Summary of Viatris Conference Call Company Overview - **Company**: Viatris (NasdaqGS: VTRS) - **Event**: UBS Healthcare Conference - **Date**: November 11, 2025 Key Updates and Financial Performance - Viatris reported a positive momentum in business with an expected operational revenue growth of **2-3%** for 2025, excluding Indor [4][80] - The company is on track to return over **$1 billion** to shareholders, including **$500 million** in share repurchases for the year [4][80] New Product Launches - Anticipated new product revenue is projected to be in the range of **$450 million to $550 million** annually, driven by existing products and upcoming launches [6][4] - Key products contributing to this revenue include: - **Iron sucrose** - **Glucagon** - **Paclitaxel** - Upcoming launches: **Liraglutide**, **Effexor GAD**, **Sotagliflozin** [6][4] Geographic Performance - **North America**: - Experienced competition in generic products, particularly **XULANE LO** [17][22] - Decline primarily attributed to the impact of Indor [19][22] - Strong double-digit growth noted in products like **Breyna** and **Uptravi** [22][22] - **Emerging Markets**: - Strong growth driven by established brand business, particularly in **Turkey**, **Mexico**, and **emerging Asia** [23][23] - Stabilization of lower-margin ARV products has supported growth in the generics business [23][23] - **