Core Insights - Viatris is viewed as three distinct businesses: a global generics footprint, established products from the Upjohn acquisition, and a growing innovative segment [2] Group 1 - The global generics business includes products from Mylan and features iconic brands such as Lipitor, Norvasc, Xanax, Viagra, and Celebrex [2] - The company faced self-inflicted challenges earlier in the year, particularly with the Indore situation [3]

Summary of Viatris Conference Call Company Overview - **Company**: Viatris - **Business Segments**: - Global generics footprint (originating from Mylan) - Established products (notable brands include Lipitor, Norvasc, Xanax, Viagra, Celebrex from Upjohn acquisition) - Growing innovative segment [2][3] Core Points and Arguments - **Strategic Review**: Viatris is undergoing an enterprise-wide strategic review to assess its structure and cost efficiency, aiming for sustainable revenue and earnings growth beyond 2026 [4][20] - **Financial Performance**: - The company has returned over $1 billion to shareholders through dividends and share repurchases this year [3] - Anticipates approximately $500 million in new revenues annually from the base business, with a net growth of around $200 million after accounting for losses and price declines [8] - Internal expectations for revenue growth are higher than market estimates, with a goal to achieve continuous earnings growth over the next three to five years [7][26] - **Operating Leverage**: The company aims to improve operating leverage, targeting a growth profile shift from 1% to 3-5% [9][10] Pipeline and Product Development - **Innovative Assets**: Viatris is focusing on developing innovative products, including fast-acting meloxicam, which shows a faster onset of action compared to competitors [38][39] - **CNS Assets in Japan**: The acquisition of Aculys added CNS assets to Viatris' portfolio, with a strategic focus on growing revenues in the challenging Japanese market [32][34] - **Upcoming Launches**: The company is preparing for the launch of several products, including meloxicam and antiplatelet drugs, with significant market potential [46][63] Market Dynamics and Challenges - **External Challenges**: The company has faced external challenges such as tariffs, policy changes, and FDA regulations, which have impacted operations [2][3] - **Cost Structure Review**: Viatris is reviewing its cost structure post-merger and divestitures, aiming for significant cost savings while ensuring that these savings are sustainable [20][21] Investment and Capital Allocation - **Capital Deployment**: Viatris generates approximately $2 billion in free cash flow annually, with plans to allocate capital evenly between shareholder returns and business development [28][29] - **Focus on High-Margin Assets**: The company is looking to acquire high-margin, revenue-generating assets, particularly in the U.S. and Japan [35] Other Important Insights - **Market Positioning**: Viatris is positioning its innovative products as differentiated solutions in the market, with a focus on addressing unmet medical needs [39][63] - **Long-Term Vision**: The management emphasizes a long-term vision for growth, with a commitment to maintaining a strong base business while investing in innovation [6][26] This summary encapsulates the key points discussed during the Viatris conference call, highlighting the company's strategic direction, financial performance, product pipeline, and market challenges.

Core Insights - Pfizer is making significant moves in the weight management market, which is expected to grow rapidly in the next decade, potentially rewarding leading companies handsomely [1][2] - The acquisition of Metsera for $7 billion, with potential milestone payments bringing the total to $10 billion, positions Pfizer as a strong contender in the weight management space [3][4] - Pfizer's CEO, Albert Bourla, expressed confidence in the company's ability to succeed in the obesity market, drawing parallels to past successes with drugs like Lipitor and COVID products [7] Company Developments - Pfizer's acquisition of Metsera indicates its commitment to entering the weight management market, especially after competing with Novo Nordisk for the deal [3][4] - Metsera's leading candidate, MET-097i, has shown promising results in clinical trials, indicating potential for substantial weight loss and good tolerability [6] - Pfizer plans to launch its first anti-obesity drug by the end of 2028, although Eli Lilly currently holds a significant lead with existing products on the market [8] Competitive Landscape - Eli Lilly is currently the leader in the weight management market with its product Zepbound, which has seen exceptional sales growth [8][11] - Eli Lilly has several promising candidates in its pipeline, including orforglipron and retatrutide, which are expected to enhance its competitive position [9][10][11] - Despite Pfizer's efforts, Eli Lilly's established presence and upcoming product launches may allow it to maintain its leadership in the anti-obesity market for the foreseeable future [11] Financial Outlook - Pfizer's recent financial performance has been underwhelming, with concerns about the impending patent cliff for its top growth driver, Eliquis [13] - However, the acquisition of Metsera and the potential success in the weight management sector could help Pfizer rebound [14] - The company also has a strong dividend program, which may attract investors despite current challenges [15]

