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Core Insights - Viatris Inc. (VTRS) reported third-quarter 2025 adjusted earnings per share (EPS) of 67 cents, exceeding the Zacks Consensus Estimate of 63 cents, but down from 75 cents in the same quarter last year [1][7] - Total revenues for the quarter were $3.76 billion, a 2% decline year over year on an operational basis, yet surpassing the Zacks Consensus Estimate of $3.6 billion [1][7] Revenue Breakdown - Total sales reached $3.7 billion, down 2% year over year, with a 1% decline on a divestiture-adjusted operational basis [3] - Sales from Developed Markets were $2.25 billion, down 5% on a divestiture-adjusted operational basis, but slightly above the Zacks Consensus Estimate of $2.20 billion [3] - Emerging Markets generated $570.4 million in sales, reflecting a 7% increase on a divestiture-adjusted operational basis, beating the Zacks Consensus Estimate of $550 million [4] - Sales from Japan, Australia, and New Zealand (JANZ) totaled $306.3 million, down 9% on a divestiture-adjusted operational basis, yet exceeding the Zacks Consensus Estimate of $303 million [4] - Greater China sales amounted to $615.2 million, up 9% on a divestiture-adjusted operational basis, surpassing the Zacks Consensus Estimate of $579 million [4] Product Category Performance - Revenues from Brands increased by 3% to $2.4 billion, with a 1% rise on a divestiture-adjusted operational basis, driven by strong performance in Greater China and Emerging Markets [5] - Key branded products included Lipitor with sales of $396.1 million, Norvasc at $179.7 million, and EpiPen at $157.2 million, while Lyrica sales decreased to $126.5 million [8] Generics Performance - Generics revenue was $1.31 billion, down 5%, with a 6% decline on an operational change basis, primarily due to the impact from the Indore facility [9][10] - The decline in generics was offset by growth in complex products in North America and strong performance in key European markets [9] Financial Guidance and Shareholder Returns - Viatris raised its 2025 revenue guidance to a range of $13.9-$14.3 billion, up from the previous guidance of $13.5-$14 billion, and adjusted EPS guidance to $2.25-$2.35 from $2.16-$2.30 [12] - The company has returned over $920 million to shareholders year to date, including more than $500 million in share repurchases, and is on track to return over $1 billion in 2025 [11] Strategic Developments - Viatris acquired Aculys Pharma, gaining exclusive rights in Japan for pitolisant and plans to file two new drug applications in Japan [13] - The acquisition also includes rights for Spydia Nasal Spray, approved in Japan for treating status epilepticus [14]

Financial Data and Key Metrics Changes - Total revenues for Q3 2025 were $3.76 billion, down approximately 1% year-over-year. Excluding the impact from Indore, operational revenue growth was approximately 1% compared to the prior year [26][27] - Adjusted gross margin for the quarter was 56%, in line with expectations, but impacted by the Indore situation [28][29] - Free cash flow generated in the quarter was $658 million, with an adjusted figure of $728 million excluding transaction-related costs [29][30] Business Line Data and Key Metrics Changes - In developed markets, net sales decreased by 5%, primarily due to the Indore impact. However, the generics business grew by 5% year-over-year, driven by new product revenues in key markets like France and Italy [26][27] - The North America business saw a 12% decrease year-over-year, mainly due to the Indore impact and competition on certain generic products. Despite this, double-digit growth was observed in products like Breyna and Yupelri [27][28] - Emerging markets experienced a 7% increase in net sales, driven by established brands in key markets such as Turkey and Mexico [27][28] Market Data and Key Metrics Changes - In Japan, net sales decreased by approximately 9% due to government price regulations and changes in reimbursement policy affecting off-patent brands [27] - Greater China saw net sales exceed expectations with a growth of 9%, attributed to a diversified commercial model and increased demand for brands sensitive to patient choice [28] Company Strategy and Development Direction - The company is focusing on three key areas for sustained profitable growth: a global generics business evolving towards higher-margin complex products, an established brands business strengthened by adding brands, and an innovative brands business expanding through late-stage or in-market growth assets [6][7] - The strategic review aims to identify operating efficiencies across various functions, including sales, marketing, R&D, and supply chain, with an expectation of delivering meaningful net cost savings over a multi-year period [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fundamentals of the business, anticipating momentum to carry into 2026. They highlighted strong commercial execution and pipeline advancement as key drivers [5][11] - The company plans to provide a detailed outlook for 2026 in the first quarter of next year, considering factors such as timing of approvals and