Indivior Annual Report 2020

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FY2020 Annual Report · Indivior

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INSPIRED BY
PATIENTS AND
SCIENCE

Annual Report 2020

2 0 2 0 H I G H L I G H T S

Contents

Strategic Report

Governance

Financial Statements

115

129

173

Independent Auditors’
report

Financial statements

Information for
shareholders

Chair’s governance
statement

Board of Directors

Executive Committee

Corporate governance

Directors’
remuneration report

109 Directors’ report

113 Statement of Directors’

responsibilities

At a glance

Chair’s statement

Chief Executive
Officer’s review

Business model

Chief Scientific
Officer’s review

Patient story

Stakeholder
engagement

Managing our business
responsibly

Non-financial
information statement

Financial review

Legal proceedings

Risk management

Viability statement

2020 Financial Results

$647m -18%

$156m

$148m

Net revenue
(2019: $785m)

Operating loss
(2019: $178m operating profit)

Net loss
(2019: $134m net income)

$130m

Net revenue from
SUBLOCADE®
(2019: $72m)

$88m -56%

$59m -66%

Adjusted operating profit*
(2019: $202m)

Adjusted net income*
(2019: $176m)

$623m -24%

$858m -19%

Year-end net cash balance**
(2019: $821m)

Year-end cash balance
(2019: $1,060m)

* Excluding exceptional items (further details on pages 138 to 140).
** See Note 19 of the Notes to the Group financial statements for the definition of net cash.

A T A G L A N C E

INDIVIOR PROVIDES PATIENT-
FOCUSED TREATMENTS FOR
ADDICTION AND CO-OCCURRING
DISORDERS

OUR VISION IS THAT ALL PATIENTS AROUND THE WORLD HAVE ACCESS
TO EVIDENCE-BASED TREATMENT FOR THE CHRONIC CONDITIONS AND
CO-OCCURRING DISORDERS OF ADDICTION.

WE UNDERSTAND
patient needs…

WE TACKLE
global challenges…

› We work to normalize addiction

› Opioid use disorder

as a chronic brain disease

› We recognize that every patient

journey is different

› We seek to expand access to

treatment

› We pioneer life-transforming

treatments

Indivior’s global presence

› Co-occurring disorders of
addiction (schizophrenia)

› Stigma of addiction

› Access to treatment

Group A

Group B

WE DELIVER
patient treatments developed
from pioneering science…

›

SUBLOCADE® Injection

PERSERIS®

SUBUTEX® Tablet

SUBOXONE® Tablet

SUBOXONE® Film

Canada

United States

Taiwan

Malaysia

Hong Kong

Israel

Indonesia

Australia

South Africa

New Zealand

Further information
View our website,
www.indivior.com,
for current product
availability

Group A – Austria, Belgium, Croatia, Czech Republic, Denmark, Finland, France, Germany, Ireland, Italy, Latvia,

Lithuania, Luxembourg, Malta, Norway, Portugal, Switzerland and United Kingdom.

Group B – Bosnia & Herzegovina, Cyprus, Estonia, Greece, Hungary, Iceland, The Netherlands, Poland, Qatar,

Slovakia, Slovenia, Spain, Sweden and Turkey.

Global presence based on countries where Indivior has a license and markets the product (January 2021).

Indivior Annual Report 2020

Strategic ReportC H A I R ’ S S T A T E M E N T

REALIZING INDIVIOR’S FULL
POTENTIAL

Graham Hetherington
Chair

THIS IS MY FIRST ANNUAL REPORT AS
CHAIR OF THE BOARD.

I joined Indivior in November 2019 and agreed
to become Chair of the Board in November 2020.
My short time on the Board has confirmed my
belief that Indivior has a significant opportunity
to make a difference to patients and with that
create value for shareholders.

There is much in Indivior’s history for all
stakeholders to be frustrated by, including unfulfilled
potential. This letter is intended to lay out how the
Board is re-setting its thinking, and to provide clarity
about how we are actively addressing the present
and future while providing appropriate oversight of
legacy issues.

The journey to 2020

Indivior, since being demerged (from Reckitt
Benckiser) in 2014, has absorbed significant
challenges that have distracted from the core
purpose of the business.

Despite this, progress has been made.

Our people have demonstrated the true spirit
of Indivior in their commitment, resilience
and dedication to serving patients, whilst the
Group has taken a number of actions that
lay a foundation for its long-term success.

The pharmacological merits and clinical benefits
of SUBLOCADE as a potentially game changing
treatment for opioid use disorder (OUD) have

Our people have
demonstrated the true spirit
of Indivior in their
commitment, resilience and
dedication to serving
patients.

been significantly advanced. In
parallel, our R&D and Medical teams
have developed a leading edge
knowledge and understanding of
OUD and the wider addiction space.

The business also has significantly
enhanced its regulatory and
control environment.

We, the Board, are committed to high
standards of corporate governance
and integrity and believe that the
long-term sustainable success of the
Group is directly linked to operating
in an ethical and responsible way.

We were therefore pleased to finally reach
resolution with the Western District of Virginia
and the Department of Justice’s Consumer

indivior.com

We believe that
SUBLOCADE represents a
significant untapped asset
to help patients and
society address the
desperate condition and
widespread epidemic
of OUD.

Protection Branch in July 2020. The terms of this
agreement are detailed in the CEO’s review.

The Board fully supported management moving
rapidly to draw a line in January 2021 under a
claim by Reckitt Benckiser Group plc, resulting in
the minimum distraction to management time and
removing the risk of exercising protracted legal
defenses through the legal system.

While there are remaining outstanding legal matters,
these will be progressed in the background with
appropriate disclosure continuing to be made
through the normal channels.

Despite the challenges the Group has faced, I have
been impressed by the financial results that the
team have continued to deliver in 2020. The business
ended the year in a stronger than expected financial
position, with a performance in 2020 exceeding
revised (post COVID-19) expectations and ending
the year with net cash of $623m.

With this, I turn to 2021 and beyond.

2021 & beyond

The Board undertook a detailed review of the
business and its strategy at the end of 2020.
The CEO’s review lays out Indivior’s long-term
aspirations and strategy. It also highlights my
and the Board’s view on our near-term priorities
which are fully aligned with Mark and his team.

In summary, the long-term strategy for Indivior is:

1. Grow SUBLOCADE, our pioneering long-acting

injectable approved for treatment of OUD, to >$1bn
net revenue p.a.

2. Diversify sources of revenue.
3. Build our pipeline for future growth.
4. Optimize our operating model and financial

discipline. Actions were implemented in 2020 and
are beginning to deliver benefits.

I reinforce the importance of our top strategic
priority which will receive relentless focus in 2021.
We believe that SUBLOCADE represents a significant
untapped asset to help patients and society address
the desperate condition and widespread epidemic
of OUD. In the short to medium term, growing sales
of SUBLOCADE is the single most significant driving
outcome for the business. Accelerating the growth
of SUBLOCADE remains the biggest potential driver
of value creation and facilitator of other strategic
options. We believe that this clear priority, along with
an enhanced strategy, can help unlock the potential
long-term success of SUBLOCADE. Mark, in his CEO’s
review, describes the actions that have been taken,
including a realigned organizational structure, to
pursue it.

In 2021, the Group will primarily look to existing,
organic opportunities to diversify sources of
revenue and furthering its pipeline. We do not
anticipate capital deployment for inorganic revenue
diversification and any capital deployment for
strategic mechanisms of action for addiction will be
very modest. This clear prioritization is in line with
our fourth pillar of our strategy which builds on the
Group’s history of financial discipline.

We are committed to creating shareholder value.
The Board has an open mind to how value is created
and released to shareholders depending on the
circumstances. This includes proving the value of
SUBLOCADE and, with it, only when appropriate,
using Indivior’s strong cash position to reinvest in
potential growth opportunities for the business on
behalf of shareholders.

Board composition

There were a number of changes to the Board during
the year, culminating in my appointment as Chair.

In June 2020, Howard Pien took a medical leave of
absence, and stepped down from the Board in
September. Following a short illness, Howard very
sadly passed away in November 2020. Howard was
the founding Chairman of Indivior and, on behalf
of the Board, I would like to take this opportunity to
recognize the very considerable contribution that
Howard made to Indivior in its first chapter.

Indivior Annual Report 2020

Strategic ReportC H A I R ’ S S T A T E M E N T

C O N T I N U E D

seasoned and talented management team, who
share a common purpose and ambition for Indivior.
Further information regarding Board changes in 2020
can be found in the Corporate Governance Report on
pages 48 to 108.

Governance & compliance

The Board remains grounded in its commitment to
the highest standards of corporate governance and
integrity and to our duty to act in a way that is most
likely to promote the success of the Company.
Further information can be found in the Corporate
Governance Report on pages 48 to 108.

During the year, Indivior entered into a Corporate
Integrity Agreement with US Health and Human
Services as well as compliance agreements with
the DOJ and US Federal Trade Commission in
relation to its resolution of the US DOJ matters.
These agreements require that Indivior maintains
certain compliance related measures and standards.
The Group has been investing in and developing its
Integrity & Compliance Program for a number of
years and I am impressed by the collective
commitment to it. Further information regarding
the Group’s Integrity & Compliance Program can
be found on page 26.

COVID-19

The safety of our workforce and continued supply
of treatments that our patients count on is critically
important to us. The COVID-19 pandemic is
unprecedented. I am proud of the way Indivior,
and its people, continue to respond, adapt, and
carry forward no matter the challenges.

I am committed to leading the Board and supporting
the business to best realize the opportunity to make
a significant difference to patients and, with it, to
create value for all shareholders.

Graham Hetherington
Chair

We are grateful to Daniel Tassé for acting as Interim
Chair from June 2020 until my appointment in
November. Daniel is stepping down from the Board
after over six years of service due to increasing
business commitments. I would like to extend our
thanks for his many strong contributions during
his tenure. Daniel will continue to serve as Senior
Independent Director until he steps down from the
Board in May 2021, following the conclusion of the
Annual General Meeting.

Tatjana May stepped down from the Board at the
end of July 2020 after three years of service to
pursue a new full-time career, and I would also
like to take this opportunity to thank her for her
dedication during her time on Indivior’s Board.

With refreshed perspective, a commitment to value
creation for all shareholders and clear priorities,
we are building a Board to support the future
development of the business. We have already
announced a search process to identify two new
Non-Executive Directors (one of which will have
recent and relevant financial experience) to build on
the Board’s existing skills and experience. The Board
is committed to diversity and inclusion and we
recognize that we currently fall short of our
aspirations and have work to do. We are supportive
of the targets set by the Hampton-Alexander Review
and are committed to achieving these targets by our
AGM in 2022. We also confirm our aspiration to
achieve the targets set by the Parker Review by 2024.

Executive management

Mark Crossley was appointed Chief Executive Officer
in June 2020 after Shaun Thaxter stood down from
this role. Mark had previously held the position of
Chief Financial and Operations Officer. Ryan Preblick
was appointed Chief Financial Officer and Executive
Director in November 2020. We were fortunate to
have two strong candidates for these roles available
within the business. Both combined diverse and
relevant previous experience with a strong
knowledge and appreciation of the opportunities
and challenges at Indivior.

I was delighted that Mark was appointed Chief
Executive Officer. Mark has an in-depth knowledge
of the business, combined with a clear and
unambiguous commitment to creating value for
Indivior’s stakeholders. He is supported by a

indivior.com

C H I E F E X E C U T I V E O F F I C E R ’ S R E V I E W

EXECUTING ON OUR STRATEGIC
PRIORITIES TO CREATE VALUE

Mark Crossley
Chief Executive Officer

2020 was a challenging year for the Group. Therefore,
it is appropriate to break with tradition and start by
thanking our employees for their resilience and
commitment to patients during the exceptional
circumstances brought about by the COVID-19
pandemic. Our strategic progress and results against
this unimagined backdrop are truly a testament to
the strength of our culture. Undoubtedly, 2020
provided us with the opportunity to live our Guiding
Principles, and I am pleased they stood the test and
helped us successfully navigate the year’s challenges.
I believe we have emerged a stronger company with
an intensified focus on realizing our Vision.

Consider what we achieved in 2020

A key accomplishment was the Resolution
Agreement with the United States Attorney’s
Office for the Western District of Virginia and the
Department of Justice’s (DOJ’s) Consumer Protection
Branch for Indivior Inc. This resolution allows us to
move forward with greater certainty and focus our
resources on helping patients in our targeted
diseases of addiction and related central nervous
system (CNS) conditions.

2020 provided us with the
opportunity to live our
Guiding Principles, and
I am pleased they stood
the test.

As part of the Resolution Agreement, the Group has
agreed to a financial fine and forfeiture of $600m
over seven years as well as entering into a Corporate
Integrity Agreement, instituting DOJ Compliance
Measures and entering into a Federal Trade
Commission Stipulated Order, which together
present ongoing reporting and annual requirements
that span the next five to ten years. These
compliance commitments are consistent
with our Integrity & Compliance Program
and the high level of legal and ethical
standards that we seek to follow every
day. Reaching this point required full
commitment and significant effort from
everyone within our US organization, and
I am pleased to have resolved this matter.

At the same time, in 2020 we delivered
relatively solid top and bottom line
financial results. We also preserved
the Group’s financial flexibility, sharpened our
go-to-market model for SUBLOCADE in the US,
and enhanced our R&D model by completing a
restructuring that accelerated the alignment of our
organizational structure with our strategy and
reduced overall operating costs.

Indivior Annual Report 2020

Strategic ReportC H I E F E X E C U T I V E O F F I C E R ’ S R E V I E W C O N T I N U E D

The result is a stronger company with clear
opportunities for profitable growth and resources
including an ending net cash balance of $623m.

Despite the transitory barriers created by the
pandemic, net revenue for SUBLOCADE, our monthly
extended-release formulation of buprenorphine for
the treatment of moderate to severe opioid use
disorder (OUD), grew by 81% to $130m in 2020,
including initial sales in geographies outside the
US. Meanwhile PERSERIS, our monthly extended-
release formulation of risperidone for the treatment
of schizophrenia, delivered net revenue of $14m for
the year (2019: $6m). This net revenue outturn,
combined with the continued share resilience of
SUBOXONE Film, led to the Group’s net revenue
performance of $647m.

Importantly, our R&D Organization continued to
support the growth potential of SUBLOCADE and
PERSERIS with the initiation and completion of
important lifecycle management studies and
marketing approvals in targeted geographies. Our
efforts included 13 peer-reviewed publications and
19 conference presentations, as well as regulatory
approvals of SUBOXONE Film in the European Union,
UK, Canada, and Israel. We also achieved regulatory
approvals of SUBLOCADE / SUBUTEX prolonged-
release (PR) solution for injection in key Nordic
countries (Sweden, Finland, and Denmark), Israel,
and New Zealand. In addition, PERSERIS was
approved in Canada through our exclusive
partnership with HLS Therapeutics.

These achievements in any year would be remarkable.
However, they are all the more inspiring in the face
of a pandemic as well as transition of leadership.
Shaun Thaxter stepped down as Chief Executive
Officer in June 2020 and subsequently entered into
an agreement with the U.S. Department of Justice
pleading guilty to one misdemeanor count under the
US Responsible Corporate Officer Doctrine. Under this
Doctrine, executives can be held liable for violations
of the Federal Food, Drug, and Cosmetic Act by
others in the Company without personal wrongdoing
or malfeasance by the executive. Mr Thaxter’s
agreement had the same underlying facts as those
that the Company finalized in November 2020.

I feel truly privileged to have been appointed
Indivior’s Chief Executive Officer in June 2020, and to
be supported by so many excellent colleagues. They
all deserve thanks for their unyielding commitment
to our Vision in 2020, not least our Board of Directors,
who helped the Group navigate such a turbulent year.

With the Group’s 2020 performance as a backdrop,
I want to set out our priorities moving forward.

indivior.com

STRATEGIC
PRIORITIES

DURING 2020, INDIVIOR’S MANAGEMENT
AND BOARD RE-EXAMINED OUR STRATEGIC
PRIORITIES. THESE PRIORITIES HAVE
SERVED US WELL SINCE OUR DEMERGER,
BUT MARKETS, OPPORTUNITIES, AND
CHALLENGES CHANGE.

We augmented and sharpened our Strategic
Priorities to provide clear milestones for our
expected progress over the next three to five years.
Below I have set out four key pillars that will support
the delivery of shareholder value.

STRATEGIC PRIORITIES

1. Grow SUBLOCADE to $1bn+ of Net Revenue

2. Diversify Revenue

3. Build our Pipeline for Future Growth

4. Optimize our Operating Model

As there is a growing consensus that OUD is a
treatable disease and not a moral failing, we believe
there remains significant opportunity to deliver on
the unmet need for treatment.

Paradigm-shifting treatment: As the first long-acting
buprenorphine-based injectable approved by the
US Food and Drug Administration (FDA) for the
treatment of moderate to severe OUD, SUBLOCADE
is a highly differentiated treatment.

The scientific foundation of SUBLOCADE lies in the
intimate knowledge of the needs of patients and
HCPs, combined with a deep understanding of the
neurobiology of addiction and OUD. SUBLOCADE
was rationally designed to deliver consistent plasma
concentrations of buprenorphine of ≥2 ng/mL from
the first injection and throughout the 28-day dosing
interval.(3) It is this level of plasma concentration,
leading to greater than 70% mu-opioid receptor
occupancy, that provides blockade of the reinforcing
and subjective effects of opioids.

Grow SUBLOCADE
to $1bn+ of Net
Revenue

SUBLOCADE in the US
remains our highest-value-
at-stake opportunity and
materially progressing its
market penetration is our
top priority for 2021. It is
a clear paradigm shift in
OUD treatment that has
the potential to help a
significant number of

patients along with psychosocial counseling.

Unmet need: The opioid epidemic in the US continues
to worsen, with opioid-related deaths once again
accelerating due to the COVID-19 pandemic.

Despite the continued increase in awareness of
the opioid epidemic, approximately only 1 in 10(1) of
the over 21 million Americans(1) who need treatment
for substance use disorder (SUD) received any
treatment. And, while US treatment capacity as
measured by the number of Healthcare Professionals
(HCPs) able to prescribe buprenorphine medication-
assisted treatment (BMAT) has more than doubled
over the last five years, significant treatment barriers
still exist. For example, in 2017 over 70%(2) of US rural
counties were still not offering any medication-
assisted treatment option, despite wide recognition
and endorsement by the Federal government of its
potential to improve patient outcomes.

COVID-19 and Substance Use Disorders (SUD)

Cocaine

Fentanyl

Heroin

Methamphetamine

Declaration of COVID-19
US National Emergency
March 13, 2020

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January

February

March

April

May

Source: Millennium Health Signals Report™, COVID-19 Special Edition: Significant Changes in Drug Use During the Pandemic. Volume 2.1 |
Published July 2020 https://www.millenniumhealth.com/news/signalsreportcovid/

Indivior Annual Report 2020

Strategic Report

C H I E F E X E C U T I V E O F F I C E R ’ S R E V I E W C O N T I N U E D

STRATEGIC PRIORITIES CONTINUED

Our proprietary RECOVER study has shown that
SUBLOCADE may translate into (1) increased
abstinence from illicit opioids compared to placebo;(4)
(2) improved patient-reported quality-of-life outcomes
(such as health status, employment and insurance
status, and healthcare resource utilization);(5) and (3)
improved recovery post-treatment.(6)

Monthly injections of SUBLOCADE also eliminate
the risk of missing daily doses that might result in
subtherapeutic plasma levels potentially leading
to relapse to opioid-seeking and opioid-taking
behaviors. Finally, because SUBLOCADE may only
be administered by a healthcare practitioner, it is
expected to negate any potential for diversion
or misuse.

We are hoping to broaden SUBLOCADE’s labeling
to include changes related to long-term safety, and
the transition from transmucosal buprenorphine
to SUBLOCADE in clinically stable OUD patients.
We also want to reference changes linked to the
ability of high sustained buprenorphine plasma
concentrations to reduce the respiratory depression
caused by fentanyl in opioid-dependent patients.
The FDA is currently reviewing our submissions on
these potential updates with decisions expected
throughout 2021 (see Chief Scientific Officer’s review
on pages 14 to 15).

This paradigm shift in treatment reinforces our
confidence in achieving our long-term goal, which
is based on SUBLOCADE’s potential to improve the
lives of patients.

The opioid epidemic in the US

162+*

People died every day from
opioid-related drug overdoses
(estimated)

9.7m**

People misused prescription
opioids in 2019

59,069*

People died from overdosing
on opioids

1.6m**

People had an opioid use
disorder in 2019

50,000**

People used heroin for the
first time in 2019

745,000**

People used heroin in 2019

Opioid misuse, 2019**

9.7m Rx pain reliever misusers

(96.6% of opioid misusers)

5.1m

Rx Hydrocodone

3.2m

Rx Oxycodone

269,000

Rx Fentanyl

745,000

Heroin users
(7.4% of opioid misusers)

404,000

Rx pain relievers misusers
and heroin users

(4.0% of opioid misusers)

* 12 month-ending provisional number of drug overdose deaths by drug or drug class (as of June 2020) https://www.cdc.gov/nchs/nvss/vsrr/drug-overdose-

data.htm

** Substance Abuse and Mental Health Services Administration. (2020). Key substance use and mental health indicators in the United States: Results from the

2019 National Survey on Drug Use and Health (HHS Publication No. PEP20-07-01-001, NSDUH Series H-55). Rockville, MD: Center for Behavioral Health
Statistics and Quality, Substance Abuse and Mental Health Services Administration. Retrieved from https://www.samhsa.gov/data/

indivior.com

Our focused strategy: In 2020, we sharpened the
focus of our go-to-market strategy and fully
aligned our operating structure to it.

During the year, we strategically realigned our
organization to emphasize and enhance our
capabilities to increase penetration of Organized
Health Systems (OHS). The advantages of this
channel are clear in terms of greater SUBLOCADE
patient potential, specialty drug handling
infrastructure, and prescriptive standards of
care (SOC). There are now over one million BMAT
patients and 20,000 waivered physicians in the OHS
channel and the number of OHS-based HCPs is
expected to continue to grow from ongoing
healthcare consolidation.

We ended 2020 with 38% of SUBLOCADE’s net
revenue coming from the OHS channel and project
that this channel will be the largest source of
SUBLOCADE net revenue in 2021. We grew account
activation to over 200 OHS customers in 2020 and
are well on track to achieve our long-term goal of
activating 500 OHS customers. As part of this effort,
we also established a team focused on growing
SUBLOCADE’s business in the US criminal justice
system, and we saw initial net revenue generation
in 2020, albeit at lower than expected levels due to
the disproportionate impact of pandemic-related
restrictions on the criminal justice system. Our focus
going forward is to continue to increase access
across the OHS channel, as well as prescriber
depth within those we have already activated.

Additionally, we are investing in growing our
advocacy voice on behalf of patients at all levels
of government. This work supports our efforts to
normalize the disease space to reduce barriers
to treatment, including social stigma, challenges
around access to treatment, and disease-related
difficulty in adhering to treatment plans, all of which
negatively impact the ability of patients to achieve
long-term recovery.

Diversify Revenue

Our goal is to continue
to diversify our revenue
base by both product
and geography.

In 2020, we continued to
make progress toward
this goal, but our work
was impacted by COVID-19

restrictions. In particular, our ability to promote
SUBLOCADE in targeted geographies outside the
US and promote PERSERIS as a treatment option for
schizophrenia patients within the US was limited by
social distancing restrictions. Put simply, the ability
to access HCPs in-person was challenging.

Nonetheless, I am pleased to report that, in 2020,
SUBLOCADE achieved initial net revenue of $4m
from countries outside the US. Net revenue was
primarily generated from the Canadian and
Australian markets. SUBLOCADE is now approved
in five additional countries, and we are expecting
net revenue contribution from rest-of-the-world
geographies to grow meaningfully in 2021. We are
also looking forward to launching SUBOXONE Film
in the EU and Canada in 2021, markets in which the
standard of treatment has been SUBUTEX and
SUBOXONE Tablets. With the availability of these
new products, we are expecting to begin reversing
the rest of the world revenue trends away from the
mid-single digit decline it has experienced in recent
years towards growth in the coming years.

In the US, our product diversification efforts remain
focused on advancing PERSERIS for schizophrenia,
and our 2020 net revenue of $14m was in line with
our expectations post COVID-19 restrictions. We
believe PERSERIS is sufficiently differentiated to
achieve a market-share level that will contribute
to sustainable bottom-line performance as we
move toward our long-term net revenue goal of
$200m to $300m.

Indivior Annual Report 2020

Strategic Report
C H I E F E X E C U T I V E O F F I C E R ’ S R E V I E W C O N T I N U E D

STRATEGIC PRIORITIES CONTINUED

Build our Pipeline
for Future Growth

As part of our
completed
strategic
realignment,
our R&D
Organization
adopted
a ‘connect &

develop’ model that leverages our drug discovery and
development capabilities through strategic partnerships
as compared to a more traditional pharmaceutical drug
development process.

We deployed this model to advance two innovative
programs: a selective Orexin-1 (OX1) receptor antagonist
(INDV-2000), a non-opioid mechanism for the treatment of
OUD; and a selective GABAb Positive Allosteric Modulator
(INDV-1000) for the treatment of alcohol use disorder. Both
remain on course to achieve key development milestones
in 2021.

INDV-2000, which is partly funded by a US National Institute
of Health HEAL (Helping to End Addiction Long-term) grant,
entered Phase 1 with first in-man dosing in July 2020 and
clear deliverables in 2021 focusing on clinical, non-clinical,
and pharmaceutical development activities. The INDV-1000
program is making good progress in its lead optimization
phase, with the identification of new chemical series
producing lead molecules for late-lead optimization and
final selection in 2021. Additionally, we will focus on
leveraging this model for future early-stage assets focused
on the most promising mechanisms underlying addiction.

We are continuing to explore additional opportunities for
our ATRIGEL® platform, our patented long-acting release
technology that delivers rapid onset and consistent
formulation release in a subcutaneous injection. Already
proven in both SUBLOCADE and PERSERIS, we have ramped
up exploratory efforts for other molecules and disease
areas where patients would benefit from consistent
therapeutic levels over a prolonged period.

Longer term, we remain open to acquiring assets that can
further our leadership in addiction or extend our position
in related CNS disease areas. Our near-term focus, however,
remains advancing the early-stage assets already in our
development pipeline with the potential for modest
deployment of capital (tens of $millions) should an
attractive mechanism of action for addiction treatment
become available.

indivior.com

Optimize our
Operating Model

With patients always at the forefront, in 2020 we
continued to take necessary steps to preserve our
financial strength and create greater certainty
for all stakeholders. Our balance sheet remains
strong, and we took actions in the third quarter
to align Indivior’s operating structure with our
strategy. These efforts generated further
underlying operating expense savings in 2020,
with the ultimate impact expected to be $60m to
$70m on an annualized basis before any further
investments in growth.

Moving forward, we expect to maintain our solid
financial position and disciplined growth-focused
capital allocation stance, and to have adequate
resources to deliver on the commitments as part of
our resolutions with the US government. As outlined
in the strategy review above, this includes our top
priority of proving the value of SUBLOCADE and then,
and only then, contemplating deployment of capital
towards potential growth opportunities on behalf of
shareholders.

SUBLOCADE remains our
highest value-at-stake
opportunity and
materially progressing its
market penetration is our
top priority for 2021.

Compliance & Integrity

Looking forward

As mentioned earlier, the Group has entered into
a Corporate Integrity Agreement, instituted DOJ
Compliance Measures and entered into a Federal
Trade Commission Stipulated Order which together
present ongoing reporting and annual requirements
that span the next five to ten years. Our successful
compliance with these measures is reliant on the
Group building and sustaining an effective Integrity
& Compliance Program which is a journey of
continuous evolution we began years ago. This
journey which we believe is critical to our success
has been fully embraced by the organization. This
commitment will help cement our goal of being
among the most ethical and respected companies
to work for and with whom to partner.

As I said in my opening remarks, we continue to
build a durable franchise in addiction and related
diseases. I believe that the work we accomplished
in 2020 and the clear strategy we outlined will
create long-term shareholder value. Most important,
I believe we have the team and capabilities inspired
by our Vision to achieve this goal, as well as an
experienced and fully engaged Board of Directors
focused on value creation.

I would like to take this opportunity to thank our
shareholders and other stakeholders for their
continued trust and loyalty. 2020 has been a
challenging and complex year, and our success
in navigating it is due in no small part to your
support and encouragement. I look forward to
reporting on our progress and successes for 2021,
in what we all hope will be a year of reinvigoration
and rejuvenation.

1. Substance Abuse and Mental Health Services Administration. (2020). Key substance use and mental health indicators in the United States:
Results from the 2019 National Survey on Drug Use and Health (HHS Publication No. PEP20-07-01-001, NSDUH Series H-55). Rockville, MD:
Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. Retrieved from https://
www.samhsa.gov/data/

2. 946 of 1,328 rural counties (71.2%), lacked a publicly available OUD medication provider in 2017. Source: JAMA Network Open. 2019;

2(6):e196373. doi:10.1001/jamanetworkopen.2019.6373
3. Nasser AF et al. Clin Pharmacokinet 2014; 53(9): 813-24.
4. Haight BR et al. The Lancet 2019, 393 (10173): 778-790; Schmith VD et al. Clin Pharmacol & Therap 2019, 106(3): 576-584; Andorn A et al. J Clin

Psychopharmacol 2020, 40(3): 231-239.

5. Ling W et al. J Addiction Med 2020, 13(6): 442-449; Ling W et al. Subst Abuse Rehabil 2020, 10: 13-21; Ling W et al. J Subst Abuse Treat 2020,

110: 1-8.

6. Ling W et al. Contemp Clin Trials 2019, 76: 93-103; Ling W et al. J Addict Med, Epub March 13, 2020.

Indivior Annual Report 2020

Strategic ReportB U S I N E S S M O D E L

INSPIRING PATIENT
TRANSFORMATION

OUR PEOPLE, CULTURE, EXPERTISE AND INSIGHT, COUPLED WITH OUR INNOVATIVE
SCIENCE AND STAKEHOLDER RELATIONSHIPS, UNIQUELY POSITION US TO HELP
ADDRESS PATIENTS’ UNMET NEEDS AROUND THE WORLD.

INDIVIOR

Our Purpose

OUR ASSETS

Highly skilled and knowledgeable people

is to pioneer life-
transforming treatment.

Indivior has an able workforce and management team with a deep understanding of
patient needs and a strong commitment to improving patient lives.

Our Vision

Culture

that all patients around
the world have access
to evidence-based
treatment for the
chronic conditions and
co-occurring disorders
of addiction.

Our Mission

is to be the global
leader that is a pioneer
in developing innovative
prescription treatments
for people suffering
from substance use
disorders.

Our Commitment

We commit to
maintaining an ethical
and responsible
business approach
at all times.

Based on a clearly defined set of Guiding Principles, Indivior’s culture is a key competitive
advantage enabling Indivior to drive strategic business growth and create social value.

Our Guiding Principles

Focus on
patient needs to
drive decisions

Believe that
people’s actions are
well intended

See it, own it,
make it happen

Seek the wisdom
of the team

Care enough
to coach

Demonstrate honesty
and integrity at
all times

Product portfolio

Indivior’s product portfolio is focused on helping meet adult patient needs in
addiction and schizophrenia.

Intellectual property

Indivior has unique capabilities and a portfolio of licenses and patents which
provide a platform for the creation of long-term value.

Financial capital

Indivior employs disciplined capital allocation with a focus on retaining a strong
financial position to provide flexibility for:

1. reinvesting in the business
2. pursuing strategic growth

opportunities

3. meeting its commitment to

stakeholders

4. managing other unknown impacts

indivior.com

1 Stakeholder engagement

For more than 20 years, Indivior has worked
together with policymakers, medical societies,
patient advocacy groups, healthcare providers,
payers and other stakeholders. These relationships
provide Indivior with critical insights to develop
and enhance its patient-focused business
approach.

2 Developing the value of our treatments
Indivior has three main products. Two of these
are opioid addiction treatments: SUBLOCADE,
a buprenorphine extended-release injection
for subcutaneous use (CIII), and SUBOXONE,
a buprenorphine and naloxone sublingual film
(CIII). Indivior’s third treatment, PERSERIS
(risperidone) is indicated for schizophrenia for
extended-release injectable suspension. Indivior
maintains the value of these treatments by
protecting its intellectual property (IP) and
developing IP value by pursuing further
international licenses outside North America.

3 Research and development

Our aim is to advance treatment innovation by
developing new patient-focused treatments,
including enabling the Group to expand the scope
of treatment it provides to help address addiction
and the co-occurring disorders of addiction.

4 Manufacturing

Our aim is to improve the lives of patients through
an uninterrupted supply of high-quality products.

5 Sales and marketing

Our aim is to deliver high-quality products and
accurate information, and maintain strong and
compliant relationships with customers and key
stakeholders.

HOW WE GENERATE VALUE

The Group has been able to help address the global addiction crisis
through the development and commercialization of buprenorphine
medication-assisted treatments. By leveraging our capabilities, we
are also now serving adult patients with schizophrenia which in the
U.S. is a well-aligned adjacency for our business.

1. Stakeholder
engagement

Strong and enduring
relationships with key
stakeholders

Advocacy &
Patient Needs

5. Sales and
marketing

Carefully managed
compliance and
adherence
to good practice

2. Developing
the value of our
treatments

Indivior has three
main products

4. Manufacturing

Producer of
high-quality medicines

3. Research and
development

World-class
treatment
innovation

Advocacy

Indivior advocates to increase global understanding and awareness,
destigmatize the disease and expand treatment access.

Meeting patient needs

Leveraging its deep understanding of patient needs, Indivior is
committed to addressing the global addiction crisis by expanding the
availability of its patient-focused treatments, including treatment access,
while also leveraging its scientific expertise to develop novel treatments.

Indivior Annual Report 2020

Strategic Report

C H I E F S C I E N T I F I C O F F I C E R ’ S R E V I E W

FOCUS ON PATIENTS’ NEEDS
DRIVES R&D DECISIONS

Christian Heidbreder
Chief Scientific Officer

THE UNPRECEDENTED MAGNITUDE
AND DYNAMIC NATURE OF THE GLOBAL
ADDICTION CRISIS, WORSENED BY THE
COVID-19 PANDEMIC, REQUIRES FOCUS
ON RESEARCH AND DEVELOPMENT (R&D)
TO DEMONSTRATE THAT COMPREHENSIVE
TREATMENT STRATEGIES FOR SUBSTANCE
USE DISORDERS (SUD) LEAD TO BETTER
OUTCOMES.

In the US, our R&D Organization continued to
support SUBLOCADE for the treatment of opioid use
disorder (OUD) through the completion or planning
of a broad range of lifecycle management studies.
These studies are aiming at (1) investigating how
high plasma concentrations of buprenorphine
may reduce the effects of respiratory depression
produced by fentanyl; (2) exploring how to initiate
SUBLOCADE treatment in the Emergency Department;
(3) extending our RECOVER (REmission from Chronic
Opioid Use: Studying enVironmental and
socioEconomic factors on Recovery) study; and
(4) understanding the root causes of transmucosal
buprenorphine abuse, diversion and misuse.

Outside the US, we geographically expanded our
SUBOXONE Film franchise by securing regulatory
approvals in Israel (April 7, 2020), Europe (July 3,
2020) and Canada (July 17, 2020). Regulatory
approvals of SUBLOCADE / SUBUTEX prolonged-
release (PR) solution for injection were granted in
Israel (February 13, 2020), Sweden (April 15, 2020),
Finland (July 10, 2020), New Zealand (November 5,

2020), and Denmark (December 21, 2020).

R&D also supported PERSERIS for the
treatment of schizophrenia in adults through
two US post-marketing commitment studies
and the regulatory approval (November 19,
2020) of PERSERIS in Canada.

At the heart of R&D is an
unwavering commitment
to support the patient
journey to treatment and
recovery, enable access to
effective treatment, and
provide education, new
scientific understanding,
and knowledge to the
treatment community.

indivior.com

Last, but not least, R&D is pioneering a non-opioid
treatment strategy for OUD (supported by a National
Institutes of Health (NIH) grant) by developing
a selective Orexin-1 (OX1) receptor antagonist
(INDV-2000).(1) The Single Ascending Dose (SAD) part
of our Phase 1 clinical trial was initiated on July 28,
2020 and is currently ongoing. We are also developing
a new pharmacotherapy to address the needs of
patients suffering from Alcohol Use Disorder (AUD).
This work involves developing a selective GABAb
Positive Allosteric Modulator (INDV-1000) in
partnership with Addex Therapeutics.(2)

During 2020, our science was disseminated through
13 peer-reviewed publications and 19 conference
presentations around the globe on topics including,
but not limited to, the following: the clinical efficacy,
safety, and patient-centered outcomes of
SUBLOCADE and SUBUTEX PR; the one-year outcomes
of our 24-month RECOVER study; the possible root
causes of transmucosal buprenorphine diversion
and misuse; buprenorphine–fentanyl interactions;
variations in DEA-waivered provider utilization of
buprenorphine for OUD treatment; the distribution
patterns of SUBLOCADE within Organized Health
Systems (OHS); and the long-term safety of PERSERIS.

R&D focus on addiction as a growing crisis

269m past year drug users (2018)

35.6m

people diagnosed
with SUD in 2018

192m

cannabis users

21m

“ecstasy” users

58m

opioid users

19m

cocaine users

27m

amphetamine
and prescription
stimulants users

1 in 8

people who need
SUD-related
treatment received
it in 2018

Source: World Drug Report 2020 (United Nations publication, Sales No. E.20.XI.6).

1. Licensing partnership with C4X Discovery Holdings
2. Partnership with Addex Therapeutics

Indivior Annual Report 2020

Strategic ReportP A T I E N T S T O R Y

K Y L E

“I SPENT NINE YEARS DESTROYING MY
LIFE AND MY BODY. I WANT TO NOT ONLY
BE BETTER THAN I WAS BEFORE, BUT TO
HELP OTHERS SO THEY DON’T HAVE TO
GO THROUGH WHAT I DID.”

Shortly after graduating from college with a degree
in finance, Kyle landed a full-time position with a
bank and moved into a downtown apartment with
a friend. He recalls “living the dream” as his career
progressed and he became financially independent.

“I loved it,” says Kyle. “They were the best two years
I can remember.”

One day, driving home from work, Kyle was involved
in a three-car accident. He was fortunate to walk
away with little more than a stiff neck and a sore
back. But his fortunes quickly changed. A doctor
prescribed an opiate to ease the pain from the
whiplash. Kyle kept refilling the prescription until it
expired, and eventually turned to the street to satisfy
his craving. He became what he calls a “functioning
addict” for nine years.

“I was in denial,” says Kyle. “I thought it was under
control. I wasn’t ready to stop.”

None of his co-workers, friends, or family were aware
of his addiction for years, Kyle believes, because on
a day-to-day basis he was easy-going and functional.
But in 2016, Kyle was hospitalized with a staph
infection. His father found syringes and heroin in a
backpack Kyle asked him to bring to the hospital.

INSPIRED
BY PATIENTS

“That’s when I realized I had a problem,” Kyle recalls.
His journey to recovery was difficult. It was a challenge
for Kyle and his family to get the kind of help he
needed. He eventually found an out-patient clinic less
than two hours from his home and began a therapy
regimen that included counseling and medication-
assisted treatment. But within a year he relapsed.

Kyle was hospitalized again in December of 2018 with a
staph infection that turned into sepsis. After four days
in an intensive care unit, he was moved to an assisted
living facility where he spent the next few months.

“That was the turning point,” says Kyle. He
remembers spending the holidays alone, looking at
pictures a niece had drawn for him, realizing he had
no money, no friends. He concluded, “I have got to
do something about this.”

After being discharged, he returned to the out-patient
clinic and began a new regimen with regular counseling
and an injectable medication-assisted treatment.

Two years on, Kyle has achieved his goal of
launching a successful online business that sells
high-end used clothing. And he has overcome his
physical and mental craving for drugs.

Kyle has more goals to achieve, including traveling
and starting a non-profit organization that will help
recovering addicts access the same resources that
enabled his journey to recovery.

“I spent nine years destroying my life and my body,”
says Kyle, now age 37. “I want to not only be better
than I was before, but to help others so they don’t
have to go through what I did.”

indivior.com

S T A K E H O L D E R E N G A G E M E N T

STAKEHOLDER ENGAGEMENT

REGULAR ENGAGEMENT WITH OUR
STAKEHOLDERS IS FUNDAMENTAL TO
DEVELOPING AND MAINTAINING A ROBUST,
SUSTAINABLE, AND SUCCESSFUL BUSINESS
MODEL. UNDERSTANDING THE VIEWS AND
FOCUS AREAS OF OUR STAKEHOLDERS
HELPS INFORM OUR DECISIONS AND DRIVE
PROGRESS TOWARDS REALIZING
INDIVIOR’S PURPOSE, VISION, AND VALUES.

The following table summarizes Indivior’s key
stakeholders and their areas of interest. It outlines
how Indivior engages with each group and includes
illustrative highlights of engagement activities during
2020. Indivior regularly reviews its understanding of
each stakeholder group, their focus areas, and the
team’s efforts to identify further opportunities to
strengthen and learn from these relationships.

Indivior employs experienced and qualified
individuals to conduct its stakeholder engagement
activities. These employees include members of the
governance, investor relations, government, and
communications teams, supported by a number
of external advisors.

Indivior employs
experienced and qualified
individuals, supported by
external advisors, to
conduct its stakeholder
engagement activities.

SECTION 172(1) STATEMENT

Section 172 of the Companies Act 2006 requires each

Director of the Company to act in the way he or she

considers, in good faith, would most likely promote

the success of the Company for the benefit of its

members as a whole. In this way, Section 172 requires

a Director to have regard, among other matters, to the

›

likely consequences of any decisions in the long term;

›

interests of the Company’s employees;

› need to foster the Company’s business relationships

with suppliers, customers, and others;

›

impact of the Company’s operations on local
communities and the environment;

› desirability of the Company maintaining a reputation

for high standards of business conduct; and the

› need to act fairly between members of the Company.

In discharging its section 172 duties, the Board has

regularly considered the factors set out above and the

views of key stakeholders. The Board acknowledges

that some decisions will not necessarily result in a

positive outcome for all our stakeholders. However, by

considering the Company’s Purpose, Mission, Vision,

and values and commitment to responsible business,

together with its Strategic Priorities and having a

process in place for decision-making, the Board aims

to ensure that its decisions are in the best interests

of the Company.

Further information regarding the principal activities

and decisions taken by the Board during the year can

be found in the section entitled ‘Principal Board

decisions’ on pages 59 to 60.

Other relevant information can be found on the

Company’s website (www.indivior.com).

Indivior Annual Report 2020

Strategic ReportS T A K E H O L D E R E N G A G E M E N T

C O N T I N U E D

STAKEHOLDER ENGAGEMENT

INDIVIOR’S STAKEHOLDERS

WHAT MATTERS TO THEM

WHY THEY MATTER TO US

HOW WE ENGAGE

2020 HIGHLIGHTS

PATIENTS AND HEALTHCARE
PROVIDERS (HCPs)

› Access to treatment

› Product safety, quality, and efficacy

› Accurate and up-to-date

information about the Group’s
products

› Indivior’s Vision is that all patients
around the world have access to
evidence-based treatment for the
chronic conditions and co-occurring
disorders of addiction

› Indivior is committed to pioneering

innovative and accessible
treatments for addiction and its
co-occurring disorders

› Responsible and compliant sales and

› Publication of Indivior-sponsored

marketing activities

› Supporting regulatory and legislative

developments intended to improve

studies to advance the scientific

understanding of addiction and the

Group’s products

treatment access for patients and allow

› Continuation of US nationwide

See page 16

HCPs to care for more patients when

‘Keep Moving Towards Recovery’

they decide to seek help

information campaign which began

› Regular dialogue with representative

in November 2019

This report page showcases Kyle’s

recovery from addiction

(see also the report front cover)

patient groups

› Regular advocacy activity

› A shared commitment to our Vision

and patients

› A diverse and inclusive workplace
featuring flexibility, responsible
business practice, and clear
communication channels

› Indivior wishes to ensure that its
workforce shares the common
purpose of realizing Indivior’s Vision
and embraces its culture, both of
which are critical to its success

› Indivior believes that a diverse and

inclusive workplace enables
innovation and continuous
improvement of quality

› Annual Culture Surveys

› Regular ‘Town Hall’ events hosted by

senior management

› Dedicated Culture Champions Network

› Personal Development Reviews

› Regular training and development

activity

› Engagement events with the Board

› Virtual workforce engagement

event between the designated

Non-Executive Director and Culture

Champions

› Distribution of COVID-19 guidelines

and PPE where required

› Diversity and inclusion insight

sessions held to drive development

› Virtual Town Hall events

See page 25

Indivior has commenced a new diversity

and inclusion initiative to obtain

employee insight into its approach

› Effective value-adding strategy and

› The Board has fiduciary

› Dedicated investor relations function

› Regular dialogue between senior

business model

› Financial and share price

performance

› Prudent cash management and

effective risk management

› Governance, quality of leadership,

and transparency

› Corporate responsibility

performance

responsibilities to promote the
long-term sustainable success of
the Company

› Regular dialogue and feedback
between shareholders and the
management team

› The investment community should
fully understand Indivior’s strategy,
performance, earnings potential,
and capital allocation priorities

› Corporate website, including a distinct

investor section

› Results presentations and regular

engagement with major shareholders

› Participation in healthcare sector

investor conferences

› Dialogue with ESG-focused agencies

› Frequent analyst consultations

management and Company’s major

shareholders and analysts

› Quarterly public financial reporting

investment community

› Regular attendance at healthcare

investor conferences (e.g. Jefferies

Global Healthcare Conference on

November 17)

and results presentations with the

See page 5

The Chief Executive Officer’s review

reviews the Group’s performance during

2020 and the future outlook for the

business. Further information is

available within the investor relations

section of the Indivior website

› Financial stewardship and

› Continued access to capital is vital

› Dedicated investor relations function

› Quarterly public financial reporting

performance

› Compliance with debt agreement

covenants

› Risk management effectiveness

› Governance and oversight

to the long-term performance of the
business, providing financial
flexibility and liquidity

› The investment community should
fully understand Indivior’s strategy,
performance, earnings potential,
and capital allocation priorities

› Corporate website, including a distinct

› Maintenance of debt ratings

investor section

› Results presentations and regular

engagement with debt holders

See pages 37 to 45

The risk management section outlines

Indivior’s processes and recent changes

in risk assessments

Patient needs and the informational
requirements of HCPs are fundamental
to the success of the business

WORKFORCE

Indivior has an experienced,
passionate, and dedicated workforce,
who are committed to its Vision

CURRENT & POTENTIAL
SHAREHOLDERS

Current and potential shareholders
have an interest in the performance
and long-term prospects of the
business

DEBT HOLDERS

Access to capital is essential to
maintaining a robust capital base
and financial flexibility

indivior.com

STAKEHOLDER ENGAGEMENT

PATIENTS AND HEALTHCARE

› Access to treatment

PROVIDERS (HCPs)

› Product safety, quality, and efficacy

› Accurate and up-to-date

information about the Group’s

products

Patient needs and the informational

requirements of HCPs are fundamental

to the success of the business

› Indivior’s Vision is that all patients

around the world have access to

evidence-based treatment for the

chronic conditions and co-occurring

disorders of addiction

› Indivior is committed to pioneering

innovative and accessible

treatments for addiction and its

co-occurring disorders

and patients

› A diverse and inclusive workplace

featuring flexibility, responsible

business practice, and clear

communication channels

workforce shares the common

purpose of realizing Indivior’s Vision

and embraces its culture, both of

which are critical to its success

› Indivior believes that a diverse and

inclusive workplace enables

innovation and continuous

improvement of quality

business model

› Financial and share price

performance

› Prudent cash management and

effective risk management

› Governance, quality of leadership,

and transparency

› Corporate responsibility

performance

responsibilities to promote the

long-term sustainable success of

the Company

› Regular dialogue and feedback

between shareholders and the

management team

› The investment community should

fully understand Indivior’s strategy,

performance, earnings potential,

and capital allocation priorities

› Financial stewardship and

performance

› Compliance with debt agreement

covenants

› Risk management effectiveness

› Governance and oversight

› Continued access to capital is vital

to the long-term performance of the

business, providing financial

flexibility and liquidity

› The investment community should

fully understand Indivior’s strategy,

performance, earnings potential,

and capital allocation priorities

Indivior has an experienced,

passionate, and dedicated workforce,

who are committed to its Vision

CURRENT & POTENTIAL

SHAREHOLDERS

Current and potential shareholders

have an interest in the performance

and long-term prospects of the

business

DEBT HOLDERS

Access to capital is essential to

maintaining a robust capital base

and financial flexibility

INDIVIOR’S STAKEHOLDERS

WHAT MATTERS TO THEM

WHY THEY MATTER TO US

HOW WE ENGAGE

2020 HIGHLIGHTS

› Responsible and compliant sales and

marketing activities

› Supporting regulatory and legislative
developments intended to improve
treatment access for patients and allow
HCPs to care for more patients when
they decide to seek help

› Regular dialogue with representative

patient groups

› Regular advocacy activity

› Publication of Indivior-sponsored
studies to advance the scientific
understanding of addiction and the
Group’s products

› Continuation of US nationwide

‘Keep Moving Towards Recovery’
information campaign which began
in November 2019

See page 16
This report page showcases Kyle’s
recovery from addiction
(see also the report front cover)

WORKFORCE

› A shared commitment to our Vision

› Indivior wishes to ensure that its

› Annual Culture Surveys

› Regular ‘Town Hall’ events hosted by

senior management

› Dedicated Culture Champions Network

› Personal Development Reviews

› Regular training and development

activity

› Engagement events with the Board

› Virtual workforce engagement
event between the designated
Non-Executive Director and Culture
Champions

› Virtual Town Hall events

› Distribution of COVID-19 guidelines

and PPE where required

› Diversity and inclusion insight

sessions held to drive development

See page 25
Indivior has commenced a new diversity
and inclusion initiative to obtain
employee insight into its approach

› Effective value-adding strategy and

› The Board has fiduciary

› Dedicated investor relations function

› Regular dialogue between senior

› Corporate website, including a distinct

investor section

› Results presentations and regular

engagement with major shareholders

› Participation in healthcare sector

investor conferences

› Dialogue with ESG-focused agencies

› Frequent analyst consultations

management and Company’s major
shareholders and analysts

› Quarterly public financial reporting
and results presentations with the
investment community

› Regular attendance at healthcare
investor conferences (e.g. Jefferies
Global Healthcare Conference on
November 17)

See page 5
The Chief Executive Officer’s review
reviews the Group’s performance during
2020 and the future outlook for the
business. Further information is
available within the investor relations
section of the Indivior website

› Dedicated investor relations function

› Quarterly public financial reporting

› Corporate website, including a distinct

› Maintenance of debt ratings

investor section

› Results presentations and regular
engagement with debt holders

See pages 37 to 45
The risk management section outlines
Indivior’s processes and recent changes
in risk assessments

Indivior Annual Report 2020

Strategic ReportS T A K E H O L D E R E N G A G E M E N T

C O N T I N U E D

STAKEHOLDER ENGAGEMENT CONTINUED

INDIVIOR’S STAKEHOLDERS

WHAT MATTERS TO THEM

WHY THEY MATTER TO US

HOW WE ENGAGE

2020 HIGHLIGHTS

SUPPLIERS

Indivior’s supply chain is critical to the
effective and continuous conduct of
Indivior’s day-to-day business activities

COMMUNITIES

By working with community groups,
including charities and patient
advocacy groups, Indivior can amplify
the need to address the addiction
crisis and bring together patient
support groups and networks

GOVERNING BODIES,
REGULATORS, AND
PROFESSIONAL ADVISORS

Indivior works with governing bodies,
regulators, and professional advisors
to enable it to operate within the
appropriate regulatory and legal
requirements

MEDIA

Stakeholders require up-to-date,
timely, complete, and accurate
information about Indivior

indivior.com

› Indivior’s supply chain requirements

› Maintenance of product quality is

› Indivior supply chain requirements and

› Key suppliers are regularly

and terms of business

essential

› Contractual terms and payment

timings

› Indivior’s future development plans

› Tender process details

› Ensuring that Indivior’s activities
are supported by a reliable and
effective supply chain

terms of business

› Contractual terms and payment timings

› Indivior’s future development goals

› Tender process details

› Day-to-day dialogue and

communications with the relevant

Indivior staff

considered as part of the

ongoing assessment of business

continuity risks

› Development of Supplier Code of

See page 26

Conduct in 2020 (to be published

in H1 2021)

This report section highlights Indivior’s

due diligence and compliance

developments in relation to suppliers

› Indivior’s approach to the global

› Indivior supports groups and

› Indivior’s approach to the global

› Ongoing cooperation with patient

addiction crisis

› Indivior’s support for and work with
patient advocacy groups, medical
societies, NGOs, and charities that
address people who are affected by
addiction

charities that offer assistance to
patients and families affected by
addiction

› Indivior activities should not cause
nuisance, pollution, or disruption

› A key business goal is to increase

the scientific understanding of the
disease space and our Vision that
evidence-based treatments are
available within wider stakeholder
groups

addiction crisis

› Indivior’s support for patient advocacy

groups, medical societies, NGOs, and

charities that address the needs of

people affected by addiction

advocacy organizations and

medical bodies to provide

education on OUD and treatment

options

› Continuation of the Indivior

Volunteer Policy, which enables

employees to take paid time off to

engage in volunteering activities

See page 27

Indivior’s advocacy approach in the US

has a number of key focus areas which

are recorded here

› Maintaining the required quality of
treatments delivered to patients

› Maintaining the Group’s license

to operate

› Regular reporting and communications

› Expansion of the Integrity and

about governance and regulatory matters

Compliance team

› Conducting all marketing and

› Indivior understands its

› Provision of engagement mechanisms

› Establishment of a center of

distribution activities responsibly
and within applicable laws and
regulations

› Ensuring that Indivior’s wider

activities are conducted within the
law and applicable regulations

obligations under laws and
regulations

with governments and regulators

› Supply of information about internal

communications and training about

compliance and regulatory matters

excellence for Compliance

Risk Management, Monitoring

& Analytics

› Refreshment of the Indivior Global

Code of Conduct

See page 26

Indivior’s approach is modeled on

national and international regulatory

requirements and best practice standards

› Accurate and timely news and

information about Indivior’s activities

› Points of contact for further
information and clarification

› Key stakeholder relationships are
maintained through accurate and
up-to-date news and information
in the media

› Accurate and timely news and

› Timely and regular news releases

information about Indivior’s activities

› Dedicated points of contact for further

information and clarification

from the Group regarding all

material aspects of its activities

during the year

› Maintenance of the corporate

New website

website

rethinkopioidaddiction.com launched

in July aims to develop the understanding

of addiction within the media and other

stakeholders

STAKEHOLDER ENGAGEMENT CONTINUED

SUPPLIERS

› Indivior’s supply chain requirements

› Maintenance of product quality is

and terms of business

essential

› Contractual terms and payment

› Ensuring that Indivior’s activities

timings

› Indivior’s future development plans

› Tender process details

are supported by a reliable and

effective supply chain

INDIVIOR’S STAKEHOLDERS

WHAT MATTERS TO THEM

WHY THEY MATTER TO US

HOW WE ENGAGE

2020 HIGHLIGHTS

› Indivior supply chain requirements and

terms of business

› Contractual terms and payment timings

› Indivior’s future development goals

› Tender process details

› Day-to-day dialogue and

communications with the relevant
Indivior staff

› Key suppliers are regularly
considered as part of the
ongoing assessment of business
continuity risks

› Development of Supplier Code of
Conduct in 2020 (to be published
in H1 2021)

See page 26

This report section highlights Indivior’s
due diligence and compliance
developments in relation to suppliers

› Indivior’s approach to the global

› Indivior supports groups and

› Indivior’s approach to the global

› Ongoing cooperation with patient

addiction crisis

› Indivior’s support for and work with

patient advocacy groups, medical

addiction

charities that offer assistance to

patients and families affected by

societies, NGOs, and charities that

› Indivior activities should not cause

address people who are affected by

nuisance, pollution, or disruption

addiction

› A key business goal is to increase

the scientific understanding of the

disease space and our Vision that

evidence-based treatments are

available within wider stakeholder

groups

› Maintaining the required quality of

› Maintaining the Group’s license

treatments delivered to patients

to operate

› Conducting all marketing and

› Indivior understands its

distribution activities responsibly

and within applicable laws and

obligations under laws and

regulations

› Ensuring that Indivior’s wider

activities are conducted within the

law and applicable regulations

addiction crisis

› Indivior’s support for patient advocacy
groups, medical societies, NGOs, and
charities that address the needs of
people affected by addiction

advocacy organizations and
medical bodies to provide
education on OUD and treatment
options

› Continuation of the Indivior

Volunteer Policy, which enables
employees to take paid time off to
engage in volunteering activities

See page 27

Indivior’s advocacy approach in the US
has a number of key focus areas which
are recorded here

› Regular reporting and communications

› Expansion of the Integrity and

about governance and regulatory matters

Compliance team

› Provision of engagement mechanisms

with governments and regulators

› Supply of information about internal
communications and training about
compliance and regulatory matters

› Establishment of a center of
excellence for Compliance
Risk Management, Monitoring
& Analytics

› Refreshment of the Indivior Global

Code of Conduct

See page 26

Indivior’s approach is modeled on
national and international regulatory
requirements and best practice standards

› Accurate and timely news and

› Key stakeholder relationships are

information about Indivior’s activities

maintained through accurate and

› Points of contact for further

information and clarification

up-to-date news and information

in the media

› Accurate and timely news and

› Timely and regular news releases

information about Indivior’s activities

› Dedicated points of contact for further

information and clarification

from the Group regarding all
material aspects of its activities
during the year

› Maintenance of the corporate

New website

website

rethinkopioidaddiction.com launched
in July aims to develop the understanding
of addiction within the media and other
stakeholders

Indivior Annual Report 2020

Indivior’s supply chain is critical to the

effective and continuous conduct of

Indivior’s day-to-day business activities

COMMUNITIES

By working with community groups,

including charities and patient

advocacy groups, Indivior can amplify

the need to address the addiction

crisis and bring together patient

support groups and networks

GOVERNING BODIES,

REGULATORS, AND

PROFESSIONAL ADVISORS

Indivior works with governing bodies,

regulators, and professional advisors

to enable it to operate within the

appropriate regulatory and legal

requirements

MEDIA

Stakeholders require up-to-date,

timely, complete, and accurate

information about Indivior

Strategic ReportM A N A G I N G O U R B U S I N E S S R E S P O N S I B L Y

CREATING VALUE FOR A WIDE
RANGE OF STAKEHOLDERS

INDIVIOR HAS DEVELOPED A RANGE OF
POLICIES, PROCESSES, RESOURCES AND
RELATIONSHIPS TO ENSURE THE
RESPONSIBLE MANAGEMENT OF ITS
BUSINESS. IN PRACTICE, INDIVIOR
ADDRESSES THESE ASPECTS OF ITS
BUSINESS BY FOCUSING ON ENVIRONMENT
AND CLIMATE CHANGE, PATIENT SAFETY
AND PRODUCT QUALITY, BUSINESS
CONDUCT, WORKFORCE, COMMUNITIES,
AND ADVOCACY.

Everyone at Indivior takes their responsibilities in
these areas seriously. The workforce aims to create
sustainable value for a wide range of stakeholders,
including patients, physicians, payors, policymakers,
shareholders, employees, and the local communities
where Indivior operates.

companies over the next few years. More
information on Indivior’s existing climate change
related disclosures can be found at the CDP
website (www.CDP.net).

Environment and climate change

Indivior’s approach to managing its environmental
impacts has been developed at a local level in line
with its activities at each site. The main area of risk is
linked to Indivior’s Fine Chemical Plant (FCP) in Hull,
UK, where buprenorphine is produced using raw
materials and a seven-stage process, which involves
the use of hazardous chemicals.

The FCP’s environmental management plan
comprises a process of continual improvement
to ensure the plant operates in line with the
expectations of the UK regulator and good industry
practice. The plan considers all aspects of the
plant’s operations and potential or actual effects
on the environment. It is governed by the FCP’s
Environmental Permit, Consent to Discharge Permit,
and ISO 14001:2015 certification.

More information about Indivior’s approach to
responsible business is available at Indivior’s
corporate website (www.indivior.com).

Dialogue with investors and reporting

Indivior conducts regular dialogue with its
investors, specialist investor environmental, social
and corporate governance (ESG) research agencies,
and other interested stakeholders about responsible
business. The scope of this dialogue addresses all
of the focus areas outlined above. Indivior also
participates in specific ESG research exercises, such
as the annual CDP climate change questionnaire
and ESG ratings research conducted by MSCI. CDP
is a global investor-led reporting project that is
aligned to the Task Force on Climate-related
Financial Disclosure (TCFD) requirements. The TCFD
requirements are being introduced into the annual
report disclosure requirements for UK-listed

Further information – Page 26
The impact of COVID-19 on Indivior’s workforce
In 2020, Indivior introduced a series of measures
to maintain the welfare, health, and safety of its
employees during the COVID-19 pandemic.

Further information – Page 25
Diversity and inclusion initiative
Indivior’s Executive Committee is committed to
ensuring the internal culture is strengthened and
maintained through diversity and inclusion.

indivior.com

Key focus areas within the FCP environmental
plan include:

› Air emissions, with the aim of keeping within

acceptable limits agreed with the UK Environment
Agency

› Management of solvent vapors, including ongoing
production improvements to reduce emissions
› Energy use reduction through ongoing production

improvements and procedural changes

› Process development to improve raw material

efficiency

› Groundwater monitoring
› Responsible behavior towards neighbors
› Water discharges in line with the FCP permit
› Waste disposal (the FCP has a zero-returns-to-

landfill policy)

Indivior’s remaining major sites consist of:

› Two research and development sites at Hessle
near Hull, UK, and at Fort Collins in Colorado, US
› Operational headquarters at North Chesterfield,
Virginia, US, where the majority of employees are
based

› A sales, administrative and company secretarial

office in Slough, UK

› A sales and administrative facility at Macquarie

Park in Sydney, Australia

Greenhouse gas emissions

Indivior’s greenhouse emissions are calculated by an
expert external service provider. The method used to
calculate GHG emissions is the GHG Protocol
Corporate Accounting and Reporting Standard
(revised edition), together with the latest emission
factors from recognized public sources including,
but not limited to, BEIS, the US Energy Information
Administration, the US Environmental Protection
Agency and the Intergovernmental panel on Climate
Change. Indivior’s baseline year is 2015 and Indivior
applies the Operational Control method.

