Financial Data and Key Metrics Changes - Total revenues for Q2 2025 were $3,580 million, down approximately 2% year-over-year, but operational revenue growth was approximately 3% when excluding the impact from Indoor [27][28] - Adjusted gross margin for the quarter was 56.6%, consistent with expectations, and operating expenses decreased due to planned cost-saving initiatives [31][32] - Free cash flow generated in the quarter was $167 million, with an adjusted figure of $241 million when excluding transaction-related costs [32] Business Line Data and Key Metrics Changes - In developed markets, brand performance helped offset the Indoor impact, with European business growing approximately 2% and brands portfolio growing approximately 3% [28] - North American business decreased 11% year-over-year, primarily due to Indoor impact and competition, while Emerging Markets saw a 1% increase driven by Turkey and Emerging Asia [29] - Greater China net sales grew 9%, benefiting from proactive patient choice and customer purchasing patterns [30] Market Data and Key Metrics Changes - The company serves approximately one billion patients worldwide each year, with a global supply chain supporting patient access [13] - The U.S. market is expected to see continued growth in generics, although moving additional manufacturing of non-complex generics to the U.S. is deemed difficult in the short term [14][15] - The company anticipates no material impact from proposed U.S. tariffs on its 2025 financial picture, while monitoring developments closely [12][35] Company Strategy and Development Direction - The company is focused on driving strong commercial execution, advancing its late-stage pipeline, and exploring strategic business development opportunities [6][11] - The enterprise-wide strategic review aims to position the company for sustainable growth in 2026 and beyond, with updates expected in the Q3 earnings call [11][54] - The company is committed to returning capital to shareholders through dividends and share buybacks, having returned over $630 million year-to-date [10][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term trajectory of the company, citing a strong business foundation and a maturing late-stage pipeline [15][16] - The company reiterated its 2025 financial guidance, expecting to be in the top half of the range for revenue and adjusted EPS [15][34] - Management acknowledged the challenges posed by tariffs but does not anticipate a material financial impact in 2025 [48][35] Other Important Information - Five of the six anticipated Phase III readouts have shown positive results, reinforcing the strength of the company's pipeline [7][18] - The company is making progress on remediation efforts at its Indoor facility, with plans to discuss reinspection with the FDA [11][69] - The company has received FDA approval for dorunavir tablets manufactured at its Nashik facility, indicating positive operational progress [12][70] Q&A Session Summary Question: Capital allocation priorities and growth expectations - Management emphasized a balanced approach to capital allocation, focusing on returning capital to shareholders while building a growth portfolio through strategic business development [40][41] Question: Impact of tariffs on revenue from India versus EU - Management stated that it is monitoring the situation closely and does not anticipate a material financial impact from tariffs in 2025 [48] Question: Performance of the China business - The China business saw a 9% operational growth, with expectations for moderate growth in the future, driven by strong brand equity and proactive patient demand [55][56] Question: Contribution from new products in developed markets - Management expects to generate approximately $450 million to $550 million from new product revenue, with a back-half weighting based on approval and launch timing [61][62] Question: Commercial strategy for meloxicam - The company is in the midst of launch planning for meloxicam, focusing on market research and positioning, with expectations for significant opportunity in the acute pain market [66][67]

Summary of Viatris (VTRS) FY Conference Call - June 09, 2025 Company Overview - **Company**: Viatris (VTRS) - **Key Executives Present**: Scott Smith (CEO), Doretta Mistras (CFO), Corinne Lagoff (CCO), Philippe Martin (Head of R&D) [2][3] Core Industry Insights - **Industry**: Pharmaceutical and Biotechnology - **Market Dynamics**: Viatris operates in a competitive landscape with a focus on both branded (60%) and generic (40%) products, with a significant portion of branded products being past loss of exclusivity (LOE) [11][12] Key Points and Arguments 1. **Base Business Performance**: The base business is described as strong, with eight to nine consecutive quarters of operational revenue growth, despite some manufacturing issues at the Indoor plant [4][6] 2. **Capital Allocation Strategy**: Viatris