Indivior PLC

Shaun Thaxter - Chief Executive Officer Mark Crossley - Chief Financial Officer Christian Heidbreder - Chief Scientific Officer Javier Rodriguez - Chief Legal Officer

James Vane Tempest - Jefferies Max Herrmann - Stifel Patrick Chen - Morgan Stanley

Okay, good morning, everybody, and welcome to our First Half Results for Indivior and very pleased to see you here today as you join us on our journey as we continue to strengthen our leadership in the treatment of addiction medicine. I'm Shaun Thaxter, the CEO, and I'm delighted to have the opportunity to share with you today some of the key drivers of future value creation in your investment.

Before we start, I'll assume that you've read the forward-looking statement in the presentation, and now I'll introduce you to the agenda for today. I will cover some performance highlights briefly before introducing you to Mark Crossley, our CFO, who will take us through the first half financials and share the good news on the revised guidance for the year.

Javier Rodriguez will then follow with the legal updates, and Christian will remind of the great progress that we're making in our pipeline before I wrap up at the end of the day. There will of course be time for questions and answers afterwards.

So what a great first half it's been. We've very pleased with our performance across the board.

Our financial performance has been ahead of plan, driven by 4% growth on the top line. Obviously the opioid epidemic is a very sad thing, it's a great tragedy and many people are in crisis.

This is gaining a lot of awareness and attention around the world, particularly in our lead market in the U.S., but we can feel very positive about the fact that more people are finding access to treatment, and this is something that we are very focused on. That in turn of course results in revenue growth for us.

So despite a little bit of share loss in the Managed Medicaid sector in the most price-sensitive payors, the business is performing very well on the top line. We're starting to see some of the flow through benefit of the legislation and regulatory changes last year that opened up the access in the market.

We've had good discipline in our cost base and made some good cost savings and we've also seen lower litigation expenses in the first half than was originally expected, so that's all flown through to the bottom line. So we're very pleased with our operational progress and we're also delighted with the excellent progress made in the pipeline.

Of course those of you who have followed the R&D updates since last year will have a very good understanding of some of the signs. Christian will remind us top line of that today, and if you want more detail, please go to our website and you can refer back to the information there.

Our once-a-month risperidone remains on track and the Arbaclofen Placarbil makes good progress in its reformulation in our pipeline. So we're very pleased across the board there.

Guidance has been raised as you've already seen from our press release. In the midpoint we've had a 4% increase on the top line and on the bottom line a 31% increase in guidance for the full year at the midpoint, and Mark will give us more detail about that in his presentation.

So with that very positive introduction, Mark, would you come and take us through the financials, please?

Thanks, Shaun, and good afternoon, everyone. I'm delighted to be here to share our first half results, which reflect the team's strong operational execution towards our strategic priorities for 2017.

Namely these priorities were Suboxone Film Resilience in the United States, ensuring successful launch of our pipeline products, which are filing NDAs in 2017, expansion of global treatment, as well as continuing to manage our overhangs and pay down our debt. By now I'm sure you've read the release, so I'll take you through the financial results starting with the profit and loss account.

We showed the profit and loss account on an adjusted basis, removing the exceptional items to reflect the underlying growth. The nature of these exceptionals are covered in the release, but include the $25million provision for the Amneal settlement in the second quarter that Shaun spoke to earlier.

As well as in the base period, our adjustments for ANDA preparation, negative ANDA scenario preparation of $10 million in cost of sales, $4 million in SD&A and there's a $14 million in the exceptional tax impact. On an adjusted basis, what you then see is very solid, underlying year-over-year business performance, with the top line at 4% to $553 million, operating profit of $269 million and net income of $169 million, reflects 27% and 25% growth, respectively.

We're expecting this momentum to largely carry through the remainder of 2017 leading to our guidance being raised for the full year 2017, which I'll provide more detail on at the end of the presentation. I'd like to spend a little bit of time on the net revenue trends of the business.

Indivior's net revenue increased 4% in the first half, including second quarter growth of 5%. This marks the 6th quarter in a row of year-over-year net revenue growth.

On a geographical basis, the U.S. market backdrop remains strong leading to net revenue growth of 4% in the first half, primarily due to a few key factors.

