Viatris(US:VTRS)2025-02-27 21:07Company Overview - Viatris supplies high-quality medicines to approximately 1 billion patients globally each year[334]. - The company operates in over 165 countries with approximately 32,000 employees and has 26 manufacturing and packaging sites worldwide[335]. - Viatris has a diversified portfolio consisting of generics, iconic brands, and innovative medicines[335]. - The company has a unique global supply chain designed to reach more people when and where they need them, addressing global healthcare needs[521]. Financial Performance - For the year ended December 31, 2024, total revenues were $14.74 billion, a decrease of $687.6 million, or 4%, compared to $15.43 billion in 2023[354]. - Net sales for 2024 were $14.69 billion, down $695.6 million, or 5%, from $15.39 billion in the prior year, with a significant impact from divestitures[357]. - Gross profit for 2024 was $5.62 billion, with gross margins at 38%, down from $6.44 billion and 42% in 2023, primarily due to divestitures and impairment charges[366]. - The company reported a significant impairment charge of $184.6 million related to its equity investment in Mapi, impacting overall financial performance[375]. - U.S. GAAP net loss for 2024 was $634.2 million, compared to a net income of $54.7 million in 2023[391]. - The comprehensive loss for 2024 was $1,099.7 million, compared to comprehensive earnings of $68.5 million in 2023 and $1,061.7 million in 2022[515]. - The total equity at December 31, 2024, was $18,635.5 million, down from $20,467.4 million at the end of 2023[518]. Cash Flow and Liquidity - Net cash provided by operating activities decreased by $597.1 million to $2.30 billion in 2024, down from $2.90 billion in 2023[398]. - Net cash from investing activities increased by $2.67 billion to $1.80 billion in 2024, compared to a net cash used of $864.5 million in 2023[400]. - Net cash used in financing activities rose by $2.03 billion to $4.33 billion in 2024, compared to $2.30 billion in 2023[403]. - Cash and cash equivalents totaled $734.8 million at December 31, 2024[408]. - The company plans to continue evaluating potential acquisitions and divestitures as part of its growth strategy, which may impact future liquidity[414]. Research and Development - Research and Development (R&D) expense for 2024 was $808.7 million, expected to increase by over $100 million in 2025 due to ongoing development programs[368]. - The company expects to incur development costs for the acquired programs through 2026, with risks associated with clinical trials and regulatory approvals[351]. Legal and Regulatory Matters - The FDA issued a warning letter and import alert for the Indore manufacturing facility, affecting 11 products, with an estimated negative impact of $500 million on 2025 total revenues[346][349]. - The company has accrued approximately $384 million for legal contingencies as of December 31, 2024[428]. - The company is involved in various legal proceedings, with potential liabilities that could materially affect its financial condition and results of operations[469]. Impairments and Charges - The company recorded a goodwill impairment charge of $321.0 million during Q2 2024 related to the JANZ reporting unit, primarily due to a 1.0% increase in the discount rate[493]. - Total litigation settlements and other contingencies, net for the year ended December 31, 2024, amounted to $350.9 million, a significant increase from $111.6 million in 2023, representing a 214% increase[371]. Market and Sales Trends - The company anticipates a negative impact on sales and gross profit due to government-imposed price reductions in certain markets[342]. - Net sales in Developed Markets decreased by $322.5 million, or 3%, while Emerging Markets saw a decrease of $300.9 million, or 12%[361][364]. - On a constant currency basis, net sales from the remaining business increased by approximately $276.1 million, or 2%, driven by new product sales of approximately $582.4 million[358]. Shareholder Returns - The company declared cash dividends of $0.48 per common share for both 2023 and 2024, totaling $586.7 million and $586.7 million respectively[518]. - The company repurchased 19,244,142 shares of common stock in 2024, costing $252.5 million[518]. Future Outlook - The company expects to continue focusing on new product development and market expansion as part of its strategic initiatives moving forward[368]. - The company plans to continue exploring various strategies to unlock the value of its global platform to create shareholder value[414].