Moody’s rates Indivior CFR, loans B3

Moody's Investors Service said it assigned RBP Global Holdings Ltd. and Indivior Finance Sarl, both subsidiaries of Indivior plc, a B3 corporate family rating, a Caa1-PD probability of default rating and B3 ratings on the senior secured first-lien revolving credit facility and term loan.

The outlook is stable.

Moody’s said the B3 rating reflects the company's leadership position in the market for opioid addiction treatments, offset by significant revenue concentration at the product, therapeutic and geographic level. Some 80% of Indivior's revenues will remain comprised of Suboxone Film in the U.S. market. The product faces declining market share and pricing not only because of recent branded competitors in the space, but also from conversion toward tablet formulations of the generic ingredients in Suboxone.

These forces will drive a double-digit revenue decline in 2015 and a much larger EBITDA decline that could exceed 40%, the agency said.

Moody’s expects initial debt/EBITDA of 1.4 times to erode to a range of 2.5 to 2.8 times in 2015. Further, Suboxone Film faces unresolved patent challenges from three generic companies, which would cause even steeper erosion if generic companies receive FDA approval and also prevail in the patent lawsuit. This scenario is unlikely before 2016, given typical timelines in pharmaceutical patent lawsuits, the agency said.

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