The first is low double-digit market growth in the first half of 2017. The market growth we're seeing is primarily being driven by increased prescribing capacity in the market, associated with the various legislative changes that happened over the last year.

These include the 275 patient cap limit, the majority of which will annualize in the fourth quarter this year. In addition, we've had great progress in certifying new prescribers which are ahead of the prior year.

And lastly, we're seeing a large number of nurse practitioners and physician assistants, which are getting certified, albeit, they haven't impacted the first half, but they'll help as we start to annualize the impact of the two - we annualize the 275 certifications. These strong market growth dynamics in the U.S.

are partially offset by share loss that Shaun spoke to in the most price-sensitive portions of our business. Specifically, we saw average share in the first half at 59% versus 61% a year ago, while Half 1 exit share was at 57% versus 61% a year ago.

As we've discussed before, the pricing dynamic at some of the Managed Medicaid accounts have become uneconomical resulting in its coming off formulary of these accounts in order to protect the overall franchise. Also impacting first half volume growth was destocking that occurred at the beginning of the year as we talked about at the Q1 results.

This was due to wholesaler inventory buildup in anticipation of the annual price increase we took in January of 2017. In terms of pricing, the 5% gross price increase we took was sufficiently offset by mandatory rebates as well as the tactical rebating that we've done for formulary access.

Finally, there was a modest mix benefit in the first half due to the slightly lower percentage of Managed Medicaid accounts. In sum, the U.S.

story is all about the strong market conditions we continue to execute extremely well against. As the market leader we're very well positioned for the launch of RBP-6000 assuming priority review is targeted for Q1 2018.

Looking at the rest of the world, net revenue grew 3% in the first half of the year, 8% excluding FX. We continue to benefit from export revenues to EMEA, solid growth in Australasia as our Suboxone Film business continues to gain share and we saw some one-time gains primarily from past due collections on certain EMEA accounts.

Excluding these one-time benefits, EMEA revenue increased modestly as we experienced market share resilience offset by the austerity measures that we've been speaking to over the past year. Now let's turn to the operating expenses and margins.

In addition to the continued net revenue growth, our operating results are accentuated by year-over-year decline in SD&A spending, driven by a number of factors. Shaun spoke to the legal costs were down significantly year-over-year due to the delay of Dr.

Reddy's ANDA decision, rescheduling of the Mylan case to the back half of the year and a lower pace of activity on the DOJ and other investigations versus year-ago period. Base SD&A is down year-over-year because of the amortization ending on the rest of world rights purchase.

R&D expenses were down year-over-year primarily due to the fact that we've been focused on the NDA submission associated with RBP-6000 and RBP-7000. In addition, we've had strong cost control on the base, which has resulted in the overall SD&A being down over the period.

As a result, we've seen this P&L operating leverage in the first half of 2017 driving an operating margin of almost 50% on an adjusted basis. However, it's important to keep in mind that as we highlighted before, there is $40 million to $60 million of pre-launch spend as well as higher legal spend throughout the back half of 2017 that will impact the SD&A line as well as a higher rate of activity on R&D in the back half.

We'll cover that in more detail as we get to the guidance. Finally as we've previously discussed, we do have the $25 million exceptional item in operating costs and this item is also on the balance sheet.

You will notice that $25 million increase in provision for liabilities and charges on top of the $217 million provision that was there and registered in Q3 2016 for the investigative and antitrust litigation matters. On the tax rate, we continue to expect the rate for the full year to be at 24%; excluding exceptional items, our first half rate was 30% and the rate reflects the earnings contribution in the first half of the year from the United States.

As you know this is a higher tax jurisdiction and accounts for the majority of Indivior's earned income. The tax rate guidance for the year reflects a higher level of spend primarily in the U.S., which impacts the rate in the back half and gets us to the 24%.

Cash and borrowing. Taking a look at our cash position, you see that we've ended the year with a solid cash position of $792 million.

This is a $100 million increase versus fiscal year-end, and as a result of our improved cash position and further debt pay down with debt covenants, our net cash position has improved by $164 million in the half year to $295 million of net cash. As we discussed, at this year-end, we continue to retain cash on our balance sheet to provide the greatest security and flexibility until we have further certainty around the potential impacts of the outstanding DOJ and antitrust litigation matters, as well as the ANDA decision.