competitive dynamics [31][32] Other Important Information - The company has returned over $920 million to shareholders year-to-date, including $500 million in share repurchases, and is on track to return over $1 billion for the year [10][30] - The acquisition of Aculys Pharma in Japan adds innovative CNS assets to the portfolio, strengthening the company's presence in a strategically important market [10][11] Q&A Session Questions and Answers Question: Update on the Indore resolution situation - Management reported significant progress in remediation efforts at the Indore facility and a productive meeting with the FDA regarding reinspection timing, which remains at the agency's discretion [36][37] Question: Performance of EpiPen and Lipitor - The strength of the Lipitor brand outside the U.S., particularly in China, has driven performance. EpiPen has seen stable market share, with strong growth in Europe following a relaunch in Canada [38][39] Question: Feedback from the FDA on fast-acting meloxicam - The company is optimistic about obtaining opioid-sparing language in the product label, with a pre-NDA meeting scheduled with the FDA to discuss this [44][45] Question: Capital allocation priorities for 2026 - The company aims for a balanced approach in capital allocation, focusing on both returning capital to shareholders and pursuing business development opportunities [46][47] Question: Insights on the enterprise-wide strategic review - Management indicated that significant cost savings are expected from the review, with a focus on various operational areas. Specific details will be provided in Q1 [51][52]

Financial Data and Key Metrics Changes - Total revenues for Q3 2025 were $3.76 billion, down approximately 1% year-over-year, but operational revenue growth was approximately 1% when excluding the Indore impact [26][27] - Adjusted gross margin was 56%, in line with expectations, but impacted by the Indore situation [28][29] - Free cash flow generated was $658 million, with an adjusted figure of $728 million when excluding transaction-related costs [29][30] Business Line Data and Key Metrics Changes - In developed markets, net sales decreased by 5%, primarily due to the Indore impact, while the generics business grew by 5% year-over-year, driven by new product revenues in key markets like France and Italy [26][27] - The North America business saw a 12% decrease, attributed to the Indore impact and competition on certain generic products, although double-digit growth was noted in products like Breyna and Yupelri [27] - Emerging markets experienced a 7% increase in net sales, driven by established brands in Turkey, Mexico, and emerging Asia [28] Market Data and Key Metrics Changes - Net sales in Greater China exceeded expectations, growing by 9%, attributed to a diversified commercial model and increased demand for brands sensitive to patient choice [28] - Japan's net sales decreased by approximately 9% due to government price regulations and changes in reimbursement policy [28] Company Strategy and Development Direction - The company is focusing on three key areas: a global generics business evolving towards higher-margin complex products, an established brands business strengthened by adding brands, and an innovative brands business expanding through late-stage or in-market growth assets [6][7] - The strategic review aims to identify operating efficiencies across various functions, including sales, marketing, R&D, and supply chain, with expectations of delivering meaningful net cost savings over a multi-year period [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fundamentals of the business, anticipating momentum to carry into 2026, and highlighted the importance of capital return to shareholders through dividends and share repurchases [5][11] - The company plans to provide a detailed outlook for 2026 in the first quarter of next year, considering factors such as product approvals and competitive dynamics [31][32] Other Important Information - The company has returned over $920 million to shareholders year-to-date, including $500 million in share repurchases, and is on track to exceed $1 billion in capital returns for the year [10][30] - The acquisition of Aculis in Japan adds innovative CNS assets to the portfolio, enhancing the company's presence in a strategically important market [10][11] Q&A Session Summary Question: Update on the Indore resolution situation - Management reported significant progress in remediation efforts and a productive meeting with the FDA, with reinspection timing dependent on the agency [36] Question: Performance of EpiPen and Lipitor - EpiPen's market share remains stable at around 24-25%, with strong growth noted in Europe and a relaunch in Canada contributing to performance [38] Question: Feedback from the FDA on fast-acting meloxicam - The company is optimistic about obtaining opioid-sparing language in the product label and has a pre-NDA meeting scheduled with the FDA [44] Question: Capital allocation priorities for 2026 - The company aims for a balanced approach between returning capital to shareholders and pursuing business development opportunities [46][47] Question: Insights on the strategic review and potential savings - Management indicated that significant savings are expected from the strategic review, with a focus on various operational areas, but specific figures will be provided in Q1 [51][52] Question: Differentiation of presbyopia treatment - The company believes its presbyopia treatment offers a favorable benefit-risk profile compared to existing options, with a focus on safety and efficacy [76]

