 343 $ 302 14 % $ 660 $ 568 16 %
*Total SUBLOCADE net revenue (U.S. and Rest of World) $ 253 $ 209 21 % $ 486 $ 385 26 %
Total net revenue increased by $41 million, or 14%, and $92 million, or 16%, in the three and six months ended June 30, 2026, respectively, as compared to the same periods of 2025. U.S. net revenue increased by $45 million, or 17%, and $95 million, or 20%, in the three and six months ended June 30, 2026, respectively, as compared to the same periods of 2025.
U.S. net revenue. The U.S. is our largest market. Rebates, discounts and returns and other offsets to gross revenues are reflected in net revenue. U.S. net revenue from SUBLOCADE increased by $42 million, or 22%, and $97 million, or 27%, in the three and six months ended June 30, 2026, respectively, as compared to the same periods of 2025. The increases were driven by dispense unit volume growth, gross-to-net benefits and favorable price mix in both periods. Dispense unit volume grew 18% and 19% in the three and six months ended June 30, 2026, respectively, as compared to the corresponding 2025 periods. U.S. net revenue from other products increased by $2 million in the three months ended June 30, 2026, and decreased by $2 million in the six months ended June 30, 2026, compared with the same periods of 2025. Both periods benefited from favorable Film gross-to-net adjustments, offset by a decline in U.S. Film category share.
Rest of the World net revenue. In the three and six months ended June 30, 2026, net revenue attributable to Rest of the World decreased by $3 million and $2 million, respectively, as compared to the same periods of 2025, reflecting the exit from certain non-U.S. markets, and we expect this trend to continue.
Estimates, assumptions and judgments applied to determine the provision for rebates, discounts and returns are set out in "Item 8. Financial Statements—Note 2. Summary of Significant Accounting Policies" in our Annual Report on Form 10-K for the year ended December 31, 2025.
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The following table provides a summary of activities with respect to accrued rebates and product returns and prompt pay discounts for the six months ended June 30, 2026 and 2025:
Accrued rebates and product returns and prompt pay discounts (in millions) June 30, 2026 June 30, 2025
Opening balance at January 1 $ 585 $ 565
Accruals related to sales made in:
Current period 814 758
Prior period (64) (45)
Payments and credits (721) (566)
Closing balance at end of period $ 613 $ 712
Accrued rebates and product returns include chargebacks as these are paid by Indivior. Prompt pay discounts are recorded as offsets to accounts receivable. Accrued rebates and product returns and prompt pay discounts decreased to $613 million as of June 30, 2026, from $712 million as of June 30, 2025, primarily due to the timing of rebate invoicing and payments. Accrued rebates and product returns and prompt pay discounts were higher in the prior-year period ending June 30, 2025, primarily due to the timing of payment of government rebates resulting from the late receipt and processing of invoices.
Expenses
Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2026 2025 % Change 2026 2025 % Change
Cost of sales $ 50 $ 52 (3) % $ 90 $ 96 (6) %
Gross margin 85 % 83 % 3 % 86 % 83 % 3 %
Operating expenses:
Selling, general and administrative 122 158 (23) % 245 291 (16) %
Research and development 12 21 (42) % 28 43 (35) %
Total operating expenses 134 179 (25) % 273 334 (18) %
Loss on debt extinguishment 18 — NM
Net interest (income) expense (1) 10 (107) % 3 17 (81) %
Income tax expense $ 38 $ 44 NM $ 65 $ 56 NM
Cost of sales. Cost of sales decreased $2 million, or 3%, and $6 million, or 6%, in the three and six months ended June 30, 2026 as compared to the same periods of 2025. The decrease was primarily attributable to a prior-year $10 million SUBLOCADE inventory write-down in the three and six months of 2025. For the year-to-date period, cost of sales reflected a benefit of approximately $5 million related to revenue recognized on inventory fully written down in prior periods with no associated cost of sales in the current year. These favorable impacts were partially offset by approximately $2 million of inventory provisions recorded in the three and six months ended June 30, 2026 related to market exit activities, and the effect of SUBLOCADE growth.