Assuming we ultimately resolve these overhangs, we'll then be in a good position to revisit our capital structure. Driving our growing cash position is the strong cash flow conversion that we see primarily resulting from operating profit improvement.

As we forecast in 2016 results presentation, our cash conversion levels in the first half are down modestly from what we saw, as we've seen an increase in working capital, primarily from the payments of prior year trade and other payables, specifically working capital with the use of cash of $63 million, which was partially offset by lower tax payments. Now let's go to guidance for the rest of the year.

On the back of the strong operational results in half 1, we're raising our full year guidance. Our updated view is driven by the combination of increased top line expectations as well as an overall lower expense base.

Starting from the top line, we've increased our guidance by $40 million for fiscal year 2017, primarily reflecting the strong U.S. market growth, share retention and modestly better short-term pricing dynamics.

As I mentioned, the U.S. market growth in the first half of 2017 has been a low double-digit and we believe this will continue for the rest of the year, as the benefit of the legislative changes and expected record number of certified physicians maintain the low double-digit growth.

Also we do expect continued modest share loss in price-sensitive accounts, but the rate of erosion has not been as steep as originally expected in our original guidance. Lastly, though the benefits of pricing continue to be largely offset by the tactical rebates, the overall pricing environment is marginally better.

These factors combined to the increase in top line guidance with the midpoint that now represents 4% increase year-over-year. On the expense side, our revised guidance reflects the lower overall spending levels we achieved in the first half of 2017, as well as with the $40 million to $60 million of investment that we're making in the back half for pre-launching activities, higher legal spend versus the first half and R&D spend also.

This said, overall operating expenses will be lower versus our initial guidance. Considering these items along with increased sales forecasts, we now expect fiscal year 2017 net income to be in the range of $265 million to $285 million.

I remind you again that our guidance assumes no material changes in the market circumstances, excludes exceptional items and is on a constant currency basis. It also assumes a 24% tax rate.

That concludes my financial update for Indivior's first half results. I am now nearly six months into the role of CFO of Indivior and five and a half years with the company.

I continue to be humbled by the passion of the Indivior team that it takes on delivering on our commitments, driving shareholder value, as well as expanding access and bringing potentially transformational treatments to market. I have been very much enjoying the initial engagements that I had with each of you during this period and look forward to spending more time moving forward.

With that, let's turn it over to Javier to talk through the legal matters.

Thank you, Mark. Good afternoon, everyone.

So in terms of a report on our major legal proceedings as with past practice, I will provide an update on the key developments that have transpired since Q1 of 2017. For a more complete report on these legal proceedings I'll refer you to our annual or half year results announcement.

So we have increased our provision for the government investigations and antitrust litigations directed at our U.S. operations by $25 million for a total reserve of $242 million.

This increase of $25 million reflects a distinct and final settlement of the antitrust lawsuit brought by Amneal Pharmaceuticals, and in fact, a stipulation to dismiss the lawsuit with prejudice was filed with the court yesterday, and by with prejudice, I mean that the case is dismissed conclusively and cannot be re-filed. The previously recorded provision remains unchanged, as the outstanding legal proceedings remain ongoing.

Our discussions with the DOJ continue regarding a possible resolution of their investigation. We're also continuing to cooperate with the states of Connecticut and California in their investigations.

There has been no activity on the FTC front; coordinated discovery, however, in the antitrust litigation is continuing with the remaining plaintiffs. We can't predict if we can reach a resolution with any of these other parties although we are encouraged by the settlement that we reached with Amneal.

Even if we're able to reach a resolution with these other parties in these open proceedings, we can't predict at this time what the ultimate cost of resolving those matters would be. It's possible that the cost of resolution could be materially higher than what we've recorded in our provision.

Within our press release, we have also reminded investors of the risk factors associated with the mutual indemnity provisions in the merger agreement with Reckitt Benckiser. Moving on to the issue, that I'm sure is on everyone's mind, we don't yet have a firm date for the court ruling in the end the litigation against Dr.

Reddy's Par and Actavis. We continue to expect a ruling any day now, but understand that the court is very busy and on a whole our issuing rulings are a lot slower than they did a year ago.

However what we can say is that to date no Suboxone Film ANDAs have been approved by the U.S. Food and Drug Administration.

