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INDV Indivior Plc

1,514.00
-6.00 (-0.39%)
24 Apr 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Indivior Plc LSE:INDV London Ordinary Share GB00BN4HT335 ORD USD0.50
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -6.00 -0.39% 1,514.00 1,518.00 1,525.00 1,540.00 1,496.00 1,540.00 517,964 16:35:12
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Pharmaceutical Preparations 1.09B 2M 0.0148 1,027.03 2.06B

Indivior PLC Annual Financial Report (3055A)

23/03/2017 1:00pm

UK Regulatory


Indivior (LSE:INDV)
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TIDMINDV

RNS Number : 3055A

Indivior PLC

23 March 2017

Indivior PLC ('Indivior' or the 'Company')

Annual Report and Accounts for the year ended December 31, 2016 ('Annual Report & Accounts 2016') and Annual General Meeting 2017 ('AGM')

The Company has today posted or made available to shareholders the following documents:

-- Annual Report & Accounts 2016;

-- Notice of AGM; and

-- Form of Proxy for the AGM.

In accordance with LR 9.6.1, these documents have been submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM.

The Annual Report & Accounts 2016 and Notice of AGM can also be viewed on the Company's website at www.indivior.com/investors/.

The AGM is scheduled to be held at 3.00pm on Wednesday, May 17, 2017 in the Wessex Ballroom, Renaissance London Heathrow, Bath Road, Hounslow, Middlesex, TW6 2AQ.

A condensed set of Indivior's financial statements and information on important events that have occurred during the financial year ended December 31, 2016 and their impact on the financial statements were included in Indivior's preliminary results announcement released on February 22, 2017. That information, together with the information set out in the Appendix below, which is extracted from the Annual Report & Accounts 2016, constitute the material required by Disclosure Guidance and Transparency Rule 6.3.5 which is required to be communicated to the media in full unedited text through a Regulatory Information Service. This announcement is not a substitute for reading the full Annual Report & Accounts 2016. Page numbers and cross references in the extracted information refer to page numbers and cross references in the Annual Report & Accounts 2016.

March 23, 2017

Investor Contact

Jason Thompson

Vice President, Investor Relations

Indivior

Tel: +1 (804) 423 8916

jason.thompson@indivior.com

Forward-Looking Statements

The Annual Report & Accounts 2016 contains certain statements that are forward--looking and which should be considered, amongst other statutory provisions, in light of the safe harbour provisions of the United States Private Securities Litigation Reform Act of 1995. By their nature, forward--looking statements involve risk and uncertainty as they relate to events or circumstances that will or may occur in the future. Actual results may differ materially from those expressed or implied in such statements because they relate to future events. Forward--looking statements include, among other things, statements regarding the Indivior Group's financial guidance for 2017 and its medium-- and long--term growth outlook, its operational goals, its product development pipeline and statements regarding ongoing litigation. Various factors may cause differences between Indivior's expectations and actual results, including: factors affecting sales of SUBOXONE(R) (buprenorphine and naloxone) Sublingual Tablets (CIII), SUBOXONE(R) (buprenorphine and naloxone) Sublingual Film (CIII), SUBUTEX(R) (buprenorphine) Sublingual Tablets (CIII) and any future products; the outcome of research and development activities; decisions by regulatory authorities regarding the Indivior Group's drug applications; the speed with which regulatory authorizations, pricing approvals and product launches may be achieved; the outcome of post--approval clinical trials; competitive developments; difficulties or delays in manufacturing; the impact of existing and future legislation and regulatory provisions on product exclusivity; trends toward managed care and healthcare cost containment; legislation or regulatory action affecting pharmaceutical product pricing, reimbursement or access; claims and concerns that may arise regarding the safety or efficacy of the Indivior Group's products and product candidates; risks related to legal proceedings; the Indivior Group's ability to protect its patents and other intellectual property; the outcome of the SUBOXONE Film patent litigation relating to the ongoing ANDA lawsuits; changes in governmental laws and regulations; issues related to the outsourcing of certain operational and staff functions to third parties; uncertainties related to general economic, political, 13 business, industry, regulatory and market conditions; and the impact of acquisitions, divestitures, restructurings, internal reorganizations, product recalls and withdrawals and other unusual items.

Any forward-looking statements that we make in the Annual Report & Accounts 2016 speak only as of the date of the Annual Report & Accounts 2016. We assume no obligation to update our forward-looking statements whether as a result of new information, future events or otherwise, after the date of the Annual Report & Accounts 2016.