Financial Data and Key Metrics Changes - Total revenues for Q3 2025 were $3.76 billion, down approximately 1% year-over-year. Excluding the impact from Indore, operational revenue growth was approximately 1% compared to the prior year [25][26] - Adjusted gross margin for the quarter was 56%, in line with expectations, but impacted by the Indore situation [27] - Free cash flow generated in the quarter was $658 million, with an adjusted figure of $728 million excluding transaction-related costs [28] Business Line Data and Key Metrics Changes - In developed markets, net sales decreased by 5%, primarily due to the Indore impact. However, the generics business grew by 5% year-over-year, driven by new product revenues in key markets like France and Italy [25][26] - The North America business saw a 12% decrease year-over-year, mainly due to the Indore impact and competition on certain generic products. Despite this, double-digit growth was observed in products like Breyna and Yupelri [26] - Emerging markets experienced a 7% increase in net sales, driven by established brands in key markets such as Turkey and Mexico [26] Market Data and Key Metrics Changes - In Japan, net sales decreased by approximately 9% due to government price regulations and changes in reimbursement policy affecting off-patent brands [26] - Greater China saw net sales exceed expectations with a growth of 9%, attributed to a diversified commercial model and increased demand for brands sensitive to patient choice [27] Company Strategy and Development Direction - The company is focusing on three key areas for sustained growth: a global generics business evolving towards higher-margin complex products, an established brands business strengthened by adding new brands, and an innovative brands business expanding through late-stage or in-market growth assets [5][6] - The strategic review aims to identify operating efficiencies across various functions, including sales, marketing, R&D, and supply chain, with an expectation of delivering meaningful net cost savings over a multi-year period [4][5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fundamentals of the business, anticipating continued momentum into 2026. They are raising full-year guidance for total revenues, adjusted EBITDA, and adjusted EPS [7][30] - The company plans to provide a detailed outlook for 2026 in the first quarter of next year, considering factors such as product approvals, competitive dynamics, and potential loss of exclusivity for certain products [31][73] Other Important Information - The company has returned over $920 million to shareholders year-to-date, including $500 million in share repurchases, and is on track to return over $1 billion for the year [10][29] - The acquisition of Aculis in Japan adds innovative CNS assets to the portfolio, enhancing the company's presence in a strategically important market [10][29] Q&A Session Summary Question: Update on the Indore resolution situation - Management reported significant progress in remediation at the Indore facility and a productive meeting with the FDA regarding reinspection timing, which remains uncertain [35][36] Question: Performance of EpiPen and Lipitor - EpiPen's market share remains stable at around 24-25%, with strong growth in Europe and a relaunch in Canada contributing to performance [37][38] Question: Feedback from FDA on fast-acting meloxicam - The company is optimistic about obtaining opioid-sparing language in the product label and has a pre-NDA meeting scheduled with the FDA [42][43] Question: Capital allocation priorities for 2026 - The company aims for a balanced approach in capital allocation, focusing on both returning capital to shareholders and pursuing business development opportunities [45][46] Question: Insights on the enterprise-wide strategic review - Management indicated that significant cost savings are expected from the review, with more details to be provided in Q1 2026 [50][51] Question: Differentiation of presbyopia treatment - The company believes its presbyopia treatment offers a differentiated benefit-risk profile compared to existing modalities, focusing on safety and efficacy [79]

GAAP / Non-GAAP Reconciliations November 6, 2025 1 Operational change: Refers to constant currency percentage changes and is derived by translating amounts for the current period at prior year comparative period exchange rates and in doing so shows the percentage change from 2025 constant currency net sales, total revenues, adjusted EBITDA, and adjusted EPS to the corresponding amount in the prior year. This document contains proprietary information of Viatris Inc. Unauthorized use, duplication, disseminati ...