Greenhouse gas emissions data for Indivior plc

Type

Scope 1

Scope 2 location-based

Scope 2 market-based

Scope 3

Total emissions location-based

Total emissions market-based

Per tonne of production
location-based

Per tonne of production
market-based

2020 tonnes
of CO2e

2019 tonnes
of CO2e

451

1,808

2,084

140

2,399

2,675

699

2,190

2,592

140

3,029

3,431

1,328

1,074

1,481

1,216

Greenhouse gas emissions split by territory

Type

Scope 1 UK

Scope 1 Non UK

Total Scope 1

Scope 2 location-based UK

Scope 2 location-based Non-UK

Total Scope 2 location-based

Scope 2 market-based UK

Scope 2 market-based Non-UK

Total Scope 2 market-based

Scope 3 UK

Scope 3 Non-UK

Total Scope 3

Total UK emissions
location- based

Total Non-UK emissions
location-based

Total emissions location based

Total UK emissions
market-based

Total Non-UK emissions
market-based

Total emissions market-based

2020 tonnes
of CO2e

2019 tonnes
of CO2e

385

451

561

1,247

1,808

836

1,248

2,084

140

309

390

699

821

1,369

2,190

1,223

1,369

2,592

140

999

1,207

1,400

2,399

1,822

3,029

1,275

1,609

1,401

2,675

1,822

3,431

Energy consumption in MwH
Type

2020 MwH

2019 MwH

Scope 1 UK

Scope 1 Non-UK

Total Scope 1

Scope 2 location-based UK

Scope 2 location-based Non-UK

Total Scope 2 location-based

Scope 2 market-based UK

Scope 2 market-based Non-UK

Total Scope 2 market-based

Energy saving measures

2,090

717

2,807

2,408

2,569

4,977

2,408

2,569

4,977

1,677

2,525

4,202

3,211

2,612

5,823

3,211

2,612

5,823

Indivior’s sites have shown a reduction in energy
usage and emissions as a result of home-working
following the outbreak of the COVID-19 pandemic
in the first quarter of 2020. Many of Indivior’s sites
monitor energy use as a consequence of cost control
measures. The use of equipment is regularly
reviewed for opportunities to reduce energy use and
emissions by local and group managers. One feature
is the operation of a 25KW solar farm at Indivior’s
R&D Center of Excellence in Hull in the UK.

Indivior Annual Report 2020

Strategic ReportM A N A G I N G O U R B U S I N E S S R E S P O N S I B L Y

C O N T I N U E D

Patient safety and product quality

Ensuring patient safety and product quality is a
central tenet of Indivior’s approach and culture.
Throughout the business, employees promote a
culture of innovation and excellence that is critical
to maintaining the trust of healthcare professionals
and patients.

Indivior’s robust pharmacovigilance management
system monitors the safety of its products. A key
element of this system is the ongoing deployment of
the US FDA required Risk Evaluation and Mitigation
Strategies (REMS) program, which helps to mitigate
the accidental misuse and abuse of SUBOXONE Film
and informs prescribers, pharmacists, and patients
of the risks associated with SUBOXONE Film use.

Indivior maintains a similar REMS program for
SUBLOCADE in the US, while developing plans
to minimize these risks in other countries
around the world.

Workforce

Indivior has an employment policy and practice
framework that is maintained by a qualified and
experienced human resources team. The team is
responsible for ensuring that Indivior is an employer
of choice and provides a fair, equitable, and
conducive working environment free from
discrimination and harassment.

Workforce data

788

People employed by Indivior at
December 31, 2020 (December 31, 2019: 796)

Breakdown of workforce data by territory

United States of America

2020

2019

508

532

Europe, Middle East, Africa and Canada

251

234

2020

2019

Australasia

2020

2019

China

2020

2019

Indivior regards its employees as fundamental to its
long-term success. It provides a variety of training,
development, and communication programs to
ensure its business activities are always conducted
in line with its Guiding Principles and stakeholder
expectations. Examples of current workforce
initiatives include:

› The Culture Champions program
› Regular culture surveys and performance reviews
› Town Hall communications events attended by

members of the senior management team
› Consistent and transparent communications

mechanisms, including a secure and confidential
intranet

› Diversity and inclusion initiative launched in 2020.

Further details can be found on page 25

Culture Champions

Indivior’s Culture Champions are a network of
employees from around the world who act as
ambassadors and create opportunities for greater
engagement with best practice. Champions are
tasked with proposing ideas and implementing
activities to drive a positive culture in collaboration
with the human resources team.

Breakdown of workforce data by employment
function

Function

Commercial

Compliance

Corporate Affairs and
Communications

Finance

Human Resources

Information Technology

Legal and Governance

Medical

Research and Development

Supply

Total

December 31,
2020

December 31,
2019

411

788

414

100

796

indivior.com

Gender diversity

Indivior’s gender diversity data, disclosed to meet
the requirements of s414c of the UK Companies Act
2006, are recorded below.

Directors of Indivior plc

All employees

DIVERSITY AND INCLUSION INITIATIVE

Male: 87%
Female: 13%

Male: 52%
Female: 48%

As at December 31, 2020

Total Women

Directors of Indivior plc

Senior Managers*

Men

All employees

788

380

48 408

* Includes members of the Executive Committee who are not

Directors of Indivior plc and all subsidiary company directors.

Business conduct

Indivior is committed to high standards of business
conduct in line with industry good practice and
stakeholder expectations. Indivior has a
comprehensive compliance approach to help
ensure that everyone within the organization acts
in a responsible manner. The Indivior Integrity &
Compliance Program (ICP) and other key business
management systems are vital components of this
approach. The ICP is described on the following
pages along with key aspects of its program for
2020 and beyond.

In July 2020, Indivior reached an agreement with
the US Attorney’s Office for the Western District of
Virginia. Full details of the agreement are recorded
on the Indivior corporate website.

As part of the settlement, Indivior entered into a
Corporate Integrity Agreement (CIA) with the Office
of Inspector General of the U.S. Department of
Health and Human Services. Indivior agreed to
maintain compliance-related measures, including
those that have been put in place to address
relations with healthcare professionals, product
information, and marketing activities. The agreement
included commitments to conduct monitoring,
auditing, training, education, reporting, and
disclosures for a period of five years.

Indivior’s Executive Committee is committed to
ensuring the internal culture is strengthened
and maintained through diversity and
inclusion. As part of this commitment, in 2020
Indivior engaged an external consultancy to
assist in gaining insight into the workforce’s
views on Indivior’s approach to diversity and
inclusion. All UK and US employees were invited
to participate in a 45-minute digital
conversation with the external consultancy
who also hosted several 90-minute focus
group sessions arranged by diversity
demographics (for example, employees who
identify as Black or African American, Hispanic
or Latino, Muslim, LGBTQ).

The feedback and findings will be applied
to assess and further develop Indivior’s
management of this important area, formulate
future objectives, and continue to build toward
a more inclusive culture.

Further information on the Group’s approach
to diversity and inclusion can be found in the
Nomination & Governance Committee Report
on pages 73 to 76.

About the Indivior Integrity & Compliance
Program (ICP)

The ICP is modeled on the Elements of an Effective
Compliance Program as described in the Federal
Sentencing Guidelines for Organizations(1). It is also
based on guidance from the US Department of
Justice (DOJ) and the US Health and Human Services’
Office of Inspector General, and relevant national
and global industry standards.

The ICP has a multi-year strategy to drive continuous
learning and evolution. Overall in 2020, its multiple
facets and activities helped to maintain and
strengthen Indivior’s commitment to compliance
as a core performance indicator.

1. United States Sentencing Commission, Guidelines Manual,

§8B2.1 (2018)

Indivior Annual Report 2020

Strategic ReportM A N A G I N G O U R B U S I N E S S R E S P O N S I B L Y

C O N T I N U E D

Program highlights for 2020 include:

› Optimization of written policies, procedures, and

standards of conduct
The project updated and simplified key policies
and procedures, including the Indivior Global Code
of Conduct, while incorporating relevant reference
to Indivior Inc.’s commitments from the US
Government Resolution (i.e. CIA, DOJ Compliance
Measures, and FTC Order). It also enhanced
Indivior’s standardized compliance risk
assessment tools, including third-party due
diligence and Risk Assessment and Mitigation Plan
(RAMP) processes, with embedded ownership of
risks and related mitigation activities. A separate
project to design and distribute an Indivior
Supplier Code of Conduct commenced in October
and will be published and distributed in the first
half of 2021.

› Development of the compliance officer roles and

the Integrity & Compliance Committee
This project refined the role of the global Indivior
Integrity & Compliance Committee and regional

Compliance Committees to ensure effective
oversight of the administration of the ICP. The
activities included embedding a robust network of
Compliance Champions across Indivior’s operations.
It ensured the allocation of appropriate budget
and headcount resources for the ICP to achieve
continued program maturity, government agreement
preparedness, full staffing of fully qualified
compliance professionals, and the performance
of required staff development activities.

› Training and education

This project delivered an interactive compliance
training program with a comprehensive curriculum
for all employees and contingent workers globally.
The program included communicating the
outcomes of workforce non-compliance as
permitted within local laws. It was conducted
in partnership with Indivior’s business units
and provided real-time, targeted education and
training based on findings from compliance audits,
monitoring, and investigations.

THE IMPACT OF COVID-19 ON
INDIVIOR’S WORKFORCE

In 2020, Indivior introduced a series of measures
to maintain the welfare, health, and safety of
its employees during the COVID-19 pandemic.
These measures were tailored to the specific
circumstances of each workforce group (for
example, workers at the FCP in Hull, UK, or
salesforce representatives working in
communities across the US).

At the start of the pandemic, the FCP instigated
a comprehensive risk management assessment
process and subsequently designed a series of
procedures and employee-training exercises to
minimize the risk of transmission. These included
guidance on wearing face coverings in certain
areas, temperature checks on arrival, regular
disinfection of high-traffic areas, guidance on
individual responsibilities (including hand
washing, social distancing, and waste disposal),
and procedures concerning site visitors.

During the COVID-19 pandemic, the FCP
operated normally (except for a brief closure
in November 2020), working as part of the

healthcare supply chain. By adapting to these
controls, the workforce team delivered on
Indivior’s commitment to focus on patient needs
and ensured the supply chain remained fully
stocked with active pharmaceutical ingredients
(APIs).

Indivior’s remaining sites also worked to ensure the
necessary COVID-19 measures were implemented.
For example, the majority of workers at the
Group’s Richmond, VA headquarters and at
Slough, UK worked from home throughout the
year. Meanwhile, sales and marketing employees
who interact with healthcare professionals in
North America were supplied with appropriate
Personal Protective Equipment and appropriate
health and safety guidelines to ensure their own
health and safety.

Other Indivior COVID-19 measures included:

› Waiver of COVID-19 healthcare cost sharing for

US employees

› Provision of online support sessions to address
anxiety, mental health, personal wellbeing, and
related matters for homeworkers

› Regular senior management review of the

Group’s approach to ensure Indivior’s workforce
were fully supported during the pandemic in
2020 and as it continues in 2021

indivior.com

Communication development

› Reduce and help prevent the abuse, misuse, and

This project aimed to deliver an enhanced
‘Speak Up’ program through the employment of
a full-time investigator and the standardization
of processes and communications for all
reported concerns. Additionally, the Group
invested in additional capabilities within the
Indivior EthicsLine reporting tool.

Compliance monitoring data, including information
about the Speak Up program, was distributed to all
employees to facilitate shared learning and drive
adherence to Indivior’s business conduct standards.

An independent Ethics & Compliance Program
Perceptions Survey was conducted by Ethisphere.
Subsequently an action plan was put in place for
continued evolution, although Indivior’s results
exceeded all eight Ethisphere benchmark pillars.

› Internal monitoring and auditing

ICP activities during 2020 included the
performance of independent reviews to simulate
and prepare for CIA monitoring activities.
Additionally, a further enhanced strategic
compliance auditing and monitoring program,
based on key risks and core monitoring activities
(e.g. CIA standards) and other factors, was
implemented after approval from the Integrity &
Compliance Committee.

A cross-functional Oversight Committee was
introduced to review and enforce standards of
conduct. This committee also has responsibility
for assessing and determining reportable events
in relation to CIA and DOJ Compliance Measures.

A procedure was also developed to assess
potential root-cause analysis of compliance
deviations to enable identification of effective
systemic resolution as warranted.

Advocacy

Indivior advocates on public policy issues that
relate to addiction by engaging responsibly with
public officials, policymakers, and other stakeholders
at all levels of government, and with healthcare
professionals and community stakeholders (for
example NGOs, patient support organizations, and
charities that address addiction and related matters).

Indivior supports public policies that:

› Enable long-term OUD recovery for patients
› Promote increased access to evidence-based OUD

treatments

diversion of our products

› Accelerate innovation
› Promote public health

In the US, Indivior’s public policy priorities are
focused on the following key areas:

› Expanding access to medication-assisted

treatment: Indivior believes that medication-
assisted treatment (MAT), or medication for opioid
use disorder (MOUD), including treatment with
buprenorphine (BMAT), is a critical part of the
solution to the global opioid crisis. MAT brings
substantial value to both patients and society, but
remains, for many reasons, severely underutilized.

› Removing barriers to innovative treatments:
Indivior believes that new, evidence-based
buprenorphine long-acting injectable medications
are innovations in MOUD. Indivior also believes
that any ambiguity in current federal and state
controlled substance distribution laws should be
addressed to ensure patients and providers can
realize the full value of these innovations.
› Increasing disease and treatment education:
Indivior advocates for accelerated public,
healthcare provider, and patient education on
the disease of OUD and evidence-based treatment
options, including all FDA-approved medication-
assisted treatments.

› Advocating for increased medical education:

Indivior advocates for education on addiction and
evidence-based treatments in medical, physician
assistant, and nursing schools, and as a core
requirement for continuing medical education
programs within the healthcare system.

› Advocating for access to treatment in correctional
settings: Because OUD is more prevalent in the
criminal justice system, Indivior advocates for
expanding access to MOUD in correctional settings,
and for smooth transitions to care and coverage in
society upon release.

› Supporting the enforcement of the Mental Health
Parity and Addiction Equity Act: Indivior supports
robust education, enforcement, and awareness of
US federal and state parity laws, and advocates to
strengthen these where necessary, working
together with key external stakeholders.

› Supporting advocacy groups: Indivior continues to
support and work with advocacy groups for those
affected by opioid use disorder.

Indivior Annual Report 2020

Strategic ReportN O N - F I N A N C I A L I N F O R M A T I O N S T A T E M E N T

COMMITMENT TO TRANSPARENCY

Indivior is committed to transparent reporting and
disclosure of its financial and non-financial
performance, risks and opportunities where this
information is relevant to shareholders and other
key stakeholders. Indivior is also required to comply
with the reporting requirements contained in
sections 414CA and 414CB of the Companies Act 2006.

The table and other information below are provided
to assist readers of this report to understand
Indivior’s approach, policies and performance.

It also aims to highlight where further relevant
information, other than that disclosed within this
report, can be accessed.

Further information – pages 12-13
Business model
An explanation of Indivior’s business model.

Further information - pages 37-45
Risk management
A description of the principal risks and their potential
adverse impacts on the business can be found on
these pages of this report.

Other reporting
requirements

Policies and statements of approach, due diligence
and outcomes

Risks, risk management and additional
information

Page reference

Non-financial performance
information

Environmental
matters

› Environmental management

approach

› Business Operations
› Supply

p23

› Greenhouse gas

emissions

Employees

› Workforce management approach

› Business operations

p24 and p39

› Employee data

Human rights

› Diversity and inclusion policy
› UK Modern Slavery Statement

› Business operations
› Product pipeline, regulatory

p25, p39-40
and p74

› Employee gender
diversity figures

and safety

Social matters

› Information Management Policy
› Data Protection Policy
› Healthcare professionals

interaction policy

Anti-corruption
and bribery

› Anti-bribery policy
› Whistleblowing policy

› Product pipeline, regulatory

and safety

p40-49
and p112

› Political

donations

› Commercialization
› Economic and financial
› Supply
› Legal and intellectual property
› Compliance

› About the Integrity &
Compliance Program
› Business Operations
› Compliance

p26-27, p39,
p44 and p60

› EthicsLine

development

In particular the Group provides the responsibility section of its website (www.indivior.com) for this purpose,
participates in the annual disclosure of environmental and climate change information to CDP (www.CDP.net)
and regularly enters into dialogue with investors and investor research organizations (such as MSCI and
FTSERussell) about this aspect of its activities.

indivior.com

F I N A N C I A L R E V I E W

FINANCIAL REVIEW

YEAR ENDED DECEMBER 31ST (AS REPORTED)

Net Revenue

2020
$m

647

(156)

(148)

2019
$m

785

178

134

%
Actual
FX

-18

2020

2019

2018

(20)

647

785

1,005

US Dollars (m)

Net revenue

Operating (loss)/profit

Net (loss)/income

Basic (LPS)/EPS
(cents per share)

NM: Not Meaningful

2020 financial and operating highlights

Adjusted Net Income*

› Although 2020 net revenue (NR) declined 18% vs.

2020

2019, 2020 SUBLOCADE net revenue grew to $130m
(+81% vs. 2019) due to strong growth from the
Organized Health Systems (OHS) channel, despite
COVID-19 impact on new patient enrollments. 2020
units dispensed were approximately 127,000
(+115% vs. 2019).

2019

2018

› PERSERIS (risperidone) extended-release injection

NR was $14m (+133% vs. 2019).

Cash Balance

176

272

US Dollars (m)

› SUBOXONE Film share averaged 21% in 2020 (2019:
32%) and exited 2020 at 21% (2019 exit share: 24%).

› Reported operating loss of $156m. Exceptional
costs of $244m primarily relate to litigation
settlements. Adjusted operating profit of $88m
(-56% vs. adjusted 2019) mainly due to lower NR
and higher SG&A expense from growth
investments in SUBLOCADE and legal defense
costs primarily due to resolving the Department
of Justice (DOJ) matter.

› Reported net loss of $148m. Adjusted net income
of $59m (-66% vs. adjusted 2019), reflecting lower
operating profit and net finance expense (versus
net finance income in 2019).

› Cash of $858m (-$202m vs. 2019), following $103m

payment, including interest, related to DOJ
resolution. Net cash of $623m (-$198m vs. 2019).
› Completed strategic alignment which is expected

to reduce the Group’s underlying operating
expense base (selling, general and administrative
expenses + research and development) by $60m
to $70m (on an annualized basis before any
further investments in growth), while accelerating
its growth strategy for SUBLOCADE with increased
investment behind further penetrating OHS and
supporting its strong commitment to integrity and
compliance.

2020

2019

2018

Net Cash**

2020

2019

2018

858

1,060

924

US Dollars (m)

623

821

681

US Dollars (m)

* Excluding exceptional items (further details on page 32)
** See Note 19 of the Notes to the Group financial statements for

the definition of net cash

Indivior Annual Report 2020

Strategic ReportF I N A N C I A L R E V I E W C O N T I N U E D

Operating review

Financial performance

U.S. opioid use disorder (OUD) market update

In 2020, growth of the U.S. buprenorphine
medication-assisted treatment (BMAT) market
was sustained at a low teens percentage rate,
underpinned by continued growth in the number
of patients receiving treatment and by increased
access to treatment. The increased market growth
followed implementation of new federal and state
government actions in light of the COVID-19
pandemic to facilitate access to medication-assisted
treatment (MAT), including counselling for patients
suffering from OUD. For example, the Drug
Enforcement Administration (DEA), jointly with the
Substance Abuse and Mental Health Services
Administration (SAMHSA), is continuing to allow
healthcare providers to initiate and continue
buprenorphine treatment by telemedicine.

Underlying market growth has also benefited from
increased overall public awareness of the opioid
epidemic and approved treatments, as well as from
regulatory and legislative changes introduced prior
to the COVID-19 pandemic that have expanded OUD
treatment funding and treatment capacity. States
increasingly acknowledge that providing treatment
brings substantial value to both patients and society
and that BMAT is under-utilized.

In response, the number of physicians, nurse
practitioners and physician assistants who have
received a waiver to administer MAT and those able
to treat up to the permitted level of 275 patients
continued to grow in 2020. As a result, there is
increasing patient access to treatment. Indivior
supports efforts to encourage more eligible
healthcare practitioners (HCPs) to provide treatment,
and the Group continues to resource its compliance
capabilities for the growing number of BMAT
prescribers and patients.

The Group is uncertain how long the elevated
underlying BMAT growth rate will continue, but
longer term it believes the growth rate will revert
to the previously observed high single-digit to low
double-digit percentage growth rate. The Group’s
focus is to continue to expand access of SUBLOCADE
amongst core HCPs and OHS, in order to ensure
availability of this potentially important new
treatment option to the estimated 1 million+ patients
per month who are prescribed BMAT by HCPs.

Total net revenue in 2020 decreased 18% to $647m
(2019: $785m).

2020 US net revenue decreased 23% to $456m
(2019: $589m). Growth in the overall US BMAT
market was sustained at a low teens percentage
rate as discussed above (“U.S. opioid use disorder
(OUD) market update”), primarily due to strength in
government channels. Underlying market strength
and SUBLOCADE net revenue growth of 75% to $126m
(2019: $72m) were more than offset by SUBOXONE
Film share loss and the absence of net revenue
contribution from the Authorized Generic (AGx) film
program, which was terminated at the end of 2019.

2020 Rest of World and United Kingdom (collectively
“ROW”) net revenue decreased 3% to $191m
(2019: $196m). Contribution from SUBLOCADE ROW
net revenue of $4m is included in 2020. This benefit
was more than offset primarily by continued
austerity measures in Western European markets.

2020 gross margin as reported was 85% (2019: 82%).
Excluding $5m of net exceptional costs of sales
related to inventory provisions due to the adverse
impact of COVID-19, 2020 adjusted gross margin
was 86%. The 2020 gross margin improvement was
primarily due to improved revenue mix from the
absence of net revenue from the AGx buprenorphine
/naloxone sublingual film program in 2020.

2020 SG&A expenses as reported were $666m (2019:
$414m). 2020 SG&A expenses included exceptional
costs of $239m, primarily related to resolution of
litigation matters. Further details of exceptional
costs are available in Note 4 of the Notes to the
Group’s financial statements.

On an adjusted basis, 2020 SG&A expenses increased
9% to $427m (Adj. FY 2019: $390m). The increase
reflects stepped up SUBLOCADE marketing expenses,
principally the direct-to-consumer (DTC) campaign,
higher legal expenses related to DOJ resolution,
partially offset by reduced travel and entertainment
due to COVID-19 restrictions.

2020 R&D expenses were $40m (2019: $53m). The
decrease primarily reflects lower clinical activity
and the reprioritization of R&D activities as part of
the completed strategic alignment to principally
support SUBLOCADE Health Economics and
Outcomes Research (HEOR) and post-marketing
study commitments for SUBLOCADE and PERSERIS,
as well as lower than expected investments for
supply-related projects.

indivior.com

2020 operating loss as reported was $156m (2019 op.
profit: $178m). Exceptional costs of $244m and $24m
are included in the 2020 and 2019 reported results,
respectively. On an adjusted basis, 2020 operating
profit was $88m (2019 adj. op. profit: $202m). The
decline on an adjusted basis primarily reflects lower
net revenue and increases in marketing and legal
defense costs as detailed above. These items were
partially offset by lower R&D and general and
administrative expenses.

2020 net finance expense was $17m (2019 income:
$2m). The net expense primarily reflects lower
interest income on the Group’s cash balance due to
lower interest rates versus the year-ago period and
increased finance expense incurred related to the
DOJ liability.

2020 reported total tax benefit was $25m, an
effective tax rate of 14% (2019 tax charge: $46m, 26%
rate). Excluding the $37m tax benefit on exceptional
items in 2020, total tax expense was $12m, an
effective tax rate of 17% (2019: $28m, 14% rate).

2020 reported net loss was $148m (2019 net income:
$134m). Excluding the $207m after-tax impact from
exceptional items, 2020 adjusted net income was
$59m (Adj. 2019: $176m). The decline in net income
on an adjusted basis primarily reflects lower net
revenue, increased operating expenses (primarily
marketing and legal defense costs) and net finance
expense (versus 2019 net finance income).

Loss per share on a diluted basis was 20 cents in
2020 and earnings per share of 8 cents on an adjusted
diluted basis (2019: earnings per share of 18 cents on
a diluted and 23 cents on adjusted diluted basis).

Balance sheet and cash flow

As at December 31, 2020 cash and cash equivalents
were $858m, a decrease of $202m versus the $1,060m
at year-end 2019. Borrowings, excluding issuance
costs, were $235m at December 31, 2020 (2019:
$239m). As a result, net cash was $623m at the end of
2020 (2019: $821m), a $198m decrease over the
twelve-month period. The change was primarily

driven by a payment to the DOJ for $103m (including
interest) and the changes in net working capital.

Net working capital (inventory, trade receivables and
other current assets, less trade and other payables)
was negative $202m at the end of 2020 versus
negative $323m at the end of 2019. The $121m change
over the period was primarily driven by a decrease in
sales returns and rebates in the US within payables
and a reduction in accrual levels.

Cash used by operating activities in 2020 was $148m
(2019 cash generated: $128m), representing an
increased use of cash of $276m primarily due to
lower revenues, timing of payments of sales rebates/
other payables and payment to the DOJ for $103m
(including interest). Net cash outflow from operating
activities was $193m in 2020 (2019 net cash inflow:
$151m) reflecting the lower cash from operating
activities and cash tax payments in 2020 versus
cash tax received in 2019.

2020 cash outflow from investing activities was $4m
(2019: $2m). The current year outflows related to the
purchase of property, plant and equipment and the
prior year outflows relate to the purchase of
property, plant and equipment offset by proceeds
from the disposal of intangible assets.

2020 cash outflow from financing activities was
$10m (2019: $13m), reflecting the principal portion of
lease payments and the quarterly repayment on the
term loan facility partially offset by proceeds from
issuance of shares to satisfy the vesting of options
under an employee stock purchase plan.

Alternative Performance Measures
(adjusted results)

The Board and management team use adjusted
results, measures and net cash to give incremental
insight to the financial results of the Group and the
way it is managed. The tables below show the list
of adjustments between the reported and adjusted
results relevant to the Group for 2020 and 2019.

Further details of each adjustment are available in
Note 5 of the Notes to the Group’s financial
statements.

Reconciliation of gross profit to adjusted gross profit:

Gross profit

Exceptional cost of sales

Adjusted gross profit

2020
$m

550

555

2019
$m

645

–

645

Indivior Annual Report 2020

Strategic ReportF I N A N C I A L R E V I E W C O N T I N U E D

Reconciliation of operating (loss)/profit to adjusted operating profit:

Operating (loss)/profit

Exceptional cost of sales

Exceptional selling, general and administrative expenses

Adjusted operating profit

Reconciliation of (loss)/profit before taxation to adjusted profit before taxation:

(Loss)/profit before taxation

Exceptional cost of sales

Exceptional selling, general and administrative expenses

Adjusted profit before taxation

Reconciliation of net (loss)/income to adjusted net income:

Net (loss)/income

Exceptional cost of sales

Exceptional selling, general and administrative expenses

Exceptional items within tax

Adjusted net income

Reconciliation of (loss)/earnings per share to adjusted earnings per share:

(Loss)/earnings per share

Exceptional cost of sales

Exceptional selling, general and administrative expenses

Exceptional items within tax

Adjusted earnings per share

2020
$m

(156)

239

2020
$m

(173)

239

2020
$m

(148)

239

(37)

2020
$m

(20)

–

(5)

2019
$m

178

–

202

2019
$m

180

–

204

2019
$m

134

–

176

2019
$m

–

Weighted average number of shares (thousands)

732,863

730,235

Reconciliation of net cash:

Net cash at the beginning of the year

Net (decrease)/increase in cash and cash equivalents

Net repayment of borrowings

Net cash at end of year

2020
$m

821

(202)

623

2019
$m

681

136

821

indivior.com

L E G A L P R O C E E D I N G S

RB Resolution

In January 2021, the Group reached an agreement
with Reckitt Benckiser (RB) to resolve RB’s claims
seeking indemnity under the 2014 Demerger
Agreement. Pursuant to the settlement, RB agreed to
withdraw the US $1.4b claim and to release Indivior
from any claim for indemnity under the Demerger
Agreement relating to the DOJ and FTC settlements
which RB entered into in July 2019, as well as other
claims for indemnity arising from those matters.
Indivior has agreed to pay RB a total of $50m and
has agreed to release RB from any claims to seek
damages relating to its settlement with the DOJ
and the FTC. The Group made a $10m payment in
February 2021 under the terms of the settlement.
Subsequently, annual installment payments of
$8m will be due every January from 2022 to 2026.
The Group carries a liability totaling $50m
(2019: $0m) related to this settlement.

DOJ resolution

Agreement to resolve criminal charges and civil
complaints related to SUBOXONE Film

› The Group settled with the United States

Department of Justice (Justice Department or DOJ),
the U.S. Federal Trade Commission (FTC), and U.S.
state attorneys general the criminal and civil
liability in connection with a multi-count
indictment brought in April 2019 by a grand jury
in the Western District of Virginia, a civil lawsuit
joined by the Justice Department in 2018, and
an FTC investigation. Under the terms of the
agreement, Indivior Solutions Inc. (“Solutions Inc.”),
a wholly owned subsidiary of Indivior PLC, has
pleaded guilty to a single count of making a false
statement relating to health care matters in 2012
in violation of 18 U.S.C. Section 1035. Indivior will
make payments to federal and state authorities
totaling $600 million (plus applicable interest of
1.25% on a portion of that total amount), has
agreed to a stipulated injunction with the FTC, and
entered into a Corporate Integrity Agreement with
the Office of Inspector General of the Department
of Health and Human Services (HHS). In November
2020, the Court approved the settlement and
dismissed all charges returned by the grand jury
in April 2019.

› Under the terms of a related agreement with
the HHS, Solutions Inc. will be excluded from
participating in government health programs.
This exclusion will not apply to any other entities
within the Group. The Group does not anticipate
the exclusion of Solutions Inc. will have any

material impact on the Group’s ability to continue
to participate in government health programs.

› Under the terms of the five-year Corporate

Integrity Agreement with the HHS Office of the
Inspector General (HHS-OIG), the Group will
continue its commitment to promote compliance
with laws and regulations and its ongoing
evolution of an effective compliance program,
including written standards, training, reporting,
and monitoring procedures. The Group will be
subject to reporting and monitoring requirements,
including annual reports and compliance
certifications from key management and the Board
Nomination & Governance Committee submitted
to HHS-OIG. In addition, the Group will be subject
to monitoring by an Independent Review
Organization, who will submit audit findings to
HHS-OIG, and review by a Board Compliance
Expert, who will prepare two compliance
assessment reports in the first and third reporting
periods of the Corporate Integrity Agreement.

› Under the terms of the Resolution Agreement with
the Justice Department, the Group has agreed to
compliance terms regarding its sales and
marketing practices. Compliance with these terms
is subject to annual Board and CEO certifications
submitted to the U.S. Attorney’s Office.

In November 2020, the Group made a payment of
$103m (including interest) when the resolution was
approved by a judge. Subsequently, six annual
installments of $50 million will be due every January
15 from 2022 through 2027. The final installment of
$200 million will be due in December 2027. The
Group carries a liability totaling of $486 million
(FY 2019: nil) pertaining to the DOJ resolution.

DOJ related matters

Federal FCA qui tam suits

› In August 2018, the United States unsealed three
qui tam suits pending in the Western District of
Virginia that made a variety of allegations under
state and federal False Claims Act statutes
regarding marketing and promotion practices
related to SUBOXONE, and in some instances
claiming unlawful retaliation. The suits also seek
reasonable attorney’s fees and costs. Many of the
civil claims concern the same conduct at issue in
the Superseding Indictment filed by the Justice
Department. Indivior is aware of additional claims
regarding similar allegations about marketing and
promotion practices which were resolved along
with the three Western District of Virginia qui tam
suits in the federal civil settlement agreement with

Indivior Annual Report 2020

Strategic ReportL E G A L P R O C E E D I N G S

C O N T I N U E D

the Justice Department; and resolved in principle
with the state Attorney Generals and are being
formalized in civil settlement agreements with the
fifty states. The Group is in discussions with certain
relators aimed toward resolving the retaliation
claims and claims for attorney’s fees and costs.

State and local matters

› In October 2016, Indivior was served with
a subpoena for records from the State of
Connecticut Office of the Attorney General under
its Connecticut civil false claims act authority.
The subpoena requests documents related to the
Group’s marketing and promotion of SUBOXONE
products and its interactions with a non-profit
third-party organization. The Group has fully
cooperated in this civil investigation.

› In November 2016, Indivior was served with a

subpoena for records from the State of California
Department of Insurance under its civil California
insurance code authority. The subpoena requests
documents related to SUBOXONE Film, SUBOXONE
Tablet, and SUBUTEX Tablet. The State of California
served additional deposition subpoenas on
Indivior in 2017 and served a subpoena in 2018
requesting documents relating to the
bioavailability/bioequivalency of SUBOXONE Film,
manufacturing records for the product and its
components, and the potential to develop
dependency on SUBOXONE Film. The Group has
fully cooperated in this civil investigation and is
in discussions aimed toward resolving the matter.
Certain of the qui tam suits filed in the Western
District of Virginia and the District of New Jersey
assert claims under the civil California insurance
code. The Group is in discussions toward resolving
these claims and claims for associated attorney’s
fees and costs.

› In June 2019, the Group learned that the State

of Illinois Insurance Department is investigating
potential violations of its civil Insurance Claims
Fraud Prevention Act with respect to its sales and
marketing activity. Certain of the qui tam suits filed
in the Western District of Virginia and the District
of New Jersey assert claims under this statute,
including claims for associated attorney’s fees and
costs. The Group is in discussions aimed toward
resolving this matter.

› In addition to the federal and state health

program claims, claims have been asserted under
the city false claims acts of Chicago and New York
City regarding the promotion of SUBOXONE Film.
The Group has resolved the matter with the City
of Chicago.

FTC investigation

› Indivior Inc. and the FTC have resolved the FTC’s

pending investigation. In July 2020, the government
simultaneously filed a complaint alleging a violation
of 15 U.S.C. §45(a), and a joint motion seeking entry
of a stipulated order. The US District Court for the
Western District of Virginia entered this stipulated
order in November 2020 and dismissed the case
with prejudice. Pursuant to the stipulated order,
the FTC received $10 million. Furthermore, as
detailed in the text of the stipulated order, for a
ten-year period Indivior Inc. is required to make
specified disclosures to the FTC and is prohibited
from certain conduct.

False Claims Act allegations

› In August 2018, the United States District Court
for the Western District of Virginia unsealed a
declined qui tam complaint alleging causes of
action under the Federal and state False Claims
Acts against certain entities within the Group
predicated on best price issues and claims of
retaliation (United States ex rel. Miller v. Reckitt
Benckiser Group PLC et al., Case No. 1:15-cv-00017
(W.D. Va.)). The suit also seeks reasonable
attorneys’ fees and costs. We understand that all
government plaintiffs have declined to intervene.
The Group was served with the complaint in
January 2021. We are in discussions regarding this
matter with the plaintiff-relator.

› In May 2018, Indivior Inc. received an informal
request from the Office of the United States
Attorney for the Southern District of New York,
seeking records relating to the SUBOXONE
manufacturing process. We are in discussions
with the government regarding the matter.

Securities class action litigation

› In April 2019, Michael Van Dorp filed a putative
class action lawsuit in the United States District
Court for the District of New Jersey on behalf of
holders of publicly traded Indivior securities
alleging violations of U.S. federal securities laws
under the Securities Exchange Act of 1934. The
complaint names Indivior PLC, Shaun Thaxter,
Mark Crossley and Cary J. Claiborne as defendants.
In February 2021, the parties reached a settlement
agreement. A Motion for Entry of Order
Preliminarily Approving Settlement is pending
with the court.

indivior.com

Intellectual property related matters

ANDA litigation

› Litigation against DRL is currently pending in the
District of New Jersey regarding U.S. Patent No.
9,687,454 and 9,931,305 (“the ‘454 and ‘305
Patents”). DRL received final FDA approval for all
four strengths of its generic buprenorphine/
naloxone film product in June 2018, and
immediately launched its generic buprenorphine/
naloxone film product “at-risk.” In July 2018, the
District Court issued a ruling granting Indivior a
Preliminary Injunction (PI) pending the outcome of
a trial on the merits of the ‘305 Patent. Indivior was
required to post a surety bond for $72 million in
connection with the PI. In November 2018, the CAFC
issued a decision vacating the PI against DRL. DRL
launched its product at-risk in February 2019. In
June 2019, DRL filed a motion for leave to file their
first amended Answer, Affirmative Defenses,
and Counterclaims to add various antitrust
counterclaims resulting from the injunction that
was issued against DRL. The motion was granted
in November 2019. In January 2020, Indivior and
DRL entered into a joint stipulation that DRL did
not infringe the ‘305 Patent based on the District
Court’s claim construction ruling, but that Indivior
retained its right to appeal the issue of
infringement of the ‘305 Patent. Indivior maintains
its infringement claims on the ‘454 Patent and DRL
maintains its counterclaims. No trial date has been
set for either the patent claims or the antitrust
counterclaims.

› In November 2018, DRL filed two separate petitions
for inter partes review (“IPR”) of the ‘454 Patent
with the USPTO. The USPTO denied institution of
one of the IPR petitions but granted institution for
the second IPR petition. The Patent Trial and
Appeal Board (USPTO) issued a decision in June
2020, holding that claims 1-5, 7, and 9-14 were
unpatentable, but that DRL had not shown that
claim 8 is unpatentable. Claim 6 was not
challenged and therefore was not addressed in
the PTAB decision. Indivior appealed to the Court
of Appeals for the Federal Circuit in July 2020.
No court date has been set yet.

› Litigation against Alvogen is pending in the United
States District Court for the District of New Jersey
regarding the ‘454 and ‘305 Patents. On January 22,
2019, Indivior filed a motion for a temporary
restraining order (“TRO”) and preliminary
injunction in the District of New Jersey, requesting
that the Court restrain the launch of Alvogen’s
generic buprenorphine/naloxone film product

until a trial on the merits of the ‘305 Patent.
Alvogen received approval for its generic product
on January 24, 2019. The same day, the District of
New Jersey granted a TRO until February 7, 2019.
On January 31, 2019, Indivior and Alvogen entered
into an agreement whereby Alvogen was enjoined
from the use, offer to sell, or sale within the United
States, or importation into the United States, of its
generic buprenorphine and naloxone sublingual
film product unless and until the CAFC issued a
mandate vacating the PI against DRL. The mandate
vacating the DRL PI was issued on February 19,
2019, and Alvogen launched its generic product.
Any sales in the US are on an “at-risk” basis,
subject to the ongoing litigation against Alvogen in
the District of New Jersey. In August 2019, Alvogen
filed a motion for leave to file an amended Answer
to Complaint and Separate Defenses and
Counterclaims to add various antitrust counter
claims. The motion was granted in November 2019.
In January 2020 Indivior and Alvogen entered into
a joint stipulation that Alvogen did not infringe
the ‘305 Patent based on the District Court’s claim
construction ruling, but that Indivior retained its
right to appeal the issue of infringement of the
‘305 Patent. In October 2020, Alvogen filed a motion
for leave to file a second amended Answer to
Complaint and Separate Defences and
Counterclaims to add additional antitrust
counterclaims. The motion was approved at
the end of the month. Indivior maintains its
infringement claims on the ‘454 Patent, and
Alvogen maintains its counterclaims. No trial date
has been set for either the patent claims or the
antitrust counterclaims.

Teva opposition to SUBLOCADE European patent

› In October 2018, Teva Pharmaceutical Industries
Ltd. (“Teva”) filed a Notice of Opposition with the
European Patent Office seeking to revoke
European Patent No. EP 2579874 (“EP 874”), which
relates to the formulation for SUBLOCADE. Oral
proceedings are scheduled to take place on
September 27, 2021.

Antitrust litigation and consumer protection

Antitrust class and state claims

› Civil antitrust claims have been filed by (a) a

class of direct purchasers, (b) a class of end payor
plaintiffs, and (c) a group of states, now numbering
41, and the District of Columbia. Each set of
plaintiffs filed generally similar claims alleging,
among other things, that Indivior violated U.S.
federal and/or state antitrust and consumer

Indivior Annual Report 2020

Strategic ReportL E G A L P R O C E E D I N G S

C O N T I N U E D

protection laws in attempting to delay generic
entry of alternatives to SUBOXONE Tablets.
Plaintiffs further allege that Indivior unlawfully
acted to lower the market share of these products.
These antitrust cases are pending in federal court
in the Eastern District of Pennsylvania. The court
has not set a trial date.

› In 2013, Reckitt Benckiser Pharmaceuticals, Inc.

(now known as Indivior Inc.) received notice that it
and other companies were defendants in a lawsuit
initiated by writ in the Philadelphia County
(Pennsylvania) Court of Common Pleas. See
Carefirst of Maryland, Inc. et al. v. Reckitt Benckiser
Inc., et al., Case. No. 2875, December Term 2013. The
plaintiffs include approximately 79 entities, most
of which appear to be insurance companies or
other providers of health benefits plans. The
Carefirst Plaintiffs have not served a complaint,
but they have indicated that their claims are
related to those asserted by the plaintiffs in re
Suboxone, MDL No. 2445 (E.D. Pa.). The Carefirst
case remains pending.

The Group has evaluated the antitrust class and
state claims in light of the DOJ settlement under
which a Group subsidiary plead guilty to one count
of making a false statement relating to health care
matters in one state in 2012. The Group continues to
believe in its defenses and continues to vigorously
defend itself. Select plaintiffs in these matters have
previously made settlement demands (which were
not accepted and most of which are not current
offers), totaling approximately $290m, which was
used for contingency planning only to model
possible downside financial effects. The final
aggregate cost of these matters, whether resolved
by litigation or by settlement, may be materially
different. If the Group were to entertain further
settlement discussions, we make no representations
as to what amounts, if any, it may agree to pay, nor
regarding what amounts the plaintiffs will demand.

Other antitrust and consumer protection claims

› In July 2019, the Indiana Attorney General issued a
Civil Investigative Demand investigating potential
violations of Indiana’s Civil Deceptive Consumer
Sales Act with respect to sales and marketing
activity by the Company. The Group is cooperating
fully in this civil investigation.

› In 2020 Group was served with lawsuits from a

number of insurance companies, some of whom
are proceeding both on their own claims and
through the assignment of claims from affiliated
companies. Cases filed by (1) Humana Inc. and (2)

Centene Corporation, Wellcare Healthcare Plans,
Inc., New York Quality Healthcare Corp. (d/b/a
Fidelis Care), and Health Net, LLC are pending in
the Eastern District of Pennsylvania. Cases filed by
(1) Blue Cross and Blue Shield of Massachusetts,
Inc., Blue Cross and Blue Shield of Massachusetts
HMO Blue, Inc., (2) Health Care Service Corp., (3)
Blue Cross and Blue Shield of Florida, Inc., Health
Options, Inc., (4) BCBSM, Inc. (d/b/a Blue Cross
and Blue Shield of Minnesota) and HMO Minnesota
(d/b/a Blue Plus), and (5) Molina Healthcare, Inc.
are pending in the Circuit Court for the County of
Roanoke, Virginia. The allegations in these cases
include many allegations made in other litigations,
including prior antitrust complaints, indictments,
and qui tam complaints. These plaintiffs have
asserted claims under federal and state RICO
statutes, state antitrust statutes, state statutes
prohibiting unfair and deceptive practices, state
statutes prohibiting insurance fraud, and common
law fraud, negligent misrepresentation, and
unjust enrichment. Each of these cases is in its
initial stages.

The Group has begun its preliminary evaluation of
the claims, believes in its defenses, and intends to
vigorously defend itself. Currently, engagement with
the claimants has been minimal and the Group’s
evaluation of the various claims is in preliminary
stages. Accordingly, no estimate of the range of
potential loss can be made at this time.

Civil opioid litigation

› As of February 16, 2021, Indivior has been named
as a defendant in fewer than 400 civil lawsuits
brought by state and local governments, public
health agencies, and individuals against
manufacturers, distributors and retailers
of opioids alleging that they engaged in a
longstanding practice to market opioids as safe
and effective for the treatment of long-term
chronic pain in order to increase the market for
opioids and their own market share. The vast
majority of these cases have been consolidated
and are pending in a federal multi-district
litigation (MDL) in U.S. District Court for the
Northern District of Ohio. At the present time,
litigation against Indivior in the MDL is stayed.
There remain three (3) cases against Indivior
pending in state courts located in Arizona,
Pennsylvania and Virginia which are similarly
stayed at the current time.

Given the status and preliminary stage of litigation
in both the MDL and state courts, no estimate of a
possible loss in the opioid litigation can be made
at this time.

indivior.com

R I S K M A N A G E M E N T

INDIVIOR’S APPROACH TO RISK

Our Board of Directors oversees
Indivior’s risk management, determines
the Group’s risk appetite, carries out
a robust assessment of the Group’s
principal and emerging risks and
provides governance of Indivior’s
principal risks

Our Executive Committee monitors the
effectiveness of risk management
activities and reviews Indivior’s
principal risks

Our Risk Management Team coordinates
the Enterprise Risk Management (ERM)
process

Board of
Directors

Executive
Committee

Risk
Management
Team

Risk
Mitigation

Integrity &
Compliance
Department

Business Unit and Corporate
Functional Leadership

Internal
Audit
Team

Our Integrity & Compliance Department
develops and implements an effective
compliance management program

Our Business Unit and Corporate
Functional Leadership executes
day-to-day risk management activities
and manages risk mitigation actions
within their respective functions or areas

Our Internal Audit Team provides
independent assurance of the
effectiveness of governance, risk
management and controls

Indivior Annual Report 2020

R I S K M A N A G E M E N T

C O N T I N U E D

PRINCIPAL RISKS AND RISK
MANAGEMENT

Effective management of existing and emerging
risks is critical to the success of our Group and the
achievement of our strategic objectives. Risk must
be accepted to a reasonable degree for our Group to
execute on our strategic objectives and pursue our
business opportunities in alignment with our
mission. Risk management is therefore an integral
component of our culture and governance.

The Board of Directors (Board) has 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 remains viable. While the
Group aims to identify and manage such risks, no
risk management strategy can provide absolute
assurance against loss.

The tables on pages 39 to 45 provide insight into
the Group’s principal risks, outlining why effective
management of these risks is important, how we
manage them, how the risks relate to the Group’s
strategic priorities, and which risks are increasing,
decreasing or have remained static during the past
twelve months. Additional risks, not listed here, that
the Group cannot presently predict or does not
believe to be equally significant, may also materially
and adversely affect the Group’s business, results of
operations and financial condition. The principal
risks and uncertainties are not listed in order of
significance.

Managing risks

Our Enterprise Risk Management (ERM) process is
designed to identify, assess, manage, report and
monitor risks and opportunities that may impact the
achievement of the Group’s strategy and objectives.
This includes adjusting the risk profile in line with the
Group’s risk tolerances to respond to new threats and
opportunities. An effective ERM process is fundamental
to our ability to meet and align to our operational and
strategic objectives. The competitive market in which
we operate has industry-specific risks, particularly
those relating to new product development and
commercialization, intellectual property enforcement
and legal proceedings, and compliance with laws and
regulations. This requires that existing and emerging
business risks are effectively assessed, appropriately
measured, regularly monitored, and addressed
through mitigation plans. Our ERM process fosters

and embeds a Group-wide culture of risk management
that is responsive, forward-looking, consistent,
and accountable.

Governance and responsibilities

The Board has overall responsibility for the Group’s
risk management. The Audit Committee assists the
Board in overseeing the Group’s risk management
activities, including reviewing the Group’s principal
risks and emerging risks with a focus on key risk
areas. In addition, 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, commercial, regulatory, and
compliance matters.

The Executive Committee is required by the Board to
oversee and monitor the effectiveness of the Group’s
risk management activities. Quarterly, the Executive
Committee reviews enterprise risks as part of its
regular quarterly business reviews, and assesses any
changes impacting the Group, including emerging
risks and impacts to Indivior’s principal risks, as well
as the underlying mitigating plans.

Business Unit and Functional Leadership executes
day-to-day risk management activities, including risk
identification, and manages risk mitigation actions
within their respective areas in alignment with the
ERM framework.

The Risk Management Team facilitates the ERM
program, including the implementation of processes
and tools to identify, assess, measure, monitor and
report risks.

Any one or a combination of the risks listed below
could impact the Group’s viability (refer to our
Viability Statement on page 46).

The emergence of the Coronavirus (COVID-19)
pandemic and related government measures to
address the pandemic have resulted in business
pressures and disruptions across industries
worldwide, and corresponding risks to the Group’s
business and operations. The COVID-19 pandemic
has specifically heightened risks for four of our
principal risks: business operations (refer to page
39); product pipeline, regulatory, and safety (refer to
page 40); commercialization (refer to page 41); and
supply (refer to page 42). Excluding the impact of the
COVID-19 pandemic, risks for these four principal
risks would have remained mostly unchanged
compared to the prior year.

indivior.com

1. Business operations

Change from 2019

The Group’s operations rely on complex processes and systems, strategic partnerships, as well as
specially qualified and high performing personnel to develop, manufacture and sell our products.
Failure to continuously maintain operational and compliance processes and systems as well as to
retain and/or recruit qualified personnel could adversely impact product availability and patient
health, and ultimately the Group’s performance and financials. Additionally, an ever evolving
regulatory, political, and technological landscape requires that we have the right priorities,
capabilities, and structures in place to successfully execute on our business strategy and adapt
to this changing environment.

COVID-19 pandemic - The persistence of the COVID-19 pandemic and the ongoing government
measures to address the pandemic continue to create a very challenging business environment
for companies across industries worldwide and therefore related risks to the Group’s business and
operations. In response to COVID-19, the Group has established an agile cross-functional response
structure; and implemented a number of mitigation and contingency actions to help maintain the
functioning of operations across the organization, supply of all products to our patients, and help
ensure the welfare of our employees. The Group continuously monitors the potential impact on the
health and well being of our employees as well as the workforce of our key third parties, which
ultimately may impact our operations. Furthermore, given the remote working environment, the
Group continues to closely monitor cybersecurity threats and the overall operating effectiveness
of the monitoring and control activities. Given the evolving and dynamic nature of the COVID-19
pandemic, and uncertainty surrounding the duration of measures designed to mitigate its spread,
including the vaccination of the population or attainment of herd immunity, the impact on the
Group’s operations and financial position is highly uncertain and cannot be predicted with
confidence. COVID-19 related developments are under constant review to ensure our mitigation and
contingency actions are appropriate, proportionate, and as effective as possible. However, despite
the measures the Group has taken, if the pandemic adversely affects Indivior’s operations and/or
performance, it will have a heightened effect on many of the risks impacting the Group, including its
business operations (refer to the other principal risks: product pipeline and regulatory on page 40,
commercialization on page 41, and supply on page 42)

The manufacturing of our SUBOXONE and SUBUTEX tablets for all of our European markets is
performed by a third-party contract manufacturer located in the UK. The Group has been proactive
in taking appropriate actions since the Brexit referendum, including changes to logistics, shipping,
and quality testing and release processes, as well as transfer of regulatory licenses and additional
inventory builds. While the UK and the European Union (EU) signed the Trade and Cooperation
Agreement on December 24, 2020; certain operational risks remain which may impact various areas
of the Group, including Operations, Regulatory, Supply Chain, and Quality. The Group is closely
monitoring it.

Examples of risks
› Failure or significant performance
issues experienced with our key
processes, Information Technology
(IT) systems, and/or at our critical
third-party partners including due
to the COVID-19 pandemic

› Loss of intellectual property,

confidential data, and personally
identifiable information or
significant impact on operations
from cybersecurity breaches

› Failure to retain and recruit

qualified workforce and key talent

› Disruptions in our operations due

to Brexit

Management actions
› An agile cross-functional response structure led by

Executive Management is in place

› Business operating standards, monitoring processes,

and contingency plans are in place

› IT policies, processes, systems, and disaster recovery
plans supporting overall business continuity are
in place

› Strategy, processes, and tools to secure systems and

protect data are deployed

› Talent management programs are in place, including
talent review and retention programs with focus on
identifying key roles and successors

› Operational and regulatory process changes were

implemented, and a Brexit steering committee regularly
monitors the impact of Brexit on our operations and
facilitates appropriate business planning

Increased complexity
and operational
challenges due to the
COVID-19 pandemic,
significant network of
third-party partners,
impact on our operations
of the Trade &
Cooperation Agreement
between UK and EU

Link to strategic priorities
Grow SUBLOCADE to
$1bn+ net revenue,
diversify revenue, build
our pipeline for future
growth, and optimize
our operating model

Indivior Annual Report 2020

Strategic ReportR I S K M A N A G E M E N T

C O N T I N U E D

2. Product pipeline, regulatory and safety

Change from 2019

The development and approval of the Group’s products is an inherently risky and lengthy process
requiring significant financial, research and development resources, and strategic partnerships.
Complex regulations with strict and high safety standards govern the development, manufacturing,
and distribution of our products. In addition, strong competition exists for strategic collaboration,
licensing arrangements, and acquisition targets. Patient safety depends on our ability to perform
robust safety assessment and interpretation to ensure that appropriate decisions are made
regarding the benefit/risk profiles of our products. Deviations from these quality and safety
practices could impact patient safety and market access, which can have a material effect on
the Group’s performance and prospects.

COVID-19 pandemic – The COVID-19 pandemic has negatively impacted our R&D operations,
specifically trial patient enrollments and limited chemistry, manufacturing & controls (CMC)
operations, and therefore caused certain delays in conducting clinical and/or CMC studies
internally and/or at our third-party partners.

Examples of risks
› Failure to advance the

development and/or obtain
regulatory approval of pipeline
products, as well as failure to
execute on business development
opportunities

› Potential liability and/or additional
expenses associated with ongoing
regulatory obligations and
oversight

› Unexpected changes to the
benefit/risk profiles of our
products

Management actions
› Product development, business development and

international growth strategies are in place

› Due diligence, market valuation, and economic and

financial modeling are in place

› Ongoing Quality and Safety monitoring and auditing

programs are in place

› Strategies to defend against and pursue appropriate
resolution of product liability claims are in place

› Rigorous pharmacovigilance processes for ongoing
evaluation of data collected from multiple sources
related to patient safety are in place, including Risk
Evaluation & Mitigation Strategy (“REMS”) programs
in the US and Risk Management Plans (RMP) outside
the US

Increased challenges in
conducting clinical trials
and/or CMC activities
due to COVID-19
pandemic

Link to strategic priorities
Grow SUBLOCADE to
$1bn+ net revenue,
diversify revenue, and
build our pipeline for
future growth

indivior.com

3. Commercialization

Change from 2019

Successful commercialization of our products is a critical factor for the Group’s sustained growth
and robust financial position. Launch of a new product involves substantial investment in marketing,
market access and sales activities, product stocks, and other investments. Certain factors, if different
than anticipated, can significantly impact the Group’s performance and position. These factors
include: HCP/Patient adoption and adherence; generic and brand competition; pricing pressures;
private and government reimbursement schemes and systems; negotiations with payors; erosion
and/or infringement of intellectual property (IP) rights; and political and socioeconomic factors.

COVID-19 pandemic - The pandemic has resulted in overall fewer patient visits to healthcare provider
offices for non-COVID-19 reasons or essential treatments, as patients become unable or unwilling to
make visits due to overburdened healthcare systems or elect to have remote consultations
(telehealth) with their providers. As a result, in Q2 2020, the Group observed a rapid decline in new
US patient enrollments followed by a modest improvement in Q3 compared to Q2, and continued
growth in Q4 compared to Q3. The pandemic has also resulted in safety concerns, quarantines, or
other travel restrictions for patients. Furthermore, even though the Group has developed remote
(digital) meeting capability with healthcare providers, the Group’s commercial organization is still
only able to engage in-person with a limited number of healthcare professionals (HCPs) and
Organized Health Systems (OHS). Although COVID-19 has not significantly impacted the Group’s
overall operating results and financial position to date, a potential enduring and/or significant
decline in patient enrollments and on the patient journey, and the inability to effectively engage
with HCPs and OHS would have a negative impact on the Group’s financial results in future periods.

Governments across the world are considering and taking actions to lower drug prices. In the US,
there is bi-partisan support for drug pricing reforms at both federal and state levels, which include
potential legislative and regulatory actions to encourage the import of drugs, to price drugs
according to a defined international pricing reference, to encourage more competition, and to
undertake other initiatives. These, together with federal and state government fiscal constraints
resulting from the COVID-19 pandemic, which constrain public benefit health programs, pose direct
and indirect downward pressure risk on drug prices. The Group continues to monitor potential
legislative and regulatory changes and their impacts, advocating for the Group’s products based
on scientific studies and patient-centered outcomes. However, certain potential legislative and
regulatory drug pricing changes could have an adverse impact on the Group’s financial performance
and results in the future.

Examples of risks
› Lower HCP adoption and patient

Management actions
› Enhanced investments in OHS access, interactions

enrollments of SUBLOCADE,
including the decrease linked to
limited/restricted patient visits
and HCP interactions due to the
COVID-19 pandemic

› Unexpected changes to

government and/or commercial
reimbursement levels and
government pricing pressures

› Launch of competing branded

and/or generic products

› Competition and challenges in the
product/geographic expansion
outside the U.S.

with HCPs, including remote (digital) meeting capability,
as well as facilitation of patients’ access and
reimbursement working with key stakeholders

› Emphasizing value of products and health economics

tailored to commercial and government payors through
market access activities

› Patient platforms supporting provider location,

reimbursement support, and co-pay assistance for
eligible patients are in place

› Ongoing training and development for field-based

employees are in place

› Monitoring of government and commercial pricing and

reimbursement related trends/measures and
development of mitigation strategies

› International growth, pipeline development, marketing,

and business development strategies are in place

Increased commercial
challenges due to
COVID-19 pandemic for
SUBLOCADE and some
government pricing
pressure. (Refer to Chief
Executive Officer’s review
on pages 5 to 11 or the
Financial Review section
on pages 29 to 32.

Link to strategic priorities
Grow SUBLOCADE to
$1bn+ net revenue,
and diversify revenue

Indivior Annual Report 2020

Strategic ReportR I S K M A N A G E M E N T

C O N T I N U E D

4. Economic and financial

Change from 2019

The pharmaceutical business includes inherent risks and uncertainties, requiring the Group to
make significant financial investments to develop and support the success of our product portfolio.
Generating cash flow from our approved products, together with external financing, sustains our
financial position, allows development of new products, and funds business growth. Realizing value
on those investments is dependent upon regulatory approvals, market acceptance (including pricing
reimbursement levels), strategic partnerships, competition, and legal developments. Unfavorable
outcome from resolutions of legal proceedings, impacts from the COVID-19 pandemic, and/or
changes in government pricing regulations could negatively impact our operating results and
financial position. Together with potential pressure on our level of net working capital, our ability
to comply with our debt covenants could be negatively impacted. As a global business, we are also
subject to political, economic, and capital markets changes.

No change

Examples of risks
› Inability to raise capital, or execute

Management actions
› Realignment of cost and finance structures, and active

on business development and
alliance opportunities

› Failure to meet financial

obligations and performance

expense management are in place

› Ongoing monitoring of financial performance and

compliance with financial covenants

› Strategies supporting expansion opportunities and

diversification are in place

› Regular appraisals of debt and capital market

conditions with advisors and counterparties are in place

Link to strategic priorities
Grow SUBLOCADE to
$1bn+ net revenue,
diversify revenue, build
our pipeline for future
growth, and optimize
our operating model

5. Supply

Change from 2019

The manufacturing and supply of our products are highly complex and rely on a combination of
internal manufacturing capabilities and third parties for the timely supply of our finished drug
and combination drug products. The Group uses third parties, including contract manufacturing
organizations (CMOs), to manufacture, package and distribute our products. The manufacturing
of oral solid dose, film products and aseptically filled injectables is subject to stringent global
regulatory, quality and safety standards, including Good Manufacturing Practice (GMP). Delays or
interruptions in our supply chain and/or product quality failures could significantly disrupt patient
access, adversely impact the Group’s financial performance and lead to product recalls and/or
potential regulatory actions against the Group along with potential reputational damages.

COVID-19 pandemic - The pandemic could adversely impact our broad supply chain (i.e., “supply to
patient delivery” process) if we experience a significant absence of our employees and/or employees
at our CMOs and vendors due to infection and/or government containment measures. Through
on-going management and risk mitigation, internally and with CMOs, the Group has not experienced
any significant COVID-19 related disruptions to its supply to patient delivery process through this
date.

Increased challenges
throughout the “supply
to patient” process due
to the COVID-19
pandemic, including
potential related
operational disruptions
at our CMOs.

Examples of risks
› Reliance on critical CMOs and

supply chain partners

› Inability to supply compliant

finished products in a continuous
and timely manner due from
operational disruptions due
to the COVID-19 pandemic

Management actions
› Business continuity, disaster recovery, emergency
response plans, and enhanced communication
protocols across the supply chain network are in place

Link to strategic priorities
Grow SUBLOCADE to
$1bn+ net revenue,
and diversify revenue

› Contingency plans and management of safety stocks

are in place

› Comprehensive product quality and control processes
and manufacturing performance monitoring across the
supply chain network are in place

› Ongoing monitoring of stock levels and business

contingency planning

indivior.com

6. Legal and intellectual property

Change from 2019

Our pharmaceutical operations, which include controlled substances, are subject to a wide range of
laws and regulations. Perceived or actual noncompliance with these applicable laws and regulations
by a pharmaceutical company can result in investigations or proceedings leading to civil or criminal
sanctions, fines and/or damages, as well as reputational damages.

Intellectual Property (IP) rights protecting our products may be challenged by external parties,
including generic manufacturers. Although we have developed robust patent protection for our
products, we are exposed to the risk that courts may decide that our IP rights are invalid and/or
that third parties do not infringe our asserted IP rights.

In connection with the agreements to resolve criminal charges and civil complaints related to
SUBOXONE Film (see Legal proceedings section on page 33), the Group has specific requirements
that are in addition to the Group’s preexisting obligations to comply with applicable laws and
regulations associated with its US pharmaceutical operations. The Group is subject to penalties
if it fails to fulfill the requirements within the agreements.

The Group is also a party to several civil lawsuits, including ongoing litigation in the Federal FCA
qui tam suits, and civil antitrust and state claims filed by various plaintiffs. Many of the civil claims
concern the same conduct at issue in the Superseding Indictment filed by the DOJ.

The Group is also a defendant in fewer than 400 civil lawsuits brought by various plaintiffs as part
of the opioid class action litigation. These cases are at an early stage and are currently stayed.

Unfavorable outcomes from resolutions of these legal proceedings, could have a material adverse
impact on the Group’s business, financial condition and/or operating results.

Examples of risks
› Legal proceedings related to
antitrust, state, shareholders,
product liability claims, government
enforcement and/or private
litigation associated with the
manufacturing, marketing, and
distribution of our products

› Inability to obtain, maintain, and

protect patents and other
proprietary rights

Management actions
› Quality, patient safety, monitoring and compliance are

embedded in the Group’s processes and culture

› Cooperation with the Government authorities in

connection with ongoing litigations, utilizing internal
and external counsel

› Insurance coverage and monitoring activities are in

place

› Ongoing active review, management and enforcement

of our product patents, marketing exclusivity and other
IP rights are in place

› Geographic expansion and product diversification

strategies are in place

Decreased given the
agreements reached
with DOJ, OIG and FTC
resolved the risk of
exclusion or other
potential federal civil
and criminal penalties
associated with the
matters alleged in the
superseding indictment,
and being able to
continue to participate
in US federal healthcare
programs. However,
material business impact
from remaining legal
proceedings exist (refer
to Legal proceedings
section on pages 33
to 36 and Chair and
Chief Executive Officer
statements on pages 5
and 11 respectively).