Group 1: Acquisition and Market Positioning - Pfizer Inc. has secured a $10 billion deal to acquire obesity-drug developer Metsera, positioning itself as a "formidable competitor" in the weight-loss drug market [1][5] - The acquisition allows Pfizer to gain rights to new weight-loss treatments that are still in trials, entering a competitive space dominated by GLP-1 drugs like Eli Lilly's Zepbound and Novo Nordisk's Wegovy [1][5] - Pfizer expects to launch its first weight-loss treatment by the end of 2028, targeting a market estimated at approximately $150 to $200 billion [2] Group 2: Strategic Initiatives and Drug Pricing - Pfizer is aligning with the Trump administration's initiative to lower prescription drug prices through the forthcoming TrumpRx platform, which aims to provide Americans with direct access to medications [6][8] - The company plans to integrate its drugs with the TrumpRx initiative to enhance access to medications, potentially increasing patient adherence to prescriptions [8][9] - A complete website featuring over 40 products will be ready by December to support the launch of TrumpRx, facilitating logistics for patients [9]

Core Insights - Pfizer has successfully acquired Metsera for $10 billion, outbidding Novo Nordisk, marking a strategic move into the obesity treatment market [4][6][5] Acquisition Details - The acquisition concluded a competitive bidding process, with Pfizer's offer being accepted due to regulatory concerns surrounding Novo Nordisk's bid [5][9] - Pfizer's offer includes $65.60 per share in cash and a contingent value right of up to $20.65 per share based on future milestones [8] Market Context - The obesity drug market is rapidly growing, with an expected global market value of $150 billion by the early 2030s, making it a lucrative area for pharmaceutical companies [11] - Novo Nordisk withdrew from the bidding due to high legal and regulatory risks associated with US antitrust investigations [9][10] Strategic Implications - The acquisition positions Pfizer to compete with market leaders Novo Nordisk and Eli Lilly, which currently dominate the obesity treatment sector [6][11] - Analysts predict that Pfizer needs to generate over $11 billion in sales from Metsera's assets by 2040 to justify the acquisition cost [13] Future Prospects - Metsera's experimental drugs, including MET-097i and MET-233i, could potentially reach combined peak yearly sales of $5 billion if they receive regulatory approval [16] - The deal reflects Pfizer's ambition to diversify its portfolio beyond COVID-19 related products and establish a stronger presence in the obesity treatment market [7][13]

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]

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 ...