The Annual Report & Accounts 2016 does not constitute an offer to sell, or the solicitation of an offer to subscribe for or otherwise acquire or dispose of shares in the Company to any person in any jurisdiction to whom it is unlawful to make such offer or solicitation.

APPIX

   i.    Statement of Directors' Responsibilities 

The Directors are responsible for preparing the Annual Report, the Directors' Remuneration Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the Group financial statements in accordance with International Financial Reporting Standards ('IFRS'), as adopted by the European Union, and the Parent Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 "Reduced Disclosure Framework", and applicable law).

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Parent Company, and of the profit or loss of the Group and parent Company for that period. In preparing these financial statements, the Directors are required to:

-- select suitable accounting policies and then apply them consistently;

-- make judgments and accounting estimates that are reasonable and prudent;

-- state whether IFRS as adopted by the European Union have been followed for the Group financial statements and the United Kingdom Accounting Standards, comprising FRS 101, have been followed for the Company financial statements, subject to any material departures disclosed and explained in the financial statements; and

-- prepare the financial statements on the going concern basis, unless it is inappropriate to presume that the Group and Parent Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's and Parent Company's transactions, and disclose with reasonable accuracy, at any time, the financial position of the Group and the Parent Company, and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Parent Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the Group and Parent Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Responsibility statement of the Directors in respect of the Annual Report

The Directors consider that the Annual Report and Accounts, taken as a whole, are fair, balanced and understandable, and provide the information necessary for shareholders to assess the Group and Parent Company's position and performance, business model and strategy.

Each of the Directors, whose names and functions are listed on page 58, confirm that, to the best of their knowledge:

-- the Parent Company financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 "Reduced Disclosure Framework", and applicable law) give a true and fair view of the assets, liabilities, financial positions and profit of the Company;

-- the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and

-- the Directors' Report and Strategic Report, includes a fair review of the development and performance of the business and the position of the Group and Parent Company, together with a description of the principal risks and uncertainties that it faces.

ii. Risk Factors and Risk Management

The Board of Directors have carried out a robust assessment to ensure that the principal risks, including those that would threaten the Group's business model, future performance, solvency or liquidity are effectively managed and/or mitigated to help ensure the Group is viable. While the Group aims to identify and manage such risks, no risk management strategy can provide absolute assurance against loss.

Set out below are what the Group considers to be the principal risks that could cause the Group's business model, future performance and solvency or liquidity to differ materially from expected and historical results, and how the risks relate to the Group's strategic priorities. Additional risks, not listed here, that the Group cannot presently identify or does not believe to be equally significant, may materially and adversely affect the business, results of operations and financial position. The principal risk factors and uncertainties are not listed in order of significance.

Principal risks

Business operations and business continuity

-- The Group's revenues are primarily derived from sales of Suboxone(R) Film and any decrease in sales due to competition or supply or quality issues could significantly affect the results of operations and prospects.

-- Competition for qualified personnel in the biotechnology and pharmaceutical industries is intense, and high-performing talent in key positions is a business-critical requirement.

-- Failures or disruptions to the Group's systems, or the systems of third parties on whom the Group relies, due to any number of causes, particularly if prolonged, could result in a loss of key data and/or affect operations.

-- The Group's systems, software and networks may be vulnerable to unauthorized access, computer viruses or other malicious code or cyber threats that could have a security impact. All of these could be costly to remedy and we may be subject to litigation.

-- The Group has a single source of supply for buprenorphine, an active ingredient in the Group's products including Suboxone(R) Film, and any disruption to this source of supply could significantly affect the Group's results, operations, and prospects.