Link to strategic priorities
Grow SUBLOCADE to
$1bn+ net revenue,
diversify revenue, and
build our pipeline for
future growth

Indivior Annual Report 2020

Strategic ReportR I S K M A N A G E M E N T

C O N T I N U E D

7. Compliance

Change from 2019

Our Group operates on a global basis and the pharmaceutical industry is both highly competitive
and regulated. Complying with all applicable laws and regulations, including engaging in activities
that are consistent with legal and industry standards, and our Group’s Code of Conduct are core to
the Group’s mission, culture, and practices. Failure to comply with applicable laws and regulations
may subject the Group to civil, criminal and administrative liability, including the imposition of
substantial monetary penalties, fines, damages and restructuring the Group’s operations through
the imposition of compliance or integrity obligations and have a potential adverse impact on the
Group’s prospects, reputation, results of operations and financial condition.

As part of the Group’s resolution of federal criminal and civil charges related to its legacy products
(see Legal proceedings section on page 33), the Group has also entered into a Corporate Integrity
Agreement (CIA) with HHS-OIG. The five-year CIA requires, among other things, that the Group
implement measures designed to ensure compliance with the statutes, regulations, and written
directives of U.S. Medicare, U.S. Medicaid, and all other U.S. Federal health care programs, as well
as with the statutes, regulations, and written directives of the U.S. Food and Drug Administration.
Furthermore, the Group is subject to additional periodic reporting and monitoring requirements
related to the Agreements. In addition, the CIA requires reviews by an independent review
organization, compliance-related certifications from the Group’s executives and certain Board
members, and the implementation of a risk assessment and mitigation process. The CIA sets forth
specified monetary penalties that may be imposed on a per day basis for failure to comply with the
obligations specified in the CIA. The CIA also includes specific procedures under which the Group
must notify HHS-OIG if it fails to meet the requirements under the CIA. In the event that HHS-OIG
determines the Group to be in material breach of certain requirements of the CIA (including:
repeated violations or any flagrant obligations under the CIA, a failure by the Group to report a
reportable event and/or take corrective action, a failure to engage and use an independent review
organization, a failure to respond to certain requests from HHS-OIG), the Group may be subject to
exclusion from participation in the U.S. Federal health care programs, which would have a severe
impact on the Group’s ability to comply with the financial covenants in the Group’s debt facility,
maintain sufficient liquidity to fund its operations, pay off its debt in 2022, generate future revenue
and ultimately impact the Group’s viability.

The Resolution Agreement with the United States Attorney’s Office for the Western District of Virginia
and Consumer Protection Branch contains certain requirements, such as reporting obligations and
that the Group’s CEO (a) certify on an annual basis that, to the best of the CEO’s knowledge, after a
reasonable inquiry, the Group was in compliance with the Federal Food, Drug and Cosmetic Act and
has not committed health care fraud, or (b) provide a list of all non-compliant activities and steps
taken to remedy the activity. The FTC Stipulated Order contains specific notice and reporting
requirements over a ten-year period related to certain activities (e.g., product switching conduct,
filing of a Citizen Petition). The Group is subject to contempt prosecution if it fails to comply with
any terms of the resolution agreement.

In connection with the
agreements to resolve
criminal and civil
complaints related to
SUBOXONE Film, the
group is subject to
heightened compliance
requirements and
commitments (refer
to Legal proceedings
section on page 33).
However, to prepare
and support the
implementation of these
agreements, the Group
has retained experienced
personnel. Further, as
ongoing evolution of the
Group’s compliance
journey and in
anticipation of these
agreements, a robust
strategic plan, advanced
preparedness efforts,
and external and internal
resources have been
deployed to develop
and operationalize an
effective compliance
program, including:
enhanced written
standards; training, best
practice standards for
concerns “speak up”
reporting and internal
investigations; cross-
functional oversight
with certification; and
monitoring activities.

indivior.com

Change from 2019

Link to strategic priorities
Grow SUBLOCADE to
$1bn+ net revenue,
diversify revenue, and
build our pipeline for
future growth

7. Compliance continued

Examples of risks
› Failure to meet the requirements
of the government agreements
(i.e., CIA, DOJ, and FTC)

› Non-compliance with our Code
of Conduct, anti-corruption,
healthcare, data privacy, or local
laws and regulations

› Inability to adequately respond to
changes in laws and regulations,
including data privacy

› Failure to comply with payment
and reporting obligations under
the U.S. and foreign government
programs

Management actions
› Oversight, monitoring and reporting of compliance

requirements with government agreements have been
implemented, including a management certification,
and defined sub-certification process

› Ongoing evolution of our compliance program and
development of compliance capabilities, guided by
defined strategic plan and learnings from program
operations, are in place

› Compliance policies and processes, including Code of
Conduct and risk assessment, and related mandatory
employee training programs are in place

› Confidential independent reporting process for

employees to report concerns is in place

› Oversight and monitoring of controls and procedures

in emerging markets are in place

› Data governance and management framework are

in place

› Continuous review and assessment of developments

in the law, applicable industry standards, and business
practices are in place

› Ongoing monitoring of controls over government pricing

and reporting is in place

Indivior Annual Report 2020

Strategic ReportV I A B I L I T Y S T A T E M E N T

Viability Statement

The Group’s viability depends upon successful
execution of our business strategy, with a focus on:

› ongoing HCP and patient adoption of SUBLOCADE

and PERSERIS,

› optimization of the base business,
› management of our remaining legal risks,
› fulfilling our CIA in the US and other compliance

requirements, and

› prudent management of our liquidity.

The Board has evaluated the Group’s risk profile
considering the challenges faced and risks mitigated
in 2020. Although the pandemic created new
challenges for the growth expansion of both
SUBLOCADE and PERSERIS, resolution of the DOJ
matter and the RB settlement, cost savings actions
taken, and market share retention of SUBOXONE Film
have helped to mitigate risk to the Group’s viability.

The Group’s future business prospects are evaluated
throughout the year as part of the strategic planning
process. This process is led by the Chief Executive
Officer through the Executive Committee and
involves all relevant functions such as R&D,
manufacturing & supply chain, commercial,
global medical affairs & safety, legal, integrity
& compliance, human resources and finance.
Development of the strategic plan includes a
thorough examination of the principal risks and
potential actions to manage and mitigate those risks.

The output of the strategic plan is a set of objectives,
an analysis of key risks that could prevent the plan
from being realized, and a financial forecast covering
the following year. The Board reviews and approves
the budget for the upcoming year as well as the
strategic plan, which includes challenging key
assumptions and risk mitigation plans included
therein.

In accordance with the UK Corporate Governance
Code, the Directors have assessed the viability of the
Group. In determining a time period to assess the
viability of the Group, the Directors considered the
Group’s strategic plan, business cycle, impact of
generic and branded competition and expected
branded competition, ongoing legal proceedings
and liquidity. Considering the commercial trajectory
of our recently launched products, the term loan
maturity in 2022 and the status of other litigation,
the Directors believe a period to the end of 2024 to
be appropriate. This assessment period provides a
reasonable horizon for the financial impact of these
developments to be reasonably considered.

The strategic plan reflects the Directors’ best
estimate of the Group’s future business prospects,
which has been adjusted downward for the expected
impacts of the COVID-19 pandemic. Additionally,
they have “stress tested” the plan under various
scenarios. All such scenarios include a reversion to
observed generic analogs for SUBOXONE film in the
US after 2021 and limited uptake of PERSERIS. The
stress testing then explores the resilience of the
Group to the potential impact of significant risks
set out on pages 37 to 45. This scenario represents
‘severe but plausible’ circumstances the Group
could experience. The scenario tested includes:

› underperformance in the expected market

acceptance of SUBLOCADE over the viability period
(considering a 15% decline on forecasts), and

› unfavorable outcome of remaining legal

proceedings at the high end of the range
(refer to Legal proceedings section on page 33).

Having considered these risk factors along with
other principal risks set out on pages 37 to 45,
the Directors have assessed the Group’s ability to
comply with the financial covenants in the Group’s
debt facility, maintain sufficient liquidity to fund its
operations, fulfill obligations under the Agreements
and the Resolution Agreement, pay off the debt at
maturity in 2022, and address the reasonably
possible financial implications of legal
proceeding risks.

indivior.com

Other risks identified in the principal risk table on
pages 37 to 45 were also considered, but the above
financial risks and operating considerations were
considered the most immediate and significant that
could prevent the Group from delivering on its
strategy and remaining viable. A number of other
aspects of the principal risks, including possible
governmental changes to pharmaceutical pricing
and reimbursement, could also threaten the Group’s
viability in its current form, because of their nature
or potential impact, if they were to occur.

The results of this stress testing showed the Group
would be able to withstand the impact of these
scenarios over the period of the viability assessment.
In doing so, the Group expects to use its cash
reserves. Although further cuts to the Group’s
operating costs and planned strategic investments
are not required in our scenario planning, the
ultimate actions required will vary to ensure
ongoing viability of the Group.

Other scenarios may occur that could impact the
Group’s viability during the assessment period
beyond those modeled in stress testing. In the early
portion of the viability period, the Directors’ control
over certain matters, such as legal proceeding
response strategy, helps mitigate risk to the Group’s
viability. However, over the full viability period, the
Directors’ ability to influence the outcome of such
matters is more limited.

Based on their assessment of the Group’s business
prospects and viability above, the Directors confirm
their reasonable expectation that the Group will
continue in operation and meet its liabilities as
they come due over the four-year period ending
December 31, 2024.

The strategic Report on pages 2 to 47 was approved
by the Board on March 18, 2021.

By Order of the Board

Kathryn Hudson
Company Secretary

Indivior Annual Report 2020

Strategic ReportC O R P O R A T E G O V E R N A N C E

CHAIR’S GOVERNANCE STATEMENT

Graham Hetherington
Chair

DEAR SHAREHOLDER,

On behalf of the Board, I am pleased to present the
Corporate Governance Report for the year ended
December 31, 2020.

Governance and culture

The Board is committed to high standards of
corporate governance and compliance. The aim of
this Corporate Governance Report is to set out the
governance framework in place, which we believe is
fundamental to driving the long-term success of the
Company and value creation for all shareholders.

Our Vision, Guiding Principles and culture underpin
everything we do. As Chair of the Board, my role is
to lead the Board and to ensure that it operates
effectively and in a way that supports and furthers

our Vision. In 2020, we made good progress in further
developing our governance framework, enhancing
our regulatory and control environment and
managing the Group’s material litigation risk.

Resolution Agreement

In July 2020, the Group reached resolution with the
United States Attorney’s Office for the Western
District of Virginia and the Department of Justice’s
Consumer Protection Branch. The Board was pleased
to reach this resolution and to provide certainty in
respect of this matter. Importantly, this agreement
allows us to move forward and focus on Indivior’s
important work for patients suffering from opioid
use disorder. As part of the Resolution Agreement,
the Group has agreed to a financial fine and
forfeiture of $600 million over seven years as well
as entering into a Corporate Integrity Agreement,
DOJ Compliance Measures and Federal Trade
Commission Stipulated Order, which present
ongoing reporting and annual requirements that
span the next five to ten years. These compliance
commitments are consistent with our Integrity &
Compliance Program and the high level of legal and
ethical standards that we seek to follow every day.

COVID-19

Shortly after we published our 2019 Annual Report
and Notice of Annual General Meeting in early
March 2020, the UK went into its first lockdown.
Our 2020 AGM was held as a closed meeting, and
we encouraged our shareholders to vote by proxy
and submit questions to the Board by email ahead
of the meeting.

As we look to our 2021 AGM, the current UK
Government roadmap states that social distancing
measures are expected to remain in place in the UK

The Board is committed to
high standards of corporate
governance and compliance.

until June 2021. We have therefore
requested that shareholders do not
attend the 2021 AGM in person. We
encourage shareholders to vote by
proxy and intend to provide a facility for
shareholders to engage electronically
with the Board at the AGM.

The Board quickly embraced digital technology and
we moved to holding our Board and Committee
meetings virtually. This technology enabled us to
continue to meet effectively, but inevitably meant

indivior.com

With refreshed
perspective, a commitment
to value creation for all
shareholders and clear
priorities, we are building
a Board to support the
future development of
Indivior.

that our plans to engage
with our workforce and to
visit our offices in Richmond,
VA and Slough, UK were
curtailed or cancelled.

Management also utilized
digital technology to interact
with shareholders at the
quarterly financial results,
virtual investor conferences
and individual meetings.

Dan Phelan, who is the designated Non-Executive
Director for workforce engagement, met virtually with
members of Indivior’s Culture Champion Network.

Whilst we have fully embraced digital technologies
throughout this challenging time, we look forward
to returning to more normal engagement with our
stakeholders when it is safe to do so.

Further information regarding engagement with the
workforce and the impact of COVID-19 on Indivior’s
workforce can be found on pages 23 and 26
respectively.

Chief Financial Officer and Executive Director in
November 2020.

Tatjana May stepped down from the Board in July
2020. Daniel Tassé has advised that, as a result of his
increasing business commitments, he will step down
from the Board at the conclusion of the Annual
General Meeting in May 2021.

The Nomination & Governance Committee, which
has responsibility for developing and overseeing the
Board’s succession plans, supported the Board in
the appointments process in 2020. The Committee
has also considered the composition of the Board
and its Committees following the changes in 2020
and in the broader context of long-term succession
planning.

To build upon the Board’s existing skills, experience
and diversity, a search process is underway to identify
two new Non-Executive Directors (one of whom will
have recent and relevant financial experience).

Further information regarding the appointments
process is detailed in the Nomination & Governance
Committee Report.

Board effectiveness

Looking ahead

This past year has been a challenging year for
Indivior. The Group’s Vision, Guiding Principles and
strong culture have stood the test and helped to
guide us through these challenging times.

With refreshed perspective, a commitment to value
creation for all shareholders and clear priorities,
we are building a Board to support the future
development of Indivior.

Graham Hetherington
Chair of the Board

March 18, 2021

As part of its annual cycle of business, the Board
undertook an evaluation to consider the performance
of the Board and its Committees. The review
highlighted a number of areas of focus for the
year ahead, as outlined on page 61. The Board and
Committees will focus attention on these areas
during the coming year.

Changes to the Board

There were a number of changes to the Board during
the year. In June 2020, Howard Pien took a medical
leave of absence, and subsequently stepped down
from the Board in September. Daniel Tassé agreed
to act as Interim Chair during this critical time and
continued in that role until my appointment as
Chair in November 2020.

In June 2020, Shaun Thaxter stepped down as Chief
Executive Officer. Mark Crossley, who had previously
held the position of Chief Financial & Operations
Officer was appointed Chief Executive Officer.
Ryan Preblick was appointed Interim Chief Financial
Officer in June 2020 and subsequently appointed as

Indivior Annual Report 2020

GovernanceB O A R D O F D I R E C T O R S

GRAHAM
HETHERINGTON
CHAIR

MARK CROSSLEY
CHIEF EXECUTIVE
OFFICER

PETER BAINS
INDEPENDENT
NON-EXECUTIVE
DIRECTOR

Appointed to the Board
November 2019
Skills and experience
› Graham was appointed a Non-Executive Director

R N

in November 2019 and Chair of the Board in
November 2020. He brings substantial financial
and industry experience having served as Chief
Financial Officer of two FTSE 100 companies.
Graham has a wide knowledge of international
finance management and planning, including
M&A and audit and risk management coupled
with an in-depth understanding of the US market.
This broad mix of skills and experience allows him
to make an effective and valuable contribution to
the Board.

› Fellow of the Chartered Institute of Management

Accountants (CIMA)

› BTG plc: Non-Executive Director & Senior

Independent Director (2016-2019)

› Shire plc: Chief Financial Officer (2008-2014)
› Bacardi: Chief Financial Officer (2007-2008)
› Allied Domecq plc: Chief Financial Officer

(1999-2005)

Other current appointments
None

Appointed to the Board
February 2017
Skills and experience
› Mark was appointed Chief Executive Officer in June
2020. He was appointed to the Board in February
2017 and served as Chief Financial Officer between
2017 and 2019 and as Chief Financial & Operations
Officer between 2019 and 2020. Mark has a wealth
of financial and pharmaceutical industry
experience and knowledge. His extensive career
experience across multiple disciplines covering
strategy, finance, information technology and
systems, treasury, supply and procurement allows
him to bring a valuable perspective to the Board.
This, complemented with an understanding of the
risks and opportunities within the pharmaceutical
industry, is highly valued by the Board.

› Indivior Chief Strategy Officer
› Reckitt Benckiser Pharmaceuticals Inc.: Global

Finance Director

› Procter and Gamble: Associate Director Corporate

Portfolio Finance

› Procter and Gamble: Associate Director Female

Beauty Strategy and Business Planning

Other current appointments
None

Appointed to the Board
August 2019
Skills and experience
› Peter has over 30 years of experience in the

pharmaceutical and biotechnology industries
including a 23-year career at GlaxoSmithKline
where he held numerous senior operational
and strategic roles. His background provides
international experience and a deep commercial
understanding of sustained delivery coupled with
investment appraisal and contracting.
The Board values his experience in understanding
the risks and opportunities present in these
industries.

› Sosei Group Corporation: Chief Executive Officer

(2010-2018)

› Syngene International: Chief Executive Officer

(2010-2016)

Other current appointments
› Mereo BioPharma Group PLC: Non-Executive

Director

› Apterna Limited: Non-Executive Director
› MiNA Therapeutics Limited: Chief Business Officer

(part-time role)

RYAN PREBLICK
CHIEF FINANCIAL
OFFICER

DANIEL TASSÉ
SENIOR
INDEPENDENT
DIRECTOR

Appointed to the Board
November 2014
Skills and experience
› Daniel has a strong track record of leading
global organizations with over 35 years of
pharmaceutical and financial industry experience.
He is an effective Senior Independent Director
with a balanced understanding of the concerns
of major shareholders. His experience provides
both the business and Board with the benefit
of extensive leadership and outlook.
› Ikaria Holdings, Inc.: CEO and President

(2008-2015), Chairman (2009-2015)

› GlaxoSmithKline: various senior management
positions including President and Regional
Director for Australasia (2001-2004)

Other current appointments
› DBV Technologies: CEO
› REGENXBIO Inc.: Director

D C

Appointed to the Board
November 2020
Skills and experience
› Ryan was appointed Chief Financial Officer and
Executive Director in November 2020, having
served as Interim Chief Financial Officer since
June 2020. He has a wealth of financial and
pharmaceutical industry knowledge and
experience, across multiple disciplines covering
strategy, finance, information technology,
commercial and supply, which allows him
to bring a valuable perspective to the Board.

› Indivior SVP, Global Finance & Commercial

Operations

› Indivior VP, US Finance
› Altria Corporation (formerly Philip Morris) Senior

Manager Financial Planning & Analysis

› Honeywell International Corporate Finance
Other current appointments
None

indivior.com

A. THOMAS
MCLELLAN, PH.D.
INDEPENDENT
NON-EXECUTIVE
DIRECTOR

LORNA PARKER
INDEPENDENT
NON-EXECUTIVE
DIRECTOR

DANIEL J. PHELAN
INDEPENDENT
NON-EXECUTIVE
DIRECTOR
DESIGNATED
NON-EXECUTIVE
DIRECTOR FOR
WORKFORCE
ENGAGEMENT

Appointed to the Board
November 2014
Skills and experience
› Tom has extensive experience in the field of

N S

addiction, which spans more than 35 years as
a career researcher in the treatment of and
policy-making around substance use and abuse.
This enables him to contribute valuable insight
and perspective to his work on Indivior’s Science
& Policy Committee which can have a material
impact on the operating context within a
regulatory and political environment.

Appointed to the Board
November 2014
Skills and experience
› Lorna has over 25 years of executive search,

R N

management assessment and board consulting
experience, and UK listed company experience,
Lorna provides strong leadership on governance
matters including succession planning. Her
experience and insight in collating and
understanding wide-ranging views contribute
to making her an invaluable source of knowledge
for the Board.

› Published over 450 articles and chapters on

› Conducts board effectiveness reviews for FTSE 100

addiction research

› Treatment Research Institute (TRI): Co-founder,

CEO and Chairman until September 2016

› White House Office of National Drug Control

Policy: Deputy Director (2009-2011)

Other current appointments
› Recover Together, Inc.: Director
› Serves on several editorial boards of scientific

journals

companies

› Future Academies: Director (2014-2017)
› BC Partners: Senior Advisor (2008-2016)
› Spencer Stuart: Partner (1989-2008); led the

private equity practice across Europe and the
legal search practice globally
Other current appointments
› CVC Capital Partners: Senior Advisor
› Royal Horticultural Society: Trustee
› National Opera Studio: Trustee

Appointed to the Board
November 2014
Skills and experience
› Dan possesses over 30 years of pharmaceutical

R N

and executive management experience, including
extensive experience dealing with executive
remuneration matters. Having overseen and
led operational teams, Dan brings valuable
perspectives regarding people, leadership
and development coupled with a wide-ranging
knowledge of inclusion and diversity, thereby
bringing a cultural focus to the Board. He is
conscious of the value of shareholder
engagement. Dan is an active and knowledgeable
Chair of the Remuneration Committee.

› Rutgers University Board of Trustees: Member

(2013-2017)

› Computer Sciences Corporation: Advisory Board

member (2013-2015)

› RiseSmart: Advisory Board member (2012-2016)
› GlaxoSmithKline: Advisor to three CEOs and

various executive positions (1981-2012)

Other current appointments
› TE Connectivity Ltd: Board Director
› GLG Institute: Advisor

KATHRYN HUDSON
COMPANY SECRETARY

COMMITTEE MEMBERSHIP KEY

A Audit Committee

R Remuneration Committee

N Nomination & Governance

Committee

S Science & Policy Committee

D Disclosure Committee

C Integrity & Compliance Committee

Appointed Company Secretary
June 2015
Skills and experience
› More than 20 years’ experience as a Company

Secretary

› Fellow of the Institute of Chartered Secretaries

and Administrators, Chartered Governance
Professional

› Kingfisher plc: Company Secretary (2012-2015)
› Senior Company Secretarial positions at Burberry

Group plc and ICAP plc

Other current appointments
None

Indivior Annual Report 2020

GovernanceE X E C U T I V E C O M M I T T E E

MARK CROSSLEY
CHIEF EXECUTIVE
OFFICER

RYAN PREBLICK
CHIEF FINANCIAL
OFFICER

CHRISTIAN
HEIDBREDER
CHIEF SCIENTIFIC
OFFICER

See biography on page 50

See biography on page 51

C D

Skills and experience
› 30 years’ leadership in neurosciences
› 350+ publications
› Affiliate Professor, Dept. of Pharmacology &
Toxicology of the VCU School of Medicine
› Member of the National Advisory Council

C D

on Drug Abuse

› Member of the Helping to End Addiction

Long-term (HEAL) Multi-Disciplinary
Working Group

Key previous roles
› Reckitt Benckiser Pharmaceuticals Inc.: Global

R&D Director

› Altria: Health Sciences
› GlaxoSmithKline: R&D Centre of Excellence for

Drug Discovery in Psychiatry

› SmithKline Beecham: R&D Neuroscience
› Swiss Federal Institute of Technology (ETH):

Biology

› National Institute on Drug Abuse: Intramural

Research Program

› University of Louvain: Psychopharmacology

CINDY CETANI
CHIEF INTEGRITY AND
COMPLIANCE OFFICER

HILLEL WEST
CHIEF SUPPLY OFFICER

JON FOGLE
CHIEF HUMAN
RESOURCES OFFICER

Skills and experience
› 30+ years
› Certification: Licensed Professional of Ethics

and Compliance
Key previous roles
› Novartis Pharmaceuticals Corp: Chief Compliance

Officer and U.S. Country Compliance Head

› Novartis International AG: Head of Compliance

Operations, Group Integrity & Compliance
› Pharmacia Corp: Director of Operations,

Managed Markets

Skills and experience
› 25+ years
Key previous roles
› Teva Pharmaceuticals: VP, Integration

& Separation Management

› Teva Pharmaceuticals: Exec. Director,

Head of Specialty Medicines Supply Chain
› Teva Pharmaceuticals: Exec. Director, Global

Supply Chain and Operations Strategy

› PwC Consulting Europe: Head of Supply Chain

Strategy, Emerging Markets

› Prudential Healthcare: Manager, Advertising

› PwC Consulting US: Senior Director, Supply Chain

Compliance

› US Life: Asst Vice President, Commissions and

Compensation

Transformation

Skills and experience
C
› 25+ years
› Senior certified professional in human resources
Key previous roles
› Reckitt Benckiser Pharmaceuticals Inc.:

Global Human Resources Director

› Reckitt Benckiser Pharmaceuticals Inc.:
Human Resources Director for the US

› Capmark Finance (formerly GMAC Commercial
Mortgage): Senior Vice President of Human
Resources, North America

indivior.com

MURALI GOPAL
CHIEF MEDICAL OFFICER

KATHRYN HUDSON
COMPANY SECRETARY

RICHARD SIMKIN
CHIEF COMMERCIAL
AND STRATEGY
OFFICER

See biography on page 51

C D

Skills and experience
20+ years
Key previous roles
› Reckitt Benckiser Pharmaceuticals Inc.:

President, North America

C D

› Reckitt Benckiser: General Manager Portugal
› Reckitt Benckiser: Marketing Director UK

Healthcare

› Reckitt Benckiser: Two Global Category roles and

a number of General Management positions

Professional experience and
qualifications
› 20 years’ experience in Pharmaceutical

C D

Industry

› 10 years’ clinical experience

in Psychiatry

Key previous roles
› Mallinckrodt LLC: Vice President and Head of

Global Medical Department

› AbbVie Inc.: Vice President in Medical Affairs
› AbbVie Inc.: Vice President in Global Health

Economics and Outcomes Research
› DWA Healthcare: Chief Medical Officer
› Eli Lilly and Co: Medical Advisor
› University of Pittsburgh: Medical Director

Inpatient Services

› Faculty Member: Western Psychiatric Institute

and Clinic – UPMC

› American Psychiatric Association

– Assembly Member

› American Psychiatric Association
– Multiple Board Memberships

› Ross University School of Medicine:

Medicine Doctorate

COMMITTEE MEMBERSHIP KEY

D Disclosure Committee

C Integrity & Compliance Committee

Jon Wasserman is currently the Interim
Chief Legal Officer

Indivior Annual Report 2020

GovernanceC O R P O R A T E G O V E R N A N C E

CORPORATE GOVERNANCE

Roles and responsibilities of the Board
The Board has a schedule of matters that are reserved
to it for approval. The key areas reserved to the
Board include:

› the Group’s strategic aims and objectives and
review of performance against those aims and
objectives;

› the Group’s annual budget and corporate plans;
› the Group’s annual, half-yearly and quarterly

financial reports;

› the Annual Report and Accounts and the reports

included therein;

› dividend policy;
› all Board appointments or removals, remuneration

arrangements and termination payments;

› membership and chairship of the Board and its

Committees;

› succession planning for the Board and senior

management;

› major capital projects, acquisitions or divestments;
› any increase in, or significant variation in, the terms

of the borrowing facilities of the Group;

› capital expenditure projects outside the scope of

the approved annual budgets and plans;

› treasury and risk management policies;

› routinely reviewing the Group’s confidential

reporting hotline facility (Ethicsline) and ensuring
that arrangements are in place for investigations
and follow up action;

› establishing an effective method for gathering the
views of the Group’s workforce and keeping this
mechanism under review; and

› considering the interests of the Group’s

shareholders and other key stakeholders in its
discussions and decision-making.

The Board has delegated responsibility for the day-to-
day management of the business to the Chief
Executive Officer.

Board and Committee attendance
Directors are expected to attend all Board meetings,
save in exceptional circumstances. To maximize
attendance, scheduled meetings are arranged well
in advance to help Directors avoid clashes with other
commitments. If a Director is unable to attend a
meeting, they are provided with the briefing materials
before the meeting and can discuss any agenda item
with the Chair of the Board, Chief Executive Officer
or relevant Committee Chair. Board and Committee
meetings are normally held in the UK and US. The
Board was able to meet once in person at the
beginning of 2020, but following the introduction
of lockdown restrictions, all Board and Committee
meetings were held virtually.

DATE APPOINTED TO
THE BOARD

DATE STEPPED DOWN
FROM THE BOARD

SCHEDULED MEETINGS
ATTENDED IN 2020

AD HOC MEETINGS
ATTENDED IN 20204

CHAIR

Graham Hetherington1

EXECUTIVE DIRECTORS

Mark Crossley2

Ryan Preblick3

NON-EXECUTIVE DIRECTORS

Peter Bains

A. Thomas McLellan

Lorna Parker

Daniel J. Phelan

Daniel Tassé5

FORMER DIRECTORS

Howard Pien6

Tatjana May

Shaun Thaxter7

November 2019

February 2017

November 2020

August 2019

November 2014

–

November 2014

September 4, 2020

February 2017

July 31, 2020

November 2014

June 27, 2020

5/5

1/1

5/5

2/2

3/3

2/2

9/9

–

9/9

7/9

4/4

7/7

4/5

1. Graham Hetherington was appointed Chair of the Board on November 18, 2020.

2. Mark Crossley was appointed Chief Executive Officer on June 27, 2020.

3. Ryan Preblick was appointed Chief Financial Officer and Executive Director in November 2020, having served as Interim Chief Financial Officer from June 27, 2020.

4. Due to the need for the Board to convene often at short notice, some Directors were not able to attend all meetings.

5. Daniel Tassé was appointed Interim Chair on June 15, 2020 and stepped down from this role on November 19, 2020. He is the Senior Independent Director.

6. Howard Pien commenced a medical leave of absence on June 15, 2020 and resigned as a Director on September 4, 2020. He did not attend any Board or Committee

meetings during his leave of absence.

7. Shaun Thaxter recused himself from the ad hoc Board meeting held on June 27, 2020 as he had an interest in the matter under discussion.

54
54

indivior.com
indivior.com

Compliance with the 2018 UK Corporate Governance Code
The UK 2018 UK Corporate Governance Code published by the Financial Reporting Council (the “Code”) sets out standards of
good practice in relation to: board leadership and company purpose; division of responsibilities; composition, succession and
evaluation; audit, risk and internal control; and remuneration.

This section describes how the Board has applied the Principles of the Code. Throughout the financial year and to the date
of this report, the Company has complied with the Provisions of the Code, with the exception of the following:

Provision 12 – Senior Independent Director
In June 2020, Howard Pien took a medical leave of absence and subsequently stood down from the Board in September 2020.
Daniel Tassé, Senior Independent Director, acted as Interim Chair of the Board from June 2020 until Graham Hetherington was
appointed Chair of the Board in November 2020. The Company was therefore not compliant with Provision 12 of the Code from
June 2020 to November 2020 as the roles of the Chair of the Board and Senior Independent Director were combined.

Provision 20 – Appointment of Chair
An external search process was not used in connection with the appointment of Graham Hetherington as Chair of the Board in
November 2020 as the Board considered that there were a number of potential candidates amongst the serving Non-Executive
Directors. Further information regarding the appointment process can be found on page 74.

Provision 21 – Annual performance evaluation
The Board undertook an evaluation of its performance and the performance of its Committees. The evaluation was facilitated
by the Interim Chair and supported by the Company Secretary and Lintstock, an independent consultancy. The Company was
not a constituent of the FTSE 350 for the majority of the year (the Company was promoted to the FTSE 350 in September 2020)
and the Board determined that it would not undertake a full externally facilitated Board evaluation in 2020, but has agreed that
it will do so in 2021. The Board last undertook an externally facilitated evaluation in 2017.

The 2020 evaluation process did not include an assessment of the performance of the Chair as, at the time of the evaluation,
an Interim Chair was in place and a succession process was underway to identify a permanent Chair.

Provision 24 – Audit Committee composition
In June 2020, Howard Pien took a medical leave of absence and subsequently stood down from the Board in September 2020.
Daniel Tassé acted as Interim Chair from June 2020 until Graham Hetherington was appointed Chair of the Board in November
2020; he remained a member of the Audit Committee during this period.

Graham Hetherington was appointed a member of the Audit Committee upon his appointment to the Board in November 2019
and was subsequently appointed Chair of the Audit Committee on March 31, 2020. Graham is currently the designated member
of the Audit Committee with recent and relevant financial experience and competence in auditing and accounting.

In November 2020, Graham Hetherington was appointed Chair of the Board. On appointment, Graham stepped down as Chair
of the Audit Committee, but remained a member of the Committee to ensure its composition remained compliant with the
requirement that a member have recent and relevant financial experience and competence in auditing and accounting.

The Company was therefore not compliant with Provision 24 of the Code from June 2020 to the end of the financial year as the
Interim Chair of the Board and subsequently the Chair of the Board were also members of the Committee. A search process is
underway to identify an independent Non-Executive Director with recent and relevant financial experience.

Provision 38 – Pensions
The pension arrangements for the Chief Executive Officer, Mark Crossley, and the Chief Financial Officer, Ryan Preblick, are fully
aligned with the wider US workforce. The pension arrangements for the former Chief Executive Officer were not fully aligned
with the wider US workforce and the Company was therefore not fully compliant with this provision for the period up to his
departure in June 2020. Further information can be found in the Annual report on remuneration on page 96.

Indivior Annual Report 2020
Indivior Annual Report 2020

55
55

Governance

C O R P O R A T E G O V E R N A N C E C O N T I N U E D

Compliance with the 2018 UK Corporate Governance Code continued

1. BOARD LEADERSHIP AND COMPANY PURPOSE

Purpose and culture
It is critical to the strategy and long-term success of the Group that there is a culture and set of values that are widely
understood and that guide the organization in everything it does. The Board is collectively responsible for the long-term
success of the Company and for delivering value to shareholders. The Board provides strategic leadership and effective
oversight of the Group’s operations, either directly or through the work of its principal Committees. It has ultimate
responsibility for the oversight and monitoring of the Group’s governance, principal risks and control framework. Further
information regarding the Group’s internal financial control and risk management systems can be found on page 70.

The Board’s primary focus is to support and further the Group’s purpose of pioneering life-transforming treatment for
patients suffering from addiction and other serious mental illnesses. Led by the Chair, it establishes the Group’s purpose,
values and strategy, reviews financial and operational performance, risk management and appetite, the Group’s capital
structure and plans proposed by management to implement agreed strategy. The Board ensures that sufficient resources
are available to meet the objectives set.

The Group’s culture is considered a key strength. The Board has responsibility for assessing and monitoring the culture of
the Group and ensuring that its policies and practices are aligned with this. During the year, Daniel J. Phelan (the designated
Non-Executive Director for workforce engagement) hosted a virtual discussion with members of the Culture Champion
network. Further information regarding the Board’s engagement with the workforce is set out on page 62. Further information
regarding the Group’s Culture Champion network can be found on page 24.

Stakeholder engagement
As part of its decision-making processes, the Board considers the interests of shareholders, key stakeholders and wider
society. Further information regarding the Board’s stakeholder engagement activities can be found in the stakeholder
engagement statement set out on pages 17 to 21 of the Strategic Report, the ‘Managing our business responsibly’ section
on pages 22 to 27 and in the ‘Engagement with shareholders’ section on page 62. Further information regarding the Board’s
activities during the year, including examples of how it considered the interests of stakeholders, is provided in the ‘Principal
Board decisions’ section on pages 59 to 60.

Workforce policies and practices
The Board keeps workforce policies and practices under review to ensure they are consistent with the Group’s values and
support the long-term sustainable success of the Group. The Group’s Code of Conduct (“Doing the Right Things Right”) sets
out standards expected of the workforce and how these standards align to the Group’s culture and Guiding Principles.

At the onset of the COVID-19 pandemic, the Group introduced a series of measures to maintain the welfare, health and
safety of its employees; this included mandating that the global workforce (excluding essential supply manufacturing) work
remotely. Further information regarding the impact of the COVID-19 pandemic on the workforce can be found on page 26.

During the year, the Chief Integrity & Compliance Officer updated the Board on the continued focus on the Group’s Integrity
& Compliance Program, including key program enhancements and the preparations and implementation of the Corporate
Integrity Agreement (CIA) with the Office of the Inspector General of the U.S. Department of Health and Human Services.

The Chief Integrity & Compliance Officer provided an overview of reports received via the confidential reporting hotline
facility (Ethicsline), which provides a facility for members of the workforce to raise concerns in confidence and (where
local regulations permit) anonymously. The Nomination & Governance Committee routinely reviews reports received via
the Ethicsline and monitors the case management and investigation process at each meeting. The Board has ultimate
responsibility for the Group’s confidential reporting facility and there is a process in place for promptly escalating significant
reports. During the year, the Board reviewed the reports received through the confidential reporting facility and the
arrangements in place for investigation and follow-up action.

An independent Ethics & Compliance Program Perceptions Survey was conducted by Ethisphere. Subsequently an action plan
was put in place for continued evolution, although Indivior’s results exceeded all eight Ethisphere benchmark pillars.

Further information regarding the Group’s Integrity & Compliance Program, including 2020 program highlights, can be found
in the ‘Managing our business responsibly’ section on page 25 and 26.

The Remuneration Committee is responsible for reviewing workforce remuneration and related policies and the alignment
of incentives with culture. Further information regarding the Remuneration Committee’s review in 2020 can be found on
page 105.

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2. DIVISION OF RESPONSIBILITIES

Chair of the Board
The Chair leads the Board and is responsible for ensuring its overall effectiveness. The Chair was considered independent on
appointment and demonstrates objective judgment and promotes a culture of openness and constructive debate. He works
with the Chief Executive Officer and the Company Secretary to ensure that all Directors receive timely and clear information.
The Chair works closely with the Senior Independent Director and the Non-Executive Directors. A part of each Board meeting
is reserved for a meeting of the Chair and the Non-Executive Directors, without executive management present.

In June 2020, Howard Pien took a medical leave of absence and subsequently stood down from the Board in September
2020. Daniel Tassé acted as Interim Chair from June 2020 until Graham Hetherington was appointed Chair of the Board in
November 2020.

Chief Executive Officer
The Chief Executive Officer is responsible for the day-to-day leadership of the business. He is supported in this role by the
Executive Committee. The Chair and the Chief Executive Officer work together, supported by the Company Secretary, to set
the Board’s agenda.

Shaun Thaxter stepped down as Chief Executive Officer in June 2020 and subsequently entered into an agreement with the
U.S. Department of Justice pleading guilty to one misdemeanor count under the US Responsible Corporate Officer Doctrine.
Under this Doctrine, executives can be held liable for violations of the Federal Food, Drug, and Cosmetic Act by others in the
Company without personal wrongdoing or malfeasance by the executive. Mr Thaxter’s agreement had the same underlying
facts as those that the Company finalized in November 2020. The Board has considered Mr Thaxter’s performance and
conduct during his tenure, and noted that there had not been any findings of personal wrongdoing or malfeasance.

Mark Crossley, who had previously served as Chief Financial & Operations Officer, was appointed Chief Executive Officer in
June 2020.

Senior Independent Director
The Senior Independent Director acts as a sounding board for the Chair and can act as an intermediary for the other
Directors and shareholders when required. He also leads the other Non-Executive Directors in the annual performance
evaluation of the Chair. He provides an alternative point of contact for shareholders on matters where the usual channels
of communication are deemed inappropriate.

Between June and November 2020, Daniel Tassé, the Senior Independent Director, also acted as the Interim Chair of the
Board. Daniel Tassé has advised that he will not stand for re-election at the 2021 Annual General Meeting (the “2021 AGM”)
and will stand down at the conclusion of that meeting. An announcement regarding his successor as Senior Independent
Director will be made in due course.

Board balance and independence
There is a clear division of responsibilities between the leadership of the Board and executive leadership of the business.
The roles of Chair, Chief Executive Officer and Senior Independent Director are clearly separated and set out in writing. Their
division of responsibilities, plus the matters reserved for the Board and the terms of reference for each principal Committee,
ensure that no single individual can have unfettered powers of decision-making.

At December 31, 2020, the Board comprised the Chair, two Executive Directors and five Non-Executive Directors; all Non-
Executive Directors are considered independent in accordance with Provision 10 of the 2018 Code. Details of the Board’s
composition and the biographical details for each of the Directors, setting out the skills and expertise they bring to the
Board, are set out on pages 50 to 51.

At its meeting in February 2021, the Board considered the independence of each of the Non-Executive Directors (other than
the Chair, who was deemed independent by the Board at the date of his appointment), and determined that all remain
independent of management and free from any relationship that could interfere with their judgment.

The Non-Executive Directors bring an external perspective to Board discussion. The Company has benefited from the broad
range of skills and experience which the Non-Executive Directors provide from different businesses and fields, including the
pharmaceutical, financial and research sectors. They offer specialist advice, constructive challenge and strategic guidance to
the Executive Directors as well as holding them to account.

Throughout the year they have helped to shape the Group’s strategy, scrutinized the performance of management, agreed
goals and objectives, and monitored the Group’s risk profile and reporting of performance.

Indivior Annual Report 2020
Indivior Annual Report 2020

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Compliance with the 2018 UK Corporate Governance Code continued

2. DIVISION OF RESPONSIBILITIES CONT/D

Board processes and the role of the Company Secretary
The Company Secretary ensures that the Board receives appropriate and timely information and provides advice and support
to the Chair, Board and senior management on regulatory and governance matters. All Directors have access to the Board
portal, which is used to distribute Board and Committee materials, governance materials and analysts’ notes.

Board meetings are scheduled well in advance. Where it is necessary to call meetings at short notice, efforts are made to find
suitable times when all Directors can attend; where this is not possible, Directors are provided with briefing materials and can
discuss any agenda item with the Chair of the Board, Chief Executive Officer or relevant Committee Chair. In addition, updates
and analysts’ notes are uploaded to the Board portal to ensure that Directors are kept apprised of any developments.

All Directors have direct access to the advice and services of the Company Secretary. Directors may also obtain independent
professional advice as required at the Company’s expense.

Time commitment
The letters of appointment for the Chair and Non-Executive Directors state the expected time commitment to fulfill their roles.
The Chair and Non-Executive Directors are expected to set aside sufficient time to prepare for meetings. The Board is satisfied
that all Directors continue to devote sufficient time to discharge their duties effectively.

3. COMPOSITION, SUCCESSION AND EVALUATION

Appointment and re-appointment of Directors
There is a formal, rigorous and transparent procedure for the appointment of new Directors. The process for new
appointments is led by the Nomination & Governance Committee, which makes its recommendations to the Board. In
accordance with Provision 18 of the 2018 Code, all Directors, with the exception of Daniel Tassé, will stand for re-appointment
at the 2021 AGM. The Notice of 2021 AGM will include a biography for each Director setting out the skills they bring to the Board
and why their contribution is, and continues to be, important to the long-term success of the Group.

Further information regarding the process for the appointment of the Chair, Executive and Non-Executive Directors can be
found in the Nomination & Governance Committee Report on pages 73 and 76.

Succession planning and diversity
The Nomination & Governance Committee is responsible for developing and overseeing the succession plans for the Board
and senior management and, as part of this review, takes consideration of the length of service of each Director. The
Committee also considers the skills and experience of each of the Directors and maintains a skills matrix. Appointments and
succession plans are based on merit and objective criteria and, within this context, are intended to promote diversity. Further
information regarding the review of succession planning, diversity and inclusion in 2020 can be found in the Nomination &
Governance Committee Report.

Board evaluation
The annual evaluation of the Board considers its composition, diversity and effectiveness. Further information regarding the
2020 Board Effectiveness Review can be found on page 61.

4. AUDIT, RISK AND INTERNAL CONTROL

Further information about the role and work of the Audit Committee is set out in the Audit Committee Report on pages
64 and 72.

Further information regarding the Group’s approach to risk management, including the management of principal and
emerging risks, can be found on pages 37 to 47.

5. REMUNERATION

Further information about our approach to remuneration and the role and work of the Remuneration Committee is set out in
the Directors’ Remuneration Report on pages 79 and 108.

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Principal Board decisions
The Directors consider that they met sufficiently frequently to enable them to discharge their duties effectively. Details of the
principal matters discussed and decisions made during the year are shown in the following table.

STRATEGY

› The Board undertook a detailed review of the Group’s refreshed long-term strategy. The Board approved the refreshed

strategy and agreed that the top strategic priority remained driving the growth of SUBLOCADE, which is considered to be
the biggest potential driver of value creation and facilitator of other strategic priorities.

› In September 2020, the Board approved the implementation of organizational and cost actions to better align the Group’s

capabilities and resources with its strategic priorities. This included the reorganization and reinvestment in the US
commercial function to align with the development of the Organized Health Systems (OHS) channel, reorganization of the
R&D function from a traditional pharmaceutical R&D model to a ‘connect and develop’ biotech model focused on early
stage assets and generating evidence for SUBLOCADE and PERSERIS, and the streamlining of certain corporate functions
and reducing discretionary spend (with an expected reduction in the operating expense base of between $60m and $70m
on an annualized basis before any further investments for growth).

FINANCIAL AND OPERATIONAL PERFORMANCE

› The Board reviewed and approved the FY 2019 preliminary announcement, Q1 results, 2020 half-year results and Q3 results

announcements.

› Supported by the Audit and Disclosure Committees, the Board reviewed the Annual Report and concluded that, when taken
as a whole, it is fair, balanced and understandable and provides the information necessary for shareholders to assess the
Group’s position, performance, business model and strategy.

› The Board received an update on the operational performance of the business at each scheduled meeting, which included

an update on the performance of SUBLOCADE and the focus on the development of the OHS channel in line with the
refreshed strategy.

› The Board reviewed the plans to diversify the Group’s revenue base, which included plans to obtain regulatory approval

and launch SUBLOCADE/SUBUTEX prolonged-release (PR) for injection, SUBOXONE Film and PERSERIS in certain countries
outside the US.

› The Board was regularly updated by the Chief Scientific Officer on the development of the Group’s pipeline and continued

progress of post-approval studies for SUBLOCADE and PERSERIS.

LITIGATION MATTERS

› In July 2020, the Group reached an agreement with the United States Department of Justice (DOJ), the Federal Trade

Commission (FTC), and the U.S. state attorneys general to resolve the Group’s criminal and civil liability in connection
with the indictment bought in April 2019 by a grand jury in the Western District of Virginia (the “Resolution Agreement”).
Under the terms of the Resolution Agreement, Indivior Solutions Inc, a wholly owned subsidiary of Indivior PLC, pleaded
guilty to one count of making a false statement relating to healthcare matters in 2012. The agreement between the Group
and the DOJ was approved by the United States federal court in the Western District of Virginia in November 2020.
As part of the Resolution Agreement, the Group agreed to a financial fine and forfeiture of $600 million over seven years as
well as entering into a Corporate Integrity Agreement, DOJ Compliance Measures and FTC Stipulated Order, which present
ongoing reporting and annual requirements that span the next five to ten years. These compliance commitments are
consistent with the Group’s Integrity & Compliance Program and the high level of legal and ethical standards that the
Group seeks to follow every day.
The Board considered the terms of the Resolution Agreement and agreed that entering into the Resolution Agreement was
in the best interests of the Company. In reaching its determination, the Board considered the potential implications of not
entering into the agreement, including potential exclusion from US federal healthcare programs which are material to the
Group’s revenues. The Board also considered the likely consequences of the decision in the longer term, the impact on key
stakeholders (including, but not limited to, shareholders, employees, suppliers and patients) and the potential reputational
impact upon the Group.

› In November 2020, Reckitt Benckiser Group plc (RB) filed a claim against the Company in the Commercial High Court in

London relating to a claim for indemnity under the 2014 Demerger Agreement between the companies. In January 2021, the
Group announced it had reached an agreement with RB, whereby RB agreed to withdraw its claim and to release Indivior
from any claim for indemnity under the Demerger Agreement relating to the DOJ and FTC settlements which RB entered
into in July 2019, as well as other claims for indemnity arising from those matters. In consideration of this release, Indivior
agreed to pay RB a total of $50m over the next five years and also agreed to release RB from any claims to seek damages
relating to its settlement with the DOJ and FTC.

› Further information regarding legal proceedings can be found on pages 33 to 36.

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Principal Board decisions continued

COVID-19

› At the onset of the COVID-19 pandemic, a meeting was convened at short notice to update the Board on the actions taken
to protect the welfare of the Group’s workforce, included mandating that the global workforce (excluding essential supply
manufacturing) work remotely.

› The Board was regularly updated on the financial and operational impact of the COVID-19 pandemic on the business. This
included ensuring a continuous supply of product was available and monitoring the financial impact on the business. A
meaningful decline in patient enrollments for both SUBLOCADE and PERSERIS was observed in early Q2, which was believed
to be indicative of a trend of a substantial reduction in patient visits to healthcare providers offices. As a result of this
uncertainty, FY2020 financial guidance was withdrawn in April 2020.

SUCCESSION PLANNING

› Supported by the Nomination & Governance Committee, the Board approved the appointment of Mark Crossley as Chief

Executive Officer in June 2020, following Shaun Thaxter stepping down from that role.

› Supported by the Nomination & Governance Committee, the Board approved the appointment of Daniel Tassé as Interim

Chair of the Board in June 2020 and Graham Hetherington as Chair of the Board in November 2020

› Supported by the Nomination & Governance Committee, the Board approved the appointment of Ryan Preblick as Interim

Chief Financial Officer in June 2020 and as Chief Financial Officer and Executive Director in November 2020.

› All matters discussed by the Nomination & Governance Committee were summarized to the Board for consideration or

approval. Further information regarding those items discussed and specifically changes to the Board in 2020 and succession
planning activities can be found on pages 74 to 75.

AUDIT AND RISK

› On the recommendation of the Audit Committee, the Board agreed to recommend the re-appointment of

PricewaterhouseCoopers LLP as the External Auditor.

› Further information regarding the Group’s approach to risk management, including the management of its principal and

emerging risks, can be found on pages 37 to 45.

› All matters discussed by the Audit Committee were summarized to the Board for consideration or approval. Further
information regarding the work of the Audit Committee, including any significant internal audit findings in 2020 can
be found on pages 64 to 72.

GOVERNANCE AND COMPLIANCE

› The Company Secretary provided an update on the impact of the COVID-19 pandemic on the arrangements for the 2020
Annual General Meeting following the introduction of social distancing measures in the UK. The arrangements for the
meeting were adapted and the 2020 AGM was held as a closed meeting, with shareholders encouraged to vote by proxy
and to submit questions by email ahead of the meeting.

› The Board considered the significant vote against the 2019 Remuneration Report at the 2020 AGM and approved the

publication of the Board’s response, including the actions it intended to take to understand the reasons behind the result.
The Group engaged with shareholders following the AGM and understood that some shareholders had concerns that
executive remuneration with respect to the 2019 financial year was not aligned with the shareholder experience.
Shareholders’ feedback was taken into account in determining remuneration outcomes in respect of the 2020 financial year
and in the development of the 2021 Remuneration Policy. The Board approved the publication of an Update Statement in
November 2020, which was published on the Group’s website and on the Investment Association’s Public Register.

› The Board was updated on the Group’s continued investment in the Integrity & Compliance function and overall program;
this included the continued development of the team, enhancements to policies, training and development activities and
the requirements of the CIA, DOJ Compliance Measures and FTC Stipulated Order, which present ongoing reporting and
annual requirements that span the next five to ten years.

› The Board received training on the requirements of the CIA from the appointed Compliance Expert to the Board. This
training covered the hallmarks of an effective compliance program and the Board’s specific obligations under the CIA.

INVESTOR RELATIONS

› The Chair of the Board and the Chair of the Remuneration Committee met with a number of major shareholders during the
year and provided a report to the Board on those discussions, including shareholders’ key concerns and areas of focus.

› The Chief Executive Officer and Chief Financial Officer1 provided an update on feedback from investors following each

quarterly results announcement.

› The Board was kept abreast of the views of shareholders during the year by management and presentations from the

Group’s brokers.

1. Mark Crossley served as Chief Financial & Operations Officer until June 2020. Ryan Preblick served as Interim Chief Financial Officer from June to November 2020

and was appointed Chief Financial Officer and Executive Director in November 2020. Unless otherwise stated, references to the ‘Chief Financial Officer’ refer to the
individuals who held the roles of Chief Financial & Operations Officer, Interim Chief Financial Officer and Chief Financial Officer respectively at the relevant time.

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Board Effectiveness Review
2019 Effectiveness Review
The 2019 Board Effectiveness Review, which was
internally facilitated, highlighted a number of areas
of focus for 2020; these areas and the actions taken
during the year to address them are set out below:

› the need to focus on succession planning for the Chair,

Non-Executive Directors and senior management.
Succession plans have been regularly reviewed and
updated during the year. The succession plan for the
Chair was accelerated when Howard Pien took a
medical leave of absence and subsequently stepped
down from the Board in September 2020. A search
process to identify at least two additional Non-
Executive Directors (one to have relevant financial
experience) commenced in November 2020. As a
result of the changes in the year, succession
planning for the Non-Executive Directors will be
regularly reviewed and the skill matrix updated;

› the need to continue to oversee management of the

Group’s material litigation matters.

› The Group’s material litigation was kept under close

review during the year. In July 2020, the Group
reached a resolution with the United States
Attorney’s Office for the Western District of Virginia
and the Department of Justice’s (DOJ’s) Consumer
Protection Branch, which was approved by the Court
in November 2020. The Board continue to have
oversight of outstanding legal matters.

2020 Effectiveness Review
The Board undertook a review of the effectiveness of
its performance and of its Committees and individual
Directors during the year. As the Company was not a
constituent of the FTSE 350 for the majority of the year
and as a result of the focus on reaching a resolution
with the US Government, the Board determined that it
would not undertake a full externally facilitated Board
evaluation in 2020.

The review was internally facilitated by the Interim
Chair, supported by the Company Secretary and
Lintstock, an independent consultancy.

The review comprised an online survey completed by
each of the Directors and the Company Secretary,
followed by individual meetings with each Director
and the Interim Chair and Company Secretary.

The online survey focused on a number of key areas,
including Board composition, stakeholder oversight,
Board dynamics, Board support, Board committees,
focus of meetings, COVID-19, strategic oversight, risk
and regulatory compliance, succession planning and
organizational capacity and priorities for change.

The responses to the survey were collated and a
report was prepared by Lintstock, an independent
consultancy who focus on board evaluations; Lintstock
do not have any other connection with the Company
or individual Directors. The report was circulated to
Directors and discussed at individual meetings with
each Director and the Interim Chair and Company
Secretary, to enable the Interim Chair to better
understand the issues raised and areas of focus
in the year ahead.

The review reflected that the overall performance of
the Board and its Committees was positively rated,

particularly in the context of the challenges faced
during the year.

The review highlighted a number of areas of focus,
including:
› the importance of driving the growth of SUBLOCADE,

with particular reference to Organized Health
Systems channel development;

› effective implementation and oversight of the CIA

and other government agreements;

› maintaining the culture of the organization,

particularly with respect to the impact of COVID-19,
and Board engagement with employees, was
highlighted as an area requiring focus in the year
ahead;

› the successful development of early stage assets to

create a sustainable and diversified platform
for growth;

› the appointment of a permanent Chair of the Board
and Chief Financial Officer was highlighted as a
critical area of focus. Graham Hetherington and
Ryan Preblick were subsequently appointed Chair
and Chief Financial Officer respectively in November
2020; and

› the importance of orderly succession planning
for the Non-Executive Directors who have been
on the Board since demerger was also highlighted.
Following departures from the Board, gender and
ethnic diversity was identified as an area for focus.

The Nomination & Governance Committee is
responsible for developing the succession plans for
the Chair of the Board.

The evaluation process did not include an assessment
of the performance of the Chair as, at the time of the
evaluation, an Interim Chair was in place and a
succession process was underway to identify a
permanent Chair.

The last externally facilitated Board Effectiveness
Review was carried out in 2017 by Oliver Ziehn of
Lintstock. The Board intends to undertake an
externally facilitated review in 2021.

Board Induction
New directors receive a comprehensive, tailored
induction program, which takes into account their
background, skills and their position on the Board and
Committees. The Company Secretary facilitates the
induction of Directors and monitors ongoing training
needs for the Board. Where an existing Director takes
on a new role, they receive induction appropriate to
their new role. In 2020, Graham Hetherington and
Mark Crossley held meetings with major shareholders
following their appointment as Chair of the Board and
Chief Executive Officer respectively.

Induction – Ryan Preblick
Ryan Preblick attended a corporate governance
induction session, delivered by Addleshaw Goddard
LLP, which covered the role, duties and legal
responsibilities of a director, the UK listing regime, the
UK Corporate Governance Code and other legislative
and regulatory matters. Mr Preblick also received
training on the Compliance and Integrity Program
and the requirements and compliance commitments
under the CIA, DOJ Compliance Measures and FTC
Stipulated Order.

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Mr Preblick also met a number of key stakeholders as
part of his induction; this included the External Audit
Partner and major shareholders.

Board accountability
The Board is responsible for the integrity of the
Group’s Annual Report, and recognizes its
responsibility to present a fair, balanced and
understandable assessment of the Group’s position
and prospects.

The Board has assessed, together with the Audit and
Disclosure Committees, all information available in
considering the overall drafting of the Group’s Annual
Report and the process by which they were compiled
and reviewed. In doing so, the Board ensured that
adequate time was dedicated to the drafting process
so that linkages and consistencies were worked
through and tested. Drafts were reviewed by
knowledgeable executives and senior management
not directly involved in the year-end process.

The Board recognizes that this responsibility extends
to interim and other inside information, information
required to be presented in relation to statutory
requests, and reports to regulators. In relation to
these requirements, reference is made to the
Statement of Directors’ Responsibilities for preparing
the Annual Report and financial statements, set out
on pages 113 and 114.

Engagement with shareholders
The Board recognizes the importance of regular,
effective and constructive communications with its
shareholders.

The principal opportunity for shareholders to engage
with the Board is at the AGM. As a result of the COVID-
19 pandemic, the Group was unable to hold its 2020
AGM in the normal way. Attendance at the 2020 AGM
was limited to essential personnel only and
shareholders were able to submit questions to the
Board in advance of the AGM by email.

Case study
Workforce engagement

The Group announces its financial results on a quarterly
basis, and these were released to the London Stock
Exchange via an authorized Regulatory Information
Service, and subsequently published on the Group’s
website. Results announcements were accompanied
by a presentation for analysts and investors from the
Chief Executive Officer, Chief Financial Officer and
other executives; these were live webcast and
archived on the Group’s website. These presentations
included dedicated question and answer sessions,
where attendees were invited to ask questions.

During the year, the Chief Executive Officer, Chief
Financial Officer and the Vice President, Investor
Relations met regularly with the Group’s major
shareholders and financial analysts to discuss matters
relating to the Group’s business strategy and current
performance. Where appropriate, the Chair, Chair of
each of the Committees and Non-Executive Directors
may attend meetings with major shareholders.

The Board regularly received reports covering
discussions with major shareholders and was
informed of any issues or concerns raised during
those discussions. In addition, the Group’s corporate
brokers provided reports to the Board on the views of
investors.

Shareholders’ and analysts’ briefings are circulated to
all Non-Executive Directors. This process enhances
Non-Executive Directors’ understanding of the views of
shareholders and enables the Board to judge what
future action would further assist investors’
understanding of the Group’s strategic objectives.

Annual General Meeting
The AGM provides all shareholders with an
opportunity to put questions to the Board of Directors
and to vote on the resolutions set out in the Notice of
Meeting. All resolutions are voted on by way of poll,
with one vote for each share held. The results of the
poll are announced to the London Stock Exchange and
published on Indivior’s website shortly after the end
of the AGM.

Workforce voice in the Boardroom
During the year, Daniel J Phelan, the designated Non-Executive Director for workforce engagement, met virtually with
members of Indivior’s Culture Champion network. The focus of the discussion was the culture of the organization, how this
had been impacted by COVID-19 and the biggest challenges and issues currently faced by the business. The session was
facilitated by an external facilitator and the Culture Champions provided thoughtful and candid feedback and whilst 2020
had been a challenging year for the Group, employees demonstrated resilience and remained passionate about Indivior’s
Vision. The Board hopes to be able to increase its face-to-face engagement activities in 2021.

Global Town Hall
Global Town Hall meetings were held throughout the year. The purpose of these events is to provide a business update and
an opportunity for employees to ask questions and engage with senior management. In addition, internal and external
speakers are invited to present at meetings to provide an insight into different areas, including strategic priorities, business
development and the global disease state. With the impact of COVID-19, these events were held virtually in 2020.

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Governance framework

The Board is responsible for ensuring there is a robust and transparent governance framework in place.
There is a clear division of responsibilities between the Board and its Committees; each role is clearly defined and is distinct
from the other.

Principal Board Committees

Oversight of financial reporting,
audit and risk

Oversight of Board composition,
succession planning,
governance and
corporate compliance

Oversight of the link of reward
to strategy

Oversight of pipeline research
& development and public
policy strategy

A
Audit Committee

N
Nomination &
Governance Committee

R
Remuneration
Committee

S
Science &
Policy Committee

Indivior Board

D
Disclosure
Committee

E
Executive
Committee

C
Integrity &
Compliance Committee

Oversight of disclosure and
reporting requirements
and the identification of
inside information

Oversight of the
implementation of the
Group’s strategic plan

Oversight of the Group’s
Integrity & Compliance Program

Executive Committees

Board Committees
The Board has established four principal committees
to support it in fulfilling its oversight responsibilities;
these are the Audit, Nomination & Governance,
Remuneration and Science & Policy Committees.
Each of these committees has certain delegated
responsibilities which are set out in their Terms of
Reference, which are available at www.indivior.com.
The Chair of each principal committee reports on the
activities of their respective Committee at the following
Board meeting. Copies of all papers and the minutes
of meetings of the principal committees are available
to all Directors.

Executive Committees
In addition to the principal committees, the Group has
three executive committees:

Executive Committee
The Executive Committee is chaired by the Chief
Executive Officer. The Committee comprises key
functional leaders from the business and its purpose
is to assist the Chief Executive Officer in discharging
his duties. The Executive Committee meets monthly.

Biographical details of the members of the Executive
Committee are on pages 52 to 53.

Integrity & Compliance Committee
The Integrity & Compliance Committee comprises all
members of the Executive Committee and is chaired
by the Chief Integrity & Compliance Officer. The
Integrity & Compliance Committee meets monthly
and is responsible for overseeing compliance with
applicable laws, rules and regulations related to
Indivior’s business operations (excluding compliance
with securities regulations and financial reporting
requirements). These meetings are also attended by
the independent Compliance Expert to the Board.

Disclosure Committee
The Disclosure Committee comprises the Chief Financial
Officer, the Chief Commercial & Strategy Officer, the
Chief Legal Officer, the Chief Scientific Officer and the
Company Secretary and is chaired by the Chief Financial
Officer. The Committee meets as necessary and
oversees the disclosure of information in accordance
with the UK Market Abuse Regulation and the FCA’s
Disclosure Guidance and Transparency Rules.

The Disclosure Committee receives input and advice
from relevant individuals and advisors as required.
These include the Group’s brokers and external legal
counsel.

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AUDIT COMMITTEE REPORT

Daniel Tassé
Daniel Tassé
Chair of the
Chair of the
Audit Committee
Audit Committee

On behalf of the Board, I am pleased to present the
Audit Committee Report for the financial year ended
December 31, 2020.