Financial Data and Key Metrics Changes - For Q3 2025, the company recorded revenues of $16.7 billion, a decrease of 7% operationally compared to the same period last year, primarily driven by a decline in COVID products [23] - Reported diluted earnings per share (EPS) was $0.62, while adjusted diluted EPS was $0.87, exceeding expectations due to strong gross margin and cost management performance [24] - Adjusted gross margin for the quarter was approximately 76%, reflecting product mix and strong cost management [25] Business Line Data and Key Metrics Changes - Non-COVID product performance was solid, growing 4% operationally compared to the same period last year, with significant contributions from Eliquis, the Vyndaqel family, and Nurtec [23][24] - The Vyndaqel family achieved 7% year-over-year global operational growth, while Padcev saw 13% year-over-year global operational growth [14][15] - The company’s recently launched and acquired products generated $7.3 billion in revenue, growing approximately 9% operationally year-over-year [24] Market Data and Key Metrics Changes - In international markets, the Vyndaqel family achieved 40% growth in total patients on treatment, while Nurtec led the oral CGRP class in primary care penetration in the U.S. [15] - The Prevnar family of vaccines saw 17% year-over-year international operational growth, with strong performance in pediatric pneumococcal vaccination [16] - The company expects the lung cancer market to reach approximately $70 billion by 2023, with significant growth potential in its lung cancer portfolio [12] Company Strategy and Development Direction - The company is focused on strategic investments in innovation and growth, highlighted by the proposed acquisition of MedSera and the licensing agreement with 3SBio [6][8] - The company aims to enhance its R&D pipeline and commercial capabilities, particularly in the high-growth therapeutic area of obesity [8] - The recent agreement with the U.S. government aims to lower prescription drug costs while allowing the company to invest in U.S. manufacturing [7][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver value for patients and shareholders, despite challenges in the COVID product line [5] - The company raised its adjusted diluted EPS guidance for the full year 2025, reflecting strong performance and improved cost structure [33] - Management noted that the agreement with the U.S. government will not impact 2025 guidance but may affect the 2026 financial outlook [32] Other Important Information - The company expects to achieve $1.5 billion in savings from its manufacturing optimization program by the end of 2027 [26] - The gross leverage at the end of Q3 was approximately 2.7 times, with expectations to return to target levels post-MedSera acquisition [31] - The company plans to provide guidance for 2026 by the end of the year [35] Q&A Session Summary Question: Insights on Vyndamax performance amid competition - Management acknowledged new competition but emphasized Vyndamax's unique benefits and strong market access, noting that volume growth was offset by gross-to-net headwinds [41][42] Question: Legal process regarding MedSera acquisition - Management stated that it is difficult to comment on the timing of legal proceedings but reiterated their belief that Novo's acquisition attempt is anti-competitive [48][50] Question: Plans if MedSera acquisition does not proceed - Management confirmed ongoing efforts to identify potential acquisition candidates across therapeutic areas, regardless of the MedSera outcome [52][54] Question: Dynamics of Paxlovid pricing - Management clarified that there were no significant changes in Paxlovid pricing, attributing variations to channel mix rather than material price changes [74] Question: Guidance on COVID-19 sales for the year - Management indicated that achieving the previously stated $9 billion in COVID sales is uncertain, depending on potential future COVID waves [87][90] Question: Pricing strategy for GLP-1 medicines - Management acknowledged that competition is driving prices down and that their calculations for the MedSera acquisition took this into account [94] Question: Delay in initiation of pivotal trial for pneumococcal vaccine - Management explained that the delay is due to ongoing discussions with the FDA regarding study designs and endpoints, with plans to align pediatric and adult studies [100]