Moving on to the proceedings with the remaining two ANDA filers, the lawsuit against Alvogen and Mylan is on track to go to trial September 25 to 27. However, Mylan has recently renewed a motion to transfer its lawsuit from Delaware to the Federal District Court in West Virginia, which is its home state.

We have opposed that motion and it's currently pending before the court. In May 2017, the U.S.

Patent and Trademark Office agreed to institute Mylan's Inter Partes review of the '514 Suboxone Film Orange Book-listed patent. A decision on the merits of that IPR is expected in May of 2018.

In June 2017, Dr. Reddy's and Par each filed a motion to join the Mylan IPR and these motions are presently under review by the U.S.

Patent and Trademarks Office. Finally, on June 23, the Patent Trial and Appeals Board denied Dr.

Reddy's request for rehearing of its petition on the '832 Suboxone Film patent. And that concludes my legal update.

I will now turn it over to Christian Heidbreder for a pipeline review.

Thank you, Javier, and good afternoon everyone. I will start by giving you an update on the pipeline and first an overview of the Buprenorphine Monthly Depot, RBP-6000.

As you know, we filed the NDA successfully at the end of May as per plan. Assuming priority review, we would then launch the product in the first quarter of 2018, and we are waiting for the FDA to give us two key information.

First of all, the designation either a priority review or standard review and ultimately the PDUFA date. For schizophrenia, RBP-7000, our monthly Risperidone product, we are completely on track to file the NDA in the fourth quarter of this year.

Last but not least, Arbaclofen Placarbil, we are still completing the bioavailability studies as per plan as well, and I will give you a little bit more update on this following slide. So you may remember that we designed 2017 as a series of go/no go milestones based on a reformulation of the product and then a series of characterizations of the pharmacokinetics profile of these new formulations versus the original formulation that we inherited from XenoPort.

The first part of the study was to really characterize two new formulations versus the original formulation, that is the pharmacokinetic study in healthy volunteers, and very importantly assessing the interaction of these formulations with alcohol per se. This had been successfully completed and allowed us to move to the second part of the study, which was an optimization of 1 chosen new formulation and determine the full interaction of that chosen formulation versus the original formulation, this as well have been successfully achieved.

Last but not least, we took 1 of the chosen new formulations and we are currently preparing a higher dosage strength. We are currently dealing with 15-milligram strength and the goal is to have 60-milligram strength.

We need now to recharacterize the pharmacokinetics profile of this new higher dosage strength formulation, as well as a repeat of the alcohol interaction studies. The final reporting of all these studies will be available in the fourth quarter of 2017 again as per the original plan.

If you look at overdose rescue medications and the situation in Canada, I want you to focus first on the left hand side of the slide with the first RBP-8000, our cocaine esterase for the treatment of cocaine intoxication. So we made the decision to actually terminate the license agreement with Columbia University on this product.

You may remember that back in 2014 - November of 2014, we actually received a breakthrough therapy designation for this product and this was based on the outstanding clinical proof-of-concept studies that we submitted to the FDA. Since then, however, and through interactions with the FDA, we understood better the complexity of the clinical development forward, especially the demonstration of clinical efficacy and safety in these very challenging patient populations, first in an emergency department environment, for a product that ultimately will really be useful for patients in an ambulatory environment and that is in the ambulance.

So at the end of the day, we made a decision to refocus our skills towards a broader indication that is stimulant use disorder and you may remember that during our R&D Day in December of 2016, we showed you an example of some new molecular entities that we are currently working on, such as the selective dopamine D3 receptor antagonist; but this is just one example. We continue to invest our efforts into the discovery on new molecular entities for stimulant use disorders rather than a niche cocaine intoxication very challenging patients of population.

Intranasal naloxone in France, this is called Nalscue, you may remember from previous communications that the French regulatory agency, the ANSM, had a commission in March this year recommending the approval of this product. We are currently waiting for the final approval of the MAA sometime in the third quarter of this year.