The role of the Audit Committee is to monitor and
assess the integrity of the Group’s Annual Report
and financial statements and review the significant
reporting judgments contained in them. We also keep
the Group’s internal controls and risk management
systems under review, to assess their effectiveness.
This report is intended to provide shareholders with
an insight into how the Committee discharged these
responsibilities throughout the year.

A number of changes to the composition of the
Committee occurred during the year, as discussed
later in this report. Further, as notified to the London
Stock Exchange on January 11, 2021, I will stand down
as a Non-Executive Director at the conclusion of the
Company’s next Annual General Meeting in May 2021.
I will remain Chair of the Audit Committee until the
conclusion of that meeting.

I hope you find this report informative. In 2021 the
Committee will continue to work closely with the
management team and the rest of the Board to meet
the opportunities and challenges facing the Group.

Daniel Tassé
Chair of the Audit Committee

Members and meetings
Daniel Tassé, who has served as a member of the
Committee since November 2014, was re-appointed
Chair of the Committee following the appointment
of Graham Hetherington as Chair of the Board. As a
current pharmaceutical-industry Chief Executive
Officer, Daniel Tassé has extensive sectoral experience
and a thorough understanding of audit matters.

Graham Hetherington has, throughout the year, served
on the Committee and was the designated Committee
member with recent and relevant financial experience
and competence in auditing and accounting. He is a
fellow of the Chartered Institute of Management
Accountants. He was Chair of the Committee from
March 2020 until his appointment as Chair of the
Board in November 2020, but remains a member of
the Committee. The Company was not compliant with
Provision 24 of the Code between June 2020 and the
end of the financial year; further details can be found
on page 55. Peter Bains has been a member of the
Committee throughout the year. Daniel J Phelan, who
had been appointed a member of the Committee on
an interim basis in July 2019, stepped down as a
member of the Committee in July 2020.

Throughout the year, the Committee invited the
Chief Financial and Operations Officer/Chief Financial
Officer, SVP-Group Controller, Vice President-Chief
Audit Executive, Vice President-Tax, External Audit
Partner and other representatives from management
and the External Auditor to attend Committee meetings.
The Committee reserves the right to meet without any
of these individuals present. Following the appointment
of Mark Crossley as Chief Executive Officer in June
2020 (previously Chief Financial & Operations Officer),
a search was initiated for a permanent Chief Financial
Officer, resulting in the appointment of Ryan Preblick
in November 2020 (who had served as Interim Chief
Financial Officer from June 2020). In order to ensure
continuity of financial reporting to the Committee
whilst the process to identify a permanent Chief
Financial Officer was undertaken, Mark Crossley and
Ryan Preblick were invited to attend Committee
meetings until the appointment of a permanent Chief
Financial Officer was made. The Deputy Company
Secretary is secretary to the Committee.

INDEPENDENT NON-
EXECUTIVE DIRECTOR

DATE APPOINTED TO
THE COMMITTEE

DATE STEPPED DOWN
FROM THE COMMITTEE

SCHEDULED MEETINGS
ATTENDED IN 2020

AD HOC MEETINGS
ATTENDED IN 2020

MEMBERS (AT DECEMBER 31, 2020)

Daniel Tassé (Chair to March 31, 2020
and from November 19, 2020)

Peter Bains

Yes

November 2014 –

August 2019

–

Graham Hetherington (Chair from
March 31, 2020 to November 19, 2020)

Independent (until
November 2020)

November 2019 –

5/5

FORMER MEMBERS

Daniel J. Phelan

Yes

July 2019

July 24, 2020

3/3

1/1

n/a

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For part of each meeting, the Committee meets
separately with each of the Chief Financial Officer1,
Vice President-Chief Audit Executive and the External
Auditor. The Committee also meets privately at each
scheduled meeting. The Chair of the Committee
reports on the outcomes of each meeting to the
Board, and copies of the minutes of Committee
meetings are circulated to all Directors.

The Committee has unrestricted access to Group
documents, information, employees, and the External
Auditor. The Committee may also take independent
professional advice on any matters covered by its
Terms of Reference at the Group’s expense.

1. Mark Crossley served as Chief Financial & Operations Officer until June 2020. Ryan Preblick served as Interim Chief Financial Officer from June to November 2020

Role and responsibilities
The Committee’s principal responsibility is to oversee and give assurance to the Board with regard to the integrity of financial
reporting, internal controls, risk management, and audit arrangements. In discharging this responsibility, the Committee, with
the assistance of management and the external auditor, focused its attention in the following areas:

FINANCIAL REPORTING

› To monitor the integrity of the Group’s financial reporting, including all formal announcements relating to financial results

and compliance with accounting standards.

› To inform the Board of the outcome of the Group’s internal and external audits and explain how they contributed to the

integrity of financial reporting.

› To review the Group’s strategy for management of key financial risks, and ensure the Group has followed appropriate

accounting policies, and made appropriate estimates and judgments.

› To challenge, where necessary, the consistency of, and any changes to, accounting and treasury policies, the clarity and

completeness of disclosures, any adjustments resulting from the external audit, the going concern assumption, the viability
statement and compliance with accounting standards.

› To review the content of each quarterly, half-yearly and annual financial results and to advise the Board of the integrity

of each. Further information is set out on page 69.

RISK MANAGEMENT

› To assist the Board in relation to the Board’s assessment of the principal risks facing the Group and the prospects of the

Group for the purposes of disclosures required in the Annual Report and Accounts.

INTERNAL FINANCIAL CONTROLS

› To review the effectiveness of the Group’s internal controls over financial reporting, including the policies and overall

processes for assessing financial control and effectiveness of corrective action taken by management. Further information
is set out on page 70.

FRAUD

› To monitor the Group’s policies, procedures and controls for preventing bribery and money laundering.

INTERNAL AUDIT

› To monitor and review the effectiveness of the Group’s Internal Audit function in the context of the Group’s overall

governance, risks and controls framework.

› To consider and review the remit of the Internal Audit function, ensuring it has adequate resources and all necessary

access to information to enable the effective performance of the function. Further information can be found on page 69.
› To review progress against the Internal Audit plan along with any significant findings and the tracking of remedial actions.

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EXTERNAL AUDITOR

› To oversee the relationship between the Group and the External Auditor, advise the Board how the External Auditor has

contributed to the integrity of the Group’s financial reporting process, and to report to the Board whether it considers the
audit contract should be put out to tender, thereby conforming to the requirements for tendering or rotation of the audit
services contract. Further information is set out on pages 71 to 72.

› To review and monitor the External Auditor’s objectivity and independence, agree the scope of their work, negotiate and

agree fees paid for the audit, assess the effectiveness of the audit process and agree the policy in relation to the provision
of non-audit services.

Activities during the year
The Committee has an annual work plan linked to events in the Group’s financial calendar including standing items that the
Committee considers, in addition to any specific matters requiring the Committee’s attention. The Committee met a total of six
times during the year and considers that it met sufficiently frequently to enable it to discharge its duties effectively. Details of
the principal matters discussed during the year are shown in the following table.

FINANCIAL REPORTING

› The Chief Financial Officer provided an update on the financial performance of the business at each scheduled meeting

including market guidance where appropriate.

› The Committee reviewed and recommended to the Board the quarterly, half-yearly and annual financial results, including

any updates to published guidance.

› Matters relating to going concern, with supporting analysis, were reviewed throughout the year.
› The viability statement was reviewed by the Committee, in line with the Group’s financial calendar. The viability statement

can be found on page 46.

› The Committee reviewed key accounting matters to ensure the Group followed appropriate accounting policies and made

appropriate estimates and judgments.

› The Committee reviewed letters of representation issued to the External Auditor prior to them being agreed by the Board.
› At each scheduled Committee meeting the SVP-Group Controller presented a treasury operations update thereby assisting

the Committee’s oversight of the Group’s capital base.

› The Committee received presentations from the Vice President-Tax regarding key tax judgments and amendments to the

annual tax strategy for 2021, which is available on the Group’s website.

› The Committee reviewed the Group’s strategy for the management of key financial risks.
› The Committee reviewed a preliminary draft of the 2021 Budget/Plan.
› The Committee met with the Chief Financial Officer following each scheduled meeting.

INTERNAL AUDIT AND RISK

› The Committee agreed the Internal Audit plan for 2020, and reviewed and approved the 2021 Internal Audit plan and the

revised 2021 Internal Audit plan (which was revised due to the impact of COVID-19).

› The Committee received presentations from Vice President-Chief Audit Executive on progress and delivery against the

Internal Audit plan and results of Internal Audit’s activities, including key audit and significant findings.
› The Committee reviewed the Group’s principal risks for inclusion in the Annual Report and financial results

announcements.

› Further information regarding the Group’s principal risks can be found on pages 37 to 45.
› The Group’s Enterprise Risk Management (ERM) program and process was reviewed by the Committee.
› The Group’s approach to cybersecurity and the threats posed to the Group were reviewed by the Committee.
› The Committee reviewed the effectiveness of the Internal Audit function, including the annual quality assessment of the

Internal Audit function.

› The Committee received a presentation on the COVID-19 Risk Landscape and the impact the current pandemic could have

across the Group.

› The Committee met privately with the Vice President-Chief Audit Executive following each scheduled meeting.

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Activities during the year continued

GOVERNANCE

› The Committee received an update on the work of the Group’s Integrity & Compliance function.
› The Committee reviewed the Group’s policies relating to related party transactions, non-audit services and non-GAAP

adjusted measures and approved amendments where appropriate.

› The Committee reviewed the Group’s insurance program and made various recommendations regarding the 2020/21

renewal planning process.

› The Committee’s effectiveness was reviewed during the year as part of the Board’s annual performance evaluation.
An explanation of how the performance evaluation was conducted and the conclusions arising from it can be found
on page 61.

› The Committee recommended to the Board the re-appointment of PricewaterhouseCoopers LLP as the External Auditor.

EXTERNAL AUDITORS

› The Committee agreed the External Auditor engagement and audit fee for 2020 as well as the external audit plan for 2020.
› The Committee considered the accounting and audit matters from the External Auditor’s reports issued throughout the year.
› The Committee reviewed the independence of the External Auditor.
› The Committee received technical and regulatory update presentations from the External Audit partner.
› The annual assessment of the External Auditor was undertaken and reviewed by the Committee.
› Following each scheduled meeting, private meetings were held with the External Auditor.

Significant judgments
In preparation for each meeting, management produced briefing papers on significant matters the Committee was to discuss.
Management is invited to attend Audit Committee meetings in order to respond to Committee inquiries. The following areas
of focus in relation to the Group’s Annual Report and other judgmental accounting areas were considered and discussed
with both management and the External Auditor:

GOING CONCERN

› In considering the implications of the DOJ resolution and RB settlement, the Committee engaged with management to fully
consider the effect on cash outflows both before and after the going concern period under different forecasting scenarios.
To assist, management provided detailed financial planning analyses for consideration by the Committee, detailing
sufficiency of the Group’s liquidity over possible near-term trading and litigation outcomes.

› Uncertainties relating to the DOJ indictment and risk of potential exclusion from participating in US government health
programs were addressed by the DOJ resolution approved in November. Uncertainties arising from the RB claim in
November were addressed by the settlement reached in January 2021.

› The Committee assessed the current trends and net revenue forecasts for SUBLOCADE, PERSERIS, US SUBOXONE Film, and

rest of world products, including reasonably possible downside scenarios for SUBLOCADE.

› The Committee continued to challenge management regarding the litigation strategy for unresolved legal matters, agreeing

to maintain the current strategy to litigate.

› As a consequence of COVID-19, the Committee evaluated management’s planning for and implementation of further

cost saving initiatives to protect and reduce the cost base of the business.

› Based substantially on the factors listed above, the Committee was able to validate removal of the previous material

uncertainty relating to the Group’s ability to continue as a going concern and the continued appropriateness of the going
concern basis of accounting.

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Significant judgments continued

VIABILITY STATEMENT

› Building on the output from the going concern assessment above, including the expected impacts of COVID-19, the

Committee assessed the prospects and challenges facing the Group. The Committee considered scenarios that could
impact future financial projections and the ability of the Group to remain viable.

› The Committee discussed with management the dependencies on which the viability statement was reliant, which

included, amongst other items, the future growth of SUBLOCADE and PERSERIS, payment of existing liabilities and debts
as they come due, the Group’s overall legal strategy associated with remaining litigation matters and expectations for the
Group’s base business.

› The Committee reviewed management’s business plan including net revenue and cash flow forecasts considering the

impact of COVID-19, and the possible use of cash reserves during the viability period. The Committee probed management’s
judgment regarding litigation risks, and management’s sensitivity analysis to assess SUBLOCADE growth potential.

› As in previous years, the Committee is of the opinion that a four-year period was an appropriate timeframe over which

to make the viability statement and reflected the best estimate of the future prospects of the business.

› Based on the Committee’s assessment of the Group’s prospects, management’s approach to the challenges facing the

business, including appropriate and detailed financial disclosures in the Annual Report referencing the possible scenarios
that may occur that could impact the Group’s viability during the assessment period, the Committee agreed there was a
reasonable expectation that the Group will be able to continue to operate and meet its liabilities as they fall due over the
next four years. Further information on the Group’s principal risks including the viability statement are detailed on pages
37 to 47.

CRITICAL ACCOUNTING JUDGMENTS AND DISCLOSURES, AND KEY SOURCES OF ESTIMATION

› When applying the Group’s accounting policies, management must make a number of key judgments on the application

of applicable accounting standards, estimates and assumptions. These judgments and estimates are based on
relevant factors.

› The Committee has challenged management on key judgments and sources of estimation covering a number of key areas

underlying the Group’s financial statements and results. The Committee specifically discussed the uncertainty and potential
outcome of the ongoing litigation matters the Group faced in order to support the judgments taken regarding maintaining
the provision, which represents the best estimate of the potential outcome. Provisions for returns, discounts, incentives and
rebates were discussed with the Committee, considering the impact of generics on pricing and contractual arrangements in
place. Management’s growth forecasts for both SUBLOCADE and PERSERIS were also considered by the Committee in
conjunction with the cash flows utilized for going concern, viability and inventory and other asset impairment and
recoverability judgments.

› Given that certain matters disclosed in the Annual Report are highly judgmental, the Committee has reviewed

management’s assumptions and inputs into their analysis and development of the judgments, estimates and disclosures,
and discussed the critical nature of each with both management and the External Auditor.

› The Committee has satisfied itself that the Group’s accounting policies and their application by management are

appropriate. The Committee is also satisfied with both the appropriateness of analysis performed by management,
including the judgments made and estimates used, and the related disclosures.

COVID-19

› The Committee has considered the COVID-19 business, financial and accounting implications on the Group. The Committee

has reviewed and challenged scenarios considered by management including cash flow forecasts, which incorporated
mitigating actions taken by management to reduce costs. The Committee has satisfied itself that management had
adequately identified and considered potentially significant accounting and disclosure matters.

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The Committee approved the 2020 Internal Audit plan
which is structured to align with the Group’s strategic
priorities and key risks. An integrated planning process
is undertaken to ensure that internal audit work is
appropriately aligned to, and coordinated with, the
activities of other functions across the Group. The
Internal Audit plan comprises both fixed and flexible
elements to provide flexibility to respond to any
change in priorities and risks, such as COVID-19. At
each scheduled Committee meeting, progress against
the Internal Audit plan is reviewed along with significant
findings and the tracking of remedial actions. The
Committee also tracks overdue remedial actions.

To fulfill its duties in keeping under review the
effectiveness of the Internal Audit function, the
Committee monitored:

› Internal Audit’s reporting lines and its access to the

Committee and all Board members;
› Internal Audit’s staffing and resources;
› Internal Audit’s plans and achievements of planned

activity;

› the results of key audits and other significant

findings, the adequacy of management’s response
and the timeliness of their resolution; and

› changes since the last annual assessment of the

significant risks and the Group’s ability to respond
to changes in its business and the external
environment.

A quality assessment review of the Internal Audit
function was conducted during the year with the
assistance of Lintstock, an independent evaluation
consultancy. The assessment included input from
Internal Audit’s stakeholders across the Group
including the External Auditor. Following consideration
of the outcome of the assessment, the Committee
concluded that significant progress continued to be
made during 2020, and that the Internal Audit function
remains effective and meets the needs of the Group.

Monitoring the integrity of reported
financial information
Ensuring the integrity of the financial statements
and associated announcements is a fundamental
responsibility of the Committee. During the year, the
Committee reviewed the Group’s FY 2019 preliminary
results announcement, the 2020 half-yearly and
quarterly financial results. In doing so, these reviews
considered:

› the accounting principles, policies and practices
adopted in the Group’s financial statements, any
proposed changes to them and the adequacy of
their disclosure;

› the description of performance to ensure it was fair,

balanced and understandable;

› accounting matters or areas of complexity, the

actions, estimates and judgments of management
in relation to financial reporting, and the
assumptions underlying the going concern and
viability statements;

› any significant adjustments to financial reporting

arising from the external audit;

› cybersecurity threats posed to the overall operating

effectiveness of controls;

› tax contingencies, compliance with statutory tax

obligations and the Group’s tax strategy;
› litigation and contingent liabilities affecting

the Group;

› long-term funding options; and
› COVID-19 challenges necessitating continued

financial discipline.

Internal Audit
Internal Audit plays an important role by providing
assurance and advice relating to the Group’s
governance, risks and controls. The internal audit
function reports into the Committee and has authority
to review any relevant part of the Group or its business
and has a planned schedule of reviews that coincide
with the Group’s risks. The Committee is required to
assist the Board in fulfilling its responsibilities
regarding the adequacy of resourcing and the
effectiveness of the Internal Audit function to ensure
it is appropriate for the Group’s needs. The Internal
Audit function also has an important role to play in
reviewing the effectiveness of internal controls as
detailed on page 70.

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To fulfill its duties, the Committee reviewed:

› presentations from the Chief Information Officer

outlining the Group’s approach to IT and
cybersecurity;

› reports from Internal Audit at each scheduled

Committee meeting covering key audit areas and
any deficiencies in the control environment
covering internal financial control, operational,
IT and risk management; and

› the External Auditor’s reports to the Committee.

Accordingly, the Committee confirms its oversight
of the process for identifying, evaluating and
managing risks faced by the Group and the
operational effectiveness of the appropriate controls,
all of which have been in place throughout the year
and up to the date of approval of the 2020 Annual
Report and Accounts.

Reviewing the effectiveness of internal control
As referred to above, the Committee, assisted by the
Internal Audit function, reviewed the effectiveness
of management’s internal controls. In addition to
financial and business reports, the Committee has
reviewed medium- and longer-term strategic plans,
reports on key operational issues, tax, treasury,
risk management, and Internal and External
Auditors’ reports.

Significant failings or weaknesses
The Committee confirms that no significant weaknesses
or failings were identified during the year and,
therefore, no remedial actions were required.

Misstatements
Management reported to the Committee that they
were not aware of any material or immaterial
misstatements intentionally made. Management and
the External Auditor reported to the Committee the
misstatements they had found during their work and,
after due consideration, the Committee agreed with
management that these misstatements were not
material and that no adjustments were required.

C O R P O R A T E G O V E R N A N C E C O N T I N U E D

Internal control over financial reporting and risk
management
The Committee acknowledges its duty to assist the
Board to fulfill its responsibilities for the Group’s risk
management and internal control systems, including
the adequacy and effectiveness of the control
environment, internal control over financial reporting
and the Group’s compliance with the 2018 Code.

During the year, all business areas prepared annual
operating plans and budgets. These are regularly
reviewed and updated as necessary. Performance
against budget is monitored centrally at the
operational level, and is discussed at Committee and
Board meetings. The cash position of the Group is
monitored daily by the treasury function.

Clear guidelines are in place for capital expenditure
and investment decisions. These include budget
preparation, appraisal and review procedures, and
delegated authority levels.

Effective controls ensure the Group’s exposure to
avoidable risk is minimized, and the Committee is
cognizant of the material controls within the Group,
including, amongst other things, that proper
accounting records are maintained, financial
information used within all business areas is reliable
and up-to-date, and the financial reporting processes
comply with relevant regulatory reporting
requirements.

Internal control systems are in place in relation to the
Group’s financial reporting processes for preparation
of consolidated accounts. These systems include
policies and procedures that relate to the
maintenance of records which accurately and fairly
reflect transactions, provide reasonable assurance
that transactions are recorded as necessary to permit
the preparation of financial statements, require
representatives of the Group to certify that their
reported information gives a true and fair view of the
state of affairs of the business and its results for the
period, and review and reconcile reported data.

Control processes are designed to manage, rather
than eliminate, the risk of assets being unprotected
and guard against their unauthorized use, culminating
in the failure to achieve business objectives. Internal
controls will only provide reasonable and not total
assurance against material misstatement or loss.

The Group’s Enterprise Risk Management (ERM)
process is designed to identify, assess, manage, report
and monitor risks and opportunities that may impact
the achievement of the Group’s strategy and
objectives. This includes adjusting the risk profile in
line with the Group’s risk tolerances to respond to
new threats and opportunities.

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To fulfill its responsibilities for oversight of the
external audit process the Committee reviewed:

› the terms, areas of responsibility, associated duties
and scope of the audit as set out in the engagement
letter with the External Auditor;

› the overall audit plan and fee proposal;
› key accounting and audit judgments and how the

External Auditor applied constructive challenge and
professional skepticism when dealing with
management;

› recommendations made by the External Auditor to
the Committee and the adequacy of management’s
response;

› recent and historical performance of the External
Auditor in relation to the Group’s audits including
the quality and probity of communication with the
Committee;

› the depth of understanding of the Group’s business,
operations and systems, and accounting policies
and practices; and

› the demonstration of professional integrity and

objectivity to rotate and select other key
engagement partners at least every five years or as
otherwise required by applicable law or regulation.

The Committee continues to review annually the
appointment of the External Auditor, taking into
account the External Auditor’s effectiveness,
independence and Audit Partner rotation, and makes
a recommendation to the Board accordingly.

Any decision to open the external audit to tender
would be taken on the recommendation of the
Committee. To date, no tender has been conducted,
and there are no contractual obligations that restrict
the Group’s current choice of External Auditor.

Further details of the responsibilities of the
Committee regarding the engagement of the External
Auditor and the supply of non-audit services can be
found in the Committee’s Terms of Reference.

External Auditor
PricewaterhouseCoopers LLP (PwC) were appointed
as the Group’s External Auditor on demerger in
December 2014, and were last re-appointed by
shareholders at the AGM in May 2020. The External
Audit team is led by Sarah Quinn (External Audit
Partner), who was appointed following the conclusion
of the 2016 year-end audit.

The Committee oversees the work undertaken by
the External Auditor, and is responsible for the
development, implementation and monitoring of
policies and procedures on the use of the External
Auditor for non-audit services in accordance with
professional and regulatory requirements. These
policies are kept under review to ensure that the
Group benefits, in a cost-effective manner, from the
cumulative knowledge and experience of the External
Auditor while ensuring that the External Auditor
maintains the necessary degree of independence and
objectivity. During the year, the Committee continued
to meet with the External Auditor following Committee
meetings, without members of management being
present, and reviewed key issues within their scope
of interest and responsibility. Such meetings provided
a forum for open dialogue and feedback.

Auditor effectiveness
The Committee on behalf of the Board is responsible
for assessing the effectiveness of the audit process.
This process was in place throughout the year and
post year-end and including the date of approval of
the Annual Report.

In fulfilling its responsibilities in assessing the
effectiveness of the External Auditor the Committee
reviewed:

› the fulfillment by the External Auditor of the agreed

audit plan and variations from it;

› reports highlighting the significant risks and key

judgments that arose during the course of the audit
and their resolution;

› key findings from the FRC’s Audit Quality Inspection

report for PwC and planned actions;

› a report from the Audit Partner at each Committee

meeting; and

› fees charges for execution of the external audit.

Consistent with the previous year, the Committee
received feedback from key internal stakeholders in
assessing the effectiveness of the External Auditor.
The analysis of the results was undertaken by
Lintstock on the quality of the External Auditor’s
communication, delivery and interaction with the
various finance teams across the Group. The results
were discussed with the Committee and the External
Auditor at the Committee meeting held in November
2020 and it was concluded that the working
relationship between the External Auditor and the
various finance teams was effective and that the audit
had been undertaken in an independent, constructive
and professional manner.

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The Committee will consider non-audit services when
it is in the best interests of the Group to do so, provided
they can be undertaken without jeopardizing the
independence of the External Auditor.

The Group’s policy on non-audit fees states that, on
an annual basis, non-audit fees by external auditors
must not exceed 70% of the average of the Group’s
external audit fees billed over the last three-year
period.

Any permitted service with a fee of $0.5m or less is
considered trivial and must be pre-approved by the
Chief Financial Officer. Any services with a fee of more
than $0.5m must first be approved by the Committee.

Amounts paid to the External Auditor were $3.1m
(2019: $2.4m) during the year, comprising $2.6m
(2019: $2.0m) for audit services and $0.5m (2019: $0.4m)
for audit-related assurance services as set out in
Note 6 to the consolidated financial statements. In
conclusion, taking into account the application of the
revised Provision of Non-Audit Services Policy, the
Committee is satisfied that the External Auditor was
independent at all times during the year under review.

External Auditor re-appointment
The Committee has recommended to the Board that
PricewaterhouseCoopers LLP be proposed for re-
appointment by shareholders as the External Auditor
at the AGM in May 2021.

The external audit contract will be put out to tender
at least every ten years and the Committee considers
that it would be appropriate to conduct an external
audit tender by no later than 2023 for the 2024 year
end. The Company continues to comply with the
Statutory Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive Tender
Processes and Audit Committee responsibilities) Order
2014 for the financial year under review.

Daniel Tassé
Chair of the Audit Committee

March 18, 2021

C O R P O R A T E G O V E R N A N C E C O N T I N U E D

External Auditor independence
Indivior has a formal policy in place to safeguard the
independence of the External Auditor. The Committee
and the Chief Financial Officer keep the independence
and objectivity of the External Auditor under review,
and during the year the Committee formally reviewed
the independence of the External Auditor, and
believes they remained independent throughout the
year. Separately, the External Auditor has reported
to the Committee confirming its independence
throughout the year within the meaning of the
regulations on this matter and in accordance with
its professional standards.

To fulfill its responsibilities to ensure the independence
of the External Auditor, the Committee reviewed:

› a report from the External Auditor describing

arrangements to identify, report and manage any
conflict of interest, and policies and procedures
for maintaining independence and monitoring
compliance with relevant requirements; and
› the extent of non-audit services provided by the

External Auditor.

The Committee has reviewed the nature and level of
non-audit services undertaken by the External Auditor
during the year to satisfy itself that there is no effect
on their independence.

Non-audit services
The Committee and the Board place great emphasis
on the objectivity of the Group’s External Auditors
in reporting to shareholders. During the year, the
Committee reviewed its Provision of Non-Audit
Services Policy and revised the policy to incorporate
the requirements of the Financial Reporting Council's
(FRC) Ethical Standard (2019) which now includes a
‘whitelist’ of permitted audit and audit-related services
along with ensuring its continuing compliance with
the FRCs Guidance on Audit Committees (2016). The
Policy recognizes the criticality of the independence
and objectivity of the External Auditor and the need
to ensure that this is not impaired by the provision
of non-audit services.

The Committee, in keeping under review the nature
and level of non-audit services undertaken by the
External Auditor, recognizes that it may be more
beneficial for the External Auditor to provide certain
services because of its existing knowledge of the
business or because the information required is a by-
product of the audit process. In these circumstances,
the External Auditor is permitted to provide certain
non-audit services where these are not, and are not
perceived to be, in conflict with its independence.

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NOMINATION & GOVERNANCE
COMMITTEE

Lorna Parker
Lorna Parker
Chair of the Nomination
Chair of the
& Governance Committee
Nomination &
Governance
Committee

On behalf of the Board I am pleased to present the
Nomination & Governance Committee Report for the
financial year ended December 31, 2020.

Once again, the Committee had a full agenda in 2020.
The Committee supported the Board in making
recommendations regarding a number of significant
appointments, including the Chair of the Board, Chief
Executive Officer and Chief Financial Officer. The
Committee will continue to monitor succession plans in
2021 to ensure these remain effective and appropriate.

The Committee has responsibility for reviewing the
Group’s corporate governance arrangements and its
Integrity & Compliance Program. As part of the
settlement with the US Attorney’s Office for the
Western District of Virginia, the Group entered into
a Corporate Integrity Agreement with the Office of
Inspector General of the U.S. Department of Health
and Human Services (the “CIA”), DOJ Compliance
Measures and FTC Stipulated Order, which present
ongoing reporting and annual requirements that span
the next five to ten years. To support in its oversight
of the Integrity & Compliance Program, the Board
appointed an independent consultancy, Guidehouse,
as Compliance Expert to the Board.

The Board and the Committee will continue to oversee
the continuous development of our Integrity &
Compliance Program in 2021.

Lorna Parker
Chair of the Nomination & Governance Committee

Members and meetings
At the invitation of the Committee, the Chair of the
Board, the Chief Executive Officer, the Chief Legal
Officer, the Chief Integrity & Compliance Officer and
the Company Secretary attended meetings of the
Committee. The Company Secretary is secretary to
the Committee.

Following the entering into of the CIA, DOJ Compliance
Measures and FTC Stipulated Order, the Compliance
Expert to the Board attends the relevant section of
each Committee meeting which relates to integrity
and compliance matters. For part of each meeting, the
Committee meets privately with the Chief Integrity &
Compliance Officer and the Compliance Expert to the
Board and then also separately meets with the
Compliance Expert to the Board only.

The Chair of the Committee reports on the activities
of the Committee at the following Board meeting, and
copies of the minutes of Committee meetings are
circulated to all Directors.

The Committee has authority to appoint search
consultants and other advisors at its discretion.

The Committee has delegated authority from the
Board, which is set out in its Terms of Reference.

Role and responsibilities
The role and responsibilities of the Committee fall into
two key areas:

Board composition and succession planning
› reviewing the size, composition, diversity and

balance of skills of the Board and its Committees;
› overseeing the appointment process for Directors

and making recommendations to the Board
regarding appointments to the Board and its
Committees; and

› overseeing succession plans for the Board, its

Committees and for senior management positions,
and ensuring that these support the development
of a diverse pipeline for succession.

INDEPENDENT
NON-EXECUTIVE DIRECTOR

DATE APPOINTED TO
THE COMMITTEE

DATE STEPPED DOWN
FROM THE COMMITTEE

MEETINGS ATTENDED IN 2020

MEMBERS (AT DECEMBER 31, 2020)

Lorna Parker (Chair)
Graham Hetherington1

A. Thomas McLellan

Daniel J. Phelan

FORMER MEMBERS

Tatjana May

Yes

November 2014

Independent on appointment November 2020

November 2014

July 2020

5/5

0/0

5/5

2/2

February 2017

July 31, 2020

3/3

1. Graham Hetherington was appointed a member of the Committee on November 18, 2020; there were no Committee meetings held between that date and the end

of the financial year.

Indivior Annual Report 2020
Indivior Annual Report 2020

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Governance

C O R P O R A T E G O V E R N A N C E C O N T I N U E D

Corporate governance and compliance
› keeping the Group’s corporate governance

arrangements under review and monitoring external
corporate governance developments;

› reviewing and evaluating additional external

appointments for the Directors of Indivior PLC and
members of the Executive Committee and conflicts
of interest notified by Directors, and making
recommendations to the Board; and

› overseeing the Integrity & Compliance Program.

Activities during the year
During the year, the Committee considered, amongst
other items, the following matters:

Corporate governance
During the year, the Committee was kept abreast of
developments in corporate governance by the
Company Secretary. In particular, the Committee:

› considered the program of engagement with the
workforce. Further information regarding the
Board’s approach to engagement with the workforce
can be found on page 62;

› reviewed the External Appointments Policy, which
requires that all Directors of Indivior PLC receive
approval from the Board prior to accepting an
additional external appointment;

› received an update on the Group’s data privacy
program, which included the establishment of a
Data Governance Committee and appointment
of a Senior Information Risk Owner; and

› on behalf of the Board, reviewed and approved the
Group’s UK Modern Slavery Statement, a copy of
which is available on the Group’s website
(www.indivior.com).

Director independence and conflicts of interest
Processes exist for actual or potential conflicts of
interest to be reviewed and disclosed and to make
sure Directors do not participate in any decisions
where they may have a conflict or potential conflict.

During the year, the Committee considered the
other commitments of the Chair and Non-Executive
Directors and if these were likely to give rise to a
potential conflict of interest. The Committee also
reviewed the likely time commitment required from
the Directors’ other appointments and if these were
likely to interfere with their ability to discharge their
duties (and having regard to ‘overboarding’ guidelines).
The Committee provided a report on its review to
the Board.

The Board considered the Committee’s
recommendations and considered that each of the
Non-Executive Directors remained independent and
dedicated sufficient time to discharge their duties
effectively.

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External directorships
In accordance with Provision 15 of the 2018 Code,
the External Appointments Policy requires that the
Directors of Indivior PLC receive approval from the
Board prior to accepting an additional external
appointment. In reviewing an additional appointment,
consideration will be given to the Director’s existing
commitments, the likely time commitment of the new
role (having regard to ‘overboarding’ guidelines) and
if the appointment is likely to give rise to a conflict of
interest. None of the Directors took on additional
external appointments during the year.

Subject to the prior approval outlined above, Executive
Directors may hold one non-executive appointment
and members of the Executive Committee may hold
one non-executive appointment subject to the approval
of the Executive Committee. The Executive Directors do
not hold any external directorships.

Succession planning
Chair succession
In June 2020, Howard Pien took a medical leave of
absence, and subsequently stepped down from the
Board in September 2020. Daniel Tassé, who has a
deep understanding of the pharmaceutical sector
and Indivior’s business, was appointed as Interim
Chair in June 2020; he continued in this role until
November 2020.

The 2019 Board Effectiveness Review had highlighted
the need to develop an orderly succession plan for the
Chair of the Board and the Committee had considered
the plan at its meeting in November 2019 and again in
July 2020; this plan was accelerated when Mr Pien
stepped down from the Board.

The Committee considered if an external process
would be undertaken and agreed that, as there were
a number of potential candidates amongst the serving
Non-Executive Directors, an external process would not
be undertaken. The Chairs of the Nomination &
Governance Committee and Remuneration Committee
led the process, which included discussions with each
of the Directors and the Company Secretary.

Following a thorough process, the Committee
recommended to the Board that Graham Hetherington
be appointed Chair of the Board. Graham has a strong
track record of value creation including in specialty
pharma and has deep strategic, operational and
financial expertise. The Board appointed Graham
Hetherington as Chair of the Board in November 2020.

Executive succession
Shaun Thaxter stepped down as Chief Executive
Officer in June 2020. Mark Crossley, who had been
Chief Financial & Operations Officer and Executive
Director since February 2017, was appointed as Chief
Executive Officer.

Mr Crossley had previously been identified as a
potential successor to Mr Thaxter as part of the
Committee’s regular succession planning discussions.
In determining to appoint Mark Crossley as Chief
Executive Officer, the Board considered his deep
understanding of the Company’s guiding principles,
proven leadership skills and broad strategic and
financial skillset.

Ryan Preblick was appointed Interim Chief Financial
Officer in June 2020. A search process, considering
both internal and external candidates, was
undertaken to identify a permanent Chief Financial
Officer. Following a thorough process, the Committee
recommended the appointment of Ryan Preblick as
Chief Financial Officer. His appointment was approved
by the Board in November 2020. In determining to
appoint Ryan, the Board took account of his strong
financial leadership, deep understanding of the
organization and strong performance in his role as
Interim Chief Financial Officer.

Non-Executive succession
The Committee keeps the succession plans for the
Non-Executive Directors under close review. In April
2020, Tatjana May advised the Board that she would
step down as a Non-Executive Director in July 2020.
Due to the COVID-19 pandemic, it was agreed that a
search process would not be implemented to identify
a successor at that time.

Following Graham Hetherington’s appointment as
Chair of the Board, it was agreed that a search would
commence to identify a Non-Executive Director with
recent and relevant financial experience.

In January 2021, Daniel Tassé notified the Board that
he would step down as a Non-Executive Director
following the conclusion of the 2021 AGM.
Consequently, the Board has extended the search
process to identify an additional Non-Executive
Director. The search process is progressing and further
information regarding the appointment process can
be found under the section below.

Appointment of Non-Executive Directors
There is a formal, rigorous and transparent process
for the recruitment of new Directors. This process
includes the appointment of an external search
consultancy to support the Committee in the
development of a candidate specification, development
of long- and shortlists, conducting screening interviews
and taking up references. Candidate specifications are
developed by reference to the skills matrix maintained
by the Committee and the personal strengths and
experience required in addition to the promotion of
diversity. Shortlisted candidates are interviewed by a
number of Directors (including Executive and Non-
Executive Directors). Prior to recommendation, a
review is undertaken of any actual or potential
conflicts and assessment of the proposed Director’s
existing commitments. Following these steps, the
Committee makes a recommendation to the Board
regarding the appointment of the preferred candidate
to the Board and relevant Committees.

The Chair of the Nomination & Governance Committee
leads the recruitment process, supported by the
Company Secretary. The Chair of the Nomination &
Governance Committee provides regular progress
reports to the Board, including copies of candidate
specifications and profiles.

Board Effectiveness Review
The Committee considered the approach regarding
the review of the effectiveness of the Board, its
Committees and the individual Directors. As the
Company was not a member of the FTSE 350 for the
majority of the year and due to a number of other
factors including the focus on the DOJ resolution, it
was agreed that an internally facilitated evaluation
would be undertaken in 2020. The Chair of the
Committee, supported by the Company Secretary,
developed the approach for 2020, which was
undertaken by way of an online survey, followed by
meetings with each individual Director, the Chair and
Company Secretary.

The Committee’s performance was reviewed as part
of the Board’s annual performance evaluation. Further
information regarding the 2020 Board Effectiveness
Review can be found on page 61.

Integrity & Compliance
At each meeting, the Committee received an update
from the Chief Integrity & Compliance Officer on the
Group’s Integrity & Compliance Program. The
Compliance Expert to the Board also attends these
parts of the Committee’s meeting.

For part of each meeting, the Committee meets
privately with the Chief Integrity & Compliance Officer
and the Compliance Expert to the Board and then also
separately meets with the Compliance Expert to the
Board only.

Ahead of each meeting, the Committee receives the
Integrity & Compliance dashboards, which show
performance across all program areas, including:

› progress against the Integrity & Compliance key

strategic priorities for the year;

› key program enhancements, including
developments to policies and process
enhancements supported by external advisors;

› risk assessments and mitigation plans;
› details of training and workforce

education activities;

› field monitoring activities;
› transparency reporting;
› reports received via the Group’s confidential
reporting hotline (Ethicsline) and subsequent
investigations; and

› staffing and resourcing of the Integrity &

Compliance Department.

During the year, the Group entered into a Corporate
Integrity Agreement (CIA) with the Office of the
Inspector General of the U.S. Department of Health
and Human Services, as well as Department of Justice
Compliance Measures and FTC Stipulated Order
commitments. The Committee has received reports on
the implementation of these commitments and the
effectiveness of Indivior's Integrity & Compliance
Program.

Further information regarding the Group’s Integrity &
Compliance program can be found on pages 25 and 26.

Indivior Annual Report 2020
Indivior Annual Report 2020

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C O R P O R A T E G O V E R N A N C E C O N T I N U E D

Diversity and inclusion
At Indivior, we value our distinctive culture and
believe it is a key source of sustainable competitive
advantage. We believe diversity and inclusion in its
broadest sense supports innovation, continuous
improvement of quality, and increased speed and
efficiency in meeting the various needs of our
patients, customers and stakeholders.

Our Diversity and Inclusion Policy, which applies to
the Board and our workforce, reflects our beliefs
and values. Supporting and promoting the diversity
of our people is an important priority for the Group
and we have focused on developing an inclusive
culture that values all employees regardless of their
age, disability, gender, race, sexual orientation or
other protected characteristics. We achieve this
through targeted sourcing of people from diverse
backgrounds and cultures and an ongoing focus on
creating an environment that allows our talented
people to prosper.

As a result of departures from the Board during
the year, gender and ethnic diversity has reduced.
When making new appointments, the Nomination
& Governance Committee and the Board gives
careful consideration to the skills, experience and
knowledge of the potential candidates and makes
its recommendations and appointments based
on merit and objective criteria and, within this context,
the promotion of diversity of gender, social and ethnic
backgrounds, cognitive and personal strengths.

The Nomination & Governance Committee has
considered the diversity of the Board and recognizes
that we have work to do. The Board is supportive of
the targets set by the Hampton Alexander Review and
Parker Review and aspires to achieve the targets set
by Hampton Alexander Review by the 2022 AGM and
the Parker Review by the target date of 2024.

There is currently one female Director on the Board,
representing 13% of the composition of the Board.
Our senior management (the Executive Committee)
is comprised of 22% women. Across the Group and at
senior leadership levels in the organization (Executive
Committee members and their direct reports), there is
32% female representation.

Board of Directors

Male: 87%
Female: 13%

Senior management team

Male: 78%
Female: 22%

Senior leadership

Lorna Parker
Chair of the Nomination & Governance Committee

Male: 68%
Female: 32%

March 18, 2021

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SCIENCE & POLICY COMMITTEE

Peter Bains
Peter Bains
Chair of the Science &
Chair of the
Policy Committee
Science & Policy
Committee

Members and meetings
At the invitation of the Chair of the Committee, the
Chief Scientific Officer, Chief Medical Officer and Chief
Commercial and Strategy Officer attended meetings
of the Committee.

The Deputy Company Secretary is secretary to the
Committee.

Role and responsibilities
The principal role and responsibilities of the
Committee include:

› to provide assurance to the Board regarding the

quality, competitiveness and integrity of the Group’s
research and development (R&D) activities;

› to evaluate emerging issues and trends in science

and policy matters including the potential impact of
wider government policy that may affect the Group’s
overall business strategy;

› to review the scientific technology and R&D
capabilities deployed within the business;

› to assess the decision-making processes for R&D

projects and programs, and to review benchmarking
against industry and scientific best practice, where
appropriate; and

› to review relevant and important bioethical issues
and assist in the formulation of, and agreement on
behalf of the Board, appropriate policies in relation
to such issues.

The Committee has delegated authority from the
Board, which is set out in its Terms of Reference and
available to view on the Group’s website
www.indivior.com.

The Committee has authority to appoint consultants
and other advisors at its discretion.

The Committee holds a private session at each
meeting without members of the executive
management team being present.

The Chair of the Committee reports on the activities of
the Committee to the Board, and copies of the minutes
of Committee meetings are circulated to all Directors.

Activities during the year
During the year, the Committee considered, among
other items, the following matters:

› monitored and reviewed the planning and
execution of appropriate post-marketing
requirement studies and post-marketing
commitment studies relating to SUBLOCADE and
PERSERIS;

› monitored and reviewed the progress and

development of the Group's product pipeline
growth strategy and early stage asset development
opportunities including INDV-2000: Selective OX1
receptor antagonist, INDV-1000: Selective GABAb
positive allosteric modulator and an ATRIGEL drug
delivery platform;

› reviewed the ongoing progress of the RECOVER
Study™ (Remission from Chronic Opioid Use-
Studying Environmental and Socio-Economic
Factors on Recovery);

INDEPENDENT
NON-EXECUTIVE DIRECTOR

DATE APPOINTED TO
THE COMMITTEE

DATE STEPPED DOWN
FROM THE COMMITTEE

MEETINGS ATTENDED IN 2020

MEMBERS (AT DECEMBER 31, 2020)

Peter Bains

A. Thomas McLellan

FORMER MEMBERS

Tatjana May

Yes

August 2019

November 2014

–

November 2019

July 31, 2020

5/5

3/3

Indivior Annual Report 2020
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C O R P O R A T E G O V E R N A N C E C O N T I N U E D

› received comprehensive briefings on the Group’s

public policy strategies with emphasis on the federal
and state landscape in the US, including legislative
developments focusing on the provision of
medication assisted treatment and drug pricing
reforms;

› revision of strategy and priorities for the Group’s
Global Medical Affairs team including strategic
alignment and collaboration between the US
Medical Affairs team and the Group’s Government
Affairs team;

› reviewed initiatives for controlled product

involvement in the US Criminal Justice System
and greater participation and delivery to health
ecosystems;

› endorsed the Group’s fresh initiative focused on
advancing patient interests through innovation,
advancing policies and messaging resulting in the
initiative ‘New Leaf for Patients’;

› reviewed progress of regulatory filings outside

the US;

› reviewed the effectiveness of the Committee
during the year as part of the Board’s annual
performance; and

› throughout the year, the Chief Scientific Officer
updated the Committee on the progress of the
Peer-Review publications in which the Group was
involved, which numbered 40 at the year-end.
The Committee also approved the Peer-Review
Publication Plan for 2021.

Peter Bains
Chair of the Science & Policy Committee

March 18, 2021

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D I R E C T O R S ’ R E M U N E R A T I O N R E P O R T

ANNUAL REMUNERATION
STATEMENT

Daniel J. Phelan
DANIEL J. PHELAN
Chair of the
Chair of the
Remuneration
Remuneration
Committee
Committee

DEAR SHAREHOLDERS,
On behalf of the Board, I am pleased to present the
Directors’ Remuneration Report for the financial year
ended December 31, 2020. This report is split into the
following sections:

› the Annual Statement, which provides a summary
of the remuneration decisions made during the
year, together with an ‘at a glance’ summary of
the remuneration decisions made during the year;

› the proposed Directors’ Remuneration Policy,

which will be put to shareholders for approval at
the Annual General Meeting on May 6, 2021; and

› the Annual Report on Remuneration, which

describes how the Remuneration Policy that was
approved by shareholders at the 2018 AGM has
been applied during the year.

My colleagues and I on the Committee hope that you
find the report clear, transparent and informative,
and that we can count on your continued support.
The Committee believes the Remuneration Policy
proposed for approval will support and drive our
long-term growth ambitions and deliver returns
on behalf of shareholders.

All payments to Directors during the year were made
in accordance with the Remuneration Policy.

COVID-19
2020 was an unprecedented year. After a positive
operational start to the year, the COVID-19 pandemic
brought about an abrupt change in market conditions.
Our immediate priorities in this challenging period
were the safety and wellbeing of our people and
ensuring that we were able to maintain a supply
of medicines to our patients.

Maintaining flexibility through cash conservation
remained a key element of our near-term plans. In
May 2020, and in direct response to the challenges
presented by COVID-19, the Executive Committee
agreed that they would forgo any bonus payment
for 2020 under the Annual Incentive Plan (AIP).

Later in the year, and with uncertainty continuing,
the Group took a number of organizational and cost
actions to better align capabilities and resources with
the Group’s strategic priorities, targeting a reduction
in the operating base by $60-70m on an annualized
basis. Unfortunately, this resulted in a number of our
colleagues leaving the Group. We also determined that
there would be no annual merit salary increases in
2021 and that the profit-sharing component of the
US 401(K) pension plan would be suspended in 2021.
The fees for the Chair and Non-Executive Directors
were reviewed and it was agreed that they would not
receive an increase, aligned with the wider workforce.

The Committee has considered the COVID-19 context
in its broader decision making and has considered
executive pay in the context of the wider workforce
and the broader impact on society, the Company
and its shareholders.

Changes to the Board
Shaun Thaxter stepped down as Chief Executive
Officer and Executive Director on June 27, 2020 in
mutual agreement with the Board. He subsequently
pled guilty in his personal capacity to one
misdemeanor count under the US Responsible
Corporate Officer Doctrine. Under this doctrine,
executives can be held liable for violations of the
Federal Food, Drug, and Cosmetic Act by others in
the Company without personal wrongdoing or
malfeasance by the executive.

In determining Mr Thaxter’s leaving arrangements, the
Committee was mindful of the circumstances in which
he stepped down and considered the operational
performance of the business. The Committee also
considered Mr Thaxter’s performance and conduct
during his tenure, and noted that there had not been
any findings of personal wrongdoing or malfeasance.

The Committee noted that Mr Thaxter had played
a pivotal role in the formation of Indivior and its
vision to improve the lives of patients suffering from
addiction and its co-occurring disorders. The business
had received successful approval for and had
launched SUBLOCADE and PERSERIS in the US and
other key territories and managed the impact of the
launch of generic film competition to SUBOXONE
Film in 2019.

The Committee determined, based on Mr Thaxter’s
leadership that produced years of positive operational
performance, and the absence of any findings of
personal wrongdoing or malfeasance, to allow
Mr Thaxter to retain his outstanding LTIP awards.
The awards will be pro-rated for time worked and
subject to the achievement of stretching performance
conditions and a two-year post-vesting holding
period. The awards will also remain subject to the
Company’s malus and clawback policies.

Indivior Annual Report 2020
Indivior Annual Report 2020

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D I R E C T O R S ' R E M U N E R A T I O N R E P O R T

Mark Crossley, who was previously the Chief Financial
and Operations Officer and who has been an
Executive Director since February 2017, was appointed
Chief Executive Officer on June 29, 2020. Ryan Preblick
was appointed Interim Chief Financial Officer on
June 29, 2020 and was appointed Chief Financial
Officer and Executive Director on November 20, 2020.

Further information regarding the remuneration
arrangements for Mark Crossley and Ryan Preblick and
the termination arrangements for Shaun Thaxter are
disclosed in the Annual Report on Remuneration on
pages 102 to 103 respectively.

Further information regarding the appointments process
can be found on pages 74 to 75.

Our new Directors’ Remuneration Policy
Over the course of 2020 and early 2021, the
Remuneration Committee conducted a full review
of remuneration arrangements ahead of proposing
the revised Directors’ Remuneration Policy for
approval at the 2021 AGM, this being three years from
the introduction of the current policy. This included
consultation with our major shareholders and investor
bodies and the feedback received was considered in
the development of our proposed Remuneration Policy.

The Committee is highly cognizant of the shareholder
experience in 2019 and 2020, the challenges facing the
business in the short to medium term as well as the
ongoing challenges posed by the COVID-19 pandemic
and has considered all these factors in the
development of our future Remuneration Policy.

When conducting its review, the Committee was mindful
of what is considered best practice in remuneration
for a Group operating within the UK listed environment,
whilst also recognizing the need to compete for talent
in the transatlantic pharmaceutical sector.

Whilst we do not propose to make any structural
changes to the framework of remuneration, we
propose the following important changes to the
key elements of our Remuneration Policy:

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› Alignment of pensions contributions for the

Executive Directors with contributions available
to the wider workforce

› Reduction in LTIP maximum and introduction of a
cap on the absolute maximum number of shares

We recognize both our market positioning and the
current executive remuneration environment in the
UK, whilst also recognizing we are behind the US
market in terms of quantum. In trying to carefully
balance these two markets, the Committee has
proposed to reduce the annual maximum Long-Term
Incentive Plan (LTIP) opportunity for the Executive
Directors from 500% of salary to 400% of salary (i.e.
a 20% reduction in the maximum award level). In
addition, a cap on the absolute number of shares
under award so that the maximum number of
shares to be awarded in any year will be the lower
of 1,500,000 shares or 400% of salary. In keeping
with previous years, the Committee will continue to
review the award level under the LTIP prior to grant
and may reduce the award level, taking into account
the underlying business and alignment with the
shareholder experience. These reductions will be
applied in respect of the awards to be granted in
March 2021.

› Shareholding policy

In order to align the shareholding policy with the
LTIP opportunity, the shareholding policy will be
changed to a number of shares such that an
Executive Director will be required to hold the
lower of 1,500,000 shares or the number of shares
equivalent to 400% of salary.

› Introduction of a formal post-cessation

shareholding policy
Executive Directors will be expected to hold Indivior
shares equal to their incumbent shareholding
requirement (or actual shareholding if lower) for
two years post departure. The introduction of a
formal policy formalizes and augments the Group's
existing provisions.

Context for remuneration at Indivior
Our remuneration philosophy is focused on aligning
the incentivization of our senior executives with our
strategic priorities.

Our approach remains the careful balancing of our
positioning as a primarily US-based business that
competes for talent in a global market, but one which
is UK-listed and operates within a UK governance
framework. We recognize that our remuneration
structure is different in some respects from a ‘typical’
UK package, but the Committee believes that the
structure carefully balances these factors and will
ensure that the Group is able to retain and attract
the talent needed to enable the delivery of our
strategic ambitions.

2020 Remuneration outcomes

Annual Incentive Plan
As announced in May 2020, the Executive Directors
have forgone any bonus payment for 2020 associated
with the Group’s Annual Incentive Bonus Plan (AIP).

Long-Term Incentive Plan
For LTIP awards granted in 2018 which vested in 2021,
the year ended December 31, 2020 was the final year
of the three-year performance period. These awards
were subject to three separate measures (each with
one-third weighting): relative Total Shareholder Return
(TSR) versus the constituents of the FTSE 250 Index
excluding investment trusts; relative TSR versus the
constituents of the S&P1500 Pharmaceutical and
Biotech Index; and key pipeline and product targets.
Threshold performance in respect of the relative TSR
performance measures was not met resulting in 0%
vesting for those elements and there was 33% vesting
in respect of the key pipeline and product element.
This resulted in an overall vesting of 11% of maximum
on a formulaic basis.

However, in light of the shareholder experience over
the same three-year period, the Committee considered
it appropriate to once again exercise its discretion
to override the formulaic outturn and reduce LTIP
amounts to zero in respect of the awards held by
Mark Crossley and Shaun Thaxter.

Discussion of the targets set and remuneration
outcomes are set out in the Annual Report on
Remuneration on pages 96 to 98.

Implementation of Remuneration Policy for Executive
Directors in 2021

Base salary
The Executive Directors will not receive a base salary
increase in 2021.

Annual Incentive Plan
The structure of the AIP will remain unchanged in
2021 with 75% of any bonus payment delivered in cash
and 25% to be deferred into shares for a period of two
years. The metrics have been realigned with the key
strategic objectives for the business: global net
revenues for SUBLOCADE and US net revenues
for PERSERIS.

Long-Term Incentive Plan
LTIP awards granted in 2021 will be subject to
relative TSR versus the constituents of the FTSE 250
(excluding investment trusts) and relative TSR versus
the constituents of the S&P 1500 Pharmaceutical
and Biotech Index, each with equal weighting.
The Committee considers that relative TSR remains
a relevant metric as it is directly aligned with the
interests of shareholders. The use of two relative
TSR comparator groups is intended to balance the
fact that Indivior is a FTSE 250 listed company, but also
recognizes that Indivior operates within a specialized
sector, where the majority of its direct peers are listed

in the US. The awards granted to the Executive
Directors in 2021 will be subject to an additional two-
year holding period following the end of the three-
year performance period. Further details can be found
on page 100.

Shareholding requirements
Our executive shareholding requirements are
significantly higher than UK market practice. At
December 31, 2020, the Chief Executive Officer held
shares with a value equivalent to 65% of salary and
the Chief Financial Officer held shares with a value
of 17% of salary.

All-employee plans
The Group operates all-employee share plans in the
US and UK.

Shareholder engagement
The Committee is committed to aligning the interests
of the Executive Directors with shareholders. During
the year, we consulted with our largest shareholders
(representing c.70% of our issued share capital), as
well as proxy advisors. As part of this consultation,
we sought feedback from shareholders in respect of
the 2019 Remuneration Report vote, the termination
arrangements in respect of the former Chief Executive
Officer and the proposals in respect of the 2021
Remuneration Policy.

The Committee recognizes that the 2019 Remuneration
Report received a 24% vote against at the 2020 Annual
General Meeting and c.15% of shareholders abstained
from voting on this and a number of other resolutions.
Following our consultation, we published an Update
Statement on our website in November 2020,
acknowledging that some shareholders had been
concerned that executive remuneration with respect
to the 2019 financial year was not completely aligned
with the shareholder experience. In particular, the
principal issues raised were that the awarding of
salary increases and payment of bonuses to the
Executive Directors were not considered to be
aligned with the shareholder experience in 2019.

The Committee is grateful for the engagement and
feedback received. That feedback received was
considered by the Committee in the development
of our proposed Remuneration Policy and also in
determining remuneration outcomes in respect
of the 2020 financial year.

2021 Annual General Meeting
We hope to receive your support for the
Remuneration Policy and Directors’ Remuneration
Report at our AGM in May 2021.

Daniel J. Phelan
Chair of the Remuneration Committee

March 18, 2021

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C O N T I N U E D

Governance

REMUNERATION AT A GLANCE

Base
salary

y
a
P
d
e
x
i
F

Pension
and
benefits

AIP

LTIP

y
a
P
e
l
b
a
i
r
a
V

Year ended 31 December 2020

Proposed implementation for 2021

Year ended 31 December 2020

Proposed implementation for 2021

Base salaries effective 1 January 2020

No merit increases applied to base salaries.

LTIP

Mark Crossley

Ryan Preblick

$775,000

$480,000

The pension benefits of the Executive
Directors are aligned with those of the
wider US workforce.

Benefits include healthcare, car allowance
and life and disability insurance. No
changes will be made to benefits and
pension arrangements for 2021.

The maximum award for 2021 remains
unchanged:

1. Mark Crossley – 200% of salary
2. Ryan Preblick – 120% of salary

The performance measures and weightings
for 2021 will be:

Measure

Global net revenue – SUBLOCADE

US net revenue – PERSERIS

Weighting

80%

20%

25% of any bonus paid will be deferred into
shares for a period of two years.

Mark Crossley1

Ryan Preblick2

Shaun Thaxter

$775,000

$480,000

$846,300

1. From appointment as CEO, effective June 29, 2020.
2. From appointment as CFO, effective November 19, 2020.

Profit sharing contributions of 4% of base
salary plus any Company match of 75% on
elected deferrals up to 4.5% of base salary
provided to Mark Crossley and Ryan Preblick,
in line with the wider workforce.

Shaun Thaxter received pension contributions
of 17.5% of salary up to the date he stepped
down from the Board.

Other benefits provided in line with policy.

In response to the COVID-19 pandemic,
the Executive Directors and members of the
Executive Committee agreed to forgo any
bonus payment under the AIP 2020 and
therefore no bonus was paid to the
Executive Directors for 2020.

Performance against the targets set at the
start of the performance period has been
included on page 96 for completeness.

For LTIP awards granted in 2018, the Committee
considered the formulaic outturn in the
context of the shareholder experience and
determined to exercise its discretion to
override the formulaic outturn to zero.

Measure

TSR (FTSE 250)

Weighting

Outcome

33.3%

TSR (S&P 1500 Pharma
& Biotech)

Key pipeline and product

Outcome (on formulaic basis)
Committee negative discretion
Final outturn

33.3%

11%

11%
(11)%
0%

Clarity

Simplicity

›

Risk

LTIP awards of 225% of base salary were

The maximum opportunity has been

granted to the Executive Directors (reduced

reduced from 500% to 400% of base salary.

from policy maximum of 500% of base salary).

In addition, a cap on the absolute number

The performance measures are unchanged

from the 2019 award:

Measure

TSR (FTSE 250)

TSR (S&P 1500 Pharma & Biotech)

A two-year holding period applies to vested

awards.

Weighting

50%

salary.

Measure

TSR (FTSE 250)

of shares will be applied so that the

maximum number of shares to be granted

is the lower of 1,500,000 or 400% of base

Weighting

50%

TSR (S&P 1500 Pharma & Biotech)

A two-year holding period will apply to

vested awards.

UK Corporate Governance Code: Provision 40

When developing the revised Remuneration Policy and considering its proposed operation for 2021, the Committee was

mindful of, and feels it has appropriately addressed, the following factors set out in the UK Corporate Governance Code:

The Committee welcomes open and frequent dialogue with shareholders on our approach to remuneration. During the course of the year,

shareholders were consulted to gather feedback and understand their views on our approach to remuneration, including:

› proposed changes to the Remuneration Policy;

remuneration arrangements for Shaun Thaxter;

remuneration arrangements for Mark Crossley on appointment; and

to gather shareholder views in respect of the 2020 AGM vote.

We believe the remuneration arrangements for Executive Directors, as well as those throughout the organization, are simple in nature and well

understood by both participants and shareholders.

The Committee considers that the structure of incentive arrangements does not encourage inappropriate risk-taking.

AIP deferral, the LTIP holding period and our shareholding requirement, including post-cessation holding, provide a clear link to the ongoing

performance of the business and the experience of our shareholders.

Malus and clawback provisions also apply to the AIP and the LTIP.

Our Remuneration Policy contains details of threshold, target and maximum opportunity levels under our AIP and LTIP, with actual outcomes

dependent on performance achieved against predetermined measures and target ranges. This is illustrated by the charts on page 89.

Our performance measures and target ranges under the AIP and LTIP are aligned with the Group’s strategy and with shareholders’ interests over

Under the AIP and LTIP, discretion may be applied where formulaic outturns are not considered reflective of underlying Group or individual

performance. The Committee has exercised this discretion in recent years to reduce the outcomes under the 2018 AIP, the 2017-2019 LTIP and

The Remuneration Policy has been designed to support the delivery of the Group’s key strategic priorities and is aligned to the Company’s values.

All employees are entitled to participate in the pension scheme. The pension provided to the Executive Directors is aligned to the wider US

Predictability

Proportionality

the longer term.

2018-2020 LTIP to zero.

Alignment to culture

workforce rate.

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Indivior Annual Report 2020

Governance

Year ended 31 December 2020

Proposed implementation for 2021

LTIP

y
a
P
e
l
b
a
i
r
a
V

LTIP awards of 225% of base salary were
granted to the Executive Directors (reduced
from policy maximum of 500% of base salary).

The performance measures are unchanged
from the 2019 award:

Measure

TSR (FTSE 250)

TSR (S&P 1500 Pharma & Biotech)

Weighting

50%

A two-year holding period applies to vested
awards.

The maximum opportunity has been
reduced from 500% to 400% of base salary.
In addition, a cap on the absolute number
of shares will be applied so that the
maximum number of shares to be granted
is the lower of 1,500,000 or 400% of base
salary.

Measure

TSR (FTSE 250)

TSR (S&P 1500 Pharma & Biotech)

Weighting

50%

A two-year holding period will apply to
vested awards.

UK Corporate Governance Code: Provision 40

When developing the revised Remuneration Policy and considering its proposed operation for 2021, the Committee was
mindful of, and feels it has appropriately addressed, the following factors set out in the UK Corporate Governance Code:

Clarity

The Committee welcomes open and frequent dialogue with shareholders on our approach to remuneration. During the course of the year,
shareholders were consulted to gather feedback and understand their views on our approach to remuneration, including:

› proposed changes to the Remuneration Policy;
remuneration arrangements for Shaun Thaxter;
›
remuneration arrangements for Mark Crossley on appointment; and
›
to gather shareholder views in respect of the 2020 AGM vote.
›

Simplicity

We believe the remuneration arrangements for Executive Directors, as well as those throughout the organization, are simple in nature and well
understood by both participants and shareholders.

Risk

The Committee considers that the structure of incentive arrangements does not encourage inappropriate risk-taking.

AIP deferral, the LTIP holding period and our shareholding requirement, including post-cessation holding, provide a clear link to the ongoing
performance of the business and the experience of our shareholders.

Malus and clawback provisions also apply to the AIP and the LTIP.

Predictability

Our Remuneration Policy contains details of threshold, target and maximum opportunity levels under our AIP and LTIP, with actual outcomes
dependent on performance achieved against predetermined measures and target ranges. This is illustrated by the charts on page 89.

Proportionality

Our performance measures and target ranges under the AIP and LTIP are aligned with the Group’s strategy and with shareholders’ interests over
the longer term.