Core Insights - Viatris reported third-quarter results that exceeded profit and revenue estimates, attributed to robust demand for its branded drugs in China and emerging markets [1] Company Performance - The strong performance in the third quarter was primarily driven by the sales of branded drugs, indicating a positive market response in key regions [1] Market Dynamics - The demand for Viatris' products in China and emerging markets highlights the potential growth opportunities in these regions, suggesting a favorable environment for pharmaceutical companies [1]

Financial Performance - Total revenues for Q3 2025 were $3.76 billion, flat on a reported basis and down 1% on a divestiture-adjusted operational basis compared to Q3 2024[10]. - Adjusted EBITDA for Q3 2025 was $1.15 billion, down 10% on a reported basis compared to Q3 2024[13]. - U.S. GAAP net loss for Q3 2025 was $(128.2) million, compared to net earnings of $94.8 million in Q3 2024[13]. - Total revenues for 2025 are estimated to be between $13.9 billion and $14.3 billion, with a midpoint of $14.1 billion[20]. - Adjusted EBITDA for 2025 is projected to be between $4 billion and $4.2 billion, with a midpoint of $4.1 billion[20]. - Adjusted EPS is expected to range from $2.25 to $2.35, with a midpoint of $2.30[20]. - The nine months ended September 30, 2025, included a goodwill impairment charge of $2.9 billion, significantly impacting net earnings[49]. - The company reported a total net sales decrease of 6% for the nine months ended September 30, 2025, compared to the same period in 2024[54]. Shareholder Returns - The company returned over $920 million of capital to shareholders year-to-date, including $500 million in share repurchases[4]. - The company plans to return over $1 billion to shareholders through dividends and share repurchases in 2025[34]. Strategic Initiatives - The company is conducting an enterprise-wide strategic review to identify areas for potential operating efficiencies and cost savings[16]. - The company identified potential operating efficiencies in its commercial sales and marketing model, R&D, and supply chain[35]. - The company plans to hold an Investor Event in Q1 2026 to provide a strategic and financial outlook[35]. Product Development - The acquisition of Aculys Pharma included rights to pitolisant in Japan and Spydia® in certain Asia-Pacific markets[10]. - The New Drug Application for the low-dose estrogen weekly patch was submitted to the FDA, with anticipated approval by mid-2026[13]. - The company anticipates filing two Japanese New Drug Applications (JNDAs) for pitolisant in Q4 2025 for two indications[34]. - The company expects approval of its low-dose estrogen weekly patch by mid-2026[34]. Cash Flow and Operating Activities - U.S. GAAP net cash provided by operating activities for Q3 2025 was $744.9 million[13]. - Viatris updated its 2025 financial guidance, estimating U.S. GAAP net cash provided by operating activities to be between $2.2 billion and $2.45 billion, with a midpoint of approximately $2.325 billion[19]. - Free cash flow for 2025 is estimated to be between $1.85 billion and $2.15 billion, with a midpoint of $2 billion[20]. - Estimated U.S. GAAP Net Cash provided by Operating Activities for 2025 is projected to be between $2,200 million and $2,450 million[57]. - Free Cash Flow for 2025 is estimated to be between $1,850 million and $2,150 million after accounting for capital expenditures of $300 million to $350 million[57]. Sales Performance - The company generated approximately $100 million in new product revenues in Q3 2025[13]. - For the three months ended September 30, 2025, Lipitor® generated sales of $396.1 million, an increase of 5.3% compared to $375.6 million in the same period of 2024[44]. - EpiPen® Auto-Injectors sales rose to $157.2 million, up 27.6% from $123.2 million year-over-year[44]. - Greater China net sales increased by 10% to $615.2 million in Q3 2025, compared to $561.8 million in Q3 2024[52]. - Developed Markets net sales decreased by 2% to $2,255.6 million in Q3 2025, down from $2,298.7 million in Q3 2024[52]. Expenses - Research and development expenses increased to $250.4 million in Q3 2025 from $198.4 million in Q3 2024, reflecting a rise of approximately 26.2%[39]. - Selling, General and Administrative (SG&A) expenses for Q3 2025 were $886.6 million, down from $1,003.4 million in Q3 2024[54]. - U.S. GAAP total operating expenses for Q3 2025 were $1,192.7 million, a decrease of 3.3% from $1,233.3 million in Q3 2024[56]. - Adjusted total operating expenses for Q3 2025 were $1,058.2 million, slightly up from $1,052.8 million in Q3 2024[56]. - U.S. GAAP interest expense for Q3 2025 decreased to $119.6 million from $145.6 million in Q3 2024, representing a reduction of 17.8%[56]. Financial Guidance and Outlook - The company raised and narrowed its 2025 financial guidance ranges for total revenues, adjusted EBITDA, and adjusted EPS[4]. - Viatris did not provide forward-looking guidance for U.S. GAAP net (loss) earnings or diluted EPS due to uncertainties related to significant items[19]. - The company anticipates changes in product disclosures in future periods due to seasonality, competition, or new product launches[45].

