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On Wednesday, an analyst from Craig-Hallum adjusted the price target for Indivior (NASDAQ: INDV) shares, a pharmaceutical company, to $24 from the previous $37. Despite the change, the buy rating on the stock was maintained. This decision follows Indivior's recent business update, which the analyst described as "messy," citing the challenges posed by Medicaid and new competition in the market.
Indivior has faced headwinds due to competition from Brixadi, a new player in the market for Sublocade, Indivior's product. Brixadi has reportedly captured 22% of new patient starts, affecting Sublocade's performance. However, the analyst pointed out that the impact of competition was anticipated and is not the sole reason for the revised guidance on Sublocade's sales.
The company's management has indicated that despite the challenges, Sublocade is still expected to grow its net revenue 25% year over year. The analyst reaffirmed the belief that the market can support multiple players, noting that long-acting injectables (LAIs) have only penetrated 6% of the potential market.
Indivior's stock is currently trading at what the analyst considers a low multiple of 4.4 times its 2024 adjusted operating income. This valuation suggests that investors may perceive the company as facing significant risk.
However, the analyst disagrees with this sentiment, maintaining that the reduced price target still offers attractive upside potential and presents a positive risk-reward scenario for investors.
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