If we move to the right side of the slide, regarding the situation in Canada, last year, we submitted a supplemental NDS for two additional dosage strength of Suboxone Tablet, that is 12 milligram and 16 milligram in addition to the 2 milligram and 8 milligram that are already available on the market, and we are expecting approval in the fourth quarter of this year. Very importantly, our Suboxone Film has now been added to the list of drugs for an Urgent Public Health Need in British Columbia, and this was announced on June 20, this year and this is part of a proposed amendment of the Food and Drug Regulation that was issued on April 22, this year.

This basically means the importation of drugs for an Urgent Public Health Need and certainly opioid use disorder is one of these urgent needs. Leveraging this entire situation in Canada as well, we are planning to file our RBP-6000 monthly buprenorphine depot in the fourth quarter of this year based on our U.S.

dosage. RBP-7000 monthly Risperidone depot for schizophrenia, you may remember and it's hard to believe that it's already two years ago that we released the top line results of our Phase 3 pivotal trial, demonstrating the clinical efficacy and safety of RBP-7000.

In the meantime, we completed the Phase 3 long-term safety extension study with the purpose of demonstrating the clinical efficacy and safety of this product, following at least 12 months of exposure. This was completed in September last year, database locked in October last year and the signature of the final clinical study report in the first quarter of this year.

We also held a pre-NDA meeting in August 2016, and we are on track to target our NDA in the fourth quarter of this year. Very importantly, if you are interested in having a look at the data of the Phase 3 long-term safety extension study, I invite you to either attend or at least look at the abstract of the Annual Meeting of the American College of Neuropsychopharmacology that will be held in California the first week of December.

And last but not least, RBP-6000, our monthly buprenorphine depot, as you know we submitted the NDA to the Food and Drug Administration on the 30th of May as planned. The FDA has now 60 days to basically give us two critical pieces of information.

First, the type of the designation, either priority review or standard review, as well as the PDUFA date. The deadline for the FDA to get back to us is July 29, which is this coming Saturday.

So we are expecting news either tomorrow or Monday. All ongoing clinical studies in the U.S.

are currently on track and I briefly remind you of what these studies are. First the Phase 3 long-term safety extension study that is the 12-month trial, also referred to as the 0003 study and the final clinical study report is expected now in the third quarter of 2017.

Health economics and outcomes research, we had a lot of clinical endpoints in the placebo-controlled, double-blind trial, so called 0001 trial, and the final report on all of these EHOR [ph] clinical endpoints will be available in the fourth quarter of 2017. And last but not least, our big observational study called the RECOVER Study, the baseline analysis is expected now to be completed in the third quarter of 2017.

The last subject will be out of that study in the first quarter of 2018 with a final heavy detailed report available in the second quarter of 2018 really very much in line with hopefully launch of the product in the first quarter of 2018. You may also remember that we interacted with a lot of ex-U.S.

regulatory agencies. So we met in November-December 2016 with the TGA in Australia, Health Canada in Canada, ANSM in France, MHRA in the United Kingdom and MPA in Sweden and BfArM in Germany.

Our priority right now is to submit our filing in Canada in the fourth quarter of this year. Last but not least, we put together a very detailed data dissemination plan for RBP-6000, our monthly buprenorphine depot, and you can see that we launched this data dissemination plan with the late breaking session at the CPDD on June 21.

This was followed by an event for investors on June 29 where we gave a little bit more detail about the data and you can see here the plan coming. There will be two, three main events in October.

We will first attend the American Conference of Pharmacometrics, the so called ACoP meeting where we will give a little bit more detail about the population PK/PD modelling and the exposure-response analysis based on the Phase 3 clinical efficacy and safety trial. There will be a meeting in France as well as the Canadian Society of Addiction Medicine.

These will be two encore sessions on the Phase 3 clinical efficacy and safety data. In November, there will be two additional events; one that will take place in Melbourne in Australia.

That will be another encore session. And then very importantly, the Association for Medical Education Research and Substance Abuse, the AMERSA meeting in Washington D.C., where for the first time we will share the health economics and outcomes research endpoints from the 0001 study, that is the clinical, the Phase 3 clinical efficacy and safety trial.

And then, we will finish the year in December with two additional events. One that is the American College of Neuropsychopharmacology, where again we will elaborate a little bit more on the PK/PD receptor occupancy model on the Phase 3 trial.