Gross margin, which we define as gross profit divided by net revenue, was 85% and 86% in the three and six months ended June 30, 2026, respectively, as compared to 83% and 83% in the corresponding periods of 2025. The increases in gross margin were primarily driven by SUBLOCADE volume growth and lower cost of sales as described above.
Selling, general and administrative expenses. Selling, general and administrative expenses decreased by $36 million, or 23%, and $46 million, or 16%, in the three and six months ended June 30, 2026, respectively, as compared to the same periods of 2025. Selling, general and administrative expenses included consulting, severance and other costs associated with corporate initiatives of $4
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million in each of the three month periods ended June 30, 2026 and 2025, and $10 million and $5 million in the six month periods ended June 30, 2026 and 2025, respectively. The overall decrease was primarily driven by headcount reductions and other cost savings related to corporate initiatives implemented in 2025 and 2026.
Research and development expenses. Research and development expenses decreased by $9 million, or 42%, and $15 million, or 35%, in the three and six months ended June 30, 2026 as compared to the same periods of 2025. Research and development expenses in the three and six months ended June 30, 2026 included $6 million and $14 million, respectively, of real estate consolidation and severance costs. Excluding these impacts, lower research and development costs in the three and six months ended June 30, 2026 reflected reduced research and development activities and decisions earlier in the year to cease Phase 3 development of INDV-6001 and not advance INDV-2000 internally. The Company is not currently pursuing any pipeline activities and, as a result, research and development costs are expected to continue to decrease in future periods.
Loss on extinguishment of debt. Loss on extinguishment of debt in the six months ended June 30, 2026 includes $18 million of costs incurred in connection with the full repayment of the Company's Note Purchase Agreement.
Net interest (income) expense. Net interest income was $1 million for the three months ended June 30, 2026 and net interest expense was $3 million for the six months ended June 30, 2026 as compared to net interest expense of $10 million and $17 million for the three and six months ended June 30, 2025. The change primarily reflects the lower interest cost of the Convertible Notes compared to the Company's previous Note Purchase Agreement.
Income tax expense. On January 26, 2026, the Company completed a redomiciliation to the United States, which resulted in a change in the applicable federal statutory income tax rate from 25% to 21%. Income tax expense of $38 million and $65 million in the three and six months ended June 30, 2026 resulted in an effective tax rate of 24% and 23%, respectively, primarily driven by a U.K. global minimum top-up tax, disallowed expenses, and a write-off of U.K. Net Operating Losses, partially offset by U.K. innovation deductions. Income tax expense of $44 million and $56 million in the three and six months ended June 30, 2025 resulted in an effective tax rate of 71% and 46%, respectively, primarily driven by a tax reserve on a U.K. HMRC settlement which became probable during the quarter, U.K. global minimum top-up tax, share based compensation shortfall tax expense and a valuation allowance against corporate interest limitation carryforwards, partially offset by U.K. innovation deductions and intragroup financing transactions.
Liquidity and Capital Resources
Overview
The Company's financial condition is summarized as follows:
(In millions) June 30, 2026 December 31, 2025
Financial assets:
Cash and cash equivalents $ 222 $ 195
Investments - long-term 27 28
Total cash and investments $ 249 $ 222
Borrowings:
Short-term borrowings $ — $ 29
Long-term borrowings $ 487 $ 290
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Cash flows
Six Months Ended June 30,
(in millions) 2026 2025
Net cash provided by (used in):
Operating activities $ 220 $ 233
Investing activities (27) (22)
Financing activities $ (166) $ (22)
Operating activities
Net cash provided by operating activities was $220 million during the six months ended June 30, 2026, compared to $233 million in the same period of 2025, a decrease of $13 million. Net cash provided by operating activities in the six months ended June 30, 2026 was driven primarily by cash generated from operations, partially offset by litigation settlement payments of $34 million and the timing of operational payments. Net cash provided by operating activities in the six months ended June 30, 2025 reflected cash generated from operations and also benefited from the timing of receipt of approximately $120 million in government rebate invoices that were unpaid at June 30, 2025, partially offset by $65 million in litigation settlement payments.