Financial Data and Key Metrics Changes - For Q3 2025, the company recorded revenues of $16.7 billion, a decrease of 7% operationally compared to the same period last year, primarily driven by a decline in COVID products, particularly Paxlovid [20][21] - Reported diluted earnings per share (EPS) was $0.62, while adjusted diluted EPS was $0.87, exceeding expectations due to strong gross margin and cost management performance [21][24] - Adjusted gross margin for Q3 was approximately 76%, reflecting product mix and strong cost management within the manufacturing footprint [22] Business Line Data and Key Metrics Changes - The non-COVID product performance was solid, growing 4% operationally compared to the same period last year, with strong contributions from Eliquis, the Vyndaqel family, and Nurtec [20][21] - The Vyndaqel family achieved 7% year-over-year global operational growth, while Padcev saw 13% year-over-year global operational growth [12][13] - The vaccines portfolio, particularly the Prevnar family, achieved 17% year-over-year international operational growth [15] Market Data and Key Metrics Changes - In international markets, the company achieved 40% growth in total patients on treatment for the Vyndaqel family [12] - The U.S. market saw double-digit demand growth for the Vyndaqel family, reflecting strong diagnostic efforts and broad access [12][13] - The company experienced a year-over-year decline in the U.S. for Prevnar 20, attributed to delayed government bulk orders [15][16] Company Strategy and Development Direction - The company is focused on strategic investments in future innovation and growth, highlighted by the proposed acquisition of MedSera and the licensing agreement with 3SBio [4][5] - The company aims to enhance its R&D pipeline and commercial capabilities, particularly in the cardiometabolic area and oncology [6][8] - The recent agreement with the U.S. government is expected to lower prescription drug costs and provide clarity for future investments [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position to deliver value for patients and shareholders, despite challenges in the COVID product line [4][18] - The company raised its adjusted diluted EPS guidance for the full year 2025, reflecting strong performance and improved cost structure [30] - Management noted that the agreement with the U.S. government will not impact 2025 guidance but may have a diluted effect on 2026 financial outlook [29] Other Important Information - The company expects to achieve $1.5 billion in savings from the manufacturing optimization program by the end of 2027 [23][25] - The MedSera acquisition is expected to be funded through a mix of available cash and debt, with anticipated dilution to adjusted EPS in 2026 [26][27] - The company plans to continue investing in R&D and business development to enhance its product portfolio and pipeline [30] Q&A Session Summary Question: Comments on Vyndamax performance amid competition - Management acknowledged new competition but emphasized Vyndamax's unique benefits and strong market share, despite some gross-to-net headwinds impacting net sales [32][35] Question: Legal process regarding MedSera acquisition - Management stated that it is difficult to comment on the timing of legal proceedings but reiterated the belief that Novo's acquisition attempt is anti-competitive [38][39] Question: Plans if MedSera acquisition does not proceed - Management indicated that the company has significant resources and will continue to pursue business development opportunities across therapeutic areas [39][40] Question: Impact of manufacturing investments under the MFN agreement - Management highlighted the importance of both manufacturing investments and operational cost efficiencies, indicating that both will be prioritized [42][43] Question: Guidance for total COVID-19 sales - Management acknowledged the uncertainty in COVID-19 sales but reiterated confidence in achieving the overall revenue guidance range [49] Question: Pricing dynamics for GLP-1 medications - Management acknowledged that competition may drive prices down but indicated that their calculations for the MedSera acquisition took potential pricing declines into account [51] Question: Delay in initiation of pivotal trial for pneumococcal program - Management explained that the timing of the trial initiation is contingent on FDA alignment and that they are coordinating pediatric and adult studies [52][53]

Acquisition of Metsera - Pfizer plans to acquire Metsera, Inc, with the transaction expected to close in 4Q 2025 and drive growth from the late 2020s and beyond[16] - The acquisition will be funded primarily with available cash and proceeds from new debt and is not expected to impact Pfizer's credit rating[19] - The enterprise value is based on Metsera's June 30 reported cash balance of approximately $500 million[19] Pipeline and Clinical Trials - Pfizer and Roche have a global collaboration for the p40 x TL1A bispecific antibody (PF-07261271)[23] - Pivotal trials are ongoing or initiation is planned before or during 1H 2026 for several drug candidates[22] - MET-097i is a fully biased ultra-long-acting next-generation GLP-1 receptor agonist[33] MET-097i Clinical Data - In a Phase 2a trial, a monthly dose of MET-097i after 12 weekly doses was well tolerated with continued weight loss observed[38] - Phase 1 data demonstrate robust efficacy and placebo-like tolerability at potential starting doses for MET-233i[41] - Placebo-adjusted weight change in adherence to treatment subgroup was -14.2% with 1.2 mg → 4.8 mg of MET-097i[40] Market Opportunity - Obesity and associated conditions are on track to become among the largest pharmaceutical opportunities[27] - The acquisition aligns with Internal Medicine R&D strategy and expertise, leveraging significant primary care commercial infrastructure and field force[27] - The deal structure is risk-managed using a Contingent Value Right (CVR), sharing risk and upside with Metsera shareholders[28] - The acquisition has the potential for attractive returns for Pfizer shareholders[28] - The acquisition targets a market impacting over 1 billion lives globally[48]