And then last but not least, The American Academy of Addiction Psychiatrist also in California, where for the first time we will really reveal the predictors of dropout in treatments or if you want remaining abstinence again based on the Phase 3 trial. So I must say that looking at all these achievements in 2017, I'm incredibly proud of the R&D organization bringing hopefully as soon as we can two transformational medications for patients who are really waiting to see a difference in their daily life.

On that note, back to you Shaun.

Thank you, Christian. So just to remind ourselves of what our priorities are for the rest of the year, we will add a bigger picture level of course.

We continue to pursue our vision to make sure that patients all around the world can access high-quality treatment. It's important to recognize that as we do that we continue to review and upgrade our operating model, particularly in the area of compliance to make sure that we're able to maintain the right standards and best practice to meet this growth of our business.

So if we think sort of narrowly and immediately, clearly we've got key legal risks that we need to resolve that really unlock the real future potential for the company. While those things are going on and in parallel, of course, there is a very, very impressive operational performance across the board.

Mark has referred to the passion, the commitment, the dedication and the engagement of everybody in the U.S. business.

That's why despite 10 competitors in the market, we still retain 57% market share for the Film, and we believe that Film share will remain resilient as we move forward. We need to make sure that we get it right in terms of our pre-launch preparation and then commercial success for our two once-a-month injectable technologies.

Our progress is going very well, and as Mark said, that we are making the relevant investments to make sure that we get this right. As we have said previously, when we do launch there will be a fairly slow build as we get started.

Don't look at the tablet-to-film conversion analogs and put that into your models. This is a transformational change.

This technology is going to help change the way that doctors practice medicine. So it is a very big opportunity and we think that it will do very well.

We continue outside the U.S. to expand access to treatment.

We've talked about the opportunity and the progress in Europe and very important recognition by the Canadian Government of the need to bring new treatments to Canada to help expand access to patient care there. So we see that as a very positive development.

Of course, we continue to position ourselves to be able to do business development, we continue preparation for U.S. listing, we continue to build on our cash position and strengthen our balance sheet, but clearly our ability to execute is dependent on the resolution of our two key risks, legal risks.

So just to remind you for the rest of the year that we will be at all the usual places, the key conferences, we will be delighted to see you if you'd like to come and meet us for one-to-one meeting and very much look forward to that. So in summary, we continue to build our confidence about the future.

I think it's a very compelling outlook, good performance across the board and we are making good progress on managing the risks to the business. I think the Amneal litigation resolution is a very important development and gives us confidence as we move forward.

So thank you very much for your interest and attention. I know there are a lot of other results presentations going on today, so very pleased that you were able to choose to join us.

So now we will take any questions that you may have. James?

James Vane Tempest from Jefferies. Just three, if I can, please.

I was just wondering from memory, I think in Q1, there was some destocking following the restocking in December ahead of the price increase. Have you seen much changes in the stocking levels in 2Q?

That's my first question. Secondly, the termination of the cocaine esterase, whether any costs associated with that and have they being booked in the quarter?

And then my third question is just on legal. Can you remind me, is there any link between your sort of position in the DOJ investigation with Reckitt, because earlier this week, they took 318 million pound provision.

So I was wondering given that it's a little larger than what you've done, whether there are any nuances we should be aware of that?

Yes, I'll take the last question and then hand the other two over to Mark. With respect to Reckitt Benckiser, they run their business, we run ours, they're in dialogue with the government.

We are in dialogue with the government. The sort of similarity ends there.

Really there is no connectivity between these two discussions. The comments that they've made about their provision is what they think is appropriate and relevant to their business and we obviously have our own litigation matters.

So I'm not able to comment beyond that, no more than I would litigation in any business. So, Mark, would you like to pick up those first two questions please?

Sure. James, with regard to the destocking, the vast majority that destocking happened within the first quarter.

I think if you think through kind of the revenue and think about the low-double digit market growth we saw in the U.S. offset with the share loss and the balance is primarily that destocking as the pricing was virtually neutral with regards the price increase and the tactical rebates that we had.

And then costs with regard to cocaine esterase, there is a de minimis amount of cost with regards to transferring the asset back to the originator, but it's not impactful to the results.

Max?

Max Herrmann from Stifel; four questions, if I may. Firstly, just a little bit of an update on Europe and the plans for RBP-6000 in the European markets, I know I think previously you had said having expected it to be - take more time, I think last time you mentioned perhaps being able to file by the end of this year.