has been actively buying back shares, totaling over $300 million, while also focusing on dividends and business development [5][63] 3. **Pipeline Development**: The company has a robust pipeline with 11 programs in Phase III, all showing positive results, including products for anxiety, pain, and eye care [6][10] 4. **Strategic Review**: An enterprise-wide strategic review is underway to optimize operations and ensure the right personnel are in place for future growth [7][9] 5. **FDA Resubmission**: The Indoor facility is on track for FDA re-inspection mid-year, with remediation efforts progressing ahead of schedule [8][32] 6. **Tariff Concerns**: Potential pharmaceutical tariffs could impact the generic market significantly, with 90% of dispensed products being generics, yet only accounting for 1% of total healthcare costs [19][22] 7. **Impact of Legislation**: The company has limited exposure to recent legislative changes, as 99% of its portfolio has gone through LOE, indicating minimal current impact but potential future considerations [30][31] 8. **Acute Pain Market Opportunity**: Viatris is developing a fast-acting meloxicam for acute pain, targeting a market of 70-80 million cases annually, with a significant unmet need for non-opioid treatments [43][44] 9. **Ocular Portfolio**: The company is expanding its eye care division, with recent positive Phase III data for a product addressing dim light disturbances post-surgery, indicating a potential first FDA-approved treatment for this condition [72][74] Additional Important Insights - **Market Size**: The acute pain market in the U.S. is valued at approximately $44 billion, highlighting the significant revenue potential for Viatris's new product [46] - **Patient Education**: For the emergency therapeutic option for heart attacks, Viatris is focusing on patient education to ensure timely self-administration of the treatment [60][61] - **Future Growth**: The company aims for sustainable revenue and EBITDA growth in 2026 and beyond, with a focus on innovative products and capital allocation strategies [10][12] This summary encapsulates the key themes and insights from the Viatris FY Conference Call, providing a comprehensive overview of the company's current status, strategic direction, and market opportunities.

Financial Data and Key Metrics Changes - Total revenues for Q1 2025 were $3,300,000,000, down 2% on a divestiture adjusted operational basis, primarily due to the impact of indoor [4][28] - The company returned approximately $450,000,000 in capital to shareholders, with about $300,000,000 through share repurchases and $143,000,000 from dividends [4][8] - Adjusted gross margin was approximately 56%, in line with expectations, but declined compared to the prior year due to price regulations and increased product supply costs [31][32] Business Line Data and Key Metrics Changes - Brand revenues grew by 3%, driven by the expansion of the cardiovascular portfolio in emerging markets and growth in Greater China [28] - The generics business saw a decline, particularly in North America, which decreased by 8% due to indoor impact and competition [29] - Emerging markets experienced a 5% decrease in net sales, primarily due to indoor impact and customer buying patterns affecting the ARV generics business [30] Market Data and Key Metrics Changes - European business grew approximately 1%, with brand portfolio growth led by Creon, Brufen, and the thrombosis portfolio [29] - Greater China net sales grew by 4%, attributed to a diversified model across e-commerce, retail, and private hospitals [30] - The North American market faced challenges, with a significant decline in generics, but new product revenues partially offset this [29] Company Strategy and Development Direction - The company is focused on executing strategic priorities, including significant pipeline progress and remediation of the indoor facility [4][9] - A strategic review is underway to streamline costs and prepare for sustainable revenue and earnings growth [9] - The company aims to prioritize capital return to shareholders while navigating market and policy unpredictability [8][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fundamentals of the business despite challenges from tariffs and supply chain disruptions [10][37] - The company reaffirmed its outlook for the year, expecting total revenues to be higher in the second half, driven by new product launches and seasonal trends [36][37] - Management highlighted the importance of patient access and ongoing discussions with the administration regarding the generic industry's role [46] Other Important Information - A non-cash goodwill impairment charge of $2,900,000,000 was recorded due to a decline in share price and increased business risk [34] - The company manufactured approximately 8,500,000,000 doses in the U.S. last year, with over 50% of U.S. revenue sourced from domestic manufacturing [12][83] - The company is exploring ways to optimize its global network and increase manufacturing capacity in the U.S. [13] Q&A Session Summary Question: Can you help us frame out how you're thinking about the peak sales opportunity for meloxicam? - Management indicated that the data from Phase three studies is compelling and positions the drug well for a major role in the acute pain market [40][56] Question: How should we think about the company's ability to mitigate the impact of tariffs? - Management is focused on increasing U.S. production and adjusting inventory levels while exploring long-term strategies to mitigate tariff impacts [44][46] Question: Can you elaborate on the volume versus price drivers for key brands in developed markets? - Management noted strong momentum in brand growth in China and Europe, while the generics portfolio was most impacted by indoor [75] Question: What is the expected timing and contribution cadence within the second half from key launches? - Management expects a second half ramp in revenue, with new product launches scheduled for approval in that period [78]

Financial Data and Key Metrics Changes - In Q1 2025, the company reported total revenues of $3,300,000,000, a decrease of 2% on a divestiture adjusted operational basis, primarily due to the impact of indoor [4][26] - The adjusted gross margin was approximately 56%, in line with expectations, but declined compared to the prior year due to price regulations and increased product supply costs [30][31] - A non-cash goodwill impairment charge of $2,900,000,000 was recorded due to a decline in share price and increased business risk [31] Business Line Data and Key Metrics Changes - Brand revenues grew by 3%, driven by the expansion of the cardiovascular portfolio in emerging markets and growth in Greater China and developed markets [27] - The generics business experienced an 8% decline in North America, primarily due to the indoor impact and competition on select products [28] - The European business showed consistent growth of approximately 1%, with the brand portfolio growing by 2% [28] Market Data and Key Metrics Changes - In Greater China, net sales grew by 4%, attributed to a diversified model across e-commerce, retail, and private hospitals [29] - Emerging markets saw a decrease of approximately 5% in net sales, primarily driven by the indoor impact and customer buying patterns affecting the ARV generics business [29] - The company's products are commercialized in 165 countries, with 36 manufacturing, R&D, and packaging sites globally [9][10] Company Strategy and Development Direction - The company is focused on returning capital to shareholders, having returned approximately $450,000,000 in capital, including $300,000,000 through share repurchases [4][7] - A strategic review is underway to streamline costs and prepare for sustainable revenue and earnings growth [8] - The company is committed to increasing U.S. manufacturing capacity and optimizing its global supply chain in response to potential tariffs [10][12] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed the outlook for the year, expecting total revenues to be higher in the second half, approximately 52% of the full-year outlook [34][35] - The company is optimistic about its ability to navigate through periods of volatility and uncertainty in the industry [87] - Management expressed concerns about potential tariffs impacting financial performance and patient access to medications [9][44] Other Important Information - The company has made significant progress in its pipeline, with three positive Phase three data readouts and plans for regulatory submissions in 2025 [5][6] - The company is on track to deliver $450,000,000 to $550,000,000 of new product revenue this year [25] - A new Chief Strategy Officer has joined the executive leadership team, bringing extensive experience in the biotech and pharmaceutical industries [13] Q&A Session Summary Question: Can you help frame the peak sales opportunity for meloxicam and how much existing infrastructure can be leveraged? - Management indicated that the market demand for safer alternatives to opioids is significant, with over 70 million acute pain cases annually in the U.S. [50][51] Question: How should the company mitigate the impact of tariffs on U.S. sales? - Management is exploring various mitigation strategies, including increasing U.S. production and adjusting inventory levels [41][44] Question: Can you elaborate on the brand resilience and generic weakness observed in Q1? - Management noted that brand growth was driven by strong performance in China and Europe, while generics were impacted by the indoor situation [72][73] Question: What is the expected timing and contribution of key launches in the second half? - Management expects new product launches to be slightly more second half weighted, with several key products scheduled for approval [75][76]