 
 Specific risks            How we manage             Possible                  Link to strategic 
  we may face               risk                      impacts                   priorities 
------------------------  ------------------------  ------------------------  ------------------------ 
  Dependence                Continue                  Hinder patient            Build resilience 
   on single                 to expand                 access to                 of our franchise. 
   product line.             the market                treatment.                Expand global 
   Approval                  by expanding              Loss of                   treatment. 
   and launch                access to                 market share.             Business development. 
   of generic                treatment                 Loss of 
   or branded                and working               revenue and 
   products that             with physicians           profits, 
   compete with              and payors                which in 
   our products.             to improve                worst case 
   Generic manufacturers     patient outcomes.         scenarios 
   seeking approval          Capitalize                may require 
   to launch                 on international          business 
   competing                 growth opportunities,     restructure 
   products prior            continued                 and recapitalization. 
   to expiry                 development               Damage to 
   of existing               of our pipeline           reputation. 
   patents.                  and disciplined           Exposure 
   Launch of                 acquisitions              to litigation 
   branded products          to enable                 and significant 
   that compete              diversification.          legal costs. 
   with our products.        Obtain and 
   Claims that               enforce product 
   our products              patents and 
   infringe third            other IP 
   -party patents.           rights, and 
   Inability                 develop and 
   to deliver                implement 
   continuous                strategies, 
   supply of                 including 
   compliant                 new product(s), 
   finished product.         to face both 
   Inability                 generic competition, 
   to retain                 if the outcome 
   or attract                of patent 
   high-performing           litigation 
   and high-potential        is unfavorable, 
   staff could               and new and 
   adversely                 existing 
   impact achievement        branded competitors. 
   of                        Develop 
   Group objectives.         and implement 
   Significant               strategies 
   disruptions               to ensure 
   of information            freedom to 
   technology                operate. 
   systems or                Explore 
   breaches of               settlement 
   data security             opportunities. 
   could disable             Continuity 
   critical systems          planning 
   and cause                 for certain 
   loss of sensitive         black swan 
   data.                     events to 
   Failure to                secure business 
   protect and               continuity 
   restrict access           in worst 
   to critical               case scenarios. 
   or sensitive              Establish 
   computer systems          and closely 
   or information.           monitor stock 
                             levels. 
                             Ongoing 
                             partnerships 
                             with manufacturers 
                             and packagers 
                             to optimize 
                             manufacturing 
                             and Quality 
                             Assurance 
                             (QA) processes. 
                             Continuously 
                             review talent 
                             retention 
                             program with 
                             focus on 
                             identifying 
                             key roles 
                             and successors. 
                             IT disaster 
                             recovery 
                             plans in 
                             place to 
                             support overall 
                             business 
                             continuity. 
                             Systems in 
                             place to 
                             protect data 
                             and devices. 
                             Various 
                             IT policies, 
                             processes 
                             and systems 
                             in place 
                             to provide 
                             access control 
                             and security 
                             management 
                             for Indivior-used 
                             or owned 
                             infrastructure 
                             and applications, 
                             now operating 
                             independently 
                             from RB. 
                             Completed 
                             initial and 
                             continuing 
                             ongoing End 
                             User Cyber 
                             Security 
                             Awareness 
                             training. 
------------------------  ------------------------  ------------------------  ------------------------ 
 

Product liability, regulation and litigation

-- As an innovative pharmaceutical company, the Group seeks to obtain appropriate intellectual property protection for its products. Its ability to obtain and enforce patents and other proprietary rights particularly for its products, drug formulation and delivery technologies and associated manufacturing processes is critical to business strategy and success. Specifically see disclosures on pages 44 to 45 referring to the current status of ANDA litigation and to the going concern statement on page 95 contained within the Statement of Directors' Responsibilities, which discusses the risks associated with current ANDA litigation, and the contingent liabilities disclosures in Note 20 of the financial statements on page 126.

-- The manufacture of the Group's products is highly exacting and complex, due in part to strict regulatory and manufacturing requirements. Active Pharmaceutical Ingredients (API) in many of the Group's products and product candidates are controlled substances that are subject to extensive regulation in all the countries in which the Group markets its products.

-- The testing, manufacturing, marketing, and sale of pharmaceutical products are highly regulated and entail a risk of product liability claims, product recalls, litigation, government investigations and enforcement action, and associated adverse publicity, each of which could have a material adverse impact on the business, prospects, results of operations and financial condition. Specifically, see disclosure on page 44 referring to the current status of the DOJ investigation and other investigative and antitrust litigation matters, and the contingent liabilities disclosures in Note 20 of the financial statement on page 125.