Clearly now, Canada is the focus, so update on that? Also just what's happening with Suboxone in Europe?

I believe Generix [ph] last year were able to launch and I wonder what - obviously the market dynamics looked stronger than I was expecting. So, I'd be interested to know what's going on in the market?

And then another question just on the pipeline. Given the size of business, there is given RBP-6000 and RBP-7000 are now through and your news on the cocaine esterase program today, was Arbaclofen pretty much your main product in development?

There seems to be quite lot of scope for either reducing R&D spend or and launching projects in the pipeline. I wonder what your strategy as any plans there?

And just finally, I have asked this before, but methadone, I mean, is that a market opportunity in terms of with expected once monthly has significant advantages over a patient who is going to be chosen to take program by methadone?

Okay, so let's talk about Europe first. I mean, the European opportunity has always been a challenge you see, takes sort of a couple of steps forward on volume.

We've kept more patients in the treatment and a couple of steps on pricing. There are government austerity measures imposed price cut.

So although we've got a good profitable business in Europe, the growth is not very interesting at the moment and that position remains. We are encouraged by the conversations that we had with the regulators with respect to the once-a-month buprenorphine depot and the next phase is really to look at European pricing and what the opportunity will be there.

Can you just remind me of the last question, please? Oh yes, methadone, right.

So we believe very strongly that it's very important that patients have access to a choice of treatment, because our vision is to ensure that patients have got access to care and they get access to treatment. So patients should have a choice and we're not interested in sort of bashing their choice to try and promote our choice.

Doctors must make the decision based on what they believe is the right medication for patients. So methadone will continue to be an important choice for doctors to use in the armamentarium and we do believe that patients who are looking for another step towards recovery, patients who are looking for a method of treatment where they won't have to go to the clinic every day to receive a dosing, but can just visit the doctor once a month rather than visit the clinic every day, clearly we would hope that our once-a-month depot product would be a very attractive option for those patients, particularly as we know that it is very effective at maintaining plasma levels above 2 nammograms per milliliter and is the only technology that we are aware of from all the publicly available information that actually sustains those plasma levels across the whole month.

And those of you who are well informed which will of course be all of you or most of you, you will have seen what the clinical significance is about plasma concentration from the R&D presentations that Christian has made previously. If you want to remind yourselves they are of course available on the website for you to have a look at.

So we think that it is a very positive proposition for physicians and patients. Christian, would you like to speak to the Arbaclofen and pipeline question?

Yes. So the Arbaclofen Placarbil is moving according to our plan.

That said, with regards to new pipeline opportunities, yes, we are actively looking for opportunities currently in the alcohol use disorder to have backup plans, so to speak. But also as I indicated, the opportunities in stimulant use disorder, there is a targeting of patients suffering from cocaine addiction and methamphetamine addiction.

As you know, however, there are no advanced opportunities in these areas. So that means that currently the most interesting targets in the non clinical stage and this is why we also very carefully access what the potential and clinical development plans will look like.

Jason, do we have any questions from online?

Can you hear me guys?

Hi, Patrick.

Hi, thanks for taking my questions. I just have two if I may.

First is on the growth rates. So in terms of the market growth a low-double digit, what in your view would you need for this market growth to accelerate any faster?

And also secondly, on R&D, could you give us more color in terms of what are you going to, what spend are you going to have on R&D over H2, and why should we see an increase here? Thanks a lot.

Okay, well I'll speak to the first point. I think what we would like to see, continue to see is that patients have access to treatment.

So I think there's a tremendous amount of good work going on across the board from government, from the medical societies. We are doing what we can as a company to provide an appropriate and compliant level support to that whole effort.

So we would like more patients to come in for treatment, because that's very good for the patients, it's good for that families and it's good for society. At the same time we want the quality of treatment to be high and appropriate, though this needs to happen at a pace that sustains the quality and the integrity of the treatment model and doesn't create any issues there.

Mark, do you want to speak to the second question?

Sure. I think just on Christian's presentation, there is still a significant amount of activity going on, on the two primary Phase 3 assets with regards to RBP-6000 and RBP-7000.

