The latest blow to London as a financial hub is the plan to relocate the primary listing of one of the largest anti-opioid companies in the world to the United States.
Indivior, a FTSE 250 pharmaceuticals firm that specializes in treating substance abuse disorders and mental illnesses, will consult its shareholders this summer about the switch.
The company, which listed on Nasdaq and the London Stock Exchange in June last year, now intends to only have a secondary listing.
Indivior, the consumer goods company that ranked in the top 100 of FTSE, spun off in late 2014. Its European headquarters is located in Slough, Berkshire. This legacy comes from Reckitt. It also has a research and development center in Hull where buprenorphine was discovered, the active ingredient of its most popular Suboxone products.
Indivior made its decision at a moment when London is under pressure. A number of large UK listed companies have chosen New York.
Arm Holdings is one of the most prominent companies. Its shares have surged since it chose to list on the Nasdaq for $52 billion. Flutter, owner of Paddy Power said last month that it would move its primary listing from London to New York if shareholders approved the move in May.
The shareholders of the travel company Tui voted to abandon their London listing in favor of a German listing, while the construction company CRH chose to switch its primary listing to the US from London’s FTSE 100.
Financial Conduct Authority, a regulator and government agency, has been working to improve UK appeal. The Financial Conduct Authority released a proposal for reforms in December.
Indivior’s global headquarters is in Virginia. The company believes that a US primary listing will “reflect current and future growth potential” of its treatments. These include Sublocade, an anti-opioid oral drug, and Perseris for schizophrenia. Indivior generates 83 percent of its group revenue in America. The country is currently battling a drug addiction epidemic.
The group also hopes to attract more US equity analysts and investors “by elevating its leadership profile on the US capital market in addiction treatment”.
Indivior will eventually be included in major US indices.
US investors own roughly half of Indivior’s share capital. Scopia Capital Management has an interest of 5.9 percent and is represented on the board. Scopia analyst asked Indivior management about four years ago if it would consider a US listing.
Indivior stated that the board was aware of this important topic and that it needed 75 percent of shareholders to support a resolution moving forward. If the consultations show a high level of support by shareholders, Indivior intends to submit a formal resolution which would facilitate an initial US listing in summer 2024.
Mark Crossley, the chief executive of Indivior who was appointed in June 2020, said that the UK is “part of our history” but acknowledged that the company has received “quite some inbound traffic regarding a dual listing”.
Crossley, 54 at the time, said that Indivior was committed to its UK operations, saying, “we have a solid footprint in the UK.” We do not anticipate this to decrease.
Indivior has emerged from a turbulent period that included costly patent litigation, US regulatory investigations and a $600million settlement. Its former CEO, Shaun Thaxter, was also imprisoned.
Shares in London rose 22.42 percent, or 304p to £16.60, after the listing plans and strong results for the full year were announced.
The net revenue increased by 21 percent to nearly $1.1 billion, and the adjusted operating profit rose by 27 percent to $269 millions. Indivior’s operating loss was $4 million, including the continued provisions of legal settlements from the US. This compares to an operating loss in 2022 of $85 millions.
Indivior took action last year to settle allegations made by groups of claimants from the US, that Indivior violated antitrust laws and consumer protection laws when marketing Suboxone. reached an agreement in October to settle outstanding legal claims with direct purchasers and drug wholesalers. In August, it reached a $385 million agreement with American insurers and in June, a $103 millions deal to settle claims from more than 40 states.
Max Herrmann, a Stifel analyst, said that Indivior delivered a “very solid” trading performance. He also stated “surprisingly strong guidance in 2024. Revenues are expected to range between $1.24 and $1.333 billion… [and] approximately 32 per cent growth in earnings in 2024. This is ahead of most estimates in the market”.