 
 Specific risks           How we manage          Possible impacts      Link to strategic 
  we may face              risk                                         priorities 
-----------------------  ---------------------  --------------------  --------------------- 
  Failure to               Obtain and               Loss of revenue      Build resilience 
   obtain, maintain,        enforce patents          and profits.         of our franchise. 
   and protect              and other                Adverse impact 
   patents and              proprietary              on the Group's 
   other proprietary        rights.                  ability to 
   rights, including        Suboxone(R)              raise funds 
   potential                Film in the              necessary 
   invalidity               US is covered            to continue 
   or non- infringement     by three Orange          its operations. 
   findings in              Book-listed 
   the current              formulation 
   US Federal               patents and 
   Court or US              two process 
   Patent and               patents, having 
   Trademark                terms that 
   Office proceedings.      run from 2022 
   Legal proceedings        to 2030, which 
   related to               are currently 
   product liability        in litigation 
   claims, antitrust,       in the US 
   government               Federal Court 
   enforcement              and/or US 
   and/or private           Patent and 
   litigation               Trademark 
   associated               Office. 
   with the testing,        Develop and 
   manufacturing,           implement 
   marketing                strategies, 
   and sale of              including 
   our products.            new product(s), 
   Potential                to prepare 
   liability                for generic 
   and/or additional        competition 
   expenses associated      in the event 
   with ongoing             of adverse 
   regulatory               outcomes in 
   obligations              these proceedings. 
   and oversight.           Quality, 
                            product safety 
                            and compliance 
                            are embedded 
                            in the Group's 
                            processes 
                            and culture 
                            and monitor 
                            and oversee 
                            the Company's 
                            activities. 
                            Develop and 
                            implement 
                            strategies 
                            to defend 
                            against and 
                            pursue appropriate 
                            resolution 
                            of these claims. 
                            The Group 
                            has instituted 
                            policies, 
                            systems, and 
                            training programs 
                            to ensure 
                            adherence 
                            to regulations 
                            governing 
                            product quality, 
                            patient safety 
                            and business 
                            standards. 
-----------------------  ---------------------  --------------------  --------------------- 
 

Product development

-- The regulatory approval process for new pharmaceutical products and expansion of existing pharmaceutical products is expensive, time-consuming and uncertain.

-- Even if product candidates are approved, there is no guarantee that they will be able to achieve expected market acceptance.

 
 Specific risks               How we manage             Possible impacts            Link to strategic 
  we may face                  risk                                                  priorities 
---------------------------  ------------------------  --------------------------  ------------------ 
  Failure to                   Increased                   Potential                  Develop our 
   receive regulatory           R&D investment              delays or                  pipeline. 
   approval to                  to enhance                  inability                  Expand global 
   successfully                 clinical capabilities       to develop                 treatment. 
   commercialize                and support                 new products. 
   a pipeline                   the development             Hinder patient 
   product.                     of pipeline                 access to 
   Failure of                   products.                   treatment. 
   third-party                  Thorough                    Loss of revenue 
   Clinical Research            contract review             and profits, 
   Organizations                process in                  which in worst 
   to properly/successfully     place to ensure             case scenarios 
   perform their                that third-party            may require 
   legal, regulatory,           vendors are                 business restructure 
   and contractual              properly vetted,            and recapitalization. 
   obligations.                 inherent risks              Damage to 
   Inability                    are identified              reputation. 
   of product                   and mitigated,              Adverse impact 
   candidates,                  and deliverables            to long-term 
   if approved,                 and obligations             growth. 
   to achieve                   are clearly                 Adverse impact 
   expected market              defined before              on the Group's 
   acceptance.                  contracts                   ability to 
                                are finalized.              raise funds 
                                Ongoing monitoring          necessary 
                                of the third-parties'       to continue 
                                activity and                its operations. 
                                performance 
                                to ensure 
                                that good 
                                clinical practices 
                                ('GCP') are 
                                being followed 
                                and milestones 
                                are met. 
                                Financial 
                                models and 
                                external support 
                                in place to 
                                provide market 
                                valuation 
                                and due diligence 
                                support. 
---------------------------  ------------------------  --------------------------  ------------------ 
 

Commercial and governmental payor account, pricing and reimbursement pressure

-- The Group's revenues are partly dependent on the availability and level of coverage provided to the Group by private insurance companies and governmental reimbursement schemes for pharmaceutical products, such as Medicare and Medicaid in the US.

-- Changes to governmental policy or practices could adversely affect the Group's revenues, financial condition and results of operations. In addition, the reimbursement of treatment established by healthcare providers, private health insurers and other organizations may be reduced.