There is the continued HEOR work. There's the RECOVER study and then there's a lot of teasing and cross-sections of data with regards to where are we going to go with this asset next, as we start to explore lifecycle management and very similar sort of thing with regards to RBP-7000 as we prepare for that.

So we expect in the back half to have a higher rate of R&D spend when combined with AP versus the first half, but moderately down year-over-year, $10 million to $15 million or so down in the period with regards to that R&D line.

That's great, thanks guys.

Next question? Jamie Zimmerman, would you like to go ahead?

Thank you.

Yes, hi good morning.

Good morning, Jamie.

So, you know on the one…Good morning, how is everybody. On the once a month depot which we're so excited about and it's so wonderful that it will actually be on the market by the end of this year because I do think it's going to have a huge impact on the opioid problem that we have in this country and we're very excited about - we're very excited about it getting fast tracked.

But in the event that it does get fast tracked, it's such a new treatment, it's such a great treatment for patients just in terms of not worrying about compliance, not worrying about abuse, don't you think these patent disputes all disappear? I mean, who will be using this film once the once-a-month depot shows up.

It seems to me that the entire market will switch to the once-a-month depot and all this talk about patent infringement overhang is going to be completely mute.

Well, certainly, we are very encouraged as you are by the new potential of the once-a-month depot has for patients and we very much hope that doctors and patients will see this as a huge step forward. So of course, what the impact is on the total market in terms of the choices that doctors exercise for patients remains to be seen, but like you we are certainly very optimistic that this will bring, it will be a very material advancement and a big step forward for patients.

And probably totally replace the film. But my other question is merely when you guys separated from Reckitt Benckiser, I believe that there was some sort of separation agreement with a sharing of I gather some sort of responsibilities when it came to anything that went before when you were part of Reckitt.

So I understand that you are both separate companies and you might have separate, there might be separate increase from justice, but it's the same harm. So I don't understand at the end when there will be some determination as to what is owed if anything to the U.S.

Government? How the amounts can be - there has to be some relationship between what you pay in my estimation and what they pay.

You can't get tagged twice for the same wrong. So I'm curious why you think there are separate investigations?

Well, they are separate, because we're now two separate legal entities and separate companies, so they are separate. There also was not any agreement at the demerger of any sharing of any issues.

What we have done, just to be responsible and to make sure that people haven't forgotten, we have reminded people of what the language actually was at the demerger and in the prospectus in this year's, this quarter's earnings statement, we've included that in the risk factors section. I mean without getting into all the nuances, it's a sort of high level mutual indemnification provision.

So there is no indication that this event at RB, if there's any intent there, certainly we wouldn't expect anything, but there isn't a mutual sharing of any sort of future liabilities and that's not the language. Is there anything that you would wish to add to that, Javier, or add further clarification?

Sure. So Jamie, I think what you are referring to is the demerger agreement that we executed to become a standalone entity, and in that agreement there is a mutual indemnity.

But because RB hasn't really provided any guidance on the direction the discussions are going or what they may entail, any assessment on our part about the scope and coverage of the indemnity or whether they're going to make a claim for indemnity or whether there are legal grounds to challenge an indemnity is hypothetical and difficult for us to opine on at this point in time.

But the Justice Department is inquiring about activity that happened when you were actually owned by and part of Reckitt?

That's correct.

So it's not something that happened when you were two separate companies, it's not about a future liability, it's about the specific behavior that happened through 2012 and 2013, right? When you were part of Reckitt.

So they can't - you can't really fine two people twice, you can't fine, if you get paid once, you don't get paid twice.

Is that a question or a statement? So, yes, no I think we've...

[Inaudible] usually you don’t get fined twice, right? So you get fined once.

Yes, I mean, these are two separate investigations, Jamie, and the situation is that RB have a dialogue with the government, and we have a dialog with the government. And the two discussions happen entirely separately.

So we all have a view on the nuances of all of this, but to try and speculate, it is all very hypothetical. So we just don't see any value in speculating on things that are totally unknown.

Not trying to be difficult, but you know that is the reality of the situation.

All right, well [indiscernible] Yes, well I am hoping that they pick up the fine, that's what I'm hoping and congratulations on a great quarter.

Any further questions online? No?

Well, thank you very much indeed everyone for your attention and interest. We look forward to seeing you again in the near future.

Thank you.