Core Insights - Viatris Inc. reported strong third-quarter 2025 financial results, reflecting solid operational execution and strategic focus on growth initiatives [2][6][14] - The company updated its full-year financial guidance, raising and narrowing ranges for total revenues, adjusted EBITDA, and adjusted EPS, primarily due to foreign exchange impacts and share repurchases [2][18][19] Financial Performance - Total revenues for Q3 2025 were $3.76 billion, flat year-over-year, with a slight operational decline of 1% after adjusting for divestitures [4][14] - Net sales in developed markets decreased by 2%, while emerging markets saw a 7% increase, driven by strong performance in Greater China [4][14] - U.S. GAAP net loss for Q3 2025 was $(128.2) million, compared to net earnings of $94.8 million in Q3 2024, with diluted EPS at $(0.11) [4][14][37] Capital Allocation - The company returned over $920 million to shareholders year-to-date, including $500 million in share repurchases, and remains on track to exceed $1 billion in total capital returns in 2025 [2][12][14] - Free cash flow for Q3 2025 was $658 million, impacted by $70 million in transaction-related costs [5][14] Strategic Initiatives - Viatris is advancing its pipeline with key regulatory submissions, including a New Drug Application for a low-dose estrogen weekly patch and the acquisition of Aculys Pharma, enhancing its portfolio in Japan [2][14][11] - The company is conducting an enterprise-wide strategic review to identify operational efficiencies and reinvest savings into growth opportunities [14][16][17] Market Outlook - The company anticipates continued growth in emerging markets and specific developed markets, with a focus on launching new products and enhancing its operational capabilities [2][14][33] - Viatris plans to hold an Investor Event in Q1 2026 to provide updates on its strategic and financial outlook, including pipeline developments [17]

Core Viewpoint - Analysts forecast a decline in Viatris' quarterly earnings and revenues, with earnings expected at $0.63 per share, a 16% decrease year-over-year, and revenues projected at $3.65 billion, down 2.8% from the previous year [1]. Earnings Projections - The consensus EPS estimate has been revised 3.8% higher in the last 30 days, indicating a collective reevaluation by analysts [2]. - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3]. Revenue Estimates - Total net sales are expected to reach $3.64 billion, reflecting a 2.7% decrease from the year-ago quarter [5]. - Net sales in developed markets are projected at $2.20 billion, down 4.1% year-over-year [5]. - Emerging markets are expected to see net sales of $549.78 million, indicating a 3.1% increase compared to the previous year [5]. Specific Market Insights - Net sales for JANZ are anticipated at $302.56 million, a decline of 12.1% year-over-year [6]. - Greater China net sales are estimated at $578.59 million, reflecting a 3% increase [6]. - Other revenues are projected at $11.40 million, down 13.6% from the prior year [6]. Emerging Markets Breakdown - Net sales for emerging markets in generics are expected to reach $140.08 million, a 2% increase [7]. - Brands in emerging markets are projected at $409.75 million, indicating a 3.5% increase [7]. JANZ Market Breakdown - Net sales for JANZ generics are expected at $148.58 million, down 4.2% year-over-year [8]. - JANZ brands are projected at $148.32 million, reflecting a significant decline of 21.7% [8]. - Developed markets brands are expected to reach $1.22 billion, showing a slight decrease of 0.1% [8]. Overall Market Performance - Developed markets generics are projected at $1.02 billion, indicating a 5.5% decline year-over-year [9]. - Viatris shares have increased by 3.5% over the past month, outperforming the S&P 500 composite's 1% increase [9].