 
 Specific risks               How we manage          Possible impacts     Link to strategic 
  we may face                  risk                                        priorities 
---------------------------  ---------------------  -------------------  --------------------- 
    Reduced reimbursement      Continue                 Loss of revenue     Build resilience 
     levels and                 to work with             and profits.        of our franchise. 
     increasing                 payors, commercial       Hinder patient      Expand global 
     pricing pressures.         or governmental,         access              treatment. 
     (e.g. as a                 to ensure                to treatment. 
     result of                  access to 
     increasing                 and coverage 
     competition).              of our products. 
     Price reductions           Establishment 
     as a result                of health 
     of commercial              economic business 
     and governmental           case to justify 
     payor austerity            existing pricing. 
     measures 
     (e.g. price 
     controls, 
     policy change, 
     or other price-setting 
     action). 
---------------------------  ---------------------  -------------------  --------------------- 
 

Compliance with law and ethical behavior

-- Business practices in the pharmaceutical industry are subject to increasing scrutiny by government authorities. Failure to comply with applicable laws and rules and regulations in any jurisdiction may result in fines, civil and/or criminal legal proceedings, each of which could have a material adverse impact on the business, prospects, results of operations and financial condition. Specifically see disclosure on page 44 referring to the current status of the DOJ investigation and other investigative and antitrust litigation matters, and the contingent liabilities disclosures in Note 20 of the financial statements on page 125.

 
 Specific risks              How we manage            Possible impacts            Link to strategic 
  we may face                 risk                                                 priorities 
--------------------------  -----------------------  --------------------------  --------------------- 
   Non-compliance             The Group                  Loss of revenue            Build resilience 
    with anti-                 has enhanced,              and profits,               of our franchise. 
    corruption,                and continues              which in worst             Expand global 
    healthcare,                to enhance,                case scenario              treatment. 
    data privacy,              its compliance             may require 
    or local laws              program and                business restructure 
    could result               compliance                 and recapitalization. 
    in business                capabilities.              Fines and/ 
    interruption               All employees              or penalties. 
    or restructuring,          required to                Hinder patient 
    fines, loss                complete a                 access to 
    of reimbursement,          comprehensive              treatment. 
    damage to                  compliance 
    reputation                 training program 
    and                        annually. 
    criminal penalties.        Reviews and 
    Failure to                 controls put 
    comply with                in place over 
    payment and                government 
    reporting                  pricing and 
    obligations                reporting. 
    under the                  Increased 
    US Medicaid                oversight 
    Drug Rebate                and monitoring 
    program or                 of controls 
    other governmental         and procedures 
    pricing programs.          in emerging 
    Restrictions               markets. 
    on Group's                 The Group 
    ability to                 has enhanced, 
    sell products              and continues 
    or product                 to enhance, 
    candidates                 its compliance 
    in certain                 program and 
    markets/ countries         compliance 
    due to controlled          capabilities. 
    substance                  Continued 
    legislation,               cooperation 
    regulation,                with the authorities 
    and/or classification.     on ongoing 
    Government                 investigations, 
    investigations             utilizing 
    of the Group's             external counsel 
    business activities        as needed. 
    alleged to 
    be improper. 
--------------------------  -----------------------  --------------------------  --------------------- 
 

Acquisitions and business development

-- The Group may seek to acquire businesses or products as part of our strategy to enhance our current portfolio.

 
 Specific risks            How we manage            Possible impacts      Link to strategic 
  we may face               risk                                           priorities 
------------------------  -----------------------  --------------------  --------------------- 
  Inability                 Board of                   Adverse impact       Build resilience 
   to identify,              Directors                  on Group's           of our franchise. 
   acquire, close            reviews all                ability to           Business 
   or integrate              significant                raise funds          development. 
   acquisition               transactions.              necessary            Expand global 
   targets successfully.     Best Practice              to continue          treatment. 
   Acquisitions              Management                 its operations.      Develop our 
   and strategic             Tools for                  Loss of revenue      pipeline. 
   alliances,                Diligence                  and profits. 
   including                 and Integration            Damage to 
   distributor               Planning and               reputation. 
   collaboration,            Execution 
   may be unsuccessful.      have been 
   Inability                 developed. 
   to raise capital          Acquisition 
   in order to               Governance 
   finance acquisitions.     Model agreed, 
                             along with 
                             identification 
                             of SME required 
                             for Acquisition 
                             Integration 
                             team. 
                             Internal 
                             and external 
                             resources 
                             in place to 
                             ensure rigorous 
                             due diligence 
                             and integration 
                             of acquisitions 
                             and/or new 
                             product initiatives. 
                             Ongoing regular 
                             appraisal 
                             of debt and 
                             equity capital 
                             markets advisors 
                             and counterparties. 
------------------------  -----------------------  --------------------  --------------------- 
 