Investing activities
Net cash used in investing activities was $27 million and $22 million in the six months ended June 30, 2026 and 2025, respectively, an increase of $4 million driven primarily by higher capital expenditures related to the new Raleigh, North Carolina manufacturing facility in the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
An additional approximately $10 million to $15 million of capital expenditures are expected in the second half of 2026, primarily related to the Raleigh, North Carolina manufacturing facility.
Financing activities
Net cash used in financing activities in the six months ended June 30, 2026 was $166 million, as compared to $22 million in the same period of 2025. The change was primarily driven by higher cash outflows for shares repurchased and canceled of $292 million, partially offset by $151 million of net cash inflows related to the issuance of the Convertible Notes and payoff in full of the previous term loan in the six months ended June 30, 2026.
During the six months ended June 30, 2026, the Company successfully completed a $500 million offering of 0.625% Convertible Senior Notes due 2031. A portion of the $500 million proceeds was used to repay in full the $333 million balance of Indivior's original term loan. See Item 1. Financial Statements—Note 8. Debt for more details.
During the six months ended June 30, 2026, the Company announced a $400 million share repurchase program and purchased 8,638,693 shares for total cash outflows of $300 million. The program runs through mid-2027.
Current Liabilities
Our current liabilities exceed our current assets by $142 million and total liabilities exceed our total assets by $208 million. The Company sustains negative working capital because of the timing of rebate payments relative to the collection of accounts receivable.
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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, debt repayments and other funding requirements, for at least the twelve-month period following the issuance of this Form 10-Q. The Company will need 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 1. Financial Statements—Note 13. Commitments and Contingencies.
In connection with the Merger Agreement and the special dividend, Indivior entered into a commitment letter with Citibank, N.A. pursuant to which Citibank, N.A. has committed to provide, subject to the terms and conditions thereof, a senior secured term loan facility in an aggregate principal amount of $650 million. For additional discussion of this matter, see Note 15. Subsequent Events.
Capital expenditures
Purchases of property and equipment were $27 million and $22 million for the six months ended June 30, 2026 and 2025, respectively. The Company’s capital expenditures primarily reflect investments in the new Raleigh, North Carolina manufacturing facility for SUBLOCADE.
Contractual obligations
Our contractual obligations as of June 30, 2026 that require material cash requirements in the future consist of debt repayments, litigation settlements, commercial commitments related to contract manufacturing and supply of materials, capital expenditures, lease and employee-related obligations, and contractual milestones. Refer to "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended December 31, 2025. Since December 31, 2025, significant changes to our contractual obligations include the issuance of the 2031 Convertible Senior Notes and repayment of debt under the Note Purchase Agreement, which altered the timing and amounts of future debt repayments. Additionally, corporate initiatives undertaken during the six months ended June 30, 2026 resulted in lower lease obligations due to real estate consolidation and increased employee-related obligations associated with additional workforce reductions, most of which will be settled within one year.
Critical Accounting Estimates
Our significant accounting policies, which include management’s estimates and judgments, are included in "Item 1. Financial Statements - Note 2 Summary of Significant Accounting Policies" of our Annual Report on Form 10-K for the year ended December 31, 2025. No significant changes to our accounting policies occurred during the quarter ended June 30, 2026. A discussion of accounting estimates considered critical because of the potential for a significant impact on the financial statements due to the inherent uncertainty in such estimates is included in the Critical Accounting Estimates section of "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended December 31, 2025.
Recently Issued Accounting Standards
For a discussion of recently issued accounting standards, refer to Item 1. Financial Statements - Note 1. Business Overview, Basis of Presentation, and Recently Issued Accounting Standards.