Under the AIP and LTIP, discretion may be applied where formulaic outturns are not considered reflective of underlying Group or individual
performance. The Committee has exercised this discretion in recent years to reduce the outcomes under the 2018 AIP, the 2017-2019 LTIP and
2018-2020 LTIP to zero.

Alignment to culture

The Remuneration Policy has been designed to support the delivery of the Group’s key strategic priorities and is aligned to the Company’s values.

All employees are entitled to participate in the pension scheme. The pension provided to the Executive Directors is aligned to the wider US
workforce rate.

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D I R E C T O R S ’ R E M U N E R A T I O N R E P O R T

DIRECTORS’ REMUNERATION
POLICY

The following tables and accompanying notes in this
section of the report set out the Remuneration Policy
for Executive Directors and Non-Executive Directors
(the “2021 Remuneration Policy”). The 2021 Remuneration
Policy will be put to a binding shareholder vote and,
subject to approval by shareholders, will become
effective from the Annual General Meeting to be
held on May 6, 2021.

Summary of decision-making process and changes
to policy
The policy has been updated to reflect the new UK
Corporate Governance Code, as well as recent
developments in best practice. In determining the new
Remuneration Policy, the Committee followed a robust
process, which included discussions on the content
of the 2021 Remuneration Policy at the Remuneration
Committee meetings throughout the year. The
Committee considered input from management
(while ensuring that conflicts of interests were
suitably mitigated) and our independent advisors.
The Committee also consulted with Indivior’s major
shareholders and considered the feedback received
as part of the review process.

A summary of the differences between the Company’s
current Directors’ Remuneration Policy, approved by
shareholders at the 2018 Annual General Meeting, and
the proposed 2021 Remuneration Policy is set out below:

› Full alignment of pension arrangements for the
Executive Directors with the wider workforce in
their local market;

› A reduction in the LTIP maximum opportunity from

500% of salary to 400% of salary and introduction of
a cap on the absolute number of shares so that the
maximum number of shares to be granted in any
year will be the lower of 1,500,000 shares and 400%
of salary;

› In order to align the shareholding policy with the

LTIP maximum opportunity, the shareholding policy
is reduced from 500% of salary to the lower of
1,500,000 shares or the number of shares equivalent
to 400% of salary;

› Introduction of a post-cessation shareholding

policy. Executive Directors will normally be expected
to maintain a holding of Indivior shares at a level
equal to the lower of the in-post shareholding
guideline or the individual’s actual shareholding for
a period of two years from the date the individual
ceases to be a Director; and

› Other minor changes have been made to improve

the operation of the Remuneration Policy.

The Remuneration Policy will be available on the
Group’s website (www.indivior.com) following the
2021 Annual General Meeting.

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Policy table – Executive Directors

BASE SALARY
To provide an
appropriate
level of fixed
remuneration
to attract and
retain Executive
Directors of the
caliber required
to deliver the
Group’s strategy.

OPERATION
Base salaries are normally
reviewed annually, with any
increase normally being applied
with effect from January 1 each year.
Base salary levels/increases take
account of:
› the competitive practice in the

Group’s remuneration peer group.

› the scope and responsibility of

the position.

› individual and overall business

performance.

MAXIMUM OPPORTUNITY

The current salaries of the Executive Directors are
disclosed in the Annual Report on Remuneration.
To avoid setting expectations of Executive Directors
and other employees, no maximum salary is set
under the Remuneration Policy.
However, salary increases will normally be
aligned with increases awarded across the
Group as a whole.
Increases may be made above this level to take
account of individual circumstances, which may
include (but are not limited to):
› increase in the size or scope of the role or

› salary increases awarded across

responsibilities.

FRAMEWORK USED TO
ASSESS PERFORMANCE
n/a

› increase to reflect the individual’s development
and performance in role. For example, where
a new incumbent is appointed on a below-market
salary.

Where increases are awarded in excess of the wider
employee population, the Committee will explain
the rationale in the relevant year’s Annual Report
on Remuneration.

Maximum levels of contributions for Executive
Directors will be in line with the rates available
to the wider workforce in the Executive Director’s
local market.

n/a

Benefits for Executive Directors are set at a level
which the Committee considers to be appropriate
against relevant market data for comparable roles
in companies of equivalent size and complexity
in similar sectors and geographical locations to
the Group.

n/a

the Group as a whole.

PENSION
BENEFITS
To provide
Executive
Directors with
an appropriate
allowance for
retirement
planning.

BENEFITS
To provide
a market-
competitive level
of benefits for
the Executive
Directors

Executive Directors may receive
contributions into a defined
contribution scheme, a cash
allowance, pension benefits in the
form of profit-sharing contributions
into the US qualified 401(K) plan,
Group matching on 401(K) elected
deferrals, or a combination thereof.

Executive Directors may receive
various market-competitive
benefits, which may include: a
company car (or cash equivalent),
travel allowance, private medical
and dental insurance, travel
accident policy, disability and
life assurance.
Where appropriate, other benefits
may be provided to take account
of individual circumstances, such
as but not limited to expatriate
allowances, relocation expenses,
housing allowance and education
support.
The Company provides Directors’
and Officers’ liability insurance,
and an indemnity to the extent
permitted by law.

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C O N T I N U E D

MAXIMUM OPPORTUNITY

The maximum annual bonus
payable under the AIP is 200%
of base salary.
The current maximum bonus level
applying to each individual
Executive Director is set out in the
Annual Report on Remuneration.

The maximum annual award that
may be made to any individual in
respect of any financial year will be
the lower of 1,500,000 shares and
400% of base salary.
The value for this purpose is the
aggregate grant market value of the
shares. Market value is the average
closing middle market quotations
of shares over the five business
days immediately preceding the
grant date.
Details of the LTIP opportunity
in respect of each year will be
disclosed in the Annual Report
on Remuneration.

FRAMEWORK USED TO
ASSESS PERFORMANCE

Bonuses are based on a combination
of stretching annual financial and
non-financial/strategic performance
measures, with the majority of the
bonus assessed against the
financial performance metrics.
The Committee retains the
discretion to change the measures
and their respective weightings to
ensure alignment with business
priorities. In any event, bonus
measures will be based at least 50%
on financial and no more than 50%
on non-financial and strategic
measures.
For threshold performance, up
to 12.5% of the maximum bonus
opportunity may be received; and
for target performance, up to 50%
of the maximum bonus opportunity
may be received. If performance is
below threshold, no bonus will
be paid.
Further details, including the
performance measures and
weightings in respect of the
relevant financial year, are
disclosed in the Annual Report
on Remuneration. Annual bonus
payments are subject to malus and
clawback arrangements as detailed
in the notes following this table.

Vesting of the awards granted
under the LTIP is subject to
continued employment and the
achievement of key financial and
strategic performance conditions
which are aligned to the Group’s
strategic plan.
The Committee retains the
discretion to change the measures
and their respective weightings to
ensure alignment with business
priorities. In any event, LTIP
measures will be based at least
50% on shareholder return based
measures and no more than 50%
on other non-financial and
strategic measures.
Threshold performance will result in
up to 12.5% of the maximum award
vesting. Target performance will
result in up to 50% of the maximum
award vesting.

Policy table – Executive Directors continued

ANNUAL
INCENTIVE PLAN
(AIP)
To drive strong
financial
performance
and reward the
delivery of the
business
strategy on an
annual basis.

LONG-TERM
INCENTIVE PLAN
(LTIP)
To incentivize
and reward
long-term
performance,
and align the
interests of
Executive
Directors with
those of
shareholders.

OPERATION
Performance is assessed on an
annual basis with measures and
targets set by the Committee at the
start of the performance year. At the
end of the performance year, the
Committee determines the extent
to which these have been achieved.
Bonuses are paid after the end of
the performance year. 75% of the
annual bonus is delivered in cash
and 25% is deferred into shares
for a period of two years. During
the deferral period, deferred share
awards may be reduced or canceled
in certain circumstances.
Dividend equivalents may be paid,
normally in the form of additional
shares, on deferred share awards
up to the end of the deferral period,
where relevant.
The Committee has discretion to
adjust the formulaic bonus outcomes
both upward and downward
(including to zero) to ensure
alignment of pay with the
underlying performance of
the Group, e.g. in the event
performance is impacted by
unforeseen circumstances
outside management control.

Awards under the LTIP may consist
of grants of conditional share
awards, nil cost options or market-
value share options which vest
subject to the achievement of
stretching performance targets
measured over a performance period
of at least three years. Awards
granted to Executive Directors are
subject to an additional holding
period following the performance
period. For awards with a three-year
performance period, this holding
period will normally be two years.
The LTIP opportunity is reviewed
annually with reference to market
data and the associated cost to the
Group is calculated using an
expected value methodology.

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OPERATION
The performance conditions are
reviewed before each award cycle
to ensure they remain appropriate
and targets are suitably stretching
and may be amended in accordance
with the terms of the LTIP or if the
Committee reasonably considers it
appropriate, provided that the
amended performance conditions
are not materially easier to satisfy.
Dividend equivalents may be paid,
normally in the form of additional
shares, on LTIP awards that vest up
to the end of the post-vesting
holding period, where relevant.
The Committee has discretion to
adjust the formulaic LTIP outcomes
to improve the alignment of pay
with value creation for shareholders
to ensure the outcome is a fair
reflection of the underlying
performance of the Group.
Executive Directors may participate
in all-employee share plans offered
by the Group on the same basis as
is offered to the Group’s other
eligible employees.

LONG-TERM
INCENTIVE PLAN
(LTIP)
(CONTINUED)

ALL-EMPLOYEE
SHARE PLANS
To align the
interests of
employees
including
Executive
Directors and
shareholders.

MAXIMUM OPPORTUNITY

FRAMEWORK USED TO
ASSESS PERFORMANCE

Further details, including the
performance targets attached to
the LTIP in respect of each year, are
disclosed in the Annual Report on
Remuneration.
Awards are subject to malus and
clawback arrangements as detailed
in the notes following this table.

n/a

Maximum opportunity for awards
will be in line with the savings limits
set by local regulations.
As an example, the current
maximum contribution set by HMRC
in relation to a Save As You Earn
(SAYE) Plan is £500 per month.

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C O N T I N U E D

Notes to the policy table
A summary of the key differences between the
Directors’ Remuneration Policy approved by
shareholders at the 2018 Annual General Meeting,
and the proposed 2021 Remuneration Policy is set
out on page 84.

Executive Director shareholding policy
The Committee recognizes the importance of aligning
Executive Director and shareholders’ interests through
executives building up significant shareholdings in the
Company. Executive Directors are expected to acquire
a significant number of shares over a period of five
years and retain these until retirement from the Board
of Directors. The shareholding requirement is the
lower of 1,500,000 shares or the number of shares
equivalent to 400% of base salary for the Executive
Directors, in line with the overall LTIP maximum. This
is generally expected to be achieved within five years
of the date of appointment. Details of the Executive
Directors’ current shareholdings are provided in the
Annual Report on Remuneration.

With effect from 2021, Executive Directors will also
be subject to a post-cessation shareholding policy.
Executive Directors will normally be expected to
maintain a holding of Indivior shares at a level equal
to the lower of the in-post shareholding guideline
or the individual’s actual shareholding for a period
of two years from the date the individual ceases
to be a Director. The specific application of this
shareholding policy will be at the Committee’s
discretion. The Committee has the discretion to
waive this requirement in certain circumstances
(e.g. compassionate circumstances).

Payments outside policy
The Committee reserves the right to make any
remuneration payments and payments for loss of
office (including exercising any discretions available to
it in connection with such payments) notwithstanding
that they are not in line with the policy set out above
where the terms of the payment were agreed (i)
before May 13, 2015 (the date the Company’s first
shareholder-approved Directors’ Remuneration Policy
came into effect); (ii) before the policy set out above
came into effect, provided that the terms of the
payment were consistent with the shareholder-
approved Directors’ Remuneration Policy in force at
the time they were agreed; or (iii) at a time when the
relevant individual was not a Director of the Company
and, in the opinion of the Committee, the payment
was not in consideration for the individual becoming
a Director of the Company. For these purposes
‘payments’ includes the Committee satisfying awards
of variable remuneration and, in relation to an award
over shares, the terms of the payment are ‘agreed’ at
the time the award is granted.

Clawback and malus
The Committee has the discretion to scale back or
cancel LTIP awards, extend the performance period or
defer the exercise period prior to the satisfaction of
awards or after the end of any relevant holding period

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in the event that results are materially misstated
for part of the performance period applicable to an
award, an individual’s conduct has amounted to gross
misconduct or, in respect of awards made after the
adoption of the 2018 Remuneration Policy, in the
event of serious reputational damage to Indivior.
Where LTIP awards have vested the Committee has
the discretion to ‘claw back’ awards or reduce
amounts of other payments due to the individual up
to the fifth anniversary of the grant of the awards in
the circumstances described above.

Share plan terms
Share-based awards will typically be settled in shares,
but may be settled in cash in certain circumstances
(for example, where the Committee determines that it
is not possible or practical to settle awards with shares).

The terms of awards may be adjusted in the event of a
variation of the Company’s share capital, a demerger,
special dividend or distribution or any other
circumstances the Committee considers appropriate.

Performance measure selection and approach to
target setting
The AIP performance measures are selected to
provide an appropriate balance between incentivizing
Executive Directors to meet financial targets for the
year and incentivizing them to further the Group’s
strategic objectives. The particular measures each
year are selected to ensure focus on the key
objectives for that particular financial year.

In respect of the LTIP, the Committee annually reviews
the performance measures which apply to awards to
ensure that they are aligned with the Group’s strategy
and with shareholders’ interests over the longer term.

Measures and targets for both the AIP and LTIP are
reviewed annually against a number of internal and
external reference points. Measures and targets
are set on a sliding scale at levels the Committee
considers to be appropriately stretching for the level
of performance delivered.

Remuneration Policy for the wider workforce
The Remuneration Policy for Executive Directors in
general is more heavily weighted towards variable
pay than for other employees.

The majority of employees participate in an annual
incentive plan, but LTIP awards are only made to
certain senior executives in the Group.

The Group’s approach to annual base salary reviews
is consistent across the business, with consideration
given to the level of experience, responsibility,
individual performance and salary levels for
comparable roles in comparable companies.

The Group also operates all-employee shares plans
that are open to eligible employees in the relevant
jurisdictions.

Employees are also entitled to taxable and non-
taxable benefits (including eligibility to participate
in defined contribution pension arrangements), with
employees being entitled to substantially the same
benefit structure as Executive Directors.

Discretions
The Committee retains discretion as to the operation
and administration of these incentive plans, including
with respect to:

› who participates;

› the timing of grant and/or payment;

› the size of an award and/or payment (within the

plan limits approved by shareholders);

› discretion to change the measures and their

respective weightings to ensure alignment with
business priorities;

› discretion to adjust the targets and/or set different

measures and alter weightings for incentives if
events occur (e.g. material divestment of a group
business or changes to accounting standards)
which cause the Committee to determine that an
adjustment or amendment is appropriate so that
the conditions achieve their original purpose;

Scenario analysis
The charts below provide an estimate of the potential
future reward opportunities for the Executive
Directors, and the potential split between the different
elements of remuneration under four different
performance scenarios: ‘Minimum’, ‘Target’, ‘Maximum’
and ‘Maximum plus 50% share price growth’.

Chief Executive Ofﬁcer – Mark Crossley

Minimum

100%

$852k

Target

27%

24%

49%

$3,177k

Maximum

16%

28%

56%

$5,502k

Maximum +
share price
growth (50%)

12%

22%

44%

22%

$7,052k

$0k

$2,000k

$4,000k

$6,000k

$8,000k

› discretion to adjust the formulaic outcomes under

Fixed pay

Annual bonus

LTIP

Share price growth

the AIP and LTIP, both upward and downward
(including to zero), to ensure alignment of pay with
the underlying performance of the Group, e.g. in the
event performance is impacted by unforeseen
circumstances outside management control;

› in exceptional circumstances, amendment of any

performance conditions applying to a share award
– provided the new performance conditions are
considered fair and reasonable, and are neither
materially more nor materially less challenging
than the original performance targets when set;

› discretion relating to the measurement of

performance in certain circumstances (e.g. a variation
of share capital, change of control, special dividend,
distribution or any other corporate event which may
affect the current or future value of an award);

› determination of a good leaver (in addition to any
specified categories) for incentive-plan purposes,
based on the plan rules and the appropriate
treatment under the plan rules; and

› adjustments required in certain circumstances

(e.g. rights issues, share buybacks, special dividends,
other corporate events, etc.).

Any use of the above discretions would, where
relevant, be explained in the Annual Report on
Remuneration. As appropriate, it might also be the
subject of consultation with the Company’s major
shareholders.

Minor amendments
The Committee may make minor amendments to the
2021 Remuneration Policy (for regulatory, exchange
control, tax or administrative purposes or to take
account of a change in legislation) without obtaining
shareholder approval.

Chief Financial Ofﬁcer – Ryan Preblick

Minimum

100%

$545k

Target

30%

16%

54%

$1,793k

Maximum

18%

19%

63%

$3,041k

Maximum +
share price
growth (50%)

14%

48%

24%

$4,001k

$0k

$1,000k

$2,000k

$3,000k

$4,000k

Fixed pay

Annual bonus

LTIP

Share price growth

Performance scenario Basis of valuation

Minimum
performance
(below threshold)

Target
performance

Maximum
performance

Fixed pay only – base salary, benefits
and pension benefits

Fixed pay plus AIP at target
performance (50% of maximum)
and target vesting under the LTIP
(50% of maximum)

Fixed pay plus maximum AIP
and full vesting under the LTIP
(all performance conditions met)

Maximum
performance plus
50% share price
growth

Fixed pay plus maximum AIP
and full vesting under the LTIP
(all performance conditions met)
plus 50% share price appreciation
over the performance period

The charts are based on the face value of awards and
do not include the value of any dividends.

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Policy table – Chair and Non-Executive Directors
The Chair and Non-Executive Directors do not have service agreements, but are engaged on the basis of a letter of
appointment. In line with the UK Corporate Governance Code, all Directors are subject to re-appointment annually at the
Annual General Meeting.

The Chair and Non-Executive Directors are not eligible to participate in the Group’s Annual Incentive Plan, Long-Term Incentive
Plan or pension schemes.

Details of the policy on fees paid to the Chair and Non-Executive Directors are set out in the table below:

COMPONENT AND OBJECTIVE

Fees and other arrangements

To attract and retain a Chair and Non-Executive Directors of the highest caliber with broad commercial experience relevant
to the Group.

APPROACH OF THE COMPANY

The fees paid to Non-Executive Directors are determined by the Board of Directors, with recommendations provided by the
Chair and Chief Executive Officer.

The fees of the Chair are determined by the Committee.

Additional fees may be payable for acting as Senior Independent Director and as Chair of a Board Committee (including
the Audit, Remuneration, Science & Policy and Nomination & Governance Committees). Members of all Board Committees
also receive an additional fee. Additional fees may be paid for additional time commitments, including, for example,
international travel.

Fee levels are reviewed from time to time. Fees are reviewed by taking into account external advice on best practice and
competitive levels, in particular at FTSE 250 companies. Time commitment and responsibility are also taken into account
when reviewing fees. Chair and Non-Executive Directors’ fees are not subject to performance conditions.

Aggregate fees are limited to £1.5m by the Company’s Articles of Association.

The Chair and Non-Executive Directors may also be reimbursed for their travel and accommodation costs incurred in the
pursuance of their duties (including any tax which may be payable in respect of such costs). The maximum reimbursement
is expenses reasonably incurred (including any taxes thereon).

The Chair and Non-Executive Directors are expected to hold an interest in Indivior shares.

The Company provides Directors’ and Officers’ liability insurance, and an indemnity to the extent permitted by law.

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Chair and Non-Executive Directors
In recruiting a new Chair or Non-Executive Director,
the Committee will use the policy as set out in the
table on page 90. A basic fee in line with the prevailing
fee schedule would be payable for membership of the
Board of Directors, with additional fees payable for
acting as Senior Independent Director, as Chair of
the Audit, Remuneration, Science & Policy and
Nomination & Governance Committees, and for being
a member of the Audit, Remuneration, Science &
Policy and Nomination & Governance Committees.

Service contracts and exit payment policy
Executive Directors’ service contracts, including
arrangements for termination, are carefully
considered by the Committee. In accordance
with general market practice, each of the Executive
Directors has a rolling service contract which is
terminable on 12 months’ notice and this practice
will also apply for any new Executive Directors. In such
an event, the compensation commitments in respect
of their contracts could amount to one year’s
remuneration based on base salary and benefits in
kind and pension rights during the notice period.

The treatment of awards under the AIP, DBP and LTIP
is set out below. Termination payments may take the
form of payments in lieu of notice, payable in a lump
sum or in installments.

The Company’s policy on any termination payment
is to consider the circumstances on a case-by-case
basis, taking into account the relevant contractual
terms in the Executive Director’s service contract and
the circumstances of the termination. The Committee
reserves the right to make any other payments in
connection with an Executive Director’s cessation of
office or employment where the payments are made
in good faith in discharge of an existing legal
obligation (or by way of damages for breach of such
an obligation) or by way of settlement of any claim
arising in connection with the cessation of a Director’s
office or employment. Any such payments may include
but are not limited to paying any fees for
outplacement assistance and/or the Director’s legal
and/or professional advice fees in connection with his
cessation of office or employment.

Copies of Executive Directors’ service contracts are
available to view at the Company’s registered office.

Chair and Non-Executive Directors’ letters
of appointment
The Chair and Non-Executive Directors have letters
of appointment setting out their duties and the time
commitment expected which are available for
inspection at the Company’s registered office. The
Chair and Non-Executive Directors’ appointments can
be terminated by one month’s notice by either party.
The Chair and Non-Executive Directors have no
entitlement to compensation on termination. Details
of the date of appointment and expiry of current
terms are set out on page 107.

Approach to recruitment remuneration
External appointment
When determining the remuneration package for a
new Executive Director, the Committee will take into
account all relevant factors based on the
circumstances at that time. This may include factors
such as the caliber of the individual, market practice
in the candidate’s location or locations and scope of
the role to which they are being appointed.

Typically, the package will be aligned to the Company’s
Remuneration Policy as set out above. However,
should there be a commercial rationale for doing so,
the Committee has the discretion to include any other
remuneration elements, to vary the composition of
the remuneration package, which are not included in
the policy table, subject to the overall limit on variable
remuneration set out below. The Committee does not
intend to use this discretion to make non-
performance related awards and is always mindful
of the need to pay no more than is necessary.

The overall limit of variable remuneration will be as
set out in the policy table taking into account the
maximum value under the AIP and the maximum
awards under the LTIP (i.e. 600% of base salary).

The Committee may make an award in respect of a
new appointment to ‘buy out’ incentive arrangements
forfeited on leaving a previous employer, i.e. over and
above the maximum limit on variable remuneration
set out above. In doing so, the Committee will
consider relevant factors including any performance
conditions attached to these awards and the
likelihood of those conditions being met with the
intention that the value awarded would be no higher
than the expected value of the forfeited arrangements
and made on a like-for-like basis.

Internal promotion
When appointing a new Executive Director by way of
internal promotion, the policy will be consistent with
that for external appointees, as detailed above. Where
an individual has contractual commitments made
prior to their promotion to Executive Director, the
Company will continue to honor these arrangements
even in instances where they would not otherwise
be consistent with the prevailing Executive Director
remuneration policy at the time of appointment or
payment.

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The table below summarizes how unvested awards under the Annual Incentive Plan and LTIP are typically treated in specific
circumstances, with the final treatment remaining subject to the Committee’s discretion as provided under the rules of
the plans:

ANNUAL
INCENTIVE
PLAN (AIP)

REASON FOR CESSATION
Voluntary resignation or
termination with ‘cause’.
All other circumstances.

LONG-TERM
INCENTIVE
PLAN (LTIP)

Voluntary resignation or
termination with ‘cause’.
Ill-health, injury, permanent
disability, retirement with the
agreement of the Company,
the sale of the individual’s
employing company or
business out of the Group,
redundancy or any other
reason that the Committee
determines in its absolute
discretion.

TIMING OF VESTING/PAYMENT

CALCULATION OF VESTING/PAYMENT

Not applicable.

Following the end of the
financial year at the usual
bonus payment date.

No bonus to be paid for the financial year.
Deferred share awards are normally forfeited if the
executive resigns or is terminated with ‘cause’.
Annual bonus will be paid only to the extent that
objectives set at the beginning of the plan year
have been met. Any such bonus will be paid on a
pro-rata basis to the termination date.

Not applicable.

Unvested awards lapse.

After the end of the financial
year in which the cessation of
employment occurs; or at the
discretion of the Committee,
after the end of the relevant
performance period.

The Committee determines whether and to what
extent unvested awards vest based on the extent to
which performance conditions have been achieved
(either to the end of the financial year in which
cessation of employment occurs, or over the full
performance period) and unless the Committee
determines otherwise the proportion of the
performance period elapsed.
The Committee may disapply performance
conditions but unless the Committee determines
otherwise will reduce unvested awards to reflect
the proportion of the performance period worked.
Awards will vest to the extent that any performance
conditions have been satisfied (unless the
Committee determines that the performance
conditions should not apply). Awards will also
be reduced pro-rata to take into account the
proportion of the performance period elapsed,
unless the Committee decides otherwise.
Awards may alternatively be exchanged for new
equivalent awards in the acquirer, where
appropriate.

Death

As soon as possible after date
of death.

Change of control of the
Company

On change of control.

Consideration of conditions elsewhere in the Group
The Committee does not consult with employees specifically on executive remuneration policy. However, the Committee
considers pay practices across the Group and is mindful of the salary increases and pay practices applying across the rest
of the business in relevant markets when considering salaries for Executive Directors.

Consideration of shareholder views
The Committee will consider shareholder views received during the year and at the Annual General Meeting each year, as well
as guidance from shareholder representative bodies more broadly, in shaping remuneration policy.

This feedback, and any additional feedback received from time to time, will then be considered as part of the Company’s
annual review of remuneration. It is the Committee’s intention to consult with major shareholders in advance of making any
material changes to remuneration arrangements.

Daniel J. Phelan
Chair of the Remuneration Committee

March 18, 2021

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ANNUAL REPORT ON
REMUNERATION

This Directors’ Remuneration Report has been prepared in accordance with the provisions of the Companies Act 2006 and
Schedule 8 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulation 2008 (as amended),
the UK Corporate Governance Code (the “Code”) and the UK Listing Authority’s Listing Rules and the Disclosure Guidance and
Transparency Rules.

The following report outlines our remuneration framework, how the Remuneration Policy was implemented in 2020, and
how the Committee intends to apply the policy in 2021. This Annual Report on Remuneration, together with the Annual
Remuneration Statement from the Chair of the Committee, will be submitted to an advisory shareholder vote at the 2021
AGM. There were no deviations from the procedure for the implementation of the Remuneration Policy during the year.

The Remuneration Committee
All members of the Committee are considered to be independent for the purposes of the 2018 Code. All members of the
Committee exercise independent judgment and discretion when authorizing remuneration outcomes. The Committee’s Terms
of Reference require that the Chair of the Committee should have served on a remuneration committee for at least 12 months
prior to appointment. As of December 31, 2020, the membership of the Committee was as follows:

MEMBERS

Daniel J. Phelan (Chair)

Graham Hetherington

Lorna Parker

Daniel Tassé

DATE APPOINTED TO THE
COMMITTEE

SCHEDULED MEETINGS
ATTENDED IN 2020

AD HOC MEETINGS
ATTENDED IN 2020

November 2014

November 2019

November 2014

November 2017

5/5

2/2

Meetings
Only members of the Committee have the right to attend Committee meetings. The Company Secretary acts as Secretary to
the Committee. At the invitation of the Committee, the Chair of the Board, the Chief Executive Officer, Jon Fogle (Chief Human
Resources Officer), Diego Castro Albano (Global Compensation and Benefits Director), and Kathryn Hudson (Company Secretary)
attended meetings and provided advice to the Committee. The Committee meets with the advisors to the Committee at each
meeting without management present.

Members of the Committee and any person attending its meetings do not participate in and are not involved in deciding their
own remuneration outcomes.

The Chair of the Committee reports on the activities of the Committee at the following Board meeting, and copies of the
minutes of Committee meetings are circulated to all Directors.

Advice provided to the Remuneration Committee
Deloitte LLP was appointed as advisor to the Committee in December 2014, following a review undertaken in advance of the
Company’s listing on the London Stock Exchange. Deloitte LLP is a member of the Remuneration Consultants Group and, as
such, voluntarily operates under the code of conduct in relation to executive remuneration consulting in the UK.

Fees for advice provided to the Committee for the year, charged on a time spent basis, were £102.9k. Deloitte LLP also provided
other employee and tax-related services to the Group during the year. This included payroll and UK tax-return support for the
US-based Non-Executive Directors in respect of their UK taxable income and tax-return support in respect of the Executive
Directors’ US and UK taxable income.

The Committee is satisfied that the advice provided by Deloitte LLP is objective and independent.

Committee performance
The performance of the Committee was considered as part of the Board and Committee evaluation process. Further
information can be found on page 61.

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Role and responsibilities
Indivior’s remuneration policies and practices are designed to promote long-term sustainable success. The Committee’s role
is to assist the Board of Directors in fulfilling its oversight responsibility by ensuring that Remuneration Policy and practices
reward fairly and responsibly, are linked to corporate performance, and take account of the generally accepted principles of
good governance.

The Committee has delegated authority from the Board for determining the policy for Executive Director remuneration and
setting remuneration for the Chair, Executive Directors and senior management. This delegated authority is set out in the
Committee’s Terms of Reference.

On behalf of, and subject to approval by, the Board, the Committee primarily:

› sets and regularly reviews the Group’s overall remuneration strategy;

› determines the Remuneration Policy for senior management; and

› in respect of senior management sets, reviews and approves:

• remuneration policies, including the AIP and LTIP;

• individual remuneration and compensation arrangements;

• participation in the Group’s AIP and LTIP; and

• the targets for the AIP and LTIP.

Key activities during the year
The key activities and matters considered by the Committee during the year were as follows:

› review of the Group’s executive remuneration arrangements, the proposed 2021 Remuneration Policy and feedback from

engagement with shareholders on those proposed changes. Further information regarding engagement with shareholders is
detailed on page 81;

› review of the outturn in respect of the AIP for the 2019 financial year and LTIP awards granted in 2017. The Committee agreed
that, in light of the shareholder experience over the performance period, it would exercise negative discretion to override the
formulaic outturn to zero in respect of the LTIP awards held by the Executive Directors;

› review of the outturn in respect of the LTIP awards granted in 2018. The Committee once again agreed that, in light of the

shareholder experience over the performance period, it would exercise negative discretion to override the formulaic outturn
to zero in respect of the LTIP awards held by the Executive Directors. The Executive Directors and members of the Executive
Committee had agreed to forgo their bonus as a result of the impact of COVID-19; the Committee considered the outturn
in respect of the AIP for the 2020 financial year for other members of the workforce who were eligible for bonuses under
the AIP;

› review and approval of the targets and measures under the 2021 AIP and LTIP awards granted in March 2021. The measures
under the AIP have been realigned with key strategic objectives for the business and consequently will be based on global
net revenue for SUBLOCADE and US net revenue for PERSERIS. The Committee also agreed to align the quantum of LTIP
awards for the Chief Executive Officer and Chief Financial Officer with the reduced maximum amounts under the proposed
2021 Remuneration Policy;

› review of the progress of the Executive Directors and members of the Executive Committee against their shareholding

requirements;

› review of the requirements of Appendix C of Indivior Inc’s Corporate Integrity Agreement with the Office of the Inspector
General of the Department of Health & Human Services and oversight of the implementation of these requirements;

› consideration of the changes in the regulatory and corporate governance environment and emerging trends in executive

remuneration;

› review of the participation rates for the Group’s all-employee share plans;

› review of workforce remuneration and related policies and their alignment with Indivior’s culture and executive

remuneration arrangements;

› review of the remuneration arrangements for Mark Crossley and Ryan Preblick in regard to their appointments as Chief

Executive Officer and Chief Financial Officer respectively;

› review of the fee paid to the Chair of the Board and agreement that there would be no increase to their fees; and

› consideration of the remuneration arrangements on the termination of Shaun Thaxter’s employment.

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Single total figure of remuneration for the Executive Directors (audited)
The table below sets out the remuneration of the Executive Directors for the financial year ended December 31, 2020, and
comparative figures for the financial year ended December 31, 2019 (where applicable).

Fixed pay

Base salary

Taxable benefits

Pension benefits

Total fixed pay

Variable pay

Total variable pay

Total pay

AIP

LTIP

Note: Totals may not sum up due to rounding.

Executive Directors

Former Executive Director

Mark Crossley

Ryan Preblick

Shaun Thaxter

2020
$,000

2019
$,000

674.91

61.4

24.2

760.5

528.32

46.2

23.8

598.3

415.2

1,013.6

2020
$,000

55.43

6.3

-5

61.7

37.56

37.5

99.3

2019
$,000

2020
$,0004

2019
$,000

416.6

51.3

89.4

557.3

821.6

84.4

156.4

1,062.4

1,076.3

0.0

1,076.3

2,138.7

1. Mark Crossley was appointed Chief Executive Officer on June 29, 2020 and his base salary increased from $571,650 to $775,000 p.a with effect from that date. His base

salary shown above for 2020 represents his pro-rated salary paid during the year.

2. Mark Crossley was appointed Chief Financial & Operations Officer on August 1, 2019 and his base salary increased from $509,232 to $555,000 p.a. with effect from

that date in recognition of increased responsibilities. His base salary for 2019 represents his pro-rated salary paid during the year.

3. Ryan Preblick was appointed Chief Financial Officer and Executive Director on November 19, 2020 with a base salary of $480,000, his base salary shown above is for

the period November 19 to December 31, 2020.

4. Shaun Thaxter stepped down from the Board on June 27, 2020. Further information regarding his termination arrangements can be found on page 103. The amounts

shown in respect of 2020 are the amounts paid in respect of salary and benefits for the period he was an Executive Director.

5. The Company had contributed the maximum amount permitted under Ryan Preblick’s pension arrangements prior to his appointment and consequently there

were no further contributions made after his appointment as Chief Financial Officer and Executive Director.

6. The LTIP award granted to Ryan Preblick in March 2018 was subject to continued employment only and vested on March 9, 2021. The value of the award on the
vesting date was US$37,525 (based on the value of the number of shares vesting (21,578) at the mid-market closing price of Indivior shares on the vesting date
(125.20p) and converted to US$ using the GBP/US$ exchange rate on the vesting date (GB£1:1.389)). The mid-market closing price of Indivior shares on the date
of grant was 402.00p.

Base salary
On appointment as Chief Executive Officer in June 2020, Mark Crossley’s base salary increased from $571,650 to $775,000 p.a.
The Executive Directors did not receive a base salary merit increase as part of the 2020/21 annual review cycle, aligned with the
wider workforce.

The annual base salaries for the Executive Directors as at January 1, 2021 and January 1, 2020 are set out below.

Director

Mark Crossley

Ryan Preblick

Base salary at
January 1, 2021
$’000

Base salary at
January 1, 2020
$’000

% increase on
prior year

775.0

480.0

571.7

n/a

Taxable benefits
Taxable benefits consist primarily of healthcare, car allowance, life and disability insurance and professional support for the
completion of US and UK tax returns.

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Pension benefits
Mark Crossley received pension contributions consisting of profit-sharing contributions of $11,400 (4% of base salary up to
annual compensation limit) and Company match of $12,825 (75% on elected deferrals up to 4.5% of base salary and subject
to annual compensation limit).

The Company had contributed the maximum amount permitted under Ryan Preblick’s pension arrangements prior to his
appointment and consequently there were no further contributions made after his appointment as Chief Financial Officer
and Executive Director.

Shaun Thaxter received pension contributions consisting of profit sharing contributions of $11,400 (4% of base salary up to
annual compensation limit), a Company match of $12,825 (75% on elected deferrals up to 4.5% of base salary and subject to
annual compensation limit) and a deferred compensation matching contribution of $50,527 and cash payment of $14,686.
There were no contributions made by the Company following him stepping down.

No changes have been made to the pension arrangements for 2021. The pension benefits of the Executive Directors are fully
aligned with those of the wider US workforce.

Annual Incentive Plan (AIP) (audited)
AIP 2020
The maximum AIP opportunity for the Chief Executive Officer was 200% of base salary. At the start of 2020, Mark Crossley’s
maximum AIP opportunity was 160% of base salary (in his role as Chief Financial & Operations Officer); this increased to 200%
of base salary when he was appointed Chief Executive Officer. The maximum AIP opportunity for the Chief Financial Officer is
120% of base salary.

The Committee set stretching performance targets in the context of the business plan for 2020 and taking account of external
forecasts. These targets were set by reference to the key strategic drivers for the business: product revenues for SUBLOCADE
and PERSERIS in the US and cash management. For threshold performance, 12.5% of the maximum bonus would be paid, for
target performance, 50% of the maximum bonus would be paid, and 100% of the maximum bonus would be paid for the
delivery of exceptional performance significantly above both internal and external expectations. The outturn is calculated
on a straight-line basis between threshold and target, and between target and maximum.

The table below provides an overview of the performance against the targets set in respect of the three financial metrics set by
the Committee.

Measure

US net revenue – SUBLOCADE

US net revenue – PERSERIS

Cash management

Performance targets

Weighting

Threshold
$m

Target
$m

Maximum
$m

Achieved
$m

Outturn as a
% of maximum

40%

20%

40%

160

518

190

575

220

633

126

858

40%

Overall performance would have resulted in a formulaic outturn of 40% of maximum. In May 2020, in response to the onset of
the COVID-19 pandemic, the Executive Directors and members of the Executive Committee agreed to forgo any bonus payment
under the AIP 2020. As no AIP payment will be made for 2020, there will be no bonus deferral in respect of the 2020 financial year.

AIP 2021
The Chief Executive Officer and Chief Financial Officer will have a maximum bonus opportunity under the AIP of 200% and 120%
of base salary respectively.

The Committee has considered the key strategic objectives for the business and has realigned the performance measures for
the 2021 AIP to align with these. Consequently, the targets for 2021 will be focused on accelerating the growth of SUBLOCADE
and advancing PERSERIS in the US, with the majority of the weighting on SUBLOCADE. The cash management target has been
removed as a target for 2021 as the Committee does not consider this to be a relevant measure for the purposes of the AIP
in 2021.

Bonuses for 2021 will be based on the following measures and weightings:

Measure

Global net revenue – SUBLOCADE

US net revenue – PERSERIS

Weighting

80%

20%

The performance targets for 2021 have not been disclosed as they are considered to be commercially sensitive. However, we
commit to disclosing the performance targets retrospectively in next year’s Annual Report on Remuneration.

In line with our Remuneration Policy, 75% of any bonus amount will be delivered in cash and 25% will be deferred into shares
for a period of two years.

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Deferred Bonus Plan (DBP) Awards (audited)
In line with the Remuneration Policy, 25% of the outturn under the 2019 AIP was compulsorily deferred into conditional shares
under the DBP. The deferred conditional share awards vest after two years subject to continued employment as well as malus
provisions.

Executive Director

Mark Crossley

Former Executive Director

Shaun Thaxter

Date of grant

No. of shares
under award1

Closing
share price at
date of grant (p)

Face value
$’0002

Vesting date

March 13, 2020

188,523

43.74p

112.6 Mar 13, 2022

March 13, 2020

488,656

43.74p

291.8 Mar 13, 20223

1. The market value used to determine the number of shares subject to awards was 43.63p, being the average mid-market closing price of Indivior shares on the

business day immediately preceding grant on March 13, 2020.

2. The face value of the awards has been calculated using the closing share price on the date of grant and converted to US$ using the GB£/US$ exchange rate on

December 31, 2020 (GB£1:US$1.3651).

3. In accordance with the rules of the Deferred Bonus Plan, the conditional award over 488,656 shares granted on March 13, 2020 will continue and vest on the normal

vesting date (March 13, 2022).

Long-Term Incentive Plan (LTIP) Awards (audited)
2018-2020 LTIP Awards
In 2018, the Executive Directors were granted awards under the LTIP as set out in the table below:

Executive Director

Mark Crossley

Former Executive Director

Date of grant

No. of shares
under award
at maximum

Closing
share price at
date of award

Face value
$’0001

Award as a % of
base salary
at grant

Vesting date

Release date

Mar 9, 2018

452,209

402.0p

2,317

500% Mar 9, 2021 Mar 9, 2023

Shaun Thaxter

Mar 9, 2018

729,617

402.0p

3,738

500% Mar 9, 2021 Mar 9, 2023

1. The face value of the awards was calculated using the closing share price on the date of grant and converted to US$ using the GB£/US$ exchange rate on

December 31, 2018 (GB£1:US$1.2746).

The performance measures for the awards granted to Shaun Thaxter and Mark Crossley were as follows:

Measure

Relative TSR vs. the constituents of the FTSE 250 excluding investment trusts1,2

Relative TSR vs. the constituents of the S&P 1500 Pharmaceutical and Biotech Index1,2

Key pipeline and product measure

Weighting (% of award)

33%

1. In respect of the award granted to Mark Crossley, 12.5% of the maximum award would have vested for Indivior being ranked median in comparison to the respective

peer group, and 100% of the maximum award would have vested for being ranked upper quartile or above. The award vests on a straight-line basis between
median and upper quartile.

2. In respect of the award granted to Shaun Thaxter, 15% of the maximum award would have vested for Indivior being ranked median in comparison to the respective

peer group, and 100% of the maximum award would have vested for being ranked upper quartile or above. The award vests on a straight-line basis between
median and upper quartile.

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Indivior Annual Report 2020

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Relative TSR measures
Relative TSR was assessed over the three-year period from January 1, 2018, to December 31, 2020, with reference to the two
separate peer groups (set out in the table above). At the end of the TSR performance period, Indivior was ranked below median
in both peer groups and consequently did not reach threshold and, accordingly, the portions of the award subject to relative
TSR did not vest. This resulted in zero outturn in respect of the TSR measures.

Key pipeline and product measure
The Committee set the following targets under the key pipeline and product measure as follows:

Product targets

SUBLOCADE 2019 US net revenue

SUBLOCADE 2020 US net revenue

PERSERIS

2019 US net revenue

PERSERIS

2020 US net revenue

Weighting
(% of measure)

Threshold
$m

Target
$m

Maximum
$m

Achieved
$m

Outturn as a %
of target

Outturn as a
% of measure

20%

10%

160

190

100

220

126

54%

20%

10.8%

0.0%

2.1%

0.0%

Pipeline target

Weighting
(% of measure)

Number of assets obtained/partnerships agreed
(% attained)

Achieved

Outturn as a %
of target

Outturn as a
% of measure

New asset acquisition/partnerships

40%

1 (15%)

2 (50%)

3 (75%) 4 (100%)

50%

Total

100%

20.1%

33.0%

1. A collaboration with Addex Therapeutics was agreed in H1 2018 and a license agreement with C4X Discovery Holdings was also agreed in H1 2018. These

collaborations continue and further information can be found on page 15.

On a formulaic basis, this resulted in 33% outturn in respect of the key pipeline and product measure (11% of the maximum award).

2018-2020 LTIP overall outturn
The Committee considered the outturn in the context of the shareholder experience over the performance period and
considered it appropriate to exercise its discretion to override the formulaic outturn and LTIP amounts for the Executive
Directors to zero, notwithstanding that the 2018-2020 LTIP construct had operated as intended. Executive management were
supportive of the Committee’s decision. The 2018-2020 LTIP awards consequently lapsed in full. The overall outcome is
summarized in the table below:

Measure

Relative TSR vs. the constituents of the FTSE 250 excluding investment trusts

Relative TSR vs. the constituents of the S&P 1500 Pharmaceutical and Biotech Index

Key pipeline and product measure

Outcome following formulaic assessment

Actual outturn (following Committee discretion)

Weighting % of maximum

33.3%

11.0%

(11.0)%

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2020 LTIP Awards
Conditional awards were granted under the LTIP to the Executive Directors on March 9, 2020. The awards will normally vest after
three years and will then be subject to a further two-year holding period before shares are released; clawback provisions apply
during this holding period.

An additional award was granted to Mark Crossley on November 6, 2020, to reflect his increased base salary for 2020 following
his appointment as Chief Executive Officer. The award was calculated on his pro-rated base salary for the year; resulting in his
2020–2022 LTIP award (effected across two separate awards) remaining at the reduced level of 225% of base salary. These
awards will normally vest in March 2023 and will then be subject to a further two-year holding period; clawback provisions
apply during this holding period.

The maximum levels achievable under these awards are set out in the table below.

Date of grant

No. of shares
under award
at maximum1

Closing
share price at
date of award

Face value
$’0002

Performance period

Vesting date

Release date4,5

Executive Director

Mark Crossley

Nov 6, 2020

157,981

Mar 9, 2020

2,057,610

117.30p

45.04p

253

Jan 2020–Dec 2022 Mar 9, 2023 Mar 9, 2025

1,265

Jan 2020–Dec 2022 Mar 9, 2023 Mar 9, 2025

Former Executive Director

Shaun Thaxter

Mar 9, 2020

3,046,0853

45.04p

1,873

Jan 2020–Dec 2022 Mar 9, 2023 Mar 9, 2025

1. The market value used to determine the number of shares subject to awards was 48.09p, being the average mid-market closing price of Indivior shares on the five
business days immediately preceding the date of grant on March 9, 2020. The award granted to Mark Crossley in November 2020 was calculated on his pro-rated
base salary for the year and the market value used to calculate the number of shares subject to the award was 112.66p, being the average mid-market closing price
of Indivior share for the five business days immediately preceding the date of grant on November 6, 2020.

2. The face values of the awards have been calculated using the closing share price on the date of grant and converted to US$ using the GB£/US$ exchange rate on

December 31, 2020 (GB£1:US$1.3651). Shaun Thaxter and Mark Crossley received awards with a value of 225% of base salary in 2020.

3. Shaun Thaxter’s award was reduced on a pro-rata basis to the date of cessation of employment (June 27, 2020); further information can be found on page 103.

4. Awards granted to Executive Directors are subject to a post-vesting holding period of two years.

5. Conditional awards include the right to receive an amount equal in value to any dividends payable on the number of vested shares between the date of grant and

the release date.

The vesting of these awards is subject to the achievement of the following performance measures.

Measure

Relative TSR vs. the constituents of the FTSE 250 excluding investment trusts

Relative TSR vs. the constituents of the S&P 1500 Pharmaceutical and Biotech Index

Weighting

50%

1. In respect of the award granted to Mark Crossley, 12.5% of the maximum award will vest for Indivior being ranked median in comparison to the respective peer

group, and 100% of the maximum award will vest for being ranked upper quartile or above. The award will vest on a straight-line basis between median and upper
quartile, with none of the award vesting if Indivior is ranked below median.

2. In respect of the award granted to Shaun Thaxter, 15% of the maximum award will vest for Indivior being ranked median in comparison to the respective peer

Relative TSR performance against each comparator group will be measured over three financial years (2020–2022).

Indivior Annual Report 2020
Indivior Annual Report 2020

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2021 LTIP Awards
Under our current Remuneration Policy, the Executive Directors would ordinarily be granted annual LTIP awards with a value
of 500% of base salary. For 2021 awards, the Committee carefully considered LTIP quantum and agreed to grant awards in line
with the proposed 2021 Remuneration Policy. On March 1, 2021, the Chief Executive Officer was granted an award over 1,500,000
shares (348% of base salary), being the maximum cap under the new policy. The Chief Financial Officer was granted an award
over 400% of base salary.

Date of grant

No. of shares
under award
at maximum1

Closing
share price at
date of award

Face value
$’0002

Performance period

Vesting date

Release date

Executive Director

Mark Crossley

Ryan Preblick

Mar 1, 2021

1,500,000

1,068,329

129.2p

$2,645.6

Jan 2021–Dec 2023 Mar 1, 2024 Mar 1, 2026

$1,884.2

Jan 2021–Dec 2023 Mar 1, 2024 Mar 1, 2026

1. The market value used to determine the number of shares subject to awards was 128.82p, being the average mid-market closing price of Indivior shares on the five
business days immediately preceding the date of grant on March 1, 2021. The award granted to Mark Crossley was capped at 1,500,000 shares, being the maximum
cap under the proposed 2021 Remuneration Policy.

2. The face values of the awards have been calculated using the closing share price on the date of grant and converted to US$ using the GB£/US$ exchange rate on

December 31, 2020 (GB£1:US$1.3651).

The Committee considered the LTIP metrics in the current business context and determined that performance measures for
2021-2023 LTIP awards will remain focused on shareholder returns. One half will be based on relative ranked TSR versus the
FTSE 250 excluding investment trusts and the other half will be based on relative ranked TSR versus the S&P 1500
Pharmaceutical & Biotech Index. The use of two relative TSR comparator groups is intended to balance the fact that Indivior
is a UK-listed company, but also recognizes that Indivior operates within a specialized sector, where the majority of its peers
are listed in the US.

Measure

Weighting

Rationale for metric

Relative TSR vs. FTSE 250 excluding investment trusts

50%

Relative TSR vs. S&P 1500 Pharmaceutical and
Biotech Index

50%

Provides alignment with shareholders through the relative
outperformance of other UK listed companies.

Provides alignment with shareholders through the relative
outperformance of direct sector peers who are subject to similar
market influences.

1. 12.5% of the maximum award will vest for Indivior being ranked median in comparison to the respective peer group, and 100% of the maximum award will vest for
being ranked upper quartile or above. The award will vest on a straight-line basis between median and upper quartile, with none of the awards vesting if Indivior
is ranked below median.

In line with our policy, the 2021 LTIP awards are subject to an additional two-year holding period following the end of the three-
year performance period.

Executive Financial Recoupment Program
As part of the Group’s Corporate Integrity Agreement with the Office of the Inspector General of the U.S. Department of Health
and Human Services, an Executive Financial Recoupment Program has been implemented (the “Recoupment Program”). Under
the terms of the Recoupment Program, up to two years of performance pay may be put at risk of forfeiture and/or recoupment
for certain US based executives (which includes both serving Executive Directors).

Forfeiture and/or recoupment may be applied in the event that it is determined that there has been a “Triggering Event”; a
Triggering Event includes significant misconduct (violation of law or regulation or a significant violation of an Indivior policy)
related to covered activities, or, significant misconduct related to covered activities by subordinate employees in the business
unit for which the relevant executive had responsibility that is not an isolated incident and which the relevant executive knew
or should have known was occurring.

Forfeiture and/or recoupment under the Recoupment Program may be applied to awards granted after November 20, 2020
and will cease to apply to awards on July 24, 2025 or the date on which the Group’s obligations under the Corporate Integrity
Agreement expire (if later).

These provisions are additional to the malus and clawback provisions contained within the rules of the Annual Incentive Plan,
the Long-Term Incentive Plan and the Deferred Bonus Plan.

A copy of the Corporate Integrity Agreement can be found on the Group’s website (www.indivior.com).

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Outstanding share awards under the LTIP and DBP (audited)
Details of share awards held by the Executive Directors at December 31, 2020 are shown below.

No. of shares
under award
at January 1,
2020

Granted
during the
year

Lapsed
during the
year

Released
during
the year

No. of shares
under award
at December
31, 2020

Market
share
price at
date of
grant

Face value
of award
granted in
2020
$’0009

Performance
period

Normal vesting
date

Normal
release
date2

Plan1 Date of grant

Executive Directors

Mark Crossley

Total

Ryan Preblick

LTIP Nov 6, 20203,4
LTIP Mar 9, 20203
LTIP Aug 8, 20195,6
LTIP Mar 5, 20195
LTIP Mar 9, 20187
Feb 24, 20178

LTIP

157,981

- 2,057,610

44,222

1,180,880

452,209

533,167

DBP Mar 13, 2020

188,523

2,210,478 2,404,114

533,167

LTIP Mar 9, 202010
LTIP Mar 9, 202010

LTIP Mar 5, 2019

LTIP Nov 28, 2018

LTIP Mar 9, 2018

LTIP

Feb 24, 2017

264,935

66,233

56,895

58,999

21,578

23,548

4,081,425

264,935

66,233

45.0p

56,895

108.4p

58,999

58.4p

21,578

402.0p

23,548

343.3p

157,981

117.3p

253 2020–2022 Mar 9, 2023 Mar 9, 2025

2,057,610

44,222

45.0p

58.4p

1,265 2020–2022 Mar 9, 2023 Mar 9, 2025

- 2019–2021 Mar 5, 2022 Mar 5, 2024

1,180,880

108.4p

- 2019–2021 Mar 5, 2022 Mar 5, 2024

452,209

402.0p

- 2018–2020 Mar 9, 2021 Mar 9, 2023

343.3p

- 2017–2019 Feb 24, 2020

188,523

43.7p

112.6

n/a Mar 13, 2022

n/a

163 2020–2022 Mar 9, 2023

n/a Mar 9, 2023

n/a Mar 5, 2022

n/a Nov 28, 2021

n/a Mar 9, 2021

n/a Feb 24, 2020

Total

161,020

331,168

- 23,548

468,640

Former Executive Director

Shaun Thaxter

LTIP Mar 9, 20203
LTIP Mar 5, 20195
LTIP Mar 9, 20187
Feb 24, 20178

LTIP

DBP Mar 13, 2020

- 3,046,085 2,740,086

1,905,294

729,617

1,032,288

- 1,070,859

169,756

- 1,032,288

- 488,656

Total

3,667,199 3,534,741 5,012,989

305,999

45.0p

1,873 2020–2022 Mar 9, 2023 Mar 9, 2025

834,435

108.4p

- 2019–2021 Mar 5, 2022 Mar 5, 2024

559,861

402.0p

- 2018–2020 Mar 9, 2021 Mar 9, 2023

343.3p

- 2017–2019 Feb 24, 2020

488,656

43.7p

291.8

n/a Mar 13, 2022

n/a

2,188,951

1. Awards granted under the LTIP and the DBP are made in the form of conditional awards over shares. Participants will receive an amount equivalent in value to any
dividends payable on the number of vested shares between the award date and the vesting (or release date for those subject to a post-vesting holding period).

2. Awards granted to the Executive Directors under the LTIP are subject to a two-year post-vesting holding period. The LTIP awards held by Ryan Preblick, which were

granted prior to his appointment as Chief Financial Officer, are not subject to a two-year post-vesting holding period.

3. Mark Crossley and Shaun Thaxter were granted LTIP awards with a value of 225% of base salary in March 2020.
4. Mark Crossley was granted an additional award under the LTIP on November 6, 2020 to reflect his increased base salary for 2020 following his appointment as

Chief Executive Officer. The award was calculated on his pro-rated base salary for the year and the market value used to calculate the number of shares subject
to the award was 112.66p, being the average mid-market closing price of Indivior shares for the five business days immediately preceding the date of grant on
November 6, 2020.

5. Mark Crossley and Shaun Thaxter were granted LTIP awards with a value of 325% of base salary in March 2019.
6. Mark Crossley was granted an additional award under the LTIP on August 8, 2019 to reflect his increased base salary for 2020 following his appointment as Chief
Financial & Operations Officer. The award was calculated on his pro-rated base salary for the year and the market value used to calculate the number of shares
subject to the award was 106.38p, being the same price as that used to calculate his award in March 2019; the Committee determined that using the price used
for the March award would avoid any inadvertent gains as a result of the share price depreciation between March 2019 and August 2019.

7. Mark Crossley and Shaun Thaxter were granted LTIP awards with a value of 500% of base salary in March 2018.
8. Mark Crossley was granted an LTIP award with a value of 500% of base salary in 2017. Shaun Thaxter was granted an LTIP award with a value of 600% of base salary

in February 2017.

9. The face values of the awards granted in 2020 have been calculated using the closing share price on the date of the award and converted to US$ using the

GB£/US$ exchange rate on December 31, 2020 (GB£1:US$1.3651).

10. Ryan Preblick was granted an award on March 9, 2020 over 264,935 shares under the LTIP, the vesting of this award is subject to the achievement of performance
conditions (as set on page 99) and continued employment. Ryan Preblick was also granted an award on March 9, 2020 over 66,233 shares under the LTIP which is
subject to continued employment only. These awards were granted on the basis of a set % of base salary (consistent with Senior Vice Presidents across the
organization).

11. Mark Crossley holds a vested but unexercised market-value option over 210,619 shares. This option was granted under the rules of the LTIP in December 2014

(on demerger) at an option price of 111.0p per share. The option vested on May 11, 2016 and is scheduled to lapse on December 28, 2024.

12. Shaun Thaxter holds a vested but unexercised market-value option over 921,461 shares. This option was granted under the rules of the LTIP in December 2014

(on demerger) at an option price of 111.0p per share. The option vested on May 11, 2016 and is scheduled to lapse on June 27, 2021, being 12 months following the
cessation of employment.

Indivior Annual Report 2020
Indivior Annual Report 2020

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C O N T I N U E D

Executive Directors’ shareholding and share interests (audited)
Indivior’s remuneration schemes have been designed to promote long-term shareholdings by Executive Directors. Awards
granted under the LTIP vest subject to the achievement of stretching performance targets measured over a performance period
of at least three years and are then subject to a two-year post vesting holding period. In addition, 25% of any annual bonus
paid under the AIP is deferred into shares for a period of two years.

The Executive Directors are currently required to build a shareholding with a value equivalent to 500% of base salary. They
have five years from the date of appointment to their current role in which to achieve this shareholding requirement. Members
of the Executive Committee are expected to build a shareholding of 150% of base salary within the same time frames. Under the
2021 Remuneration Policy, the shareholding requirement will be realigned for the Executive Directors with the maximum LTIP
opportunity to be the lower of 400% of base salary or 1,500,000 shares.

Once the requirement has been met, Executive Directors are not expected to buy shares in the open market to rebuild their
shareholding where the market value of their shareholding has subsequently reduced as a result of share price decline and/or
exchange rate fluctuations. The Executive Directors are, however, expected to retain a proportion of shares arising from future
vestings or releases of shares to rebuild their holding.

The table below shows the shareholding of each of the Executive Directors (together with interests held by their connected
persons) and a summary of outstanding awards as at December 31, 2020. The changes in the interests of the Directors in the
shares of Indivior PLC between December 31, 2020 and the date of this report are noted in the table below.

Number of shares owned outright

Conditional awards held

Vested and
subject to
two-year
post-
vesting
holding
period at
December
31, 2020

Vested and
subject to
two-year
post-
vesting
holding
period at
December
31, 2019

Unvested and
subject to
performance
conditions
and
continued
employment
at December
31, 2020

Unvested
and
subject to
continued
employment
at
December
31, 2020

At
December
31, 2019

At March
18, 2021

At
December
31, 2020

Deferred
bonus
awards

Options
held

Unvested
and
subject to
continued
employment

Vested
but not
exercised

Shareholding
requirement
(% of base
salary)1

Shareholding
at December
31, 2020
(% of base
salary)1

Date by
which
shareholding
requirement
to be
achieved

Executive Directors

Mark Crossley

346,663

Ryan Preblick

71,3033

57,363

–

346,663

Former Executive Director

Shaun Thaxter

- 1,609,3344

– 1,609,334

–

3,892,902

188,523 210,6192

264,935

203,705

500%

65%

Jun 2025

17% Nov 2025

1,700,295

488,656 921,4615

n/a

1. In line with Indivior’s current executive shareholding requirements, the Executive Directors’ shareholdings as a % of base salary have been calculated based on
shares owned outright valued using the three-month average share price to December 31, 2020 (109.7p), and the US/UK exchange rate over the same period
(GB£1:US$1.3651).

2. Mark Crossley holds a vested but unexercised market-value option over 210,619 shares. This option was granted under the rules of the LTIP in December 2014

(on demerger) at an option price of 111.0p per share. The option vested on May 11, 2016 and is scheduled to lapse on December 28, 2024.

3. Ryan Preblick was granted an award over 21,578 shares under the Indivior Long-Term Incentive Plan on March 9, 2018. The vesting of this award was settled on

a net settled basis, resulting in the delivery of 13,940 shares to Mr Preblick on March 9, 2021.

4. Shaun Thaxter’s shareholding is shown as at the date of cessation of employment (June 27, 2020). There were no post-cessation holding requirements attached

to the Indivior shares that he held outright. His unvested conditional awards remain subject to a two-year post-vesting holding period.

5. Shaun Thaxter holds a vested but unexercised market-value option over 921,461 shares. This option was granted under the rules of the LTIP in December 2014

(on demerger) at an option price of 111.0p per share. The option vested on May 11, 2016 and is scheduled to lapse on June 27, 2021, being 12 months following the
cessation of employment.

Appointments during the year
Mark Crossley
As announced on June 29, 2020, Mark Crossley was appointed Chief Executive Officer. His annual remuneration package, which
is in line with the Company’s Remuneration Policy, is as follows:

› Base salary: $775,000 p.a.

› AIP opportunity of up to 200% of base salary. 25% of any bonus paid will be deferred into shares for a period of two years.

› LTIP award opportunity: up to 400% of base salary or 1,500,000 shares.

› Shareholding requirement of 400% of base salary or 1,500,000 shares.

› Mark Crossley’s employer pension contribution is in line with the pension contribution available to the wider US workforce,

which includes a profit-sharing contribution of 4% and 75% Company matching on elected employee contributions up to 6%,
subject to plan/IRS limits.

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Ryan Preblick
As announced on November 19, 2020, Ryan Preblick was appointed Chief Financial Officer and Executive Director. His annual
remuneration package, which is in line with the Company’s Remuneration Policy is as follows:

› Base salary: $480,000 p.a.

› AIP opportunity of up to 120% of base salary. 25% of any bonus paid will be deferred into shares for a period of two years

under the Deferred Bonus Plan.

› LTIP award opportunity: 400% of base salary or 1,500,000 shares.

› Shareholding requirement of 400% of base salary or 1,500,000 shares.

› Ryan Preblick’s employer pension contribution is in line with the pension contribution available to the wider US workforce,

which includes a profit-sharing contribution of 4% and 75% Company matching on elected employee contributions up to 6%,
subject to plan/IRS limits.

Payments for loss of office (audited)
Shaun Thaxter stepped down as Chief Executive Officer on June 27, 2020 and ceased to be an Executive Director and employee
on the same date. His remuneration arrangements on leaving were in line with the approved Remuneration Policy.

Policy

Base salary,
benefits and
pension benefits

Treatment
Shaun Thaxter received $846,300 in lieu of salary plus $244,804 in lieu of benefits as a payment in lieu
of notice in respect of his contractual 12-month notice entitlement. These sums were paid in a single
payment following the termination of employment.

AIP

DBP

LTIP

There was no bonus payment in respect of 2020.

In accordance with the rules of the Deferred Bonus Plan, the conditional award over 488,656 shares
granted under the Deferred Bonus Plan on March 13, 2020 will continue and vest on the normal vesting
date (March 13, 2022).

Shaun Thaxter’s outstanding 2018, 2019 and 2020 awards granted under the LTIP were treated in accordance
with the rules of the LTIP, as follows:

a. The 2018 award over 729,617 shares will lapse in full on March 9, 2021.

b. The 2019 award over 1,905,294 shares will continue to vest in the ordinary course and will vest on March 5,
2022, subject to the satisfaction of the applicable performance conditions and a pro-rata reduction to
reflect the period of employment during the applicable performance period. Following vesting, any shares
received will be subject to a two-year holding period and will be released on March 5, 2024.

c. The 2020 award over 3,046,085 shares will continue to vest in the ordinary course and will vest on March 9,

2023, subject to the satisfaction of the applicable performance conditions and a pro-rata reduction to
reflect the period of employment during the applicable performance period. Following vesting, any shares
received will be subject to a two-year holding period and will be released on March 9, 2025.

Shaun Thaxter’s vested but unexercised market-value option over 921,461 shares at an option price of 111.0p
per share will remain exercisable until 26 June 2021, being 12 months following the termination of
employment.

Other

› Legal fees of $66,484 incurred in connection with advice in respect of Shaun Thaxter’s departure.

› $42,314 for 13 days of accrued but unused holiday entitlement.

› $100 in consideration for entering into ongoing obligations.

› Up to 12 months of continued health cover, for which $22,577 was paid in 2020.

Indivior Annual Report 2020
Indivior Annual Report 2020

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C O N T I N U E D

Payments to past Directors (audited)
There were no payments made to past Directors.

External appointments
Subject to the prior approval of the Board, Executive Directors are able to accept an external appointment to a corporate board
outside the Company. The Executive Directors do not hold any external appointments.

Review of past performance

Historical TSR performance
The graph below shows the TSR of the Company and the UK FTSE 250 Index over the period from admission on December 23,
2014, to December 31, 2020. The Index was selected on the basis that the Company was a member of the FTSE 250 Index in the
UK for the majority of the period.

Value of a hypothetical holding of £100 invested from admission to December 31, 2020.

350

300

250

200

150

100

)
d
e
s
a
b
e
r
(

)
£
(
e
u
l
a
V

2014

2015

2016

2017

2018

2019

2020

FTSE 250

Indivior

Historical Chief Executive Officer pay
The historical total remuneration for the role of the Chief Executive Officer for the period from January 1, 2014, to December 31,
2020, is set out in the table below.

2014

2015

2016

2017

2018

2019

2020

Shaun
Thaxter1

Mark
Crossley1

Single figure of total remuneration ($’000)

1,968.1

4,317.9

5,024.8

9,215.7

1,009.6

2,138.7

557.3

760.5

AIP (outturn as a % of maximum)

LTIP (outturn as a % of maximum)

100%2

n/a

94.5%

93.3%

94.5%

100%

78.5%

73.5%

0.0%

65.5%

0.0%

1. Mark Crossley was appointed Chief Executive Officer on June 29, 2020. Shaun Thaxter was Chief Executive Officer from the date of listing until June 27, 2020.

2. Indivior was a division of Reckitt Benckiser Group plc (“RB”) for the majority of 2014 and Shaun Thaxter participated in the RB annual bonus plan in that year.

The maximum bonus payable to Shaun Thaxter under that plan was 214% of base salary; he was paid the maximum bonus in 2014.

3. Historical data is not provided prior to 2014 when the Group was a division of Reckitt Benckiser Group plc.

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Percentage change in remuneration of Directors and employees
The following table sets out the change in remuneration paid to the Directors who served on the Board from 2019 to 2020,
compared with the average percentage change for the rest of the US employee population; the majority of the Group’s
employees are based in the US.

Executive Directors
Mark Crossley1
Ryan Preblick2
Non-Executive Directors
Graham Hetherington3
Peter Bains4
A. Thomas McLellan
Lorna Parker
Daniel J. Phelan
Daniel Tassé
Other employees (US based)5
Former Executive Director
Shaun Thaxter6
Former Non-Executive Directors
Tatjana May7
Howard Pien8

Base salary/fees
(% change)

Taxable benefits
(% change)

Annual bonus
(AIP)

27.7%
n/a

754.4%
172.0%
(10.7)%
0%
0%
77.55%
4.8%

32.7%
n/a

-
-
1.0%
-
(1.1)%
1.3%
13%

(100)%
n/a

-
-
-
-
-
-
(38)%

(49.3)%

(39.2)%

(100)%

(41.7)%
(31.8)%

-
1.5%

-
-

1. Mark Crossley was appointed Chief Executive Officer on June 29, 2020. Further details of his remuneration arrangements can be found on page 102.
2. Ryan Preblick was appointed Chief Financial Officer and Executive Director on November 19, 2020. Further details of his remuneration arrangements can be found

on page 103.

3. Graham Hetherington was appointed as Non-Executive Director on November 1, 2019 and was appointed Chair of the Board on November 18, 2020. The large %

change in his fee on the prior year is primarily driven by him being appointed to the Board during 2019.

4. Peter Bains was appointed as Non-Executive Director on August 1. 2019. The large % change in his fee on the prior year is primarily driven by him being appointed

to the Board during 2019.

5. Indivior PLC is not an employing company and therefore the remuneration of US-based employees has been included as the comparator group as this is where the

majority of the Group’s employees are based.

6. Shaun Thaxter stepped down from the Board on June 27, 2020.
7. Tatjana May stepped down from the Board on July 31, 2020.
8. Howard Pien stepped down from the Board on September 4, 2020.

The Group has fewer than 250 employees in the UK and is therefore not required to publish Chief Executive Officer pay ratio
information as set out by The Companies (Miscellaneous Reporting) Regulations 2018.

Workforce remuneration and engagement
During the year, the Committee undertook a review of the remuneration arrangements and related policies for the wider
workforce. This included a review of the Group’s core compensation programs, including the base salary merit increase process,
benefits, and short- and long-term incentive arrangements. Variable remuneration schemes are designed to drive performance
and behaviors consistent with the Group’s purpose, values and strategy. Performance measures under the AIP are designed
to align to the key strategic drivers for the year ahead, and are developed alongside the Group’s annual financial plans.
Performance measures for awards granted to senior leaders under the LTIP are subject to relative TSR measures and are
therefore directly aligned with the interests of shareholders.

The Committee did not consult with employees specifically on executive remuneration and its alignment with the wider
Company pay policy in 2020, but will consider its approach in 2021 in light of the FRC's document entitled ‘Improving the
quality of ‘comply or explain’, reporting published in February 2021.

Relative importance of spend on pay
The following table shows total employee pay compared with shareholder distributions and research and development
expenses for 2020 and 2019. Research and development expenses have been selected as a comparator as this measure
is considered to be an indicator of investment in the future performance of the business.

Total employee pay
Shareholder distributions1
Research and development expenses

2020
$m

178
–
40

2019
$m

172
–
53

%
change

3.5%
n/a
(24.5)%

1. In line with the Dividend Policy approved by the Board in 2016, the Company does not intend to pay dividends for the foreseeable future.

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C O N T I N U E D

Dilution limits
Indivior’s share plans provide that awards can be satisfied by newly issued shares, the transfer of treasury shares, or existing
shares (purchased in the market and held in an employee benefit trust). Indivior’s share plans state that the aggregate number
of shares that may be issued to satisfy awards made under these plans must not exceed 10% of the Company’s issued share
capital in any year period.

The Committee has reviewed the number of shares subject to award to ensure that these limits would not be breached by the
granting of awards in 2021.

Single total figure of remuneration for the Chair and Non-Executive Directors (audited)
The table below sets out the total remuneration received by the Chair and the Non-Executive Directors for the year ended
December 31, 2020.

Role as at December 31, 2020

Fees1

Benefits2

remuneration

Fees1

Benefits2

2020
‘000

Total

2019
‘000

Total
remuneration

Graham Hetherington3 Chair
S

Peter Bains4

A. Thomas McLellan

Lorna Parker

Daniel J. Phelan

Daniel Tassé5

N S

N R

Senior Independent Director

Former Directors

Tatjana May6

Howard Pien7

n/a

Note: Totals may not sum up due to rounding.

£106.8

£85.0

$108.3

£85.0

$122.7

$254.1

$2.1

£106.8

£85.0

$110.3

£85.0

$124.8

$256.2

£12.5

£31.3

$119.1

£85.0

$122.7

$143.1

$2.1

$2.0

£12.5

£31.3

$121.2

£85.0

$124.8

$145.2

£43.8

$270.7

$2.3

£43.8

$273.0

£75.0

$396.9

£75.0

$2.3

$399.2

1. Fees paid to the Chair and the Non-Executive Directors are paid in their local currency. Since 2016, a fixed exchange rate (GB£1:US1.4434) has been used to translate

UK amounts into US dollars, effectively setting fees at that time, on both a UK and US basis.

2. Benefits comprise the grossed-up cost of providing professional support for the completion of UK tax returns for US tax residents; these costs have been translated

to US$ using the average exchange rates for 2020 (GB£1:US$1:1.2833) and 2019 (GB£1:US1.2767).

3. Graham Hetherington was appointed a Director of the Company on November 1, 2019; the fee shown for 2019 is from the date of appointment to December 31, 2019.
He was appointed Chair of the Audit Committee on March 31, 2020 and stepped down as Chair of that Committee (but remained a member) when he was appointed
Chair of the Board on November 19, 2020.

4. Peter Bains was appointed a Director of the Company on August 1, 2019; the fee shown for 2019 is from the date of appointment to December 31, 2019. He was

appointed Chair of the Science & Policy Committee on January 1, 2020.

5. Daniel Tassé acted as Interim Chair from June 2020 to November 18, 2020 and was paid an additional fee during this period so that his aggregate fee was equivalent

to the Chair’s fee (on a pro-rated basis). He served as Chair of the Audit Committee between January 1, 2020 and March 31, 2020 and reassumed that role on
November 19, 2020.

6. Tatjana May stepped down from the Board on July 31, 2020; the fee shown for 2020 is to the date of termination.

7. Howard Pien took a medical leave of absence with effect from June 4, 2020 and stepped down from the Board on September 4, 2020. The fee shown for 2020 is to
the date of termination. Mr Pien’s estate is in the process of being finalized and consequently his benefits during the period have not yet been finalized and the
amount has been estimated.

Chair and Non-Executive Directors’ fees
The fees paid to the Chair fall within the remit of the Committee; the fees paid to the Non-Executive Directors are reserved
to the Board. Since 2016, a fixed exchange rate (GB£1:US$1.4434) has been used to translate UK fee amounts into US dollars,
effectively setting fees at that time, on both a UK and US basis. Fees are reviewed on a biennial basis.

The fees paid to the Chair were set at the time of listing and were last reviewed in November 2020 as part of the consideration
of the appointment of the new Chair and by reference to the market. It was agreed that there would be no increase to the fees
paid and these would remain at £275,000 per annum.

The fees paid to the Non-Executive Directors were set at the time of listing and were last reviewed in February 2021. It was
agreed that there would be no increase to the fees paid to the Non-Executive Directors. Non-Executive Directors receive a basic
fee of £55,000 per annum ($79,400), with additional fees of £20,000 p.a. ($29,900) for Chairing a Committee and for acting as
Senior Independent Director and £10,000 p.a. ($14,400) for membership of a Committee. The Chair of the Board does not receive
additional fees for being a member of the Committees.

There have been no increases to the fees paid to the Chair and Non-Executive Directors since the Company listed in December
2014. The Chair and the Non-Executive Directors are not eligible to participate in the Company’s annual bonus, long-term
incentive, or pension schemes.

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Chair and Non-Executive Directors’ shareholding (audited)
The Chair and Non-Executive Directors are expected to acquire an interest in Indivior shares over the course of their
appointment. The following table shows the shareholdings of each of the Chair and Non-Executive Directors (together with the
interests of their connected persons) as at December 31, 2020 (or up to the date they stepped down from the Board) and as at
the date of this report.

Peter Bains

Graham Hetherington

A. Thomas McLellan

Lorna Parker

Daniel J. Phelan

Daniel Tassé

Former Directors

Tatjana May

Howard Pien

Total number
of shares held at
March 18, 2021

Total number of
shares held at
December 31, 2020

Total number of
shares held at
December 31, 2019

54,000

50,000

7,546

25,890

60,318

12,996

54,000

50,000

7,546

25,890

60,318

12,996

54,000

7,546

25,890

60,318

12,996

Total number of shares held at
date of stepping down from Board

Total number of
shares held at
December 31, 2019

22,309

146,219

22,309

146,219

Executive Directors’ service agreements
The Executive Directors have service agreements that set out the contract between them and the Group.

Date of appointment

Notice period from Group

Notice period from individual

Expiry of current term

Mark Crossley

Ryan Preblick

June 29, 2020

November 19, 2020

12 months

Rolling contract

Chair and Non-Executive Directors’ letters of appointment
The terms of service of the Chair and the Non-Executive Directors are contained in letters of appointment. In accordance
with the 2018 Code, the Chair and Non-Executive Directors are appointed subject to re-appointment by shareholders at the
Company’s next AGM following their appointment and re-appointment at each subsequent AGM. The Chair and Non-Executive
Directors are not entitled to receive compensation for loss of office.

The table below sets out the dates of appointment of the Chair and the Non-Executive Directors and the expiry of their
current terms.

Peter Bains

Graham Hetherington1

A. Thomas McLellan

Lorna Parker

Daniel J. Phelan

Daniel Tassé

Date of appointment

Expiry of current term

August, 2019

July, 2022

November, 2019

November, 2023

November, 2014

November, 2023

November, 2014

November, 2023

November, 2014

November, 2023

November, 2014

November, 2023

Length of service at December 31,
2020 in years

Notice period

1 month

1. Graham Hetherington was appointed a Non-Executive Director in November 2019. He was appointed Chair of the Board in November 2020.

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C O N T I N U E D

Summary of voting outcomes for the Remuneration Policy and 2019 Remuneration Report
The 2019 Remuneration Report received a c.24% vote against at the 2020 Annual General Meeting and c.15% of shareholders
also abstained from voting on this and a number of other resolutions. The Board acknowledges that some shareholders felt
that executive remuneration with respect to the 2019 financial year was not fully aligned with the shareholder experience.

Throughout its decision making, the Committee remained focused on balancing the alignment of the shareholder experience
with rewarding the operational performance of the business, advancement of the Group’s long-term strategic objectives and
the retention and motivation of management. As such, Long-Term Incentive Plan (LTIP) awards granted in March 2020 were
reduced by 55% (from the amount permitted under the approved Remuneration Policy) and the Committee exercised negative
discretion and reduced the outturn under the 2017-2019 LTIP to zero. This was the second consecutive year in which the
Committee exercised negative discretion in relation to incentive outcomes, having reduced the 2018 bonus outturn to zero.

The Committee continues to strive to align executive remuneration with the shareholder experience. Therefore, as announced
in May 2020, and as part of the response to the COVID-19 pandemic, the Executive Committee agreed to forgo any bonus
payment for 2020 associated with the Group’s Annual Incentive Plan (AIP) and did not receive a base salary merit increase in
2021 (aligned with the wider workforce). The Committee, supported by management, considered the formulaic outturn of the
2018-2020 LTIP in the context of the shareholder experience over the performance period and considered it appropriate to
exercise its discretion to override the formulaic outturn and LTIP amounts for the Executive Directors to zero.

During the year, the Committee engaged with shareholders and shareholder representative bodies to seek their views
regarding the 2019 remuneration outcomes and also in relation to the remuneration arrangements for Mark Crossley and
in the development of the 2021 Remuneration Policy. In November 2020, the Board approved the publication of an Updated
Statement, setting out the feedback received; the Update Statement is available on the Group's website.

The Committee is grateful for the engagement and feedback received. The views of shareholders and shareholder
representative bodies has been carefully considered by the Committee in the development of our proposed Remuneration
Policy and also in determining remuneration outcomes in respect of the 2020 financial year.

The Remuneration Policy was last put to shareholders for a vote at the 2018 AGM and 94.3% of shareholders voted in favor
of the Remuneration Policy.

The votes cast by proxy and at the meeting in respect of the 2019 Directors’ Remuneration Report and 2018 Remuneration
Policy were as follows:

Resolution

Votes for

Votes for (%)

Votes against

Votes against (%)

Votes withheld
(abstentions)

Approve the 2019 Directors’ Remuneration
Report (2020 AGM)

Approve the Remuneration Policy (2018 AGM)

335,155,904

563,892,577

76.1%

94.3%

105,280,675

34,156,066

23.9%

5.7%

111,815,212

113,809

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D I R E C T O R S ’ R E P O R T

DIRECTORS’ REPORT

Directors and their interests
The Directors of the Company who served during the
financial year ended December 31, 2020 and up to the
date of signing the financial statements appear on
pages 50 and 51. Details of Directors’ interests in the
Company’s ordinary shares, including any interest in
share awards and long-term incentive plans, are set
out in the Directors’ Remuneration Report on pages
79 to 108.

No Director held a material interest at any time during
the year in any derivative or financial instrument
relating to the Company’s shares.

Powers of Directors
The Directors are responsible for managing the
business of the Company and may exercise all the
powers of the Company, subject to the provisions of
Company’s Articles of Association in respect of the
liability incurred as a result of their office. Powers
relating to the issuing of shares are also included in
the Articles of Association and such authorities are
renewed by shareholders at the AGM each year; see
page 110.

Appointment and replacement of Directors
The Company’s Articles of Association give the Directors
power to appoint and replace Directors. Under the
Terms of Reference of the Nomination & Governance
Committee, any appointment will be recommended by
that Committee for approval by the Board of Directors.

The Articles of Association require Directors to retire
and submit themselves for re-appointment at the first
Annual General Meeting (“AGM”) following appointment,
and all Directors who have held office at the date of
the two preceding AGMs.

Notwithstanding these provisions of the Articles of
Association, in compliance with the UK Corporate
Governance Code and in line with previous years,
all Directors wishing to continue in office will offer
themselves for re-appointment by the shareholders at
the 2021 AGM. Daniel Tassé has notified the Company
of his intention to stand down as a Non-Executive
Director of the Company, and will not stand for
re-appointment at the Company’s 2021 AGM. Details
of unexpired terms of Directors’ service contracts are
set out in the Directors’ Remuneration Report on
page 107.

THE DIRECTORS PRESENT THEIR ANNUAL
REPORT TOGETHER WITH THE AUDITED
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020.

Corporate Governance Statement
The Directors’ Report on pages 109 to 112 which
includes the Corporate Governance Statement on
pages 48 to 108, together with the Strategic Report on
pages 2 to 47, when taken together constitute the
management report as required by DTR 4.1.8R.

The Statement of Directors’ Responsibilities on pages
113 to 114 is incorporated into the Directors’ Report by
reference.

The following information fulfilling the further
disclosure requirements contained in the Companies
Act 2006, Schedule 7 of the Large and Medium-Sized
Companies and Groups (Accounts and Reports)
Regulations 2008 and the FCA’s Listing Rules and
Disclosure Guidance and Transparency Rules (DTRs)
has been included elsewhere within the Annual
Report and is incorporated into the Directors’ Report
by reference:

Disclosure

Location

Future business developments
and R&D activities

Strategic Report
(pages 14 to 16)

Principal Risks and Risk
Management

Greenhouse gas emissions

Strategic Report
(pages 37 to 47)

Strategic Report
(page 23)

Both the Directors’ Report and the Strategic Report
have been drawn up and presented in accordance
with, and in reliance upon, applicable English
company law. The liabilities of the Directors in
connection with those reports shall be subject to the
limitations and restrictions provided by such law.

Results and dividends
The consolidated income statement is on page 129.
The loss for the financial year attributable to equity
shareholders amounted to $(148)m.

In line with the dividend policy approved by the
Board, the Directors do not recommend payment
of a dividend in respect of the financial year ended
December 31, 2020. The Directors are of the view that
the dividend policy remains appropriate for the Group
considering its current financial position, strategy and
prospects and the continuing uncertainties faced.
These uncertainties include the ongoing legal matters
and the risk that SUBLOCADE and PERSERIS might not
meet revenue growth expectations due to the
continued impact from the COVID-19 pandemic.

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Director indemnities and insurance cover
The Directors have the benefit of an indemnity
provision contained in the Company’s Articles of
Association in respect of the liability incurred as a
result of their office. Also, throughout the financial
year, the Company purchased and maintained
Directors’ and Officers’ liability insurance for its
Directors and Officers which remained in force at the
date of the approval of the Directors’ Report. Neither
the indemnity nor the insurance provides cover in the
event that a Director is found to have acted
dishonestly or fraudulently.

Articles of Association
The Articles of Association may be amended by
special resolution of the shareholders.

Stakeholder engagement
How the Directors have had regard to the need
to foster business relationships with suppliers,
customers and others can be found on pages 17
to 21 of the Strategic Report. Further information
regarding the Board’s engagement with the workforce
can be found on page 62.

Share capital
Details of the Company’s share capital are set out in
Note 25 on page 161.

The Company has one class of ordinary share which
carries no rights to fixed income. Each share carries
the right to one vote at general meetings of the
Company. The ordinary shares are listed on the
Official List and traded on the London Stock Exchange.
As of December 31, 2020, the Company had 733,635,511
ordinary shares in issue. The Company does not hold
any shares in Treasury.

There are no restrictions on the voting rights attaching
to the Company’s ordinary shares or the transfer of
securities in the Company. No person holds securities
in the Company which carry special voting rights with
regard to control of the Company. The Company is not
aware of any agreements between holders of
securities that may result in restrictions on the
transfer of securities or on voting rights.

The Company has a Sponsored Level 1 American
Depositary Receipt (“ADR”) program in the US. The
ADR program is currently closed to new issuances.
For further information please go to www.adr.com.

Authority to allot shares
At the 2021 AGM, the Directors will ask shareholders
to renew the authority last granted to them at the
2020 AGM to allot shares up to a maximum of an
amount equivalent to two-thirds of the shares in issue
(of which one-third must be offered by way of rights
issue). The renewed authority will apply until the
conclusion of the 2022 AGM.

Two special resolutions will be proposed at the 2021
AGM to authorize the Directors to allot equity shares
in the Company for cash, without regard to the pre-
emption provisions of the Companies Act 2006.
These authorities are also renewable annually and
are in line with institutional shareholder guidance.

Authority to purchase own shares
At the 2020 AGM, shareholders approved a resolution
for the Company to make purchases of its own shares
to a maximum number of ordinary shares, being
approximately 10% of the issued share capital. As at
December 31, 2020 the full extent of this authority
remained in force and unutilized.

The authority is renewable annually and shareholders
will be asked to approve an equivalent resolution at
the 2021 AGM.

The Directors consider it desirable for these general
authorizations to be available in order to maintain an
efficient capital structure but will only purchase the
Company’s shares in the market if they believe it is
in the best interests of shareholders generally.

Substantial shareholdings
As at December 31, 2020 and the date of this Report,
the Company had been notified under Rule 5 of the
Disclosure Guidance and Transparency Rules of the
following major interests in the voting rights in the
capital of the Company:

Scopia Capital Management

Standard Life Aberdeen

Old Mutual Global Investors
(UK) Limited

Kairos Capital Management

Newtyn Management

At March 18
2021 (% of total
voting rights)

At December 31,
2020 (% of total
voting rights)

16.61%

9.99%

15.51%

10.61%

8.02%

5.13%

3.94%

8.02%

5.13%

4.02%

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Shares held in the Indivior PLC Employee
Benefit Trust
The trustee of the Indivior PLC Employee Benefit Trust
(“EBT”) has agreed not to vote using any shares held
by the EBT at any general meeting. If any offer is made
to shareholders to acquire their shares the trustee will
not be obliged to accept or reject the offer in respect
of any shares which are at that time subject to
subsisting awards, but will have regard to the interests
of the award holders and will have power to consult
them to obtain their views on the offer. Subject to the
above, the trustee may take action with respect to the
offer it thinks fair.

Workforce
Our workforce includes employees, interns and
contingent workers. During the year under review,
the Group employed an average of 819 people
worldwide (2019: 824). The Group’s business priority is
to safeguard the well-being, development and safety
of its workforce. It also wants its workforce to have
opportunities to grow and progress as part of an
enjoyable career.

The Group is an inclusive and equal opportunity
employer that relies on Human Resources specialists
throughout its worldwide locations to ensure
compliance with all applicable laws governing
employment practices and to advise on all Human
Resources policies and practices, including for
example recruitment and selection, training and
development, promotion and retirement.

Group policies seek to create a workplace that has
an open atmosphere of trust, honesty and respect.
Harassment or discrimination of any kind based
on race, color, religion, gender, age, national origin,
citizenship, mental or physical disabilities, sexual
orientation, veteran status, or any other similarly
protected status is not tolerated. This principle applies
to all aspects of employment from recruitment and
promotion, through to termination and all other terms
and conditions of employment. It is Group policy not
to discriminate on the basis of any unlawful criteria,
and its practices include the prohibition on the use of
child or forced labor. Employment policies are fair and
equitable and consistent with the skills and abilities of
the employee and the needs of the business.

The Group is committed to offering equal opportunities
in recruitment, training, career development and
promotion to all people, including those with
disabilities, having regard to their individual aptitudes
and abilities. As a matter of policy, full and fair
consideration is given to applicants with disabilities
and every effort is made to give employees who
become disabled while employed by the Group an
opportunity for retraining and for continuation in
employment. It is Group policy that the training,
career development and promotion of disabled
persons should, as far as possible, be the same
as that of other employees.

Employees and their representatives are briefed and
consulted on all relevant matters on a regular basis in
order to take their views into account with regard to
decision-making and to achieve a common awareness
of all the financial and economic factors affecting the
performance of the Group. Information relevant to the
employees is provided to them and, where appropriate,
to employee trade union representatives.

The Group also supports the wider fundamental human
rights of its employees worldwide, as well as those of
its customers and suppliers.

Further information regarding our people can be
found on page 24.

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Significant agreements – change of control
There are several agreements that take effect, alter or
terminate upon a change of control of the Company
following a takeover, such as commercial contracts,
bank agreements, property lease arrangements and
employee share plans. None of these is deemed to be
significant in terms of their potential impact on the
business of the Group as a whole.

There are no significant agreements between the
Company and its Directors or employees providing for
compensation for loss of office or employment that
occurs due to a takeover, save that provisions of the
Company’s share plans may cause options and awards
to vest on a takeover.

There is no information that the Company would be
required to disclose about persons with whom it has
contractual or other arrangements which are essential
to the business of the Company.

The Directors acknowledge that there are other
significant stakeholders, in addition to shareholders,
who provide valuable feedback and help shape the
Company’s overall approach to governance.

Political donations
There were no political donations, as defined in
the Companies Act 2006, during 2020 (2019: nil).
The Company’s US subsidiaries do make ‘political
donations’ as defined under UK law, but these
donations are not subject to that law. Donations
by US subsidiaries will not exceed US$500,000.

Branches
The Group has branches in Finland, Norway and
Sweden.

Disclosure of information to External Auditor
Each of the persons who are Directors at the time
when this Directors’ Report is approved confirms that:

› so far as he/she is aware, there is no relevant audit

information of which the Company’s External
Auditor is unaware; and

› each Director has taken all reasonable steps that
he/she ought to have taken as a Director to make
himself/herself aware of any relevant audit
information and to establish that the Company’s
External Auditor is aware of that information.

For these purposes, relevant audit information means
information needed by the Company’s External
Auditor in connection with the preparation of their
report on pages 115 and 128.

External Auditor
PricewaterhouseCoopers LLP have agreed to be re-
appointed as the External Auditor of the Company.
Resolutions for their re-appointment, and to authorize
the Audit Committee to determine their remuneration,
will be proposed at the forthcoming AGM.

Financial risk management
Details of the Group’s use of financial instruments,
together with information on the Company’s risk
objectives, policies and exposure to price, credit,
liquidity, cash flow and interest rate risks, can be
found in Note 17.

Disclosures required under Listing Rule 9.8.4
There are no disclosures required to be made under
UK Listing Rule 9.8.4. Details of long-term incentive
plans can be found in the Directors’ Remuneration
Report on pages 79 to 108.

Annual General Meeting (“AGM”)
The AGM will be held at 3.00pm (UK time) on Thursday,
May 6, 2021 at the offices of Indivior PLC, 234 Bath
Road, Slough, Berkshire SL1 4EE. A full description of
the business to be conducted at the meeting is set out
in the Notice of AGM, available from the Company’s
website www.indivior.com.

Due to COVID-19 social distancing measures,
shareholders are requested not to attend the meeting
in person. Shareholders are encouraged to submit
their votes ahead of the meeting either by submitting
a form of proxy or by voting electronically (please see
the Notice of Meeting for further details regarding
voting at the AGM).

Strategic Report
The Strategic Report set out on pages 2 to 47 was
approved by the Board on March 18, 2021.

By Order of the Board

Kathryn Hudson
Company Secretary of Indivior PLC

234 Bath Road,
Slough, Berkshire, SL1 4EE

Company registration number: 09237894

March 18, 2021

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S T A T E M E N T O F D I R E C T O R S ’ R E S P O N S I B I L I T I E S

STATEMENT OF DIRECTORS’
RESPONSIBILITIES IN RESPECT
OF THE FINANCIAL STATEMENTS

THE DIRECTORS ARE RESPONSIBLE FOR
PREPARING THE ANNUAL REPORT AND THE
FINANCIAL STATEMENTS IN ACCORDANCE
WITH APPLICABLE LAW AND REGULATION.
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
accounting standards in conformity with the
requirements of the Companies Act 2006. Additionally,
the Financial Conduct Authority’s Disclosure Guidance
and Transparency Rules require the Directors to
prepare the Group financial statements in accordance
with international financial reporting standards
adopted pursuant to Regulation (EC) No 1606/2002
as it applies in 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, together “UK Accounting
Standards”). 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 the financial statements,
the Directors are required to:

The Directors are also responsible for safeguarding
the assets of the Group and Parent Company and
hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.

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
Parent Company and enable them to ensure that the
financial statements and the Directors’ Remuneration
Report comply with the Companies Act 2006.

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

Directors’ confirmations
The Directors consider that the Annual Report, taken
as a whole, is fair, balanced and understandable and
provides 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 in the Annual Report, confirm that, to the best
of their knowledge:

› select suitable accounting policies and then apply

› the Group financial statements, which have been

them consistently;

› state whether international accounting standards in
conformity with the requirements of the Companies
Act 2006 and international financial reporting
standards adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union have
been followed for the Group financial statements
and United Kingdom Accounting Standards,
comprising FRS 101 have been followed for the
Parent Company financial statements, subject to
any material departures disclosed and explained
in the financial statements;

› make judgments and accounting estimates that are

reasonable and prudent; 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.

prepared in accordance with international accounting
standards in conformity with the requirements of
Companies Act 2006 and international financial
reporting standards adopted pursuant to Regulation
(EC) No 1606/2002 as it applies in the European
Union, give a true and fair view of the assets,
liabilities, financial position and loss of the Group;

› the Parent Company financial statements, which have
been prepared in accordance with United Kingdom
Accounting Standards, comprising FRS 101, give a
true and fair view of the assets, liabilities, financial
position and loss of the Parent Company; and

› the Directors’ 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.

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C O N T I N U E D

These risks were balanced against the Group’s current
and forecast working capital position, impact of the
cost saving actions taken to date, and timing of the
final balloon payment on the term loan in Q4 2022
which is outside the going concern assessment period
and would also impact the Parent Company. As a
result of the factors set out above, the Directors of
the Group and Parent Company have a reasonable
expectation that the Group and Parent Company
have adequate resources to continue in operational
existence for at least one year from the approval
of these financial statements. Based on the above
assessment, the previous material uncertainty relating
to the Group’s and Parent Company’s ability to
continue as a going concern has been removed.

The Directors have given the going concern assessment
due consideration and have concluded that it is
appropriate to adopt the going concern basis for
accounting and preparing these financial statements.
The viability statement is on pages 46 and 47.

By Order of the Board

Kathryn Hudson
Company Secretary of Indivior PLC

234 Bath Road
Slough, Berkshire, SL1 4EE

Company Registration number: 9237894

March 18, 2021

Disclosure of information to auditors
A Directors’ statement in relation to disclosure of
relevant audit information can be found in the
Directors’ Report on pages 109 to 112.

Going concern
The Group’s business model, strategy, and viability
assessment are set out in the Strategic Report on
pages 2 to 47, along with the Group’s risk management
strategy and the principal risks that could threaten the
Group’s business model, future performance and
solvency or liquidity. The Group’s and Parent
Company’s financial position, cash flows, and liquidity
position are discussed in the notes to the Group and
Parent Company financial statements, along with the
Group’s and Parent Company’s objectives, policies and
processes for managing its financial risks, and the
Group’s and Parent Company’s exposure to liquidity
risk and capital risk.

The Directors have considered the Group’s and Parent
Company’s financial plan, in particular with reference
to the period through June 2022.

As disclosed in Notes 4, 21, 22 and 23 to the Group
Financial Statements, the Group reached a resolution
with the U.S. Department of Justice (DOJ), Federal
Trade Commission (FTC) and the Department of Health
and Human Services (HHS), which was approved in
November 2020. The agreement reached with HHS
(as described in Note 23) has eliminated the risk
of potential exclusion from participating in US
government health programs. Additionally,
subsequent to the year-end, the Group resolved a
claim raised by Reckitt Benckiser (RB) in November
2020. These settlements have resulted in liabilities
totaling $536m as at December 31, 2020. While the
uncertainty relating to these matters has been resolved,
various other legal proceedings as discussed in Note
23 carry their own specific ongoing risk and uncertainty.

The Directors have assessed the Group’s and Parent
Company’s ability to comply with the financial
covenants in the Group’s debt facility, maintain
sufficient liquidity to fund its operations, fulfill
obligations under the DOJ and RB agreements, and
address the reasonably possible financial implications
of the ongoing legal proceedings. The Directors have
modeled the failure of SUBLOCADE to meet revenue
growth expectations due to the continued impact from
the COVID-19 pandemic (considering a 15% decline on
forecasts) as part of the Group’s and Parent
Company’s going concern assessment and downside
scenario. The risk of a worse than expected outcome
relating to the remaining ongoing legal matters has
been considered for purposes of the viability period
only as these cases are not expected to be concluded
during the going concern period. Should the maximum
reasonably possible risk occur (as disclosed in Note
23) in the going concern period, the Group and
therefore also the Parent Company would still
maintain adequate liquidity to comply with its
financial covenants and obligations.

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INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF INDIVIOR PLC
Report on the audit of the Financial Statements

Opinion
In our opinion:

› Indivior PLC’s Group Financial Statements and Parent Company Financial Statements (the “Financial Statements”) give a true
and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2020 and of the Group’s loss
and the Group’s cash flows for the year then ended;

› the Group Financial Statements have been properly prepared in accordance with international accounting standards in

conformity with the requirements of the Companies Act 2006;

› the Parent Company Financial Statements have been properly prepared in accordance with United Kingdom Generally

Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 “Reduced Disclosure Framework”,
and applicable law); and

› the Financial Statements have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the Financial Statements, included within the Annual Report, which comprise: the Consolidated and Parent
Company balance sheets as at 31 December 2020; the Consolidated income statement, the Consolidated statement of
comprehensive (loss)/income, the Consolidated cash flow statement and the Consolidated and Parent Company statements
of changes in equity for the year then ended; and the notes to the Financial Statements, which include a description of the
significant accounting policies.

Our opinion is consistent with our reporting to the Audit Committee.

Separate opinion in relation to international financial reporting standards adopted pursuant to Regulation (EC)
No 1606/2002 as it applies in the European Union
As explained in Note 2 to the Group Financial Statements, the Group, in addition to applying international accounting standards
in conformity with the requirements of the Companies Act 2006, has also applied international financial reporting standards
adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.

In our opinion, the Group Financial Statements have been properly prepared in accordance with international financial
reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the Financial Statements
section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.

Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the
Financial Statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities,
and we have fulfilled our other ethical responsibilities in accordance with these requirements.

To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not
provided to the Group.

Other than those disclosed in Note 6 to the Financial Statements, we have provided no non-audit services to the Group in the
period under audit.

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Our audit approach

Context
The Group audit team has devised its audit approach by directing the audit efforts to areas where the Group and Parent
Company Financial Statements are most susceptible to material misstatement.

Our audit report on the Group and Parent Company Financial Statements for the year ended 31 December 2019 included a
material uncertainty related to going concern section and an emphasis of matter with respect to the outcome of litigation.

As explained in Notes 2, 4, 21 and 23 to the Group Financial Statements, in July 2020 the Group reached a resolution with the U.S.
Department of Justice (DOJ), Federal Trade Commission (FTC) and the Department of Health and Human Services (HHS), which
was approved by a United States federal court in the Western District of Virginia in November 2020. In addition, subsequent to
the year-end, the Group resolved a claim raised by Reckitt Benckiser (RB) in November 2020. Both matters are discussed further
in the ‘Ongoing litigation and investigative matters and related provisions’ key audit matter below. Although there are various
other ongoing legal matters, the impact of the resolution of these specific matters has significantly reduced the uncertainty of
the Group’s ongoing legal risk which has resulted in the emphasis of matter with respect to the outcome of litigation included
in our 2019 report no longer being necessary. In addition, due to the agreement reached with the HHS (as described in Note 23
to the Group Financial Statements), the risk of potential exclusion from participating in US government health programs has
been eliminated.

As a result of the above factors and based on the cash flow forecasts prepared by the Directors to support their conclusion
that the Group and Parent Company are able to maintain adequate liquidity to comply with their financial covenants and
obligations, the Directors concluded that no material uncertainty relating to the Group’s and Parent Company’s ability to
continue as a going concern now exists. Due to this current year activity, the Group audit team spent a significant amount of
time assessing the risks which could still have an impact on the Group’s and Parent Company’s ability to continue as a going
concern. As noted in the ‘Conclusions related to going concern’ section below, we have considered whether the impact of a
worse than expected outcome relating to the remaining ongoing legal matters and failure of SUBLOCADE to meet revenue
growth expectations due to the continued impact from the COVID-19 pandemic which in combination could have an impact
on the Group's and Parent Company’s ability to continue as a going concern. Although our report does not include a ‘Material
uncertainty related to going concern’ section this year, we have included going concern considerations as a key audit matter
for the year which explains the risks identified with details of the audit procedures we performed to address these risks and
our conclusions in respect of going concern being detailed in the 'Conclusions related to going concern’ section below.

In addition, management’s way of working has been impacted by COVID-19 as a result of a large number of employees working
remotely and using technology enabled working practices. For example, this has meant virtual review meetings, electronic
review processes (in place of hardcopy reviews) and some inventory counts being performed using virtual technology tools.
We have also adapted the oversight of our component teams, using video conferencing and remote workpaper reviews to
satisfy ourselves as to the sufficiency of audit work performed at the significant and material components.

Overview

Audit scope
› We conducted full scope audits at three components and specific Financial Statement line item audit procedures for one

further component.

› The components where we performed audit work, taken together with our central corporate functions, accounted for 91%

of the Group's net revenue and 87% of the Group's profit before tax adjusted for exceptional items.

Key audit matters
› Going concern considerations (Group and Parent)
› Ongoing litigation and investigative matters and related provisions (Group)
› Sales rebate adjustments recognized primarily in the US business (Group)
› Recoverability of assets (Group)
› Impact of COVID-19 (Group and Parent)
› Carrying value of investments in subsidiaries (Parent)

Materiality
› Overall Group materiality: US$6.5m (2019: US$7.8m) based on 1% of total net revenue.
› Overall Parent Company materiality: US$14.6m (2019: US$14.6m) based on 1% of total assets.
› Performance materiality: US$4.8m (Group) and US$11.0m (Parent company).

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The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the Financial
Statements.

Capability of the audit in detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line
with our responsibilities, outlined in the Auditors’ responsibilities for the audit of the Financial Statements section, to detect
material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below.

Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws
and regulations related to pharmaceutical regulatory requirements (including, but not limited to, those of the Federal Trade
Commission, US Food and Drug Administration, the European Medicines Agency and the UK Medicines & Healthcare products
Regulatory Agency) in addition to US, UK and European tax legislation (refer to the Risk Management section of the Annual
Report), and we considered the extent to which non-compliance might have a material effect on the Financial Statements.
We also considered those laws and regulations that have a direct impact on the preparation of the Financial Statements such
as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the
Financial Statements (including the risk of override of controls), and determined that the principal risks were related to posting
inappropriate journal entries to manipulate revenue or expenditure, and management bias in accounting estimates. The Group
engagement team shared this risk assessment with the component auditors so that they could include appropriate audit
procedures in response to such risks in their work. Audit procedures performed by the Group engagement team and/or
component auditors included:

› Discussions with management, internal audit, compliance officer and the Group’s general counsel and legal advisors,
including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;
› Reviewing key correspondence with regulatory authorities and discussion with external and internal legal counsel;
› Review of significant component’s auditors’ working papers;
› Reading of internal audit reports;
› Challenging assumptions and judgements made by management in its significant accounting estimates, in particular in

relation to legal provisions, sales rebate adjustments, impairment of intangible assets and Parent Company investments
in subsidiaries and recoverability of other non-current assets, deferred tax assets and inventories (see related key audit
matters below);

› Evaluation of management’s controls designed to prevent and detect irregularities, in particular its anti-bribery controls;
› Assessment of matters reported on the Group’s whistleblowing helpline and the results of management’s investigation of

such matters; and.

› Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations, posted

by senior management or posted at unusual times.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of
non-compliance with laws and regulations that are not closely related to events and transactions reflected in the Financial
Statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations,
or through collusion.

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Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the
Financial Statements of the current period and include the most significant assessed risks of material misstatement (whether
or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the
allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and any comments we
make on the results of our procedures thereon, were addressed in the context of our audit of the Financial Statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

This is not a complete list of all risks identified by our audit.

Going concern considerations and Impact of COVID-19 are new key audit matters this year. As noted in the context section
above, although our report for the year ended 31 December 2020 does not include a ‘Material uncertainty related to going
concern’ section, we have included going concern considerations as a key audit matter for the year. Our procedures performed
to address the key audit matter and our conclusions in respect of going concern are detailed within the 'Conclusions related to
going concern' section below. Otherwise, the key audit matters below are consistent with last year.

How our audit addressed the key audit matter
The procedures we performed to address the risks
of going concern and our findings are set out in the
'Conclusions relating to going concern’ section below.

Key audit matter
Going concern considerations (Group and Parent)
Refer to the Audit Committee report within the Corporate
Governance section, Note 2 to the Group Financial Statements
and Note 1 to the Parent Company Financial Statements
As disclosed in Notes 21 and 23 to the Group Financial
Statements, the Group has liabilities and provisions totaling
$568m (2019: $438m) for DOJ and related matters in addition
to the Reckitt Benckiser (RB) resolution. Although the Group
has entered into settlement agreements with the DOJ and RB,
various other legal proceedings (as discussed in Note 23 to the
Group Financial Statements) are still ongoing and therefore
create future financial risk and uncertainty.

We considered this a key audit matter as there could be a risk
of a worse than expected outcome relating to ongoing legal
matters and failure of SUBLOCADE to meet revenue growth
expectations due to the continued impact from the COVID-19
pandemic. These risks in combination can have an impact on
the Group's ability to continue as a going concern. These matters
could also impact the Parent Company's ability to recover
amounts owed by subsidiary undertakings and the value
of the Parent Company's investments in shares in
subsidiary undertakings.

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Key audit matter
Ongoing litigation and investigative matters and related
provisions (Group)
Refer to the Audit Committee report within the Corporate
Governance section and Notes 2, 4, 21, 22 and 23 to the Group
Financial Statements
The pharmaceutical industry is a highly regulated industry.
Compliance is required across the industry, however, with the
US representing 70% of the Group’s revenue, the US regulatory
requirements, including those of the Federal Trade Commission
and US Food and Drug Administration is considered a significant
focus. The Group is engaged in a number of ongoing litigation
and investigative matters, which may have a material impact
on the Group Financial Statements.

As explained in Notes 4, 21 and 23 to the Group Financial
Statements, on 24 July 2020, the Group reached an agreement
with the DOJ and other litigants described in Note 23 to the Group
Financial Statements under “DOJ and Resolution”, which was
approved by the court in November 2020. As at 31 December 2020,
the Group has recorded other liabilities amounting to $536m
which is to be paid over a period of seven years. On 29 June 2020,
Shaun Thaxter stepped down as CEO and as a Director of the
Company and subsequently entered into an agreement with
the DOJ pleading guilty to one misdemeanor count under the
Responsible Corporate Officer Doctrine which was finalized on
23 October 2020. Under this Doctrine, executives can be held
liable for violations of the Federal Food, Drug and Cosmetic
Act by others in the Company without personal wrongdoing or
malfeasance by the executive. This agreement had the same
underlying facts as those that the Company finalized in
November 2020.

On January 25, 2021, the Group reached an agreement with RB
to resolve claims which RB issued on 13 November 2020, seeking
indemnity under the 2014 Demerger Agreement. RB has agreed
to withdraw the $1.4bn claim and to release the Group from any
claim for indemnity under the Demerger Agreement relating to
the US DOJ and FTC settlements which RB entered into in July
2019, as well as other claims for indemnity arising from those
matters. The Group has, in consideration of the above release,
agreed to pay RB a total of $50m and has agreed to release RB
from any claims to seek damages relating to its settlement with
the DOJ and the FTC. As at 31 December 2020, the Group has
recorded other liabilities amounting to $50m related to
this settlement.

The Group is also involved in a number of other ongoing legal
matters as explained in Notes 21 and 23 to the Group Financial
Statements. The Group believes that it has strong defences and
is actively litigating these matters.

We focused on this area because the outcome of claims is
uncertain and the positions taken by the Directors are based
on the application of material judgements and estimation.
Accordingly, should the outcomes of the legal proceedings differ
from those anticipated by the Directors, this could materially
impact the Group’s results and balance sheet position.

How our audit addressed the key audit matter
We discussed actual or pending litigation and investigative
matters with the Group’s external and internal legal
counsel to gain an understanding of the status of each
matter.

Where the Group has reached a settlement in the year, we
assessed that appropriate amounts have been recorded in
the Financial Statements and are classified appropriately
as per the agreed payment arrangements. We also assessed
that these liabilities are appropriately discounted as at
31 December 2020. We read the agreements with respect
to the former CEO’s plea agreement and based on
discussions with the Group’s legal counsel, it was
confirmed that his agreement does not indicate that he
had any direct involvement in the matter and as such is
not expected to have a negative impact on management’s
other ongoing legal matters. In addition, it was noted
that in determining his leaving arrangements, the
Remuneration Committee considered the operational
performance of the business and his performance and
conduct during his tenure in addition to being mindful of
the circumstances in which he stepped down, noting that
there has not been any findings of personal wrongdoing
or malfeasance.

Where provisions have been recorded or contingent
liabilities have been disclosed in the Group Financial
Statements, we substantively tested the amounts provided
and evaluated management’s position of the likely
outcome by:

› reading documentation such as correspondence from

external legal counsel and Board and Committee minutes;
› evaluating independent confirmations that we received

from the Group’s external legal counsel;

› utilizing an auditor's subject matter expert to assess the
information provided by management and the Group's
external counsel in arriving at the judgements taken; and
› enquiring of (with support of an auditor’s subject matter

expert) external and internal legal counsel.

In addition, we considered the completeness of litigation
and investigative matters through discussions with
internal legal counsel and by reading Board and
Committee minutes. We did not detect any other litigation
and investigative matters that had not already been
disclosed to us. Furthermore, we obtained representations
from management that there have been no breaches of
laws or regulations.

Finally, we reviewed the sufficiency and appropriateness
of the legal proceedings disclosures in the Financial
Statements based on our underlying work. We determined
that appropriate disclosures are included in Notes 4, 21
and 23 to the Group Financial Statements. We also assessed
the disclosures made regarding the former CEO's plea
agreement and consider them to be fair and balanced.

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How our audit addressed the key audit matter
We obtained the accruals calculation for sales rebates and tested the

inputs into the calculations by comparing them with:

› rates included in sales contracts and agreements with third parties;
› rebate invoices received during the year, on a sample basis, in order
to assess the accuracy of the estimate of volumes by channel; and

› recent changes in government pricing regulations.

We performed look back tests that compared accruals recognised in
previous periods to actual rebates received in order to test the historical
accuracy in calculating these accruals.

We deployed our US government pricing specialists in reviewing the
reasonableness of the assumptions on average manufacturer price, unit
rebate amount and best price for products, including advising on relevant
changes in the US government pricing regulations.

We assessed the completeness and accuracy of the accruals by
understanding and testing the process management used to record
the year-end balances, by comparing such amounts to our own
independently developed expectations of the year-end balances. Our
independent expectations were developed based upon historical rebate
invoices received, adjusted for current volumes, rebate rates and
adjusted for industry experience in the face of competition. The accruals
recognised in the Financial Statements were not materially different from
our internally generated expectations.

In determining the appropriateness of the revenue recognition policy
applied in calculating sales rebates under contractual and regulatory
requirements, we note there is estimation taken regarding these items.
From the evidence obtained we found the assumptions, methodology
and policies used to be appropriate.

We evaluated whether management’s revenue recognition policies
applied were consistent with IFRSs as adopted by the European Union,
noting no differences.

Key audit matter
Sales rebate adjustments recognised primarily
in the US business (Group)
Refer to the Audit Committee report within the
Corporate Governance section and Notes 2, 3
and 24 to the Group Financial Statements
At 31 December 2020, payables in respect of sales
returns and rebates totalled $396m (2019: $460m)
of which 96% originated in the US in relation to
Managed Care, Federal and Medicaid (2019: 96%).
In the US, the Group sells products through
distributors and the ultimate selling price is
determined based on the contractual
arrangements that the Group has with the patient’s
insurer or other payment programme (Medicaid,
Medicare or equivalent scheme). The time between
initial shipment to the distributor (when the
revenue is recognised), the dispensing of a product
to a patient and notification by the relevant insurer
or payment programme may be several months.
Accordingly, an estimate of the net selling price
is necessary at the date of shipment when the
revenue is recognised.

As a result, revenue recognised on sales to
wholesale and retail distributors is subject to
a final determination of the net sales price
predominantly in the form of rebates. The process
for determining the size of these estimates is
complex and depends on contract terms and
regulation, as well as estimates of sales volumes
by channel.

We focused on this area as the process for
calculating sales rebates involves the use of
large volumes of data, being sales volumes from
multiple sources, which, taken together, can be
subjective and at risk of management manipulation
or bias.

Given the large quantities of data and significant
judgements involved in compiling these
calculations, we considered there to be a risk of
bias in the calculations and that this risk related
to the understatement of these accruals.

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Key audit matter
Recoverability of assets (Group)
Refer to the Audit Committee report within
the Corporate Governance section and
Notes 2, 11, 15 and 16 to the Group Financial
Statements
At 31 December 2020 the Group held
intangible assets of $62m (2019: $72m) and
long-term prepaid expenses within other
assets of $22m (2019: $23m), both of which
are accounted for at amortised cost less
impairment and are assessed for
impairment if impairment indicators exist.
At 31 December 2020, the Group held
inventories of $93m (2019: $73m) which are
accounted for at the lower of cost or net
realizable value.

The recoverability of certain assets,
including intangible assets, long-term
prepaid expenses and inventory may
be impacted by the developments in
the Group’s business. This is mainly due
to the impact that COVID-19 has had on
SUBLOCADE and PERSERIS revenue
projections resulting in slower than
expected market uptake and potential
risk to the future pipeline, in relation
to the products in development.

The recoverable amounts of these assets
are estimated in order to determine the
extent of impairment loss or provision
required, if any, both of which are
recognised in the Consolidated income
statement. No intangible assets or long-
term prepaid expenses were deemed to be
impaired at 31 December 2020. Inventory
write-off and losses of $6m were recorded
in 2020 based on expiration dates and sales
forecast reductions in the year associated
with SUBLOCADE and PERSERIS and in line
with the Group policy.

How our audit addressed the key audit matter
Our procedures focused on management's estimates in relation to the

recoverability and valuation of its intangibles, long-term prepaid expenses and
inventory assets linked to management revised forecasts due to the impact that
COVID-19 has had on SUBLOCADE and PERSERIS revenue projections resulting in
slower than expected market uptake and the potential risk to future pipeline.

For intangible assets, we considered whether the SUBLOCADE and PERSERIS
intangible assets were recoverable based on management’s revised forecasts,
which were used in its value in use impairment models to support the book
value of the intangible assets maintained. We evaluated the mathematical
accuracy of management’s models, understood the basis for how the forecasts
were developed and assessed the reasonableness of a number of key
assumptions utilised within management’s impairment models, including the
impact that COVID-19 is expected to have on the business going forward.

The key assumptions within the models included the price, Length of Treatment
(LoT), Buprenorphine Medically Assisted Treatment (BMAT) market growth, Long
Acting Injectable (LAI) market share, working capital, costs, tax rates and the
discount rate. We challenged management’s key assumptions and obtained
evidence to substantiate the assumptions within the models:

› We assessed the pricing assumptions that management has included within
the value in use model based on the current marketed price for SUBLOCADE
and PERSERIS and the forecasted market growth;

› We understood the basis for growth in patient numbers in the LAI area of the BMAT

market and agreed the underlying patient figures to third party external data;

› We evaluated the LoT assumptions based on current average LoT;
› We assessed management’s growth assumptions against external market

data, noting the BMAT market has grown at a 10% rate for the past 12 years;

› We challenged management on its market share assumptions over the

forecasted period using third party external data;

› We understood and evaluated the basis of the costing and working capital
assumptions that management has included within their models based on
current contractual commitments and forecasted spend; and

› We utilised our pharmaceutical industry valuation experts to support us in our
assessment of the accuracy and appropriateness of the discount rate applied
compared with third party information, past performance, the Group’s cost of
capital and relevant risk factors as disclosed in the Financial Statements.

Based on the work performed, the key assumptions used appear supportable.
We also performed our own independent sensitivity analysis to understand the
impact of reasonable changes in management’s assumptions on the available
headroom and considered whether the disclosures made in the Group Financial
Statements by management, including the judgements and estimates
disclosures, were appropriate.

For other intangible assets related to products in development, we considered the
accuracy of forecasts used in the impairment assessments. We evaluated the key
assumptions, including the probability of success, forecast sales, discount rate and
any further potential delays due to COVID-19. Based on our testing, we consider
management’s conclusion that no impairment was required to be appropriate.

Utilising the work performed above on the forecasts and the required production
plans, we assessed whether the inventory held at 31 December 2020 relating to
SUBLOCADE, PERSERIS, SUBOXONE and SUBUTEX was recognised at the
appropriate net realisable value by assessing the expiration dates and forecast
sales, concluding that the forecasts support the net inventory balance held at
31 December 2020.

For all of the above matters, we verified that the cash flow forecasts and
assumptions used were consistent with those used in the going concern
assessment set out in the 'Conclusions relating to going concern’ section
detailed below. We have also assessed management’s disclosures within
the Group Financial Statements and consider them to be appropriate.

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How our audit addressed the key audit matter
We reviewed management’s assessment of the impact of the uncertainty

presented by the COVID-19 pandemic and considered its completeness. In
assessing management’s consideration of the potential impact of COVID-19,
we discussed with management and the Directors the critical estimates and
judgements applied in preparing the 2020 Financial Statements in order to
understand and challenge the rationale underlying the sensitivities applied
as a result of COVID-19.

We also audited the disclosures included in the Annual Report in respect of the
impact of COVID-19, including going concern, and impairment sensitivities and
consider them reasonable.

Refer to the key audit matter on 'Going concern considerations' above for
further details.

Refer to the key audit matters entitled 'Recoverability of assets' and 'Carrying
value of investments in subsidiaries' above.

Key audit matter
Impact of COVID-19 (Group and Parent)
Refer to the Audit Committee report within
the Corporate Governance section, Note 2
to the Group Financial Statements and
Note 1 to the Parent Company Financial
Statements
The COVID-19 pandemic has affected
individuals and businesses across the world
and there have been varying impacts on the
countries where the Group operates.

Given the unprecedented nature of the
pandemic, the impact of COVID-19 remains
an uncertainty in both the short and longer
term; the Directors have considered the
Group’s financial performance during the
year and the potential impact on future
cash flows.

The Directors performed a detailed going
concern assessment for the Group, covering
a period of at least twelve months from
the date of approval of these Financial
Statements, which includes a plausible but
severe downside scenario. The Directors
concluded based on these forecasts and
sensitivities, that there was sufficient
headroom in respect of covenants and
liquidity beyond the severe but plausible
downside scenario, to prepare the Financial
Statements on a going concern basis.

The Directors have also considered the
risk of impairment of non-current assets,
increased credit risk on trade receivables
and obsolescence of inventory across the
Group. We have focussed on this risk due
to the evolving nature of the pandemic, the
uncertainties involved and the magnitude
of any potential impact on the Financial
Statements.

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Key audit matter
Carrying value of investments in
subsidiaries (Parent)
Refer to Notes 1 and 2 to the Parent
Company Financial Statements
Investments in subsidiaries of $1,437m
(2019: $1,437m) are accounted for at cost
less impairment in the Parent Company’s
balance sheet at 31 December 2020.

Investments are assessed for impairment
if impairment indicators exist. If such
indicators exist, the recoverable amounts
of the investments in subsidiaries are
estimated in order to determine the extent
of the impairment loss, if any. Any such
impairment loss is recognised in the
Income Statement.

At 31 December 2020, as well as at the
date of our audit opinion, the market
capitalisation of the Group was less than the
book value of the investment held on the
Parent Company balance sheet. In addition,
the net assets of the subsidiaries were also
significantly below the carrying value. These
are both impairment indicators.

Judgement and estimation are required in
the area of impairment testing, particularly
in assessing: a) whether an event has
occurred that may indicate that the related
asset values may not be recoverable; b)
whether the carrying value of an asset can
be supported by the recoverable amount,
being the higher of fair value less cost of
disposal or value in use (VIU) basis where
the net present value of future cash flows
are estimated based on the continued use
of the asset in the business; c) the
appropriate key assumptions to be applied
in preparing cash flow projections including
whether these cash flow projections are
discounted using an appropriate rate; and
d) the appropriate sensitivity analyses to
perform, wherein the extent of change
in key assumptions as identified could
result in a material impairment is
appropriately disclosed.

How our audit addressed the key audit matter
We evaluated management’s assessment of whether any indicators of

impairment existed and as a result of the market capitalisation and net asset
position being identified as impairment indicators, management prepared a VIU
model to support the book value of the investment held.

We evaluated the mathematical accuracy of management’s model, agreed to
management's strategic forecasts, understood the basis for how the forecasts
were developed and assessed the reasonableness of the key assumptions
utilised within management’s impairment model. We corroborated the long-term
forecasts back to Board presentations and compared the underlying figures
within management’s model with these presentations. We utilised our work as
set out in the 'Recoverability of assets' key audit matter above to support our
assessment of the accuracy of the revenue key assumptions and forecasts,
working capital, costs and the discount rate. We also held calls with and received
confirmations from internal and external legal counsel in order to confirm that
management’s impairment model appropriately reflected the potential
outcomes as noted from these communications.

We performed our own independent sensitivity analysis to understand the
impact of reasonable changes in management’s assumptions on the available
headroom and considered whether the disclosures made in the Parent Company
Financial Statements by the Directors, including the judgements and estimates
disclosures, were appropriate.

As a result of our work, we considered that the carrying value of the investment
held by the Parent Company is supportable in the context of the Parent
Company Financial Statements taken as a whole and the Directors’ disclosures
within the Parent Company Financial Statements are considered to be
appropriate.

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How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the Financial
Statements as a whole, taking into account the structure of the Group and the Parent Company, the accounting processes and
controls, and the industry in which they operate.

The Group operates a single business activity and therefore has one reportable segment. The Group Financial Statements are
a consolidation of 44 components comprising the Group’s operating businesses and centralised Group functions. The Group
consolidation, Financial Statements disclosures and corporate functions were audited by the Group engagement team. This
included our work over legal, intangible assets impairment, tax, borrowings, net finance expense, share-based payments
and equity.

In addition to centralised Group audit procedures, we conducted our audit by concentrating our work on those parts of the
Group that make up the most significant proportions of the Financial Statements. We identified one component in the US and
one in each of the UK and Ireland that required a full scope audit due to their size. Audit procedures over specific financial
statement line items were performed at a further component in the US to give sufficient audit coverage. The Parent Company is
not in Group audit scope as it is a holding company and predominantly eliminated on consolidation which is tested centrally.
With the largest components of the Group being the US, UK and Ireland we focused our audit work there. For the audit of the
US component, we utilised our Richmond, Virginia based component audit team with knowledge and experience of the US
pharmaceuticals industry and regulations. For the audit of the UK and Irish components, we utilised our Reading, UK based
component audit team. These component teams were supplemented by procedures performed on certain Group related
balances by PwC staff based in London, UK.

Although our Group engagement team could not carry out physical site visits to the components in the current year, there were
no changes made to the extent of our oversight of each of our components, nor to the extent of the work performed by our
components. We held numerous meetings with our component teams, including via video conference, and performed remote
reviews of the key working papers associated with the component team’s audit in the US and UK. We were also in attendance
at our full scope components’ audit closing meetings. This helped to ensure that the Group audit team was sufficiently involved
in the component auditors’ planned response to key audit matters, particularly regarding sales rebates in the US and certain
asset recoverability considerations in the UK.

Taken together, the components and corporate functions where we conducted audit procedures accounted for 91% of the
Group’s net revenues and 87% of the Group’s profit before tax adjusted for exceptional items. This provided the evidence we
needed for our opinion on the Consolidated Financial Statements taken as a whole. This was before considering the
disaggregated group level analytical review procedures, which covered certain of the Group’s smaller and lower risk
components that were not directly included in our Group audit scope.

Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and
extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect
of misstatements, both individually and in aggregate on the Financial Statements as a whole.

Based on our professional judgement, we determined materiality for the Financial Statements as a whole as follows:

Financial Statements - Group

Financial Statements - Parent Company

Overall materiality

US$6.5m (2019: US$7.8m).

US$14.6m (2019: US$14.6m).

How we determined it

1% of total net revenue

1% of total assets

Rationale for benchmark
applied

As the market focus is on the Group’s
revenues rather than profitability, including
the success of SUBLOCADE and PERSERIS,
we have considered net revenue to be the
most appropriate benchmark for materiality.

As explained in the scoping section and based
on our professional judgement, the Parent
Company is not in Group audit scope as it is
a holding company which is predominantly
eliminated on consolidation. We believe total
assets is the primary measure used by the
shareholders in assessing the performance of
the entity, and is a generally accepted auditing
benchmark for holding companies.

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For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality.
The range of materiality allocated across components was between $2.0m to $6.1m. Certain components were audited to a local
statutory audit materiality that was also less than our overall Group materiality.

We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of
our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in
determining sample sizes. Our performance materiality was 75% of overall materiality, amounting to US$4.8m for the Group
Financial Statements and US$11.0m for the Parent Company Financial Statements.

In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment
and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range
was appropriate.

We agreed with the Audit Committee that we would report to them misstatements identified during our audit above $0.6m
(Group audit) (2019: $0.8m) and $1.5m (Parent Company audit) (2019: $0.7m) as well as misstatements below those amounts
that, in our view, warranted reporting for qualitative reasons.

Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the Group's and the Parent Company’s ability to continue to adopt the going
concern basis of accounting included:

› agreed the underlying cash flow projections to Board approved forecasts, assessed how these forecasts are compiled

including the impact due to COVID-19 and assessed the accuracy of these forecasts by reviewing third-party data for the
SUBOXONE Film, SUBLOCADE and PERSERIS revenue streams;

› evaluated the key assumptions within management’s forecasts as detailed further within the 'Recoverability of assets' key

audit matter above;

› evaluated the assumptions regarding the impact of revenue decline of SUBOXONE Film by reference to the historical impact

of other generic launches on the revenues of a branded product;

› considered the potential timing to resolve the remaining outstanding legal matters and noted that based on the Board's

strategy to litigate, the resolution of these matters is not expected to occur in the going concern period;

› performed additional sensitivities to determine the breakeven scenarios over revenue reductions in addition to legal

payments relating to the other ongoing litigation and investigation matters;

› assessed whether the downside model prepared by management appropriately considered the risks facing the business as

identified in the Risk management section of the Annual Report; and

› checked the mathematical accuracy of the spreadsheet used to model future financial performance and determined whether

the minimum cash balance requirements will be met.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group's and the Parent Company’s ability to continue as a going
concern for a period of at least twelve months from when the Financial Statements are authorised for issue.

In auditing the Financial Statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
preparation of the Financial Statements is appropriate.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group's and
the Parent Company's ability to continue as a going concern.

In relation to the Parent Company’s reporting on how they have applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the Directors’ statement in the Financial Statements about whether the
Directors considered it appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant
sections of this report.

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Reporting on other information
The other information comprises all of the information in the Annual Report other than the Financial Statements and our
auditors’ report thereon. The Directors are responsible for the other information. Our opinion on the Financial Statements
does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise
explicitly stated in this report, any form of assurance thereon.

In connection with our audit of the Financial Statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the Financial Statements or our knowledge obtained
in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material
misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the Financial
Statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based
on these responsibilities.

With respect to the Strategic Report and Directors’ Report, we also considered whether the disclosures required by the UK
Companies Act 2006 have been included.

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions
and matters as described below.

Strategic Report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic Report and
Directors’ Report for the year ended 31 December 2020 is consistent with the Financial Statements and has been prepared
in accordance with applicable legal requirements.

In light of the knowledge and understanding of the Group and Parent Company and their environment obtained in the course
of the audit, we did not identify any material misstatements in the Strategic Report and Directors’ Report.

Directors’ Remuneration
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with
the Companies Act 2006.

Corporate governance statement
The Listing Rules require us to review the Directors’ statements in relation to going concern, longer-term viability and that part
of the corporate governance statement relating to the Parent Company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review. Our additional responsibilities with respect to the corporate governance statement
as other information are described in the Reporting on other information section of this report.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement is materially consistent with the Financial Statements and our knowledge obtained during the audit, and
we have nothing material to add or, with the exception of the matter noted below, nothing else we wish to draw attention to in
relation to:

› The Directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
› The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging

risks and an explanation of how these are being managed or mitigated;

› The Directors’ statement in the Financial Statements about whether they considered it appropriate to adopt the going

concern basis of accounting in preparing them, and their identification of any material uncertainties to the Group’s and
Parent Company’s ability to continue to do so over a period of at least twelve months from the date of approval of the
Financial Statements;

› The Directors’ explanation as to their assessment of the Group's and Parent Company’s prospects, the period this assessment

covers and why the period is appropriate; and

› The Directors’ statement as to whether they have a reasonable expectation that the Parent Company will be able to continue

in operation and meet its liabilities as they fall due over the period of its assessment, including any related disclosures
drawing attention to any necessary qualifications or assumptions.

However, we draw attention to the disclosures made within the Viability Statement of the Annual Report regarding the possible
scenarios that may occur where the uptake of both SUBLOCADE and PERSERIS falls significantly below expectations, and there
is an unfavorable outcome of remaining legal proceedings at the high end of management's range as disclosed in Note 23 to
the Group Financial Statements.

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Our review of the Directors’ statement regarding the longer-term viability of the Group was substantially less in scope than an
audit and only consisted of making inquiries and considering the Directors’ process supporting their statement; checking that
the statement is in alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the
statement is consistent with the Financial Statements and our knowledge and understanding of the Group and Parent
Company and their environment obtained in the course of the audit.

In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of
the corporate governance statement is materially consistent with the Financial Statements and our knowledge obtained during
the audit:

› The Directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and
provides the information necessary for the members to assess the Group’s and Parent Company's position, performance,
business model and strategy;

› The section of the Annual Report that describes the review of effectiveness of risk management and internal control

systems; and

› The section of the Annual Report describing the work of the Audit Committee.

We have nothing to report in respect of our responsibility to report when the Directors’ statement relating to the Parent
Company’s compliance with the Code does not properly disclose a departure from a relevant provision of the Code specified
under the Listing Rules for review by the auditors.

Responsibilities for the Financial Statements and the audit

Responsibilities of the Directors for the Financial Statements
As explained more fully in the Statement of Directors' Responsibilities, the Directors are responsible for the preparation of the
Financial Statements in accordance with the applicable framework and for being satisfied that they give a true and fair view.
The Directors are also responsible for such internal control as they determine is necessary to enable the preparation of
Financial Statements that are free from material misstatement, whether due to fraud or error.

In preparing the Financial Statements, the Directors are responsible for assessing the Group’s and the Parent Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no
realistic alternative but to do so.

Auditors’ responsibilities for the audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of
these Financial Statements.

Our audit testing might include testing complete populations of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete
populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases,
we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected.

A further description of our responsibilities for the audit of the Financial Statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.

Use of this report
This report, including the opinions, has been prepared for and only for the Parent Company’s members as a body in
accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions,
accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent in writing.

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Other required reporting

Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:

› we have not obtained all the information and explanations we require for our audit; or
› adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been

received from branches not visited by us; or

› certain disclosures of Directors’ remuneration specified by law are not made; or
› the Parent Company Financial Statements and the part of the Directors’ Remuneration Report to be audited are not in

agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Appointment
Following the recommendation of the Audit Committee, we were appointed by the members on 23 December 2014 to audit the
Financial Statements for the year ended 31 December 2014 and subsequent financial periods. The period of total uninterrupted
engagement is seven years, covering the years ended 31 December 2014 to 31 December 2020.

Sarah Quinn (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London

18 March 2021

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C O N S O L I D A T E D I N C O M E S T A T E M E N T

For the year ended December 31

Net revenues

Cost of sales

Gross profit

Gross profit before exceptional items

Exceptional items

Selling, general and administrative expenses

Research and development expenses

Operating (loss)/profit

Operating profit before exceptional items

Exceptional items

Finance income

Finance expense

Net finance (expense)/income

(Loss)/profit before taxation

Income tax benefit/(expense)

Taxation before exceptional items

Exceptional items within taxation

Net (loss)/income

(Loss)/Earnings per ordinary share (cents)

Basic (loss)/earnings per share

Diluted (loss)/earnings per share

C O N S O L I D A T E D S T A T E M E N T O F C O M P R E H E N S I V E ( L O S S ) / I N C O M E

For the year ended December 31

Net (loss)/income

Other comprehensive income

Items that may be reclassified to profit or loss in subsequent years:

Net exchange adjustments on foreign currency translation

Other comprehensive income

Total comprehensive (loss)/income

Notes

2020
$m

647

(97)

550

555

(5)

(666)

(40)

(156)

(244)

(26)

(17)

(173)

(12)

(148)

(20)

2020
$m

(148)

(138)

2019
$m

785

(140)

645

–

(414)

(53)

178

202

(24)

(22)

180

(46)

(28)

(18)

134

2019
$m

134

143

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C O N S O L I D A T E D B A L A N C E S H E E T

As at December 31

Assets

Non-current assets

Intangible assets

Property, plant and equipment

Right-of-use assets

Deferred tax assets

Other assets

Current assets

Inventories

Trade receivables

Other assets

Current tax receivable

Cash and cash equivalents

Total assets

Liabilities

Current liabilities

Borrowings

Provisions and other liabilities

Trade and other payables

Lease liabilities

Current tax liabilities

Non-current liabilities

Borrowings

Provisions and other liabilities

Lease liabilities

Total liabilities

Net assets

Equity

Capital and reserves

Share capital

Share premium

Other reserves

Foreign currency translation reserve

Retained earnings

Total equity

Notes

2020
$m

104

344

179

858

1,187

1,531

(4)

(48)

(524)

(8)

(15)

(599)

(230)

(577)

(43)

(850)

(1,449)

(1,295)

(13)

1,311

2019
$m

292

192

–

1,060

1,360

1,652

(4)

(71)

(623)

(5)

(39)

(742)

(233)

(417)

(51)

(701)

(1,443)

209

(1,295)

(23)

1,449

209

The financial statements on pages 129 to 172 were approved by the Board of Directors on March 18, 2021 and signed on its
behalf by:

Mark Crossley
Director

Ryan Preblick
Director

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C O N S O L I D A T E D S T A T E M E N T O F C H A N G E S I N E Q U I T Y

Balance at January 1, 2019

Comprehensive income

Net income

Other comprehensive income

Total comprehensive income

Transactions recognized directly in equity

IFRS 16 impact (adjustment to opening balance)

Share-based payments

Deferred taxation on share-based payments
and IFRS 16

Total transactions recognized directly in equity

Balance at December 31, 2019

Balance at January 1, 2020

Comprehensive loss

Net loss

Other comprehensive income

Total comprehensive loss

Transactions recognized directly in equity

Shares issued

Share-based payments

Deferred taxation on share-based payments

Total transactions recognized directly in equity

Balance at December 31, 2020

Notes

Share
capital
$m

–

Foreign
currency
translation
reserve
$m

Retained
earnings
$m

(32)

1,315

Other
reserves
$m

(1,295)

–

134

–

134

(2)

(1)

–

Total
equity
$m

134

143

(2)

(1)

–

(1,295)

(23)

1,449

209

(1,295)

(23)

1,449

209

–

(148)

–

(148)

–

(1,295)

(13)

1,311

(148)

(138)

Share
premium
$m

–

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Financial statements

C O N S O L I D A T E D C A S H F L O W S T A T E M E N T

For the year ended December 31

Cash flows from operating activities

Operating (loss)/profit

Depreciation and amortization

Gain on disposal of intangible assets

Gain on disposal of right-of-use assets

Depreciation and impairment of right-of-use assets

Share-based payments

Impact from foreign exchange movements

Decrease in trade receivables

Increase in other assets

(Increase)/decrease in inventories

Decrease in trade and other payables

Increase/(decrease) in provisions and other liabilities1

Cash (used in)/generated from operations

Interest paid

Interest received

Tax (paid)/refunded

Net cash (outflow)/inflow from operating activities

Cash flows from investing activities

Purchase of property, plant and equipment

Proceeds from lease incentives

Proceeds from disposal of intangible assets

Net cash outflow from investing activities

Cash flows from financing activities

Repayment of borrowings

Payment of lease liabilities

Proceeds from the issuance of ordinary shares

Net cash outflow from financing activities

Net (decrease)/increase in cash and cash equivalents

Cash and cash equivalents at beginning of the year

Exchange difference

Cash and cash equivalents at end of the year

Notes

11, 12

2020
$m

(156)

–

(2)

(5)

(44)

(16)

(103)

129

(148)

(20)

(34)

(193)

(4)

–

(4)

(7)

(10)

2019
$m

178

(4)

–

(56)

(101)

(8)

128

(17)

151

(7)

(2)

(4)

(9)

–

(13)

(207)

1,060

858

136

924

–

1,060

1. Changes in provisions and other liabilities line include $228m of exceptional charges relating to litigation matters offset by the $100m initial payment under the

DOJ resolution in 2020. $3m of interest on the DOJ resolution has been recorded in the interest paid line item.

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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

1. General information
Indivior PLC (the “Company”) and its subsidiaries (together,
“Indivior” or the “Group”) are predominantly engaged in the
development, manufacture and sale of buprenorphine-based
prescription drugs for the treatment of opioid dependence,
and co-occurring disorders (the “Indivior Business”).

The Indivior Business was previously the pharmaceuticals
business of the Reckitt Benckiser Group plc (RB), carried
out by RBP Global Holdings Limited and its subsidiaries.

The Company is a public limited company incorporated and
domiciled in the United Kingdom on September 26, 2014 and
is the holding company for the Group. The address of the
registered office and company number are stated on page 173.

The principal accounting policies adopted in the preparation
of these financial statements are set out below. Unless
otherwise stated, these policies have been consistently
applied to all years presented.

2. Basis of preparation and changes in accounting policy
The consolidated financial statements have been prepared
on a going concern basis in accordance with international
accounting standards in conformity with the requirements
of the Companies Act 2006, and in accordance with
International Financial Reporting Standards adopted
pursuant to Regulation (EC) No 1606/2002 as it applies
in the European Union (adopted IFRSs).

The financial statements are presented in US dollars ($)
and are prepared on a historical cost basis except where
otherwise stated. The 2019 consolidated balance sheet and
consolidated cash flow statement have been expanded to
present trade receivables and other assets (current) in
separate line items to improve transparency and consistency.
This had no impact on the net assets or net current assets
of the Group.

The Directors have considered the Group’s and Parent
Company’s financial plan, in particular with reference to
the period through June 2022.

As disclosed in Notes 4, 21, 22 and 23 to the Group Financial
Statements, the Group reached a resolution with the U.S.
Department of Justice (DOJ), Federal Trade Commission (FTC)
and the Department of Health and Human Services (HHS),
which was approved in November 2020. The agreement
reached with HHS (as described in Note 23) has eliminated
the risk of potential exclusion from participating in US
government health programs. Additionally, subsequent to
the year-end, the Group resolved a claim raised by Reckitt
Benckiser (RB) in November 2020. These settlements have
resulted in liabilities totaling $536m as at December 31, 2020.
While the uncertainty relating to these matters has been
resolved, various other legal proceedings as discussed in
Note 23 carry their own specific ongoing risk and uncertainty.

expected outcome relating to the remaining ongoing legal
matters has been considered for purposes of the viability
period only as these cases are not expected to be concluded
during the going concern period. Should the maximum
reasonably possible risk occur (as disclosed in Note 23) in
the going concern period, the Group and therefore also the
Parent Company would still maintain adequate liquidity to
comply with its financial covenants and obligations.

These risks were balanced against the Group’s current and
forecast working capital position, impact of the cost saving
actions taken to date, and timing of the final balloon
payment on the term loan in Q4 2022 which is outside the
going concern assessment period and would also impact the
Parent Company. As a result of the factors set out above, the
Directors of the Group and Parent Company have a
reasonable expectation that the Group and Parent Company
have adequate resources to continue in operational
existence for at least one year from the approval of these
financial statements. Based on the above assessment, the
previous material uncertainty relating to the Group’s and
Parent Company’s ability to continue as a going concern has
been removed.

The Directors have given the going concern assessment due
consideration and have concluded that it is appropriate to
adopt the going concern basis for accounting and preparing
these financial statements. The viability statement is on
page 46.

Adoption of new and revised standards
The following new IFRS standard has been adopted by
Indivior from January 1, 2020:

IFRS 3 Business Combination amendments
The amendment to IFRS 3 Business Combinations revised the
definition of a business, assisting entities with the evaluation
of when an asset or group of assets acquired or disposed of
should be considered a business. The amended standard
also allows application of an optional concentration test, to
evaluate whether substantially all the fair value of the gross
assets acquired is concentrated in a single identifiable asset
or group of similar identifiable assets, which is common in
some pharmaceutical industry licensing and product
acquisition arrangements. If this optional concentration test
is met, the entity may choose to consider the transaction an
acquisition of an asset or set of assets. The Group’s adoption
of this standard had no impact on the consolidated financial
statements.

Interest Rate Benchmark Reform
(Amendments to IFRS 9, IAS 29 and IFRS 7)
Interest Rate Benchmark Reform (Amendments to IFRS 9,
IAS 39 and IFRS 7) was issued in response to the ongoing
reform of interest rate benchmarks around the world. These
standards relate to the replacement of benchmark interest
rates such as LIBOR, a priority of global regulators. The
International Accounting Standards Board (IASB) identified
two phases of the reform: Phase 1 amendments primarily
deal with pre-LIBOR reform where uncertainty could arise in
the lead up to transition and Phase 2 amendments relate to
post-LIBOR reform, when uncertainty is removed, and new
rates adopted. Phase 1 amendments provide relief from
applying specific hedge accounting requirements. The
Group’s adoption of these amendments had no impact on
the consolidated financial statements.

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C O N T I N U E D

2. Basis of preparation and changes in accounting policy
continued
Phase 2 amendments primarily address potential financial
reporting issues that may arise when LIBOR is replaced.
For contractual changes or changes to cash flows directly
required by LIBOR reform, the effective interest rate (EIR)
may be updated without adjusting the carrying amount
of the financial asset/liability or the EIR may be used to
recalculate the carrying amount, with any modification gain
or loss recognized in profit or loss. Phase 2 amendments
apply retrospectively from January 1, 2021 with earlier
application permitted. As the Group’s term loan matures
after publication of LIBOR is expected to end, it has engaged
with an administrative agent and expects to transition to a
reasonable substitute base rate. The Group does not expect
the adoption of this standard to have a significant impact on
the future consolidated financial statements.

Definition of Material (Amendments to IAS 1 and IAS 8)
The amendments to the definition of “materiality” clarify
the term and ensure consistency across all IFRS standards.
The new definition is: “Information is material if omitting,
misstating or obscuring it could reasonably be expected
to influence the decisions that the primary users of general
purpose financial statements make on the basis of those
financial statements, which provide financial information
about a specific reporting entity. The Group’s adoption
of this standard had no impact on the consolidated
financial statements.

New accounting standards issued but not yet effective
The following standard has been issued but is not yet
effective:

IFRS 17 Insurance Contracts
IFRS 17 Insurance Contracts provides the first comprehensive
guidance to accounting for insurance contracts under IFRS
increasing transparency and to reducing diversity in practice
in accounting for insurance contracts. The effective date of
IFRS 17 has been deferred to annual reporting periods
beginning on or after January 1, 2023. The adoption of this
standard is not expected to impact the consolidated financial
statements in future periods.

Basis of consolidation
The consolidated financial statements include the results
of the Company and its subsidiaries, which are entities
controlled by the Group. Control exists where the Group
is exposed to or has the rights to variable returns from its
involvement with the investee and can use its power over
the investee to affect its returns. The Company has a 100%
direct or indirect interest in all of its consolidated
subsidiaries. Inter-company transactions, outstanding
balances payable or receivable and unrealized income and
expense on transactions between Group companies have
been eliminated on consolidation. All subsidiaries have
year-ends which are co-terminus with the Group’s. For IFRS
reporting, subsidiaries’ accounting policies are consistent
with the policies adopted by the Group.

Foreign currency translation
The financial statements of each of the Group’s entities
are measured using the currency of the primary economic
environment in which the entity operates (the functional
currency), which is frequently the local currency with the
exception of treasury and holding companies where the
functional currency is the US dollar. The Group’s presentation
currency is the US dollar.

Foreign currency transactions are translated into the
functional currency using exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and
losses resulting from the settlement of foreign currency
transactions and from the remeasurement of monetary
assets and liabilities denominated in foreign currencies
are recognized within SG&A in the income statement.

The exchange rates used for the translation of currencies
into US dollars that have the most significant impact on the
Group results were:

GBP year-end exchange rate

GBP average exchange rate

EUR year-end exchange rate

EUR average exchange rate

2020

2019

1.3651

1.2833

1.2226

1.1403

1.3263

1.2768

1.1228

1.1198

The financial statements of subsidiaries with different
functional currencies are translated into US dollars on the
following basis:

› Assets and liabilities at the year-end rate.

› Profit and loss account items at the weighted average

exchange rate for the year.

Exchange differences arising from translation of the net
investment in foreign entities are taken to equity and
recognized in the statement of comprehensive income
on consolidation.

Accounting estimates and judgments
The Directors make several estimates and assumptions
regarding the future and significant judgments in applying
the Group’s accounting policies.

Key estimates and assumptions
Estimates and assumptions made may affect the reported
amount of assets and liabilities, disclosure of contingent
assets and liabilities, and the reported amounts of revenues
and expenses. These estimates are based on the Group’s
best knowledge of the amount, events or actions; however,
actual results may ultimately differ from those estimates.
Estimates and underlying assumptions are reviewed on an
ongoing basis. The Group reviewed the impact of COVID-19
on key business practices and further evaluated estimates
used in judgmental accounting positions. The Group’s review
focused on inventory obsolescence, impact on cash flow
(going concern), impairment of intangible assets, impairment
of fixed assets and expected credit loss provisions for trade
receivables. Revisions to estimates are recognized
prospectively. The key estimates and assumptions used
in the financial statements are set out below.

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2. Basis of preparation and changes in accounting policy
continued
Provisions for returns, discounts, incentives and rebates
The Group offers various types of reductions from list
prices on its products. Products sold in the United States
are covered by various programs (such as Medicare and
Medicaid) under which products are sold at a discount.
Rebates are granted to healthcare authorities, and under
contractual arrangements with certain customers. Some
wholesalers are entitled to chargeback incentives based
on the selling price to the end customer, under specific
contractual arrangements. Cash discounts may also be
granted for prompt payment.

The discounts, incentives and rebates described above are
estimated based on specific contractual arrangements with
customers or of specific terms of the relevant regulations
and/or agreements applicable for transactions with
healthcare authorities, and in some cases on assumptions
about the attainment of sales targets. Several months may
pass between the original estimate of rebates due and when
the amount is confirmed, which may increase the estimation
risk. Please refer to Note 3 for further details.

The Group also estimates the amount of product returns
based on contractual sales terms and reliable historical
data. The estimates are recognized in the period in which
the underlying sales are recognized, as a reduction of
sales revenue.

A 5% variation in our provision for rebates and product
returns would impact net revenue by $20m. For more details
of accruals for returns, discounts, incentives and rebates, see
Note 24 to the consolidated financial statements.

Critical judgments
The Directors have made the following critical judgments in
the applying the Group’s accounting policies, that have the
most significant effect on the amounts recognized in the
Group’s financial statements:

Provisions for litigation and IP related claims
The Group is involved in litigation, arbitration, and other
legal proceedings. These proceedings typically are related to
compliance and trade practices, commercial claims, product
liability claims, intellectual property rights, and employment
and wrongful discharge claims. For each claim or grouping of
similar claims, the Directors make judgments regarding the
relative merits and risks within the claims. These judgments
inform the Group’s defense strategies, whether a loss or
settlement from the claims is probable and whether there
is sufficient information to make a reliable estimate of the
likely outcome of the claims. Provisions are recognized when
the Group has a present legal or constructive obligation, an
outflow of resource to settle the obligation is more likely
than not, and the amount can be reliably estimated.
For matters that cannot be reliably estimated or are not
considered probable at the current time the Directors
have assessed as contingent. For more details of all the
outstanding legal proceedings including those that have
been deemed contingent, see Note 23 to the consolidated
financial statements.

Provisions, when made, are valued based on the Directors’
best estimates considering all available information,
external advice, and historical experience. The assessment
of provisions can involve a series of complex judgments
about future events and can rely heavily on estimates and
assumptions, including advice from counsel on the merits of
the claim, the settlement or litigation strategy, amount and
timing of potential payments, and discounting. The Group
currently maintains a provision related to DOJ related
matters for $32m (2019: $438m) and for IP related claims
for $47m (2019: $45m). These provisions are valued based
on the Directors’ best estimates considering all available
information, external advice, and historical experience.
For more details of provisions for litigation and IP related
claims, see Note 21 to the consolidated financial statements.
Provisions for IP related claims are not expected to
materially change in the next twelve months. Given the
inherent uncertainties related to the DOJ related matters
the actual outflows resulting from the realization of those
risks could differ materially from the Group’s estimates.
Depending upon final settlement negotiations, it is
reasonably possible a portion of this provision could
be released in the next twelve months.

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C O N T I N U E D

3. Segment information
Operating segments are reported in a manner consistent
with the internal reporting provided to the chief operating
decision-maker. The chief operating decision-maker (CODM),
who is responsible for allocating resources and assessing
performance of the operating segments, has been identified
as the Chief Executive Officer (CEO).

The Group is predominantly engaged in a single business
activity, which is the development, manufacture, and sale of
buprenorphine-based prescription drugs for treatment of
opioid dependence and related disorders. The CEO reviews
disaggregated net revenue on a geographical and product
basis. Financial results are reviewed on a consolidated basis
for evaluating financial performance and allocating
resources. Accordingly, the Group operates in a single
reportable segment.

Accounting policy
Revenues
Net revenues are generated from sales of pharmaceutical
products, net of sales returns, customer incentives and
discounts, and certain sales-based payments paid or payable
to the healthcare authorities.

Net revenue is recognized when a contractual promise
to a customer (performance obligation) has been fulfilled
by transferring control over pharmaceutical products to
the customer, substantially all of which is with receipt of
the products by the customer. The amount of net revenue
recognized is based on the consideration expected in
exchange for pharmaceutical products. The consideration
Indivior receives may be fixed or variable. Variable
consideration is only recognized when it is highly probable
that a significant reversal will not occur. The Group has no
material contracts with more than one performance
obligation.

The Group is required to determine the transaction price in
respect of each of its contracts with customers. In making
such judgment, the Group assesses the impact of any
variable consideration in the contract due to returns,
discounts, incentives and rebates. These are estimated and
recognized in the period in which the underlying sales are
recognized as a reduction of sales revenue.

These amounts are calculated as follows:

› accruals for rebates based on attainment of sales targets
are estimated and recorded as each of the underlying
sales transactions is recognized;

› accruals for price reductions under government and

state programs, largely in the US, are estimated on the
basis of the specific terms of the relevant regulations
and agreements, and recorded as the underlying sales
transactions are recognized;

› accruals for sales returns are calculated on the basis of

management’s best estimate of the amount of product that
will ultimately be returned by customers. In countries
where product returns are possible, the Group has
implemented a returns policy that allows the customer to
return products within a certain period either side of the
expiry date (usually three to six months before and six to
twelve months after the expiry date). The accrual is estimated
on the basis of past experience of sales returns and
expectations of future returns.

The Group also takes account of factors such as levels of
inventory in its various distribution channels, product expiry
dates, information about potential discontinuation of
products and the entry of competing products into the
market. In each case, the accruals are subject to continuous
review and adjustment as appropriate, based on the most
recent information available to management. The Group
believes it has the ability to measure each of the above
accruals reliably, using the following factors in developing
its estimates:

› the nature and patient profile of the underlying product;

› the applicable regulations and/or the specific terms and
conditions of contracts with governmental authorities,
wholesalers and other customers;

› historical data relating to similar contracts, in the case

of qualitative and quantitative rebates and
chargeback incentives;

› past experience and sales growth trends;

› actual inventory levels in distribution channels, monitored

by the Group using internal sales data and externally
provided data;

› the shelf life of the Group’s products; and

› market trends including competition, pricing and demand.

There may be adjustments to the accruals when the actual
rebates are invoiced based on utilization information
submitted to the Group (in the case of accruals for rebates
related to sales targets or contractual rebates) and
claims/invoices received (in the case of regulatory rebates
and chargebacks). Management believes the estimates made
are reasonable; however, such estimates involve judgments
on distribution channel mix, distributors’ sales performance
and market competition.

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3. Segment information continued
Revenues are attributed to countries based on the country where the sale originates. The following table represents net
revenues from continuing operations and non-current assets, net of accumulated depreciation, amortization and impairment,
by country. Non-current assets for this purpose consist of intangible assets, property, plant and equipment, right-of-use
assets, and other receivables.

Net revenue*:

For the year ended December 31

United States

Rest of World

United Kingdom

Total

Non-current assets*:

For the year ended December 31

United States

United Kingdom

Rest of World

Total

2020
$m

456

182

647

2019
$m

589

189

785

2020
$m

2019 (restated)
$m

141

122

269

118

129

252

* - The current and prior year presentation has been expanded to present the United Kingdom as a separate line item. This had no impact on the total net revenue
or non-current asset balances. Additionally, the prior year (2019) non-current asset balance has been restated to reflect a $50m reclassification between ROW/UK
and United States related to surety bonds. The impact of the change was an increase to United States non-current assets from $68m to $118m and a decrease in
ROW/UK from $184m to $134m.

On a disaggregated basis, the Group’s net revenue by major product line:

For the year ended December 31

SUBLOCADE

PERSERIS

Sublingual/Other

Total

2020
$m

130

503

647

Significant customers
Revenues include amounts derived from significant customers that amount to 10% or more of the Group’s revenues as
follows (in percentages of total net revenue):

Customer

Customer A

Customer B

Customer C

2020
%

19%

17%

21%

2019
$m

707

785

2019
%

21%

20%

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4. Operating costs and expenses
Research and development
Research expenditure on internal activities is charged to the consolidated income statement in the year in which it is incurred.

Development expenditure is written off as incurred, unless the following criteria are met, in which case it is capitalized:

› it must be technically feasible to complete the development project (or intangible asset) so that the related product will be

available for use or sale;

› there is an intention to complete the intangible asset or development project and use or sell it;

› the Group has the ability to use the intangible asset or to sell it;

› the way in which the intangible asset will generate probable future economic benefits;

› adequate technical, financial and other resources are available to complete the development and to use or sell the

intangible asset; and

› expenditure attributable to the intangible asset during its development is able to be reliably measured.

Amounts capitalized are amortized over the useful life of the developed product.

The Group has determined that filing for regulatory approval is generally the earliest point at which internal development
costs can be capitalized. However, judgment is exercised when assessing the point at which it is probable that the asset
created will generate future economic benefits, which may not be until final regulatory approval for certain assets. All internal
development expenditure incurred prior to filing for regulatory approval is therefore expensed as incurred. Internally
generated intangibles recognized include software and technology and development costs in relation to PERSERIS.

Expenses
Expenses are recognized in respect of goods and services received when supplied in accordance with contractual terms.
Provision is made when an obligation exists for a future liability in respect of a past event and where the amount of the
obligation can be reliably estimated.

Marketing and promotional expenses are charged to the income statement as incurred.

The table below sets out selected operating costs and expense information.

Research & development expenses

Selling and general expenses

Administrative expenses1

Depreciation and amortization2

Selling, general and administrative expenses

Notes

11, 12, 13

2020
$m

(40)

(202)

(447)

(17)

(666)

2019
$m

(53)

(199)

(196)

(19)

(414)

1. Administrative expenses include exceptional costs in the current and prior year as outlined in the table below.

2. Additional depreciation and amortization of $9m (2019: $9m) for intangibles and ROU assets is included within cost of sales.

Exceptional items
Where significant expenses or income that do not reflect the Group’s ongoing operations are incurred during the year, these
items are disclosed as exceptional items in the income statement. Examples of such items could include restructuring and
related expenses for the reconfiguration of the Group’s activities and/or capital structure, impairment of current and non-
current assets, certain costs arising as a result of material and non-recurring regulatory and litigation matters, and certain
tax related matters.

The COVID-19 pandemic has had an adverse impact on the Group in 2020 primarily driven by a decrease in patient
enrollments during the onset of the initial outbreak. The Group announced cost saving actions to protect the financial and
operational flexibility of the Group. Consistent with the Group’s existing policies the restructuring charges due to COVID-19
were considered non-recurring and therefore classified as exceptional. Additionally, the Group revised estimates used in
inventory provision calculations for SUBLOCADE and PERSERIS which led to an overall increase in inventory needing to be
provided for. Provisions were based on expiration dating and sales forecast associated with SUBLOCADE and PERSERIS
inventory in line with the Group policy. The change in inventory provision due to COVID-19 was considered a one-off
transaction and therefore recorded as exceptional.

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4. Operating costs and expenses continued
Exceptional items

Cost of sales1

Other operating income2

Restructuring costs3

Legal expenses/provision4

Total exceptional items before taxes

Tax on exceptional items5

Exceptional tax items6

Total exceptional items within taxation

Total exceptional items

2020
$m

(5)

–

(11)

(228)

(244)

–

(207)

2019
$m

–

(20)

(8)

(24)

(22)

(18)

(42)

1. FY 2020 exceptional cost of sales relate to changes in inventory provision estimates due to the adverse impact of COVID-19

on the business.

2. Exceptional income in 2019 relates to the proceeds received from out-licensing of nasal naloxone opioid overdose patents

which are included in SG&A.

3. Restructuring costs incurred in 2020 relate to the cost saving actions taken by the Group to protect the financial and

operational flexibility in response to ongoing challenges posed by COVID-19. Restructuring costs incurred in 2020 consist
of redundancy costs and early lease termination costs. Restructuring costs incurred in 2019 were a result of adverse US
market developments, more specifically the launch of generic buprenorphine/naloxone film in the US. These consist
primarily of supply chain restructuring, redundancy, and related costs. Each of these charges are a result of one-off
factors and therefore non-recurring. These are included in SG&A.

4. Legal costs incurred in FY2020 relate to net settlement expenses with the DOJ Resolution/DOJ Related Matters ($178m)

and RB ($50m). In Q1 2020, the Group increased its provision for DOJ and related matters to $621m (2019: $438m) to reflect
the evolution of negotiations with DOJ. Settlement was reached preliminarily in July 2020 with confirmation from HHS that
entities within the Group, other than Indivior Solutions Inc., would not be excluded from US Federal healthcare programs.
The matter was subsequently finalized at this revised estimate in November 2020 upon Court acceptance of the
settlement. Legal expenses incurred in 2019 relate to potential redress for intellectual property related litigation with
Dr. Reddy’s Laboratories, S.A., and Dr. Reddy’s Laboratories Inc. (collectively, “DRL”) and Alvogen Pharmaceuticals (Alvogen).
These are included within SG&A. Refer to Note 23, Legal proceedings for further discussion.

5. Represents the tax benefit on exceptional items recorded during the period.
6. The tax expense of $22m in 2019 primarily consists of $34m of tax expense relating to a reversal of orphan drug

designation development credits claimed and reported as exceptional in prior years, offset by a tax benefit of $11m due to
regulation changes stemming from US tax reform.

5. Adjusted results
The Board, Directors and management team use adjusted results and measures to provide incremental insight to the
financial results of the Group and the way it is managed. The tables below show the list of adjustments between the reported
and adjusted results. Refer to Note 4 for more information on exceptional items.

Reconciliation of gross profit to adjusted gross profit:

Gross profit

Exceptional cost of sales

Adjusted gross profit

Reconciliation of operating (loss)/profit to adjusted operating profit:

Operating (loss)/profit

Exceptional cost of sales

Exceptional selling, general and administrative expenses

Adjusted operating profit

Notes

2020
$m

550

555

2020
$m

(156)

239

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2019
$m

645

–

645

2019
$m

178

–

202

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5. Adjusted results continued

Reconciliation of (loss)/profit before taxation to adjusted profit before taxation

(Loss)/profit before taxation

Exceptional cost of sales

Exceptional selling, general and administrative expenses

Adjusted profit before taxation

Reconciliation of net (loss)/income to adjusted net income

Net (loss)/income

Exceptional cost of sales

Exceptional selling, general and administrative expenses

Exceptional items within taxation

Adjusted net income

Reconciliation of (loss)/earnings per share to adjusted earnings per share:

(Loss)/earnings per share

Exceptional cost of sales

Exceptional selling, general and administrative expenses

Exceptional items within taxation

Adjusted earnings per share

Weighted average number of shares (thousands)

Reconciliation of net cash:

Net cash at beginning of year

Net (decrease)/increase in cash and cash equivalents

Net repayment of borrowings

Net cash at end of year

Notes

2020
$m

(173)

239

2020
$m

(148)

239

(37)

2020
cents

(20)

–

(5)

2019
$m

180

–

204

2019
$m

134

–

176

2019
cents

–

732,863

730,235

2020
$m

821

(202)

623

2019
$m

681

136

821

Net cash is presented as it is relevant to our term loan maximum leverage ratio. In accordance with the Group’s debt
covenant calculations, net cash is not reduced for lease liabilities of $51m (2019: $56m).

6. Auditors’ remuneration

Audit of Parent Company and consolidated financial statements:

Audit of the Group’s Annual Report and financial statements

Audit of the Group’s subsidiaries

Audit services

Audit-related assurance services

Total auditors’ remuneration

2020
$m

2019 (restated)
$m

2.3

0.3

2.6

0.5

3.1

1.7

0.3

2.0

0.4

2.4

Audit-related assurance services were services pertained primarily to the performance of quarterly reviews. After the
completion of the audit of the 2019 Consolidated Financial Statements and subsidiary statutory accounts, additional fees
amounting to $0.3m were incurred, which have been included in the 2019 fee analysis above.

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7. Employees
Employee benefits
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits, vacation and accumulating sick leave expected to be
settled within 12 months after the end of the period in which the employees render the related service, are recognized in
respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid
when the liabilities are settled. The liability for vacation and accumulating sick leave is recognized in the provision for
employee benefits. All other short-term employee benefits are included within trade and other payables.

Post-retirement benefits other than pensions
Some companies within the Group provide post-retirement medical care to their retirees. The costs of providing these
benefits are accrued over the period of employment and the liability recognized in the balance sheet is calculated using
the projected unit credit method and is discounted to its present value and the fair value of any related asset is deducted.

Pension commitments
Some companies within the Group operate defined contribution and (funded and unfunded) defined benefit pension
schemes. The cost of providing pensions to employees who are members of defined contribution schemes is charged to the
income statement as contributions are made. The Group has no further payment obligations in respect of such schemes once
the contributions have been paid.

(a) Staff costs

The total employment costs, including Directors, were:

Wages and salaries

Social security costs

Pension costs*

Share-based payments

Total staff costs

Note

2020
$m

(139)

(22)

(9)

(8)

(178)

2019
$m

(139)

(22)

(8)

(3)

(172)

* Pension costs mostly reflect contributions made towards the Group’s defined contribution plans.

Exceptional termination costs of $9m (2019: $8m) are not included above. See Note 4 for further details on exceptional costs.

Key management personnel is defined as the Executive Committee. Compensation awarded to key management was:

Short-term employee benefits

Termination costs

Share based payments

Total compensation awarded to key management

(b) Staff numbers
The average monthly number of persons employed by the Group, including Directors, during the year was:

Operations

Management

Research and development

Average number of employees

2020
$m

2020

567

168

819

2019
$m

2019

562

172

824

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8. Net finance (expense)/income
Finance costs of borrowings are recognized in the income statement over the term of those borrowings. Finance income on
cash and cash equivalents are recognized in the income statement in the period they are earned. Finance costs related to
lease payments are recognized in the income statement over the lease period. Finance costs on legal matters predominantly
relate to the Group’s settlement with the DOJ and are recognized in the income statement over the settlement payment
period. See Note 21 for further details.

Finance income

Interest income on cash and cash equivalents

Other finance income

Total finance income

Finance expense

Interest payable on borrowings

Interest expense on lease liabilities

Interest expense on legal matters

Other finance expense

Total finance expense

Net finance (expense)/income

2020
$m

(14)

(3)

(7)

(2)

(26)

(17)

2019
$m

–

(17)

(3)

(2)

–

(22)

9. Income tax benefit/(expense)
Income tax for the year comprises current and deferred tax expense. Income tax is recognized in the income statement except
to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is
also recognized in other comprehensive income or directly in equity, respectively.

Current tax is the expected tax payable on taxable income for the year, using tax rates enacted, or substantively enacted,
at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Current tax

Adjustments for current tax of prior years

Total current tax

Origination and reversal of temporary differences

Adjustments for prior year deferred tax

Total deferred tax

Total income tax benefit/(expense)

2020
$m

(11)

(8)

(4)

2019
$m

(30)

(8)

(38)

–

(8)

(46)

The standard rate of corporation tax in the UK is 19% for the year ended December 31, 2020. The Group’s loss for the year
ended December 31, 2020 are taxed at an effective rate of 14% (2019: 26%).

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9. Income tax expense continued
The total tax benefit for the year can be reconciled to the accounting profit as follows:

(Loss)/Profit before taxation

Tax at the notional UK corporation tax rate of 19% (2019: 19%)

Effects of:

Tax at rates other than the UK corporation tax rate

Permanent differences

R&D tax credit

UK Patent Box

Adjustments in respect of prior years

Development tax credits claimed for prior years

Adjustments to amounts carried in respect of unresolved tax matters

Share awards

Income tax (benefit)/expense

2020
$m

(173)

(33)

(1)

–

(6)

(2)

(25)

2019
$m

180

(1)

(11)

(4)

(14)

The reported effective tax rate of 14% (2019: 26%) was impacted by:

› Permanent difference tax expense of $7m (2019 $2m). Permanent differences arise due to differences between financial

statement income and taxable income determination that will never reverse. Current year differences resulted from income
not subject to tax, offset by business expenses not deductible.

› The prior year adjustments relate to tax accrual to return true up of $5m expense (2019: $4m benefit).

› Excluding the impact of exceptional items, the effective tax rate for the year ended December 31, 2020 was 17% (2019: 14%).

Income tax (benefit)/expense

Tax on exceptional pre-tax expense

Development tax credits (provided)/claimed for prior years

Adjustments to amounts carried in respect of unresolved tax matters

Income tax expense excluding exceptional items

Details of the exceptional items can be found at the bottom of Note 4.

2020
$m

(25)

–

2019
$m

(34)

The Group believes it has made adequate provision for the liabilities likely to arise from periods that are open and not yet
agreed by tax authorities. The ultimate liability for such matters may vary from the amounts provided and is dependent
upon the outcome of agreements with relevant tax authorities or litigation where appropriate. In assessing these income tax
uncertainties, management is required to make judgments in the determination of the unit of account, the evaluation of the
circumstances, the facts and other relevant information in respect of the tax position taken together with estimates of
amounts that may be required to be paid in ultimate settlement with the tax authorities. As Indivior operates in a multi-
national tax environment, uncertain tax positions are often complex and subject to change. Original estimates are refined as
additional information becomes known. Indivior has developed its probability assessment to review and measure uncertain
tax positions using internal expertise, experience and judgment, together with assistance and opinions from professional
advisors.

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9. Income tax expense continued
Factors affecting future tax charges
As a group with worldwide operations, Indivior is subject to several factors that may affect future tax charges, principally the
levels and mix of profitability in different jurisdictions, transfer pricing regulations, tax rates imposed and tax regime reforms.
The enacted United Kingdom (“UK”) Statutory Corporation Tax rate is 19% for the year ended December 31, 2020. On March 3,
2021 the UK Chancellor announced an increase in the corporation tax rate from 19 to 25 percent with effect from April 1, 2023.
The rate is not substantially enacted or enacted at the Balance Sheet date. The impact, of the proposed rate change, to the
deferred tax balance is immaterial.

Other tax matters
The European Commission issued a press release on April 2, 2019 announcing its conclusion that the United Kingdom (“UK”)
Finance Company Partial Exemption Rules are partly justified. The UK government has made an annulment application to
the General Court against this decision. The UK government is now required to initiate recovery of the alleged State Aid
irrespective of any appeal against the decision. The Group continues to monitor its position regarding the potential State Aid
challenge and based upon our fact pattern has determined that no provision is required at this time. The Group has benefited
from the UK controlled foreign company financing exemption and the tax thereon is approximately $25m including interest.
The Group continues to maintain its assertion that unremitted earnings are permanently reinvested in the foreign
jurisdictions. Other than the US leveraged dividend, in 2015, and Luxembourg entities and Irish entities, which had zero
withholding tax, there have been no dividends declared and paid outside the UK since our formation as a stand-alone
company in 2014. Our position has not changed.

The potential tax liability on unremitted earnings would be less than $1m. Given our permanent investment assertion and the
immateriality of this balance, no provision has been made at this time.

10. (Loss)/earnings per share

Basic (loss)/earnings per share

Diluted (loss)/earnings per share

Adjusted basic earnings per share

Adjusted diluted earnings per share

2020
cents

(20)

2019
cents

Basic
Basic (loss)/earnings per share is calculated by dividing net (loss)/income for the year attributable to owners of the Company
by the weighted average number of ordinary shares in issue during the year.

Diluted
Diluted (loss)/earnings per share is calculated similarly to the basic (loss)/earnings per share but adjusting the weighted
average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company
has dilutive potential ordinary shares in the form of share awards and options. The weighted average number of shares is
adjusted for the number of shares granted assuming the vesting of all awards and exercise of all stock options.

Weighted average number of shares

On a basic basis

Dilution for share awards and options

On a diluted basis

2020
thousands

732,863

37,132

769,995

2019
thousands

730,235

25,123

755,358

Adjusted earnings per share
The Directors believe that (loss)/earnings per share, adjusted for the impact of exceptional items after the appropriate tax
amount, provides meaningful information on underlying trends to shareholders in respect of earnings per share.
Reconciliations of net (loss)/income to adjusted net income and earnings per share to adjusted earnings per share are
included in Note 5.

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11. Intangible assets
Intangible assets are carried at cost less accumulated amortization and accumulated impairment.

Payments made in respect of acquired distribution rights are capitalized when it is probable that the expected future
economic benefits attributable to the asset will flow to the Group. The useful life of the acquired distribution rights is
determined based on legal, regulatory, contractual, competitive, economic or other relevant factors. Acquired rights with
finite lives are subsequently amortized using the straight-line method over their defined useful economic lives. Amortization
expense related to acquired distribution rights is included in selling, general and administrative expenses.

Payments related to the acquisition of rights to products in development or marketed products are capitalized if it is
probable that future economic benefits from the asset will flow to the Group. Probability is assumed for all externally
acquired products in development, including subsequent success-based milestone payments up to and including approval.
Amortization of the asset starts when it becomes available for use, at which point the asset is amortized over its useful
economic life, which is generally estimated as the patent life within the product’s primary market. Prior to that date, the
intangible asset is tested for impairment annually, irrespective of whether any indication of impairment exists. Amortization
charges of marketed products are recognized within cost of sales.

Gains and losses on the disposal of intangible assets are determined by comparing the asset’s carrying value with any sale
proceeds, and are included in the income statement.

Impairment of intangible assets
The carrying values of intangible assets are reviewed for impairment either annually or when events or changes in
circumstances indicate the carrying value may be impaired depending on the intangible asset type. If any such indication
exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Where it is not
possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-
generating unit to which it belongs.

An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs of disposal or its value
in use. In assessing value in use, its estimated future cash flow is discounted to its present value using a pre-tax discount rate
that reflects the current market assessments of the time value of money and the risks specific to the asset.

In carrying out impairment reviews of products in development, a number of significant assumptions have to be made. These
include the probability of success in obtaining regulatory approvals, future rate of market growth, discount rates, the market
demand for the products acquired, the future profitability of acquired businesses or products, and levels of reimbursement
for pharmaceutical products. If actual results should differ, or changes in expectations arise, impairment charges may be
required which would adversely impact reported results. Products in development of $10m are subject to potential
impairment in line with the risk of success.

Cost

At January 1, 2020

Exchange adjustments

At December 31, 2020

Accumulated amortization and impairment

At January 1, 2020

Amortization charge

Exchange adjustments

At December 31, 2020

Net book amount at December 31, 2020

Acquired
distribution rights
$m

Products in
development
$m

Marketed
products
$m

Software
$m

228

235

228

–

235

–

Total
$m

359

368

287

306

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11. Intangible assets continued

Cost

At January 1, 2019

Exchange adjustments

At December 31, 2019

Accumulated amortization and impairment

At January 1, 2019

Amortization charge

Exchange adjustments

At December 31, 2019

Net book amount at December 31, 2019

Acquired
distribution rights
$m

Products in
development
$m

Marketed
products
$m

Software
$m

219

228

219

–

228

–

Total
$m

346

359

262

287

Products in development
Products in development are products in different stages of research and development and have not received regulatory
approval. These products are not amortized as they are not yet in use but are assessed for impairment at the end of each
reporting period. Once approved in their primary market, products in development are transferred to marketed products.
There were no new primary market product approvals in 2020.

In FY 2019 $4m of proceeds were received for the out-licensing of nasal naloxone opioid overdose patents to Adapt
Pharmaceuticals (Emergent Biosolutions) and PERSERIS commercialization rights in Canada to HLS Therapeutics each
of which had a nil carrying value.

Marketed products
Marketed products include approved product rights for SUBLOCADE of $18m (2019: $20m) and PERSERIS of $24m (2019: $27m)
which are amortized over the patent exclusivity period in the major market to which the approval relates. All products are
assessed for impairment indicators at the end of each reporting period. The adverse impact COVID-19 has had on the
business was identified as a triggering event and therefore the Group tested each asset for impairment. There were no
impairments recognized in the year. Amortization expense of $6m (2019: $5m) was recognized in cost of sales.

Software
Acquired computer software licenses and related implementation costs are capitalized at cost. These costs are typically
amortized on a straight-line basis, generally over a period of up to five years. Acquired computer software primarily relates to
SAP, the Group’s ERP system. In 2020, the Group extended the useful life estimate for its SAP instance through December 2024.
The change in estimate resulted in a $3m decrease in amortization expense related to this asset in 2020.

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12. Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment, with the exception
of freehold land, which is shown at cost less impairment. Cost includes expenditure that is directly attributable to the
acquisition of the asset.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be
reliably measured.

Except for freehold land and assets under construction, the cost of property, plant and equipment is depreciated on a
straight-line basis over the expected useful life of the asset. For this purpose, expected lives are determined within the
following limits:

› freehold buildings: not more than 20 years;

› plant and equipment: not more than 10 years;

› motor vehicles and computer equipment: not more than 4 years; and

› leasehold improvements: up to the expected lease term.

Assets’ residual values and useful lives are reviewed, and adjusted if necessary, at each balance sheet date. Property, plant
and equipment are reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not
be appropriate. Freehold land is reviewed for impairment on an annual basis.

Gains and losses on the disposal of property, plant and equipment are determined by comparing the asset’s carrying value
with any sale proceeds and are included in the income statement.

Cost

At January 1, 2020

Additions

Exchange adjustment

At December 31, 2020

Accumulated depreciation and impairment

At January 1, 2020

Charge for the year

Exchange adjustment

At December 31, 2020

Net book amount at December 31, 2020

Land and
buildings
$m

Plant and
equipment
$m

–

Total
$m

120

128

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12. Property, plant and equipment continued

Cost

At January 1, 2019

Additions

Exchange adjustment

At December 31, 2019

Accumulated depreciation and impairment

At January 1, 2019

Charge for the year

Exchange adjustment

At December 31, 2019

Net book amount at December 31, 2019

Land and
buildings
$m

Plant and
equipment
$m

–

Total
$m

109

120

Depreciation expense is included in cost of goods sold, selling, general and administrative expenses, and R&D expenses
within the income statement.

Additions in the year relate primarily to PERSERIS syringe-filler equipment and other manufacturing equipment.

13. Leases and right-of-use assets
Leases and right-of-use assets
As lessee, the Group assesses whether a contract conveys the right to control the use of an identified asset for a period in
exchange for consideration, in which case it is classified as a lease. The Group recognises a right-of-use asset (lease asset)
and a corresponding liability at the lease commencement date. Assets and liabilities arising from a lease are initially measured
on a present value basis. The lease liability is initially measured at the present value of outstanding lease payments,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental
borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

The Group recognizes a right-of-use asset and a corresponding lease liability for all arrangements in which it is a lessee,
except for leases with a term of 12 months or less (short-term leases) and low-value leases. For these short-term and low-
value leases, the Group recognizes the lease payments as an operating expense on a straight-line basis over the term of the
lease.

The Group initially measures the right-of-use asset at cost, which generally consists of the following:

› the amount of the initial measurement of the lease liability;

› any lease payments made to the lessor at or before the commencement date, less any lease incentives (e.g. rent abatements,

tenant improvement allowances) received; and

› any initial direct costs incurred by the Group.

Right-of-use assets are amortized on a straight-line basis from the commencement date of the lease over the shorter of the
lease term or useful life of the right-of-use asset, unless another systematic basis better represents the pattern in which
Indivior expects to consume the right-of-use asset’s future economic benefits. Right-of-use assets are assessed for
impairment whenever there is an indication the carrying amount may not be recoverable, generally using cash flow
projections for the cash generating unit in which the right-of-use asset belongs.

The lease liability is initially measured at the present value of the lease payments to be made over the lease term using the
discount rate for the lease at lease commencement. If an interest rate is implicit in the lease, it will be used to measure the
liability. If an interest rate is not implicit in the lease, the incremental borrowing rate at the date of commencement will be
used, which ranged from 4.5% to 7.0% depending upon type of lease and country of origin.

The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever
the lease terms or expected payments under the lease change, or a modification occurs that is not accounted for as a
separate lease. Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss
over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each
period. The repayment of lease liabilities and corresponding interest payments are recognized in cash flows from financing
activities.

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13. Leases and right-of-use assets continued
The Group leases various properties and equipment (including vehicles). Rental contracts are typically made for fixed periods
of 3 to 10 years but may have termination or extension options. The Group assesses whether it is reasonably certain to
exercise the options at lease commencement and subsequently, if there is a chance in circumstances within its control.
Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain
to be extended (or not terminated). Such assessment involves management judgment and estimate based on information at
the time the assessments are made. Potential future cash outflows of $21m (2019: $28m) have not been included in the lease
liability because it is not reasonably certain that the leases will be extended (or not terminated).

The following tables summarize the movements of the right-of-use assets in 2020 and 2019:

Net Book Value

At January 1, 2020

Additions

Depreciation

Impairment

Exchange adjustments

At December 31, 2020

Net Book Value

At January 1, 2019

Additions

Depreciation

Lease incentives

At December 31, 2019

Land and
buildings
$m

Plant and
equipment
$m

(3)

(2)

–

(5)

–

Land and
buildings
$m

Plant and
equipment
$m

(3)

(1)

(5)

–

Total
$m

(8)

(2)

Total
$m

(8)

(1)

Depreciation expense of $5m (2019: $5m) is included in SG&A and $3m (2019: $3m) in cost of sales within the income
statement.

Additions in the year relate primarily to equipment, office space, and vehicle leases.

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13. Leases and right-of-use assets continued
The lease liabilities at December 31, 2020 and 2019 by maturity were as follows:

Within one year

Later than one and less than five years

More than five years

Gross lease liabilities

Less: future interest on lease liabilities

Net lease liabilities

The following table provides additional disclosures related to lease liabilities:

Interest expense on lease liabilities

Payments of lease liabilities

Total lease payments

2020
$m

(9)

2020
$m

2019
$m

(12)

2019
$m

14. Deferred tax
Deferred tax is provided in full, using the balance sheet approach, on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred tax is not recorded
if it arises from the initial recognition of an asset or liability in a transaction (other than a business combination) that affects
neither accounting nor taxable profit or loss at that time. Deferred tax is determined using tax rates (and laws) that have
been enacted or substantively enacted at the balance sheet date and apply when the deferred tax asset or liability is settled.
They are revalued for changes in tax rates when new tax rates are substantively enacted. Deferred tax assets (“DTAs”) are
recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences
can be utilized.

Deferred tax on unrealized profit in inventory arises due to elimination of inter-company sales that are taxed at different
rates between jurisdictions.

The Group has not recorded any deferred tax on temporary differences arising from investments in subsidiaries as it is able
to control the timing of temporary difference reversals and the temporary difference is not probable to reverse in the
foreseeable future.

Deferred tax assets and liabilities within the same tax jurisdiction are offset where there is a legally enforceable right to offset
current tax assets against current tax liabilities and where there is an intention to settle these balances on a net basis.

Deferred tax assets

At January 1, 2019

Charged to the income statement

(Charged)/Credit directly to equity

At December 31, 2019

Charged to the income statement

Credit directly to equity

At December 31, 2020

Unrealized
profit in
inventory
$m

Short-term
temporary
differences
$m

Share-based
payments
$m

Long-term
temporary
differences
$m

(2)

–

(2)

(1)

(2)

–

Other
$m

(7)

–

Total
$m

(8)

The Group has not recognized DTAs in relation to certain losses and interest expense in the UK entities, as the likelihood of
future economic benefit is not sufficiently assured.

The unrecognized DTAs in respect of losses of earlier periods is $11m (2019: $9m) and the unrecognized DTA on interest
expense is $6m (2019: $5m). Both the losses and interest expense have an unlimited carry-forward period. On March 3, 2021
the UK Chancellor announced an increase in the corporation tax rate from 19 to 25 percent with effect from April 1, 2023. The
rate is not substantially enacted or enacted at the Balance Sheet date. The impact, of the proposed rate change, to the
deferred tax balance is immaterial.

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14. Deferred tax continued
To the extent that dividends remitted from overseas subsidiaries are expected to result in additional taxes, appropriate
amounts have been provided for. A large proportion of Group profits outside of the UK are realized in the US and we expect
that we can rely on UK-US treaty provisions to ensure that any future dividends paid will not be subject to withholding tax.
Post Brexit, on the assumption the EU Parent Subsidiary exemption will cease to apply, the estimated potential tax liability
on unremitted earnings from EMEA is less than $1m.

15. Inventories
Raw materials, stores and consumables, work in progress and finished goods are stated at the lower of cost or net realizable
value. Cost comprises materials, direct labor and an appropriate portion of overhead expenses (based on normal operating
capacity) required to get the inventory to its present location and condition. Inventory valuation is determined on a first in,
first out basis. Selling expenses, product amortization, and certain other overhead expenses are excluded. Net realizable value
is the estimated selling price less applicable selling expenses.

Write-down of inventory occurs in the general course of business. Impairments are recognized in cost of sales.

Total net inventory is comprised of:

Raw materials, stores and consumables

Work in progress

Finished goods and goods held for resale

Total inventories, net

2020
$m

2019
$m

The cost of inventories recognized as an expense and included as cost of sales amounted to $97m (2019: $140m). The
decrease in cost of sales is primarily due to lower volume and improved revenue mix by product. Cost of sales includes
inventory write-offs and losses of $6m (2019: $22m). The decrease of inventory write-offs is primarily driven by favorable
inventory provision releases due to a change in PERSERIS product expiry dating and continued share retention of SUBOXONE
Film, which were partially offset by additional write-offs of $5m (2019: nil) due to the adverse impact of COVID-19, which has
been classified as exceptional during the year. Refer to Note 4 for more information on exceptional items. The inventory
provision (reflected in the carrying amounts above) at December 31, 2020 was $12m (2019: $23m). The decrease in the
provision was primarily due to the destruction of inventory that occurred throughout the year.

16. Trade receivables and other assets
Trade receivables are initially recognized at their invoiced amounts less any adjustments for estimated deductions such as
cash discounts. Trade receivables consist of amounts due from customers, primarily wholesalers and distributors, for whom
there is no significant history of default. The credit risk of customers is assessed, taking into account their financial positions,
past experiences and other relevant factors. Individual customer credit limits are imposed based on these factors. Provisions
for expected credit losses are established using an expected credit loss model (ECL). The provisions are based on a forward-
looking ECL, which includes possible default events on the trade receivables over the entire holding period. These provisions
represent the difference between the carrying amount in the consolidated balance sheet and the estimated collectible
amount. Charges for ECL are recognized in the consolidated income statement within SG&A expenses. The recognized
amounts approximate fair value.

The Group is not aware of any deterioration in the credit quality of its customers and considers that the receivables are still
recoverable.

Trade receivables

Less: provision for ECL

Trade receivables – net

2020
$m

181

(2)

179

2019
$m

194

(2)

192

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16. Trade receivables and other assets continued
The aging of past due trade receivables as of December 31 is as follows:

Up to three months past due

Three to six months past due

Over six months past due

Neither past due nor impaired

Provision for impairment of receivables

Trade receivables – net

2020
$m

167

(2)

179

As at December 31, 2020, a provision of $2m (2019: $2m) was recorded against the trade receivables balance based on the
Group’s assessment of ECL in accordance with IFRS 9. The assessment factors are discussed earlier within this note.

The Group’s trade receivables are denominated in the following currencies:

Sterling

Euro

US dollar

Other currencies

Total trade receivables

Current and non-current other assets

Short-term prepaid expenses

Other current assets

Total other current assets

Long-term prepaid expenses

Other non-current assets

Total other non-current assets

Total other assets

2020
$m

146

181

2020
$m

104

154

2019
$m

175

(2)

192

2019
$m

151

194

2019
$m

108

The decrease in short-term prepaid expenses was primarily driven by costs related to the US direct-to-customer advertising
campaign, which were prepaid as of December 31, 2019. Long-term prepaid expenses relate primarily to payments for contract
manufacturing capacity.

Other current and non-current assets relate primarily to surety bond funding (see Note 23). As at December 31, 2020 total
funds provided to surety bond holders, inclusive of accrued interest, was $108m (2019: 50m). In January 2021, one of the bond
holders returned $26m of collateral, which has been classified within other current assets as of December 31, 2020.

The maximum exposure to credit risk at the year-end is the carrying value of each class of receivable mentioned above.
The Group does not hold any collateral as security.

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17. Financial instruments and risk management
The Group classifies its financial assets at amortized cost. At initial recognition, the Group measures a financial asset at its
fair value plus transaction costs that are directly attributable to the acquisition of the financial asset. Subsequently, financial
assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal
and interest are measured at amortized cost. A gain or loss on a financial asset that is subsequently measured at amortized
cost and is not part of a hedging relationship is recognized in profit or loss when the asset is derecognized or impaired.
Interest income from these financial assets is included in finance income using the effective interest rate method.

The Group’s financial assets and liabilities include cash and cash equivalents, borrowings, trade receivables, other assets,
trade and other payables as set out in Notes 18, 19, 16 and 24, respectively. Financial assets and liabilities are offset, and
the net amount reported in the consolidated balance sheet when there is a legally enforceable right to offset and there
is intention to settle on a net basis or realise the asset and liability simultaneously. The carrying value less impairment
provision of current borrowings, cash, trade receivables, other assets, trade accruals and trade payables is assumed to
approximate fair value due to their short-term nature. The non-current borrowing, which is presented at amortized cost,
was trading at approximately 98% (2019: 93%) of par value.

Financial risk management of the Group is mainly exercised and monitored at Group level. The Group’s financing and financial
risk management activities are centralized to achieve benefits of scale and control with the ultimate goal of maximizing the
Group’s liquidity and mitigating its operational and financial risks. Financial exposures of the Group are managed centrally
in a manner consistent with underlying business risks. Only those risks and flows generated by the underlying commercial
operations are managed; speculative transactions are not undertaken.

Foreign exchange risk management
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures. Foreign
exchange risk arises from future commercial transactions, recognized assets and liabilities, and net investments in foreign
operations. The Group’s policy is to align the foreign currency payables and receivables within its major subsidiaries in order
to provide some protection against the remeasurement exposure on profits.

Interest rate risk management
The Group has interest-bearing assets and liabilities. The Group monitors interest income and expense rate exposure on
a regular basis with an objective of minimizing net interest cost. Main interest rate risk arises primarily from the Group’s
borrowings, which are discussed in Note 19, due to the floating interest rate. This exposure is partially offset by the interest
income generated on the Group’s cash and cash equivalents which are based on variable market interest rates.

Liquidity risk management
Liquidity risk is the risk that the Group is not able to settle or meet its obligations on time or at a reasonable price. The
Group’s policy is to ensure there is sufficient funding and facilities in place to meet foreseeable liquidity requirements.
The Group manages and monitors liquidity risk through regular reporting of current cash and borrowing balances and
periodic review of short-, medium- and long-term cash forecasts, while considering the maturity of its borrowing facility.
At December 31, 2020, Indivior had $4m (2019: $4m) of borrowings repayable within one year and $858m (2019: $1,060m)
of cash and cash equivalents.

Credit risk management
The Group’s exposure to credit risk arises from cash and cash equivalents, deposits with banks and financial institutions,
trade receivables and other assets. Financial institution counterparties are subject to approval under the Group’s
counterparty risk policy and such approval is limited to financial institutions with a BBB rating or above. Concentration of
credit risk with respect to trade receivables in the US is limited as the balances consist of amounts due from customers,
primarily major wholesalers and distributors, for whom there is no significant history of default. Outside the US, no single
customer accounts for a significant share of Group’s trade receivables balance. In the US, in line with other pharmaceutical
companies, the Group sells its products through a small number of wholesalers in addition to hospitals, pharmacies,
physicians and other groups. Sales to the three largest wholesalers amounted to approximately 57% of the Group sales in
2020 (2019: 61%). At December 31, 2020, the Group had trade receivables due from these three wholesalers totaling $142m
(2019: $127m). The Group is exposed to a concentration of credit risk in respect of these wholesalers such that, if one or more
of them encounters financial difficulty, it could materially and adversely affect the Group’s financial results. The Group’s credit
risk monitoring activities relating to these wholesalers include a review of their financial information and Standard & Poor’s
credit ratings, and establishment and periodic review of credit limits. However, the Group believes there is no further credit
risk provision required in relation to these customers (see Note 16).

Capital risk management
The Group considers capital to be net debt plus total equity. Net debt is calculated as total borrowings less cash and cash
equivalents, short-term available-for-sale financial assets and financing derivative financial instruments. Total borrowings
do not include lease liabilities of $51m (2019: $56m). Refer to Note 19 for further discussion on borrowings.

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17. Financial instruments and risk management continued
Total equity includes share capital, reserves and retained earnings as shown in the consolidated balance sheet.

Net cash

Total equity

Note

2020
$m

623

705

2019
$m

821

209

1,030

The objectives for managing capital are to safeguard the Group’s ability to continue as a going concern, in order to provide
returns for shareholders and benefits for other stakeholders and to maintain an efficient capital structure to optimize the
cost of capital.

The Group monitors net debt, which at year-end amounted to net cash of $623m (2019: $821m) to maintain an appropriate
level of financial flexibility.

18. Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, current balances with banks and similar institutions, and highly liquid
investments with original maturities of less than three months.

Cash and cash equivalents

There were no bank overdrafts in the current or prior year.

2020
$m

858

2019
$m

1,060

19. Financial liabilities – borrowings
Interest-bearing borrowings are recognized initially at fair value less attributable transaction costs. Subsequent to initial
recognition, interest-bearing borrowings are stated at amortized cost, with any difference between cost and redemption value
being recognized within finance expense in the income statement over the year of the borrowings on an effective interest basis.

Borrowings are classified as a current liability unless the Group has an unconditional right to defer settlement of the liability
for at least 12 months after the reporting date.

Current

Term loan

Non-current

Term loan

Analysis of net cash

Cash and cash equivalents

Borrowings1

2020
$m

(4)

2020
$m

(230)

2020
$m

858

(235)

623

2019
$m

(4)

2019
$m

(233)

2019
$m

1,060

(239)

821

1. Borrowings reflect the outstanding principal amount drawn before debt issuance cost of $1m (2019: $2m). These do not include lease liabilities of $51m (2019:

$56m).

Reconciliation of net cash

Net cash at beginning of year

Net (decrease)/increase in cash and cash equivalents

Net repayment of borrowings

Net cash at end of year

2020
$m

821

(202)

623

2019
$m

681

136

821

Net cash is presented as it is relevant to our term loan maximum leverage ratio. In accordance with the Group’s debt
covenant calculation net cash does not include lease liabilities of $51m (2019: $56m).

The term loan was trading at approximately 98% of par value at December 31, 2020 (2019: 93%).

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19. Financial liabilities – borrowings continued
The terms of the loan in effect at December 31, 2020 are as follows:

Currency Carrying value $m

Nominal interest
margin

Maturity

Annual
amortization

Maximum leverage
ratio

Term loan facility

USD

235

LIBOR1(1%)
+4.5%

2022

$4m

3.0

1. The term loan matures after publication of LIBOR is expected to end. We have engaged with the administrative agent and expect to work with other market

participants in the transition to a reasonable substitute base rate. No financial impact is expected.

Also included within the terms of the loan were:

› nominal interest margin is calculated over three-month LIBOR subject to the LIBOR floor;

› the maximum leverage ratio (adjusted aggregated net debt divided by adjusted EBITDA) is a financial covenant to maintain

net secured leverage below 3.0x; and

› a $50m revolving credit facility is available to the Group, which remained undrawn at the balance sheet date.

Maturity of gross borrowings (including expected interest)

Within one year or on demand

Bank loans payable due:

Later than one and less than five years

More than five years

Gross borrowings (including interest)

2020
$m

243

–

260

2019
$m

265

–

285

Analysis of changes in liabilities from financing activities

Current borrowings

Non-current borrowings

Lease liabilities

Interest payable

Total liabilities from
financing activities

At January 1,
2020
$m

(4)

(233)

(56)

(3)

(296)

Cash flows
$m

Profit and loss
$m

Additions
$m

Reclassifications
$m

Exchange adj.
$m

At December 31,
2020
$m

(1)

–

(13)

(9)

–

(5)

–

(5)

(4)

–

(1)

–

(1)

(4)

(230)

(51)

(2)

(287)

20. Commitments
The Group has various purchase commitments for services and materials in the ordinary course of business. These
commitments are generally entered into at current market prices and reflect normal business operations.

As of December 31, 2020, the Group had no material PP&E or intangible asset commitments for future periods. See Note 13 for
commitments arising from lease obligations.

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21. Provisions and other liabilities
Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, an outflow
of resources to settle that obligation is more likely than not, and the amount can be reliably estimated. Provisions are
measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at
the reporting date. Provisions are reviewed regularly, and amounts updated where necessary to reflect the latest assumptions.
The assessment of provisions can involve complex judgments about future events and can rely heavily on estimates and
assumptions. Given the inherent uncertainties related to these estimates and assumptions, the actual outflows resulting
from the realization of those risks could differ from the Group’s estimates.

Other liabilities represent contractual obligations to third parties where the amount and timing of payments is fixed. Where
other liabilities are not interest-bearing and the impact of discounting is significant, other liabilities are recorded at their
present value, generally using a discount rate appropriate to the liability or approximating the risk-free rate at the time the
Group entered into the obligation.

Provisions and other liabilities

At January 1, 2019

Charged to the income statement

Utilized during the year/payments

Exchange adjustments

At December 31, 2019

Charged to income statement

Transfer to other liabilities

Interest and discounting

Utilized during the year/payments

At December 31, 2020

Provisions and other liabilities

Current

Non-current

At December 31, 2020

Current

Non-current

At December 31, 2019

Provisions

Other liabilities

IP related
matters
$m

Restructuring
costs
$m

Retirement
benefit costs
$m

DOJ/RB resolution
$m

Total
provisions & other
liabilities
$m

(8)

–

(14)

–

(5)

–

586

(103)

536

526

536

–

493

(22)

–

488

238

–

(108)

625

577

625

417

488

DOJ related
matters
$m

438

–

438

178

(586)

–

369

438

The Group is involved in legal and intellectual property disputes as described in Note 23, Legal proceedings.

Provisions
DOJ related matters
The Group carries a provision of $32m (2019: $438m) pertaining to all of the DOJ related matters as discussed in Note 23. The
opening balance of $438m was increased by net exceptional charges of $178m and non-exceptional interest of $2m. $586m
was reclassified to other liabilities with the DOJ resolution. The remaining DOJ related matters of $32m are based upon
settlement discussions in progress or analogues of comparable settlements and are expected to be settled within the year.

IP related matters: ANDA litigation
The Group carries provisions totaling $47m (2019: $45m) for intellectual property related matters, all of which relate to
potential redress for intellectual property litigation with DRL and Alvogen should the Group not be successful with those
cases outlined in Note 23, Intellectual property related matters: ANDA litigation. The provision represents the Group’s
estimate of potential damages for lost profits owed to DRL and Alvogen for the period between FDA approval and lifting
of the preliminary injunction based on industry analogues for generic market share capture. Finance costs are recognized
in the income statement at an interest rate of 5.25%. The Group recorded finance expense totaling $2m (2019: $2m).

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21. Provisions and other liabilities continued
Restructuring costs
The restructuring provision relates to cost-saving initiatives announced and implemented in 2019 and 2020 to offset the
financial impact of recent adverse US market developments and to protect the financial and operational flexibility in response
to ongoing challenges posed by COVID-19. Each restructuring initiative has been evaluated in accordance with IAS 37 and, at
initial recognition, the Group concluded that each initiative met the definition of a constructive obligation. Restructuring costs
consist primarily of redundancy and related costs, the majority of which are expected to be utilized within one year.

Other liabilities
DOJ resolution
In July 2020, the Group reached an agreement with the DOJ and other litigants described in Note 23 under “DOJ and related
matters” to resolve the investigation of alleged charges of healthcare fraud, wire fraud, mail fraud, and conspiracy, in
connection with the marketing and promotion practices, pediatric safety claims, and overprescribing of SUBOXONE Film
and/or SUBOXONE Tablet by certain physicians. In November 2020, the Group made a payment of $103m (including interest)
when resolution was approved by a judge. Subsequently, six annual installments of $50m will be due every January from 2022
to 2027. A final installment of $200m will be due in December 2027. Interest accrues on certain portions of the resolution
which will be paid together with the annual installments. For non-interest-bearing portions, the liability has been recorded at
the net present value based on timing of the estimated payments. The discount rate and interest rate are 1.25%. In FY 2020,
the Group recorded finance expense totaling $3m (2019: nil). As of December 31, 2020, the Group carries other liabilities of
$486m (2019: nil) related to the settlement agreement with the DOJ.

RB resolution
In January 2021, the Group announced it had reached an agreement with Reckitt Benckiser (RB) to resolve claims which
RB issued in the Commercial Court in London in November 2020, seeking indemnity under the 2014 Demerger Agreement.
Pursuant to the settlement, RB has agreed to withdraw the US $1.4b claim and to release Indivior from any claim for
indemnity under the Demerger Agreement relating to the DOJ and FTC settlements which RB entered into in July 2019, as well
as other claims for indemnity arising from those matters. Indivior has agreed to pay RB a total of $50m and has agreed to
release RB from any claims to seek damages relating to its settlement with the DOJ and the FTC. The Group made a $10m
payment, in February 2021 following the settlement. Subsequently, annual installment payments of $8m will be due every
January from 2022 to 2026. The effect of discounting was not material. The Group carries a liability totaling $50m (2019: $0m)
related to this settlement.

22. Contingent liabilities
The Directors have assessed certain legal and other matters to be not probable based upon current facts and circumstances,
including any potential impact the DOJ resolution could have on these matters. These represent contingent liabilities. Except
for those matters in Note 23 described under “DOJ related matters” and “Intellectual property related matters”, for which
provisions have been recognized, Note 23 sets out the contingent liabilities for legal and other disputes for which the Directors
have assessed as contingent liabilities. The Directors have also assessed the State Aid matter discussed in Note 9 to be a
contingent liability.

23. Legal proceedings
DOJ resolution
Agreement to resolve criminal charges and civil complaints related to SUBOXONE Film
The Group settled with the United States Department of Justice (Justice Department or DOJ), the U.S. Federal Trade Commission
(FTC), and U.S. state attorneys general the criminal and civil liability in connection with a multi-count indictment brought in
April 2019 by a grand jury in the Western District of Virginia, a civil lawsuit joined by the Justice Department in 2018, and an FTC
investigation. Under the terms of the agreement, Indivior Solutions Inc. (“Solutions Inc.”), a wholly owned subsidiary of Indivior
PLC, has pleaded guilty to a single count of making a false statement relating to healthcare matters in 2012 in violation of 18
U.S.C. Section 1035. Indivior will make payments to federal and state authorities totaling $600 million (plus applicable interest
of 1.25% on a portion of that total amount), has agreed to a stipulated injunction with the FTC, and entered into a Corporate
Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services (HHS). In November
2020, the Court approved the settlement and dismissed all charges returned by the grand jury in April 2019.

Under the terms of a related agreement with the HHS, Solutions Inc. will be excluded from participating in government health
programs. This exclusion will not apply to any other entities within the Group. The Group does not anticipate the exclusion of
Solutions Inc. will have any material impact on the Group’s ability to continue to participate in government health programs.

Under the terms of the five-year Corporate Integrity Agreement with the HHS Office of the Inspector General (HHS-OIG), the
Group will continue its commitment to promote compliance with laws and regulations and its ongoing evolution of an effective
compliance program, including written standards, training, reporting, and monitoring procedures. The Group will be subject to
reporting and monitoring requirements, including annual reports and compliance certifications from key management and the
Board Nomination & Governance Committee submitted to HHS-OIG. In addition, the Group will be subject to monitoring by an
Independent Review Organization, who will submit audit findings to HHS-OIG, and review by a Board Compliance Expert, who
will prepare two compliance assessment reports in the first and third reporting periods of the Corporate Integrity Agreement.
See Risk factors update section on page 37 for further discussion.

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23. Legal proceedings continued
Under the terms of the Resolution Agreement with the Justice Department, the Group has agreed to compliance terms
regarding its sales and marketing practices. Compliance with these terms is subject to annual Board and CEO certifications
submitted to the U.S. Attorney’s Office.

In November 2020, the Group made a payment of $103m (including interest) when the resolution was approved by a judge.
Subsequently, six annual installments of $50 million will be due every January 15 from 2022 through 2027. The final installment
of $200 million will be due in December 2027. The Group carries a liability totaling $486 million (2019: nil) pertaining to the
DOJ resolution.

DOJ related matters
Federal FCA qui tam suits
In August 2018, the United States unsealed three qui tam suits pending in the Western District of Virginia that made a variety
of allegations under state and federal False Claims Act statutes regarding marketing and promotion practices related to
SUBOXONE, and in some instances claiming unlawful retaliation. The suits also seek reasonable attorney’s fees and costs.
Many of the civil claims concern the same conduct at issue in the Superseding Indictment filed by the Justice Department.
Indivior is aware of additional claims regarding similar allegations about marketing and promotion practices which were
resolved along with the three Western District of Virginia qui tam suits in the federal civil settlement agreement with the
Justice Department; and resolved in principle with the state Attorney Generals and are being formalized in civil settlement
agreements with the fifty states. The Group is in discussions with certain relators aimed toward resolving the retaliation
claims and claims for attorney’s fees and costs.

State and local matters
In October 2016, Indivior was served with a subpoena for records from the State of Connecticut Office of the Attorney General
under its Connecticut civil false claims act authority. The subpoena requests documents related to the Group’s marketing and
promotion of SUBOXONE products and its interactions with a non-profit third-party organization. The Group has fully
cooperated in this civil investigation.

In November 2016, Indivior was served with a subpoena for records from the State of California Department of Insurance
under its civil California insurance code authority. The subpoena requests documents related to SUBOXONE Film, SUBOXONE
Tablet, and SUBUTEX Tablet. The State of California served additional deposition subpoenas on Indivior in 2017 and served
a subpoena in 2018 requesting documents relating to the bioavailability / bioequivalency of SUBOXONE Film, manufacturing
records for the product and its components, and the potential to develop dependency on SUBOXONE Film. The Group has
fully cooperated in this civil investigation and is in discussions aimed toward resolving the matter. Certain of the qui tam suits
filed in the Western District of Virginia and the District of New Jersey assert claims under the civil California insurance code.
The Group is in discussions toward resolving these claims and claims for associated attorney’s fees and costs.

In June 2019, the Group learned that the State of Illinois Insurance Department is investigating potential violations of its civil
Insurance Claims Fraud Prevention Act with respect to its sales and marketing activity. Certain of the qui tam suits filed in the
Western District of Virginia and the District of New Jersey assert claims under this statute, including claims for associated
attorney’s fees and costs. The Group is in discussions aimed toward resolving this matter.

In addition to the federal and state health program claims, claims have been asserted under the city false claims acts of
Chicago and New York City regarding the promotion of SUBOXONE Film. The Group has resolved the matter with the City
of Chicago.

FTC investigation
Indivior Inc. and the FTC have resolved the FTC’s pending investigation. In July 2020, the government simultaneously filed a
complaint alleging a violation of 15 U.S.C. §45(a), and a joint motion seeking entry of a stipulated order. The US District Court for
the Western District of Virginia entered this stipulated order in November 2020 and dismissed the case with prejudice. Pursuant
to the stipulated order, the FTC received $10m. Furthermore, as detailed in the text of the stipulated order, for a ten-year period
Indivior Inc. is required to make specified disclosures to the FTC and is prohibited from certain conduct.

False Claims Act allegations
In August 2018, the United States District Court for the Western District of Virginia unsealed a declined qui tam complaint
alleging causes of action under the Federal and state False Claims Acts against certain entities within the Group predicated
on best price issues and claims of retaliation (United States ex rel. Miller v. Reckitt Benckiser Group PLC et al., Case No. 1:15-cv-
00017 (W.D. Va.)). The suit also seeks reasonable attorneys‘ fees and costs. We understand that all government plaintiffs have
declined to intervene. The Group was served with the complaint in January 2021. We are in discussions regarding this matter
with the plaintiff-relator.

In May 2018, Indivior Inc. received an informal request from the Office of the United States Attorney for the Southern District
of New York, seeking records relating to the SUBOXONE Film manufacturing process. We are in discussions with the
government regarding the matter.

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23. Legal proceedings continued
Securities class action litigation
In April 2019, Michael Van Dorp filed a putative class action lawsuit in the United States District Court for the District of New
Jersey on behalf of holders of publicly traded Indivior securities alleging violations of U.S. federal securities laws under the
Securities Exchange Act of 1934. The complaint names Indivior PLC, Shaun Thaxter, Mark Crossley and Cary J. Claiborne as
defendants. In February 2021, the parties reached a settlement agreement. A Motion for Entry of Order Preliminarily Approving
Settlement is pending with the court.

Intellectual property related matters
ANDA litigation
Litigation against DRL is currently pending in the District of New Jersey regarding U.S. Patent No. 9,687,454 and 9,931,305
(”the ‘454 and ’305 Patents“). DRL received final FDA approval for all four strengths of its generic buprenorphine/naloxone
film product in June 2018, and immediately launched its generic buprenorphine/naloxone film product “at-risk.” In July 2018,
the District Court issued a ruling granting Indivior a Preliminary Injunction (PI) pending the outcome of a trial on the merits
of the ’305 Patent. Indivior was required to post a surety bond for $72 million in connection with the PI. In November 2018,
the CAFC issued a decision vacating the PI against DRL. DRL launched its product at-risk in February 2019. In June 2019, DRL
filed a motion for leave to file their first amended Answer, Affirmative Defenses, and Counterclaims to add various antitrust
counterclaims resulting from the injunction that was issued against DRL. The motion was granted in November 2019. In
January 2020, Indivior and DRL entered into a joint stipulation that DRL did not infringe the ’305 Patent based on the District
Court’s claim construction ruling, but that Indivior retained its right to appeal the issue of infringement of the ’305 Patent.
Indivior maintains its infringement claims on the ’454 patent, and DRL maintains its counterclaims. No trial date has been
set for either the patent claims or the antitrust counterclaims.

In November 2018, DRL filed two separate petitions for inter partes review (“IPR”) of the ’454 Patent with the USPTO. The
USPTO denied institution of one of the IPR petitions but granted institution for the second IPR petition. The Patent Trial and
Appeal Board (USPTO) issued a decision in June 2020, holding that claims 1-5, 7, and 9-14 were unpatentable, but that DRL had
not shown that claim 8 is unpatentable. Claim 6 was not challenged and therefore was not addressed in the PTAB decision.
Indivior appealed to the Court of Appeals for the Federal Circuit in July 2020. No court date has been set yet.

Litigation against Alvogen is pending in the United States District Court for the District of New Jersey regarding the ’454 and
’305 Patents. On January 22, 2019, Indivior filed a motion for a temporary restraining order (“TRO”) and preliminary injunction
in the District of New Jersey, requesting that the Court restrain the launch of Alvogen’s generic buprenorphine/naloxone film
product until a trial on the merits of the ’305 Patent. Alvogen received approval for its generic product on January 24, 2019.
The same day, the District of New Jersey granted a TRO until February 7, 2019. On January 31, 2019, Indivior and Alvogen
entered in to an agreement whereby Alvogen was enjoined from the use, offer to sell, or sale within the United States, or
importation into the United States, of its generic buprenorphine and naloxone sublingual film product unless and until the
CAFC issued a mandate vacating the PI against DRL. The mandate vacating the DRL PI issued on February 19, 2019, and Alvogen
launched its generic product. Any sales in the US are on an “at-risk” basis, subject to the ongoing litigation against Alvogen in
the District of New Jersey. In August 2019, Alvogen filed a motion for leave to file an amended Answer to Complaint and
Separate Defenses and Counterclaims to add various antitrust counterclaims. The motion was granted in November 2019. In
January 2020, Indivior and Alvogen entered into a joint stipulation that Alvogen did not infringe the ’305 Patent based on the
District Court’s claim construction ruling, but that Indivior retained its right to appeal the issue of infringement of the ’305
Patent. Indivior maintains its infringement claims on the ’454 patent, and Alvogen maintains its counterclaims. No trial date
has been set for either the patent claims or the antitrust counterclaims.

Teva opposition to SUBLOCADE European patent
In October 2018, Teva Pharmaceutical Industries Ltd. (“Teva“) filed a Notice of Opposition with the European Patent Office
seeking to revoke European Patent No. EP 2579874 (“EP 874“), which relates to the formulation for SUBLOCADE. Oral
proceedings are scheduled to take place on September 27, 2021.

Antitrust litigation and consumer protection
Antitrust class and state claims
Civil antitrust claims have been filed by (a) a class of direct purchasers, (b) a class of end payor plaintiffs, and (c) a group of
states, now numbering 41, and the District of Columbia. Each set of plaintiffs filed generally similar claims alleging, among
other things, that Indivior violated U.S. federal and/or state antitrust and consumer protection laws in attempting to delay
generic entry of alternatives to SUBOXONE Tablets. Plaintiffs further allege that Indivior unlawfully acted to lower the market
share of these products. These antitrust cases are pending in federal court in the Eastern District of Pennsylvania. The court
has not set a trial date.

In 2013, Reckitt Benckiser Pharmaceuticals, Inc. (now known as Indivior Inc.) received notice that it and other companies were
defendants in a lawsuit initiated by writ in the Philadelphia County (Pennsylvania) Court of Common Pleas. See Carefirst of
Maryland, Inc. et al. v. Reckitt Benckiser Inc., et al., Case. No. 2875, December Term 2013. The plaintiffs include approximately 79
entities, most of which appear to be insurance companies or other providers of health benefits plans. The Carefirst Plaintiffs
have not served a complaint, but they have indicated that their claims are related to those asserted by the plaintiffs in re
Suboxone, MDL No. 2445 (E.D. Pa.). The Carefirst case remains pending.

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Financial statements

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D

23. Legal proceedings continued
The Group has evaluated the antitrust class and state claims in light of the DOJ settlement under which a Group subsidiary
plead guilty to one count of making a false statement relating to healthcare matters in one state in 2012. The Group continues
to believe in its defenses and continues to vigorously defend itself. Select plaintiffs in these matters have previously made
settlement demands (which were not accepted and most of which are not current offers), totaling approximately $290m,
which was used for contingency planning only to model possible downside financial effects. The final aggregate cost of these
matters, whether resolved by litigation or by settlement, may be materially different. If the Group were to entertain further
settlement discussions, we make no representations as to what amounts, if any, it may agree to pay, nor regarding what
amounts the plaintiffs will demand.

Other antitrust and consumer protection claims
In July 2019, the Indiana Attorney General issued a Civil Investigative Demand investigating potential violations of Indiana’s
Civil Deceptive Consumer Sales Act with respect to sales and marketing activity by the Company. The Group is cooperating
fully in this civil investigation.

In 2020 Group was served with lawsuits from a number of insurance companies, some of whom are proceeding both on their
own claims and through the assignment of claims from affiliated companies. Cases filed by (1) Humana Inc. and (2) Centene
Corporation, Wellcare Healthcare Plans, Inc., New York Quality Healthcare Corp. (d/b/a Fidelis Care), and Health Net, LLC are
pending in the Eastern District of Pennsylvania. Cases filed by (1) Blue Cross and Blue Shield of Massachusetts, Inc., Blue Cross
and Blue Shield of Massachusetts HMO Blue, Inc., (2) Health Care Service Corp., (3) Blue Cross and Blue Shield of Florida, Inc.,
Health Options, Inc., (4) BCBSM, Inc. (d/b/a Blue Cross and Blue Shield of Minnesota) and HMO Minnesota (d/b/a Blue Plus),
and (5) Molina Healthcare, Inc. are pending in the Circuit Court for the County of Roanoke, Virginia. The allegations in these
cases include many allegations made in other litigations, including prior antitrust complaints, indictments, and qui tam
complaints. These plaintiffs have asserted claims under federal and state RICO statutes, state antitrust statutes, state statutes
prohibiting unfair and deceptive practices, state statutes prohibiting insurance fraud, and common law fraud, negligent
misrepresentation, and unjust enrichment. Each of these cases is in its initial stages.

The Group has begun its preliminary evaluation of the claims, believes in its defenses, and intends to vigorously defend itself.
Currently, engagement with the claimants has been minimal and the Group’s evaluation of the various claims is in preliminary
stages. Accordingly, no estimate of the range of potential loss can be made at this time.

Civil opioid litigation
As of February 16, 2021, Indivior has been named as a defendant in fewer than 400 civil lawsuits brought by state and local
governments, public health agencies, and individuals against manufacturers, distributors and retailers of opioids alleging that
they engaged in a longstanding practice to market opioids as safe and effective for the treatment of long-term chronic pain in
order to increase the market for opioids and their own market share. The vast majority of these cases have been consolidated
and are pending in a federal multi-district litigation (MDL) in U.S. District Court for the Northern District of Ohio. At the present
time, litigation against Indivior in the MDL is stayed. There remain three (3) cases against Indivior pending in state courts
located in Arizona, Pennsylvania and Virginia, which are similarly stayed at the current time.

Given the status and preliminary stage of litigation in both the MDL and state courts, no estimate of possible loss in the
opioid litigation can be made at this time.

24. Trade and other payables

Sales returns and rebates

Trade payables

Accruals and other payables

Other tax and social security payable

Interest payable

Trade and other payables

160
160

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indivior.com

2020
$m

(396)

(20)

(97)

(9)

(2)

(524)

2019
$m

(460)

(39)

(110)

(11)

(3)

(623)

24. Trade and other payables continued
Sales return and rebate accruals, primarily in the US, are provided for by the Group at the point of sale in respect of the
estimated rebates, discounts or allowances payable to direct and indirect customers. Trade and other payables are recognized
initially at fair value and, where applicable, subsequently measured at amortized cost using the effective interest method.
Accruals are made at the time of sale, while the amounts eventually paid are based on claims made some time after the
initial recognition of the sale. As the amounts are estimated, they may not fully reflect the final outcome and are subject to
change dependent upon, amongst other things, the channel (e.g. Medicaid, Medicare, Managed Care) and product mix. The
level of accrual is reviewed and adjusted in light of historical experience of actual rebates, discounts or allowances given and
returns made, and any changes in arrangements or rules. Future events could cause the assumptions on which the accruals
are based to change, which could affect the future results of the Group.

The carrying amounts of total trade and other payables are denominated in the following currencies:

Sterling

Euros

US dollar

Other currencies

2020
$m

473

524

2019
$m

555

623

25. Share capital
Incremental costs directly attributable to the issue of ordinary shares, net of any tax effects, are recognized as a deduction
from equity.

Issued and fully paid

At January 1, 2020

Allotments

At December 31, 2020

Issued and fully paid

At January 1, 2019

Allotments

At December 31, 2019

Equity
ordinary
shares

Nominal value
paid per share
$

Nominal
value
$m

730,787,719

2,847,792

733,635,511

0.10

–

Equity
ordinary
shares

Nominal value
Paid per share
$

Nominal
value
$m

728,441,653

2,346,066

730,787,719

0.10

–

Allotment of ordinary shares
During the year, 2,847,792 ordinary shares (2019: 2,346,066) were allotted to satisfy vesting/exercises under the Group’s Long-
Term Incentive Plan and the US Employee Stock Purchase Plan.

26. Other equity
Nature and purpose of reserves
Foreign currency translation
The foreign currency translation reserve contains the accumulated foreign exchange differences from the translation of the
financial statements of the Group’s foreign operations arising when the Group’s entities are consolidated.

Other reserves
The other reserves balance relates to the Group formation in 2014. It represents the difference between the nominal value of
the shares issued by the Company and the net investment in the Group by the former owner.

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Financial statements

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D

27. Share-based payments
The Group operates three equity-settled executive and employee share plans. For all grants of share options and awards, the
fair value at the grant date is calculated using appropriate pricing models. The grant date fair value is recognized over the
vesting period as an expense, with a corresponding increase in retained earnings.

Employee plans
Indivior Long-Term Incentive Plan (LTIP)
In 2015, a share-based incentive plan was introduced for employees (including Executive Directors) of the Group. An award
under the LTIP can take the form of a nil cost option, a market value option, or a conditional award.

The Remuneration Committee may determine the vesting of awards is conditional upon the satisfaction of one or more
performance conditions. Awards with performance conditions granted under the LTIP will normally have a performance
period of at least three years. Awards granted to Executive Directors are subject to a further two-year post-vesting period.

Upon Indivior demerging from RB and listing on the UK Main Market, awards under the Reckitt Benckiser 2007 Long-Term
Incentive Plan granted in 2012 were exchanged on a value-neutral basis for new awards over Indivior ordinary shares under
the Indivior LTIP for a number of executives. The Remuneration Committee concluded that 93.33% of the award would vest
in May 2016. The LTIP is reviewed annually with reference to market data and the associated cost to the Company, calculated
using an expected-value methodology. The performance conditions are reviewed before each award cycle to ensure they
remain appropriately stretching.

The fair values of awards granted under the Long-Term Incentive Plans are calculated using a Monte Carlo simulation model.
The key assumptions in the simulation model are share price of the Company, expected volatilities of the Company, risk-free
rate, and dividend yield.

Other employee plans
The Group operates an HMRC-approved SAYE plan for UK employees and US Employee Stock Purchase Plan (“ESPP”) for US
employees. The amounts recognized for these plans are not material for disclosure.

For all plans, the inputs to the option pricing models are reassessed for each grant. The following assumptions were used in
calculating the fair value of options granted.

Award

Grant date

2015

February 26, 2015

2015 March 11, 2015

2016 February 19, 2016

2016 August 2, 2016

2017

February 24, 2017

2018 March 9, 2018

2018 November 28, 2018

2019 March 5, 2019

2019 August 8, 2019

2020 March 9, 2020

2020 November 6, 2020

Performance
period

Share price on
grant date
£

Volatility
%

Dividend yield
%

Expected life in
years

Risk-free interest
rate1
%

Weighted average
fair value
£

2015–17

2016–18

2017–19

2018–20

2019–21

2020–22

2020–23

1.70

1.75

1.55

2.92

3.43

4.02

0.99

1.08

0.58

0.45

1.17

n/a

110

0.0

0.73

0.78

0.40

0.15

0.12

0.85

n/a

0.82

0.10

1.67

1.28

1.10

2.59

2.76

3.39

2.90

0.99

0.77

0.50

0.41

0.42

1.10

1. The risk-free interest rate reflects the continuous risk-free yield based on the UK government interest rates as of the valuation date, based upon a maturity

commensurate with the performance period.

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27. Share-based payments (continued)
At the end of the year, the maximum number of shares that could vest under the Group’s LTIP was:

Outstanding at January 1, 2019

Awarded

Vested/Exercised

Forfeited

Outstanding at December 31, 2019

Awarded

Vested/Exercised

Forfeited

Outstanding at December 31, 2020

Charged to income statement
The expense charged to the income statement for share-based payments is as follows:

Granted in current year

Granted in prior years

Unvested awards due to unmet performance conditions

Total share-based expense for the year

Total LTIP
millions

(1)

(10)

(1)

(12)

2019
$m

(12)

2020
$m

(5)

The Group does not expect income statement benefits for unvested awards due to unmet performance conditions in the
coming years as performance conditions for outstanding awards are market based.

28. Related party transactions
Key management compensation is disclosed in Note 7.

The subsidiaries included in the consolidated financial statements at December 31, 2020 are disclosed in Note 2 to the Parent
Company financial statements.

29. Post balance sheet events
As discussed in Note 21, the Group entered into a settlement agreement with Reckitt Benckiser on January 25, 2021 to pay $50m.

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Financial statements

H I S T O R I C A L F I N A N C I A L I N F O R M A T I O N

Income statement

Revenue from continuing operations

Operating (loss)/profit

Net finance (expense)/income

(Loss)/profit on ordinary activities before tax

Tax benefit/(expense) on profit on ordinary activities

Net (loss)/income

Balance sheet

Net assets/(liabilities)

Net working capital1

Statistics

Reported basis

Operating margin

Tax rate

Diluted (loss)/ earnings per share (cents)

20202
$m

647

(156)

(17)

(173)

(148)

(202)

20192
$m

785

178

180

(46)

134

209

(323)

-24.1%

14.4%

(20)

22.7%

25.6%

2018
$m

1,005

292

(14)

278

(3)

275

(356)

29.1%

1.1%

2017
$m

1,093

193

(56)

137

(79)

(203)

(335)

17.7%

57.7%

2016
$m

1,058

149

(51)

(63)

(295)

(390)

14.1%

64.3%

1. Net working capital includes inventories, trade receivables and other current assets less trade and other payables.

2. The 2020 and 2019 balances reflect the adoption of IFRS 16. The 2018, 2017 and 2016 balances have not been restated.

164
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P A R E N T C O M P A N Y B A L A N C E S H E E T

As at December 31

Fixed assets

Investments in subsidiaries

Deferred tax

Current assets

Debtors due within one year

Cash and cash equivalents

Creditors due within one year

Net current assets

Creditors due after one year

Net assets

Equity

Share capital

Share premium

Retained earnings

Total equity

Note

4, 5

2020
$m

2019
$m

1,437

(11)

(40)

–

1,416

1,465

1,337

1,416

1,387

1,465

The net loss of the Parent Company for the financial year was $60m (2019: $6m). The financial statements on pages 165 to 172
were approved by the Board of Directors on March 18, 2021 and signed on its behalf by:

Mark Crossley
Director

Ryan Preblick
Director

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Financial statements

P A R E N T C O M P A N Y S T A T E M E N T O F C H A N G E S I N E Q U I T Y

Balance at January 1, 2019

Comprehensive loss

Net loss for the financial year

Other comprehensive income

Total comprehensive loss

Transactions with owners

Share-based payments

Deferred taxation on share-based payments

Total transactions recognized directly in equity

Balance at December 31, 2019

Balance at January 1, 2020

Comprehensive loss

Net loss for the financial year

Other comprehensive income

Total comprehensive loss

Transactions with owners

Shares issued

Share-based payments

Deferred taxation on share-based payments

Total transactions recognized directly in equity

Balance at December 31, 2020

Notes

Share
capital
$m

–

Share
premium
$m

–

Retained
earnings
$m

1,391

Total
equity
$m

1,469

(6)

–

(6)

(1)

(6)

–

(6)

(1)

1,387

1,465

1,387

1,465

(60)

–

(60)

–

1,337

(60)

–

(60)

1,416

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N O T E S T O T H E P A R E N T C O M P A N Y F I N A N C I A L S T A T E M E N T S

The Parent Company financial statements of Indivior PLC
(the “Company”) for the year ended December 31, 2020 were
authorized for issue by the Board of Directors on March 18,
2021 and the balance sheet was signed on the Board’s
behalf by Mark Crossley and Ryan Preblick. Indivior PLC
is an investment holding company and is a public limited
company incorporated and domiciled in the United Kingdom.
The address of the registered office and company number
are given on page 173.

These financial statements were prepared in accordance with
Financial Reporting Standard 101. ‘Reduced Disclosure
Framework’ (FRS 101). The financial statements are prepared
under the historical cost convention, and in accordance with
the Companies Act 2006 as applicable to companies using
FRS 101.

As permitted by s408 (4) of the Companies Act 2006, no profit
and loss account is presented for Indivior PLC. The results of
the Company are included in the consolidated financial
statements of Indivior PLC.

The accounting policies which follow apply to preparation
of the financial statements for the year ended December 31,
2020. They have all been applied consistently throughout the
year and the preceding year. The financial statements are
prepared in US dollars and are rounded to the nearest million.

The exchange rates used for the translation of currencies
into US dollars that have the most significant impact on the
Company results were:

GBP year-end exchange rate

GBP average exchange rate

2020

1.3651

1.2833

2019

1.3263

1.2768

1. Accounting policies
Basis of preparation
Indivior PLC (the “Company”) is the Parent Company of the
Indivior Group. Indivior PLC is a public limited company
incorporated and domiciled in England and Wales.

The Company and its subsidiaries (together, “the Group”) are
predominantly engaged in the development, manufacture
and sale of buprenorphine-based prescription drugs for the
treatment of opioid dependence, and co-occurring disorders.

The Parent Company financial statements have been
prepared in accordance with Financial Reporting Standard
101, ‘Reduced Disclosure Framework’ (FRS 101) and the
Companies Act 2006 (the “Act”) for all periods presented.

The Company is included in the Group financial statements
of Indivior PLC, which are publicly available on the
Company’s website.

The Directors have considered the Group’s and Parent
Company’s financial plan, in particular with reference to
the period through June 2022.

As disclosed in Notes 4, 21, 22 and 23 to the Group Financial
Statements, the Group reached a resolution with the U.S.
Department of Justice (DOJ), Federal Trade Commission (FTC)
and the Department of Health and Human Services (HHS),
which was approved in November 2020. The agreement
reached with HHS (as described in Note 23) has eliminated
the risk of potential exclusion from participating in US
government health programs. Additionally, subsequent to
the year-end, the Group resolved a claim raised by Reckitt
Benckiser (RB) in November 2020. These settlements have
resulted in liabilities totaling $536m as at December 31, 2020.
While the uncertainty relating to these matters has been
resolved, various other legal proceedings as discussed in
Note 23 carry their own specific ongoing risk and uncertainty.

The Directors have assessed the Group’s and Parent
Company’s ability to comply with the financial covenants in
the Group’s debt facility, maintain sufficient liquidity to fund
its operations, fulfill obligations under the DOJ and RB
agreements, and address the reasonably possible financial
implications of the ongoing legal proceedings. The Directors
have modeled the failure of SUBLOCADE to meet revenue
growth expectations due to the continued impact from the
COVID-19 pandemic (considering a 15% decline on forecasts)
as part of the Group’s and Parent Company’s going concern
assessment and downside scenario. The risk of a worse than
expected outcome relating to the remaining ongoing legal
matters has been considered for purposes of the viability
period only as these cases are not expected to be concluded
during the going concern period. Should the maximum
reasonably possible risk occur (as disclosed in Note 23) in
the going concern period, the Group and therefore also the
Parent Company would still maintain adequate liquidity to
comply with its financial covenants and obligations.

These risks were balanced against the Group’s current and
forecast working capital position, impact of the cost saving
actions taken to date, and timing of the final balloon
payment on the term loan in Q4 2022 which is outside the
going concern assessment period and would also impact
the Parent Company. As a result of the factors set out above,
the Directors of the Group and Parent Company have a
reasonable expectation that the Group and Parent Company
have adequate resources to continue in operational
existence for at least one year from the approval of these
financial statements. Based on the above assessment, the
previous material uncertainty relating to the Group’s and
Parent Company’s ability to continue as a going concern
has been removed.

The Directors have given the going concern assessment due
consideration and have concluded that it is appropriate to
adopt the going concern basis for accounting and preparing
these financial statements. The viability statement is on
page 46.

Indivior Annual Report 2020
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N O T E S T O T H E P A R E N T C O M P A N Y F I N A N C I A L S T A T E M E N T S

C O N T I N U E D

1. Accounting policies (continued)
The Company has taken advantage of the following disclosure
exemptions under FRS 101:

a. The requirements of paragraphs 45(b) and 46 to 52 of IFRS

2 Share-Based Payments for an ultimate parent: the
share-based payment arrangement must concern its own
equity instruments and its separate financial statements
must be consolidated financial statements of the Group;
and in both cases, this exemption requires that equivalent
disclosures are included in the consolidated financial
statements of the Group in which the entity is consolidated.

b. The requirements of paragraphs 17 and 18 of IAS 24

Related-Party Disclosures to disclose information about
key management personnel compensation and related
party transactions entered into between two or more
members of a group, provided that any subsidiary which
is a party to the transaction is wholly owned by such a
member.

c. The requirements of paragraphs 30 and 31 of IAS 8

Accounting Policies, Changes in Accounting Estimates and
Errors to provide information about the impact of IFRSs
that have been issued but are not yet effective.

d. The requirements of IAS 7 Statement of Cash Flow to

prepare a cash flow statement for any qualifying entity.

e. The requirements of paragraphs 10(d), 10(f), 16, 38, 38A-D,

40A-D, 111, 134-6 of IAS 1 Presentation of Financial
Statements to present:

› a cash flow statement;

› a statement of financial position and related notes
at the beginning of the earliest comparative period
whenever an entity applies an accounting policy
retrospectively, makes a retrospective restatement, or
when it reclassifies items in its financial statements;

› an explicit statement of compliance with IFRS. Indeed,

FRS 101 prohibits such a statement of compliance and an
FRS 101 statement of compliance is required instead; and

› information about capital and how it is managed.

New standards, amendments and IFRIC interpretations
IFRS 3 Business Combinations (Amendments to IFRS 3),
Interest Rate Benchmark Reform (Amendments to IFRS 9,
IAS 29 and IFRS 7) and Definition of Material (Amendments
to IAS 1 and IAS 8) are new accounting standards that are
effective from January 1, 2020 and have had no impact on
the Parent Company.

Foreign currency translation
Transactions denominated in foreign currencies are
translated using exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting
from the settlement of foreign currency transactions and
from the translation at year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies are
recognized in the income statement.

Taxation
The tax charge/credit is based on the result for the year
and takes into account taxation deferred due to timing
differences between the treatment of certain items for
taxation and accounting purposes. Deferred tax liabilities are
provided for in full and deferred tax assets are recognized to
the extent that they are considered recoverable.

A deferred tax asset is considered recoverable if it can
be regarded as more likely than not that there will be
suitable taxable profits against which to recover carried-
forward tax losses and from which the future reversal of
underlying timing differences can be deducted.

Deferred tax is measured at the tax rates that are expected
to apply in the periods in which the timing differences are
expected to reverse, based on tax rates and laws that have
been enacted or substantively enacted by the balance sheet
date. Deferred tax is measured on an undiscounted basis.

Cash and cash equivalents
Cash at bank and in hand includes cash held in bank accounts.

Financial instruments
The Company only enters into basic financial instrument
transactions that result in the recognition of basic financial
assets and liabilities, including receivables and payables and
loans to and from related parties. These transactions are
initially recorded at transaction price and subsequently
recognized at amortized cost. See Note 17 for more information
on the Group’s policies on financial instruments.

Accounting estimates and judgments
In the application of the Company’s accounting policies,
the Directors are required to make some estimates and
assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on
historical experience and other factors that are considered
to be relevant. Actual results may differ from these estimates.
See Note 2 of the Parent Company financial statements for
key judgments and assumptions used in assessing the
carrying value of the Company's investments.

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2. Investments in subsidiaries
Investments in subsidiaries are stated at the lower of cost and their recoverable amount, which is determined as the higher
of fair value less cost to sell and value in use.

Impairment of investments in subsidiaries
A review of the potential impairment of an investment is carried out by the Directors if events or changes in circumstances
indicate that the carrying value of the investment could exceed their recoverable values based on the higher of value in use
or fair value less costs to sell. Such impairment reviews are performed in accordance with IAS 36 Impairment of Assets.

At January 1

At December 31

2020
$m

1,437

2019
$m

1,437

As at December 31, 2020, Indivior PLC's market capitalization of $1,090m was below the Company’s investments in subsidiaries
value of $1,437m (2019: $1,437m) indicating a potential impairment. Additionally, during the year, the Group experienced a
slower uptake of SUBLOCADE and PERSERIS which led to lower than expected revenues primarily driven by the COVID-19
pandemic. As these events could impact the Company’s ability to recover amounts owed by subsidiary undertakings and
the value of the Company’s investments, they are considered to be indicators of impairment.

Management has made certain key judgements and assumptions in its assessment of the following:

› whether the carrying value of the investments in the Group undertakings could exceed their recoverable values based

on their value in use or fair value less costs to sell; and

› the key measures considered in its cash flow projections, such as market growth rates and discount rates.

Value in use is calculated by discounting future expected cash flows. These calculations use cash flow projections based
on Board-approved budgets and projections which reflect management’s current experience and future expectations of the
markets in which the subsidiary undertaking operates. Risk adjusted pre-tax discount rates used by the Company in its
impairment tests were calculated using measurable inputs such as debt at fair value, equity value (market capitalization),
and beta. The cash flow projections consist of Board-approved forecasts for the following year, together with Board reviewed
forecasts for an additional eight years and a constant nominal long-term growth rate beyond these periods through the end
of the patent period. The market growth rates used in the analysis are based on management’s view of the Group’s market
position, pricing, and the maturity of the relevant market.

An impairment analysis of the investment balance was performed at the end of the year and no impairment was required
as a result of the impairment analysis.

The Directors believe that the carrying value of the investments is supported by their underlying net assets. The cost of
investments has been determined with reference to the nominal value of shares issued as permitted by s615 of the Act.

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C O N T I N U E D

2. Investments in subsidiaries (continued)
Subsidiaries
The subsidiaries as at December 31, 2020, all of which are included in the consolidated financial statements, are shown below,
in accordance with s410 of the Act.

Name

Bio-Found Limited
Indivior Austria GmbH
Indivior (Beijing)
Pharmaceuticals Information
Consulting Co. Ltd
Indivior Belgium SRL
Indivior Canada Ltd
Indivior Česko s.r.o
Indivior Deutschland GmbH
Indivior España S.L.U.

Country of
incorporation
or registration
and operation

England & Wales
Austria
China

Belgium
Canada
Czech Republic
Germany
Spain

Registered office

Principal activity

Effective %
of share capital
held by the Group

234 Bath Road, Slough, Berkshire, SL1 4EE, United Kingdom
Kärntner Ring 12, 3. Stock, 1010 Wien, Austria
Unit 102,21 Nei 21st Floor, Fortune Financial Centre, No. 5,
3rd Middle East Ring Road, Beijing, 100020, China

Dormant company
Ordinary shares 100
Operating company Ordinary shares 100
Ordinary shares 100
In liquidation

De Kleetlaan 12A, 1831 Machelen, Belgium
333 Bay Street, Suite 2400, Toronto, Ontario, M5H 2T6, Canada
Na Prikope 988/31, Prague 1, Czech Republic
Hermsheimer Straße 3, 68163 Mannheim, Germany
Camino Cerro de los Gamos, n° 1, Edificio Negocenter, Pozuelo de
Alarćon, 28224, Madrid, Spain

Operating company Ordinary shares 100
Operating company Common shares 100
Operating company Ordinary shares 100
Operating company Ordinary shares 100
Operating company Ordinary shares 100

Indivior EU Limited

England and Wales The Chapleo Building, Henry Boot Way, Priory Park, Hull, HU4 7DY,

Operating company Ordinary shares 100

Indivior Europe Limited
Indivior Finance LLC
Indivior Finance (2014) LLC

Ireland
US*
US

United Kingdom
27 Windsor Place, Dublin 2, Ireland
234 Bath Road, Slough, Berkshire, SL1 4EE, United Kingdom
10710 Midlothian Turnpike, Suite 430, North Chesterfield VA 23235,
United States
21 Fort Elizabeth, L-1463 Luxembourg
1, rue de la Poudrerie, Leudelange, L – 3364, Luxembourg
7 Avenue de la Cristallerie, 92310 Sèvres, France

Indivior Finance S.àr.l
Indivior Finance (2015) S.àr.l
Indivior France SAS
Indivior Global Holdings Limited England and Wales 234 Bath Road, Slough, Berkshire.SL1 4EE, United Kingdom

Luxembourg
Luxembourg
France

Indivior Hrvatska d.o.o.
Indivior Inc.

Indivior Ireland (Investments)
Limited
Indivior Israel Ltd
Indivior Italia S.r.l
Indivior Jersey Limited

Croatia
US

Ireland

Israel
Italy
Jersey

Indivior Jersey Finance LLC
Indivior Middle East FZ-LLC

Indivior Nederland B.V.
Indivior Nordics ApS

US**
Dubai Healthcare
City Free Zone (UAE)
Netherlands
Denmark

Indivior Portugal Unipessoal LDA Portugal

Indivior Pty Ltd

Australia

Indivior Schweiz AG
Indivior Solutions Inc.

Switzerland
US

Indivior South Africa (Pty) Ltd

South Africa

Indivior Treatment Services, Inc. US

Ozaljska 136, 10 000 Zagreb, Croatia
10710 Midlothian Turnpike, Suite 125, North Chesterfield, VA 23235,
United States
29 Earlsfort Terrace, Dublin 2, Ireland

13 Hamiktsoot St., Modiin, 7178094, Israel
Corso di Porta Romana 68, 20122 Milano, Italy
28 Esplanade, St Helier, Jersey, JE2 3QA, Jersey

251 Little Falls Drive, Wilmington, Delaware, 19808, United States
Unit ED03, Second Floor, Building No.27, Dubai Healthcare City,
Dubai, United Arab Emirates
Kabelweg 57, Unit 1.06.07, 1014BA, Amsterdam, Netherlands
c/o Lundgrens Advokatpartnerselskab, Tuborg Boulevard 12, 4.,
2900 Hellerup, Denmark
Avenida Engenheiro Duarte Pacheco, Amorreiras, Torre 2, 15°. A,
1070 -102, Lisboa, Portugal
Pod B.02, Level 3, 78 Waterloo Road, Macquarie Park, NSW 2113,
Australia
Neuhofstrasse 5A, 6340, Baar, Switzerland
10710 Midlothian Turnpike, Suite 125, North Chesterfield, VA 23235,
United States
Building 21 C, Woodlands Office Park, 20 Woodlands Drive,
Woodmead, 2191, South Africa
215 Little Falls Drive, Wilmington, Delaware 19808, ,
United States

Indivior UK Limited

England and Wales The Chapleo Building, Henry Boot Way, Priory Park, Hull, HU4 7DY,

United Kingdom

Indivior UK Finance Limited
Indivior UK Finance Lending Limited
Indivior UK Finance No1 Limited
Indivior UK Finance No2 Limited
Indivior UK Finance No3 Limited

England and Wales 234 Bath Road, Slough, Berkshire, SL1 4EE, United Kingdom
England and Wales
234 Bath Road, Slough, Berkshire, SL1 4EE, United Kingdom
England and Wales
234 Bath Road, Slough, Berkshire, SL1 4EE, United Kingdom
England and Wales
234 Bath Road, Slough, Berkshire, SL1 4EE, United Kingdom
England and Wales
234 Bath Road, Slough, Berkshire, SL1 4EE, United Kingdom

Indivior US Holdings Inc.

RBP Global Holdings Limited

England & Wales

10710 Midlothian Turnpike, Suite 125, North Chesterfield VA 23235,
United States
234 Bath Road, Slough, Berkshire, SL1 4EE, United Kingdom

Operating company Ordinary shares 100
Common stock 100
Finance company
Holding and finance
US $1 shares 100
company
US $100 shares 100
Finance company
In liquidation
US $100 shares 100
Operating company Ordinary shares 100
Holding and
Ordinary shares 100
operating company
Operating company Ordinary shares 100
Operating company Common stock 100

In liquidation

Ordinary shares 100

Operating company Ordinary shares 100
Operating company Ordinary shares 100
Holding and finance
Ordinary shares 100
Company
Finance company
Dormant company

Membership interests
Ordinary shares 100

Operating company Ordinary shares 100
Operating company Ordinary shares 100

Operating company Common stock 100

Operating company Ordinary shares 100

Operating company Ordinary shares 100
Operating company Common stock 100

Operating company Common stock 100

Holding and
operating company
Finance company
Finance company
Finance company
Finance company
Finance company

Holding company

Holding and Finance
company

Ordinary shares 100

Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Company limited by
guarantee
Class A and Class B
common stock 100
Ordinary shares 100

* Indivior Finance LLC is registered in the US state of Delaware but also has a UK establishment.

** Indivior Jersey Finance LLC is registered in the US state of Delaware, but also has a principal place of business in Jersey.

With the exception of Indivior Global Holdings Limited, none of the above subsidiaries are held directly by Indivior PLC.

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3. Deferred tax assets

Deferred tax assets

2020
$m

2019
$m

Deferred tax assets relate to primarily to share awards of $5m (2019: $2m). Refer to Notes 14 and 27 of the Group financial
statements for further details on deferred tax assets and share awards, respectively.

4. Debtors due within one year
Debtor balances due within one year have been assessed for recoverability in accordance with IFRS 9 and no impairment was
identified and thus no provision was recorded. In 2020, there have been no credit losses (2019: nil).

Amounts owed by subsidiaries

Corporate tax receivable

Prepayments and other receivables

Debtors due within one year

Amounts owed by Group undertakings are unsecured and repayable on demand.

5. Financial instruments

Financial assets:

Financial assets that are debt instruments measured at amortized cost

Financial liabilities:

Financial liabilities that are measured at amortized cost

6. Creditors

Amounts falling due after one year:

Amounts owed to third parties

Amounts falling due within one year:

Amounts owed to subsidiaries

Amounts owed to third parties

Creditors

2020
$m

(51)

2020
$m

(40)

(1)

(10)

(51)

2019
$m

–

2019
$m

–

Amounts owed to Group undertakings are payable within one year with a maturity date of December 2021. Amounts owed
to third parties result from a settlement agreement between the Group and Reckitt Benckiser. Further information on the
settlement can be found in Note 21 of the Notes to the Group financial statements.

7. Share capital & share premium
Further information on the share capital of the Company can be found in Note 25 of the Notes to the Group financial
statements. Share premium represents additional paid in capital or paid in surplus (not distributable).

8. Share-based payments
The disclosure relating to the Company is detailed in Note 27 of the Notes to the Group financial statements.

9. Directors and employees
There were no employees of the Company during this or the previous financial year.

Details of the remuneration of key management personnel are given in Note 7 of the Notes to the Group financial statements.

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C O N T I N U E D

10. Auditors’ remuneration
The fee charged for the statutory audit of the Company was $0.04m (2019: $0.03m). Details for non-audit fees are given in
Note 6 of the Notes to the Group financial statements.

11. Related party transactions
The Company has taken advantage of the exemption within IAS 24 Related Party Disclosures not to disclose related party
transactions with wholly owned subsidiaries of the Group. There were no other related party transactions.

12. Post balance sheet events
As discussed in Note 21 of the Notes to the Group financial statements, the Group entered into a settlement agreement with
Reckitt Benckiser on January 25, 2021 to pay $50m.

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I N F O R M A T I O N F O R S H A R E H O L D E R S

INFORMATION FOR
SHAREHOLDERS

Useful contacts

Managing your shareholding

Registered address
Indivior PLC
234 Bath Road, Slough, Berks, SL1 4EE, UK

Registered in England and Wales
(company number: 09237894)

Website: www.indivior.com

Company Secretary
Kathryn Hudson
Email: cosec@indivior.com

Registrar
Computershare Investor Services PLC
The Pavilions, Bridgwater Road, Bristol, BS99 6ZZ, UK

Website: www.investorcentre.co.uk
Telephone: +44 (0) 370 707 1820

Key dates

First quarter financial
results announcement

Annual General Meeting

Half year financial
results announcement

Third quarter financial
results announcement

Note: dates may be subject to change

April 29, 2021

May 6, 2021

July 29, 2021

October 28, 2021

Annual General Meeting (‘AGM’)
The AGM will be held at 3.00pm on May 6, 2021 at the
offices of Indivior PLC, 234 Bath Road, Slough, Berkshire
SL1 4EE. The Notice of Meeting, together with
information regarding the business to be conducted
at the meeting and results of voting, will be available
on the Company’s website www.indivior.com.

Investor centre
Investor Centre is Computershare’s easy to use self-
service website (www.investorcentre.co.uk) through
which shareholders can do the following:

› amend personal details;

› view payment and tax information;

› register for eComms; and

› view share balances.

eComms
Our Registrar, Computershare Investor Services PLC, is
responsible for sending shareholder communications
and documents to you as well as handling any queries
you may have.

We encourage you to join the growing number of our
shareholders who receive shareholder communications
and documents electronically, in place of receiving
paper copies by mail. By registering for eComms you
will receive information by email quickly and efficiently
and help us to reduce both our environmental impact
and our costs.

Visit www.investorcentre.co.uk/eComms to register
for the eComms service, or alternatively contact
Computershare by using one of the methods outlined
on the ‘Contact Us’ page. By registering you will
receive an email to let you know when and how
to access shareholder documents online.

Shareholders who receive eComms are entitled to
request hard copy shareholder documents at any time
free of charge and can also revoke their consent to
receive eComms at any time.

Dividends
The Board have determined that it does not anticipate
the payment of dividends for the foreseeable future.
The Directors are of the view that the dividend policy
remains appropriate for the Group considering its
current financial position, strategy and prospects and
the continuing uncertainties faced. These uncertainties
include the ongoing legal matters and the risk that
SUBLOCADE and PERSERIS might not meet revenue
growth expectations due to the continued impact from
the COVID-19 pandemic.

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I N F O R M A T I O N F O R S H A R E H O L D E R S

C O N T I N U E D

Dealing in Indivior securities

Ordinary shares
The Company has ordinary shares admitted to the
Official List of the Financial Conduct Authority and
traded on the London Stock Exchange, a regulated
market. Live trading data for the Company’s ordinary
shares can be accessed through www.indivior.com/
share-price-center, or via the London Stock
Exchange’s website www.londonstockexchange.com.

Shareholders have the opportunity to buy or sell
Indivior PLC shares using a share dealing facility
operated by our Registrar, Computershare. Internet
and telephone dealing is available via the Investor
Centre (www.investorcentre.co.uk):

› Internet Dealing – the fee for this service will be

1% of the value of each sale or purchase of shares
(subject to a minimum of £30). Stamp duty of 0.5%
is also payable on all purchases. Before you trade
you will need to register for this service. This can be
done by going online at www.computershare.trade.

› Telephone Dealing – the fee for this service will be
1% of the value of the transaction plus £50. Stamp
duty of 0.5% is also payable on all purchases. To use
the service please call +44 (0)370 703 0084 and have
your Shareholder Reference Number to hand.

These services are available Monday to Friday from
8am to 4.30pm (UK) (except public holidays). Please
note that, due to the regulations in the UK,
Computershare is required to check that you have
read and accepted the Terms & Conditions before
being able to trade, which could delay your first
telephone trade. If you wish to trade quickly, we
suggest visiting the Registrar’s website and registering
online first at www.computershare.trade.

Boiler room scams
Shareholders are advised to be wary of any offers
of unsolicited investment advice or offers of free
company or research reports. These are typically from
overseas brokers, who target UK shareholders offering
to sell them what often turn out to be worthless or
high-risk shares in US or UK securities.

If you receive any unsolicited investment advice
you should firstly obtain the name of the person
and organization and check that they are properly
authorized by the FCA before getting involved, by
visiting www.fca.org.uk/register.

Using an unauthorized firm to buy or sell shares or
other securities will prohibit access to the Financial
Ombudsman Service or Financial Services
Compensation Scheme.

Shareholder analysis
Analysis of shareholder bands at December 31, 2020

Range

1 - 1,000

1,001 - 5,000

5,001 - 10,000

10,001 - 100,000

100,001 - 999,999,999

Total

Analysis of shareholder categories as at December 31, 2020

Individuals

Bank or nominees

Investment trust

Insurance company

Other company

Pension trust

Other corporate body

Total

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indivior.com

No. of
Shareholders

8,896

1,975

190

260

219

No. of Shares

77.09

17.11

1.65

2.25

1.90

2,814,869

3,993,784

1,352,464

8,320,816

717,153,578

11,540

100%

733,635,511

Holdings

10,338

1,079

No. of Shares

89.58

9,827,811

9.35

471,170,358

0.13

0.02

0.71

0.02

28,697

15,211

35,621,010

6,501

0.19

216,965,923

11,540

100%

733,635,511

0.38

0.55

0.19

1.13

97.75

100%

1.35

64.22

0.00

4.86

0.00

29.57

100%

Disclaimer
The purpose of this Annual Report and Accounts is
to provide information to members of the Company.
The Annual Report and Accounts have been prepared
for, and only for, the members of the Company, as a
body, and no other persons. The Company, its
Directors and employees, agents or advisors do not
accept or assume responsibility to any other person to
whom this document is shown or into whose hands it
may come and any such responsibility or liability is
expressly disclaimed.

The Annual Report and Accounts contains certain
forward-looking statements with respect to the
operations, performance and financial condition of
the Group. By their nature, these statements involve
uncertainty, since future events and circumstances
can cause results and developments to differ materially
from those anticipated. The forward-looking statements
reflect knowledge and information available at the
date of preparation of this Annual Report and
Accounts and the Company undertakes no obligation
to update these forward-looking statements. Nothing
in this Annual Report and Accounts should be
construed as a profit forecast.

American Depositary Receipts
In addition to having its securities listed on the
London Stock Exchange, Indivior sponsors a Level 1
American Depositary Receipt (ADR) program in the US.
The ADRs are publicly traded on a US over-the-
counter market, under symbol INVVY; the value of one
Indivior ADR corresponds to the value of five ordinary
shares of the Company. Please note that with effect
from Monday December 2, 2019 the ADR Program was
closed to new issuances.

For questions related to Indivior’s ADR Program,
please contact Equiniti Shareowner Services (see
details below) or visit the J.P. Morgan Depositary
Receipts Services website at www.adr.com.

JPMorgan Chase Bank, N.A.
383 Madison Avenue, Floor 11
New York, NY 10179, US

ADR Holders can contact:
Equiniti Shareowner Services
P.O. Box 64504, St. Paul, MN 55164-0854, US

Delivery of ADR Certificates and overnight mail:
Equinti Shareowner Services 1110
Centre Point Curve, Suite 101
Mendota Heights, MN 55120, US

General enquiries:
In the US: +1 (800) 990 1135
Hearing impaired: +1 (866) 700 1652
Outside the US: +1 (651) 453 2128
www.shareowneronline.com

ShareGift
We support ShareGift, a charity share donation
scheme (registered charity number: 1052686).

Through ShareGift, shareholders with only a very
small number of shares, which might be considered
uneconomic to sell, are able to donate them to charity.

Donated shares are aggregated and sold by ShareGift,
the proceeds being passed on to a wide range of UK
registered charities.

Please contact ShareGift with any queries or for
further information using the details below or visit
the ShareGift website at www.sharegift.org.

Email: help@sharegift.org
Telephone: +44 (0)20 7930 3737
Address: PO Box 72253, London, SW1P 9LQ.

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accordance with the FSC® (Forest Stewardship
Council®) and is recyclable and acid-free.

Pureprint Ltd is FSC certified and ISO 14001 certified
showing that it is committed to all round excellence
and improving environmental performance is an
important part of this strategy.

Pureprint Ltd aims to reduce at source the effect its
operations have on the environment and is committed
to continual improvement, prevention of pollution and
compliance with any legislation or industry standards.

Pureprint Ltd is a Carbon / Neutral® Printing Company.

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