Product safety

-- The pharmacovigilance process has been established to monitor the safety of the Group's products in a comprehensive and thorough manner. This includes capturing safety-related data from multiple sources (e.g. Medical Information Unit (MIU), market research, literature search and clinical trials) and entering all adverse events received into a safety database. The Company reports to health authorities across the globe within the required and mandatory timelines and identifies safety signals with an assessment of changes to benefit/risk profile and determines actions needed to optimize the safe and effective use of our products, including communicating any relevant changes to key stakeholders.

 
 Specific risks                How we manage          Possible impacts    Link to strategic 
  we may face                   risk                                       priorities 
----------------------------  ---------------------  ------------------  -------------------- 
  Change in                     Quarterly              Product recall.     Build resilience 
   benefit-risk                  reviews performed      Hinder patient      of our franchise. 
   profile based                 by Global              access of           Expand global 
   on cumulative                 Signal detection       treatment.          treatment. 
   evidence internally           team of all            Significant 
   (from all                     potential              legal cost. 
   Indivior cross-functional     safety sources         Adverse impact 
   departments)                  across Indivior        on the Group's 
   and externally.               organization           ability to 
                                 and externally.        raise funds 
                                 Recommended            necessary 
                                 actions (e.g.          to continue 
                                 Labelling              its operations. 
                                 changes, Risk          Loss of revenue 
                                 Management             and profits. 
                                 Plan update,           Damage to 
                                 Dear Dr. Letters,      reputation. 
                                 Post-Authorization 
                                 Safety Studies) 
                                 approved by 
                                 the Global 
                                 Signal management 
                                 team to optimize 
                                 the safe and 
                                 effective 
                                 use of all 
                                 Indivior products. 
----------------------------  ---------------------  ------------------  -------------------- 
 

Risk management

To achieve our objective of being the leading pharmaceutical company focused on the treatment of addiction, we recognize that we must have a good understanding of the risks we face, those inherent in our strategy and operations, and those presented by external conditions. We take a systematic and robust approach, which aims to continuously monitor those risks and internal control systems accordingly.

Our approach

Our systematic risk management approach is designed to identify risks that would threaten the Group's business model, future performance, solvency or liquidity. Effective risk management is fundamental to our ability to meet our operational and strategic objectives. The competitive market in which we operate has industry-specific risks, particularly those relating to new product development, intellectual property enforcement and legal proceedings, and compliance with laws and regulations. This requires effective decision-making to ensure that the risks the business takes are assessed and appropriately measured, whilst ensuring that there is overall resilience to risks the business has limited control over through disaster recovery and business continuity procedures. Our overall risk management approach remains to foster and embed a culture of risk management that is responsive, forward-looking, consistent and accountable.

The Executive Committee helps to establish the risk agenda, for the reporting and ongoing management of risks and for the stewardship of the risk management approach. The Executive Committee reviews the risk register on a quarterly basis and identifies and assesses Indivior's principal risks on an ongoing basis.

Risk control assurance

The Board has overall responsibility for the Group's risk management framework. The Board reviews the Group's principal risks with focus on the key risk areas framework. The Board's Committees regularly review risks relevant to their area of focus; this includes, but is not limited to, risks relating to legal, financial and compliance matters. Assurance on risk controls is provided by internal management information, internal audits, external audits and Board oversight. There is also an externally supported whistleblowing reporting system in place.

iii. Related party transactions

Subsequent to the demerger from former parent, RB, on December 23, 2014, Indivior continues to receive certain services like office space rental and other operational services on commercial terms and on an arm's length basis. Adrian Hennah, the RB CFO, served on the Indivior PLC Board of Directors until the AGM on May 11, 2016. The amount included within SD&A in respect of these services is $4m (2015: $9m).

Key management compensation is disclosed in Note 6a.

The subsidiary undertakings included in the consolidated Financial Statements at December 31, 2016 are disclosed in Note 2 to the Parent Company Financial Statements.

This information is provided by RNS

The company news service from the London Stock Exchange

END

ACSKXLBLDXFXBBZ

(END) Dow Jones Newswires

March 23, 2017 09:00 ET (13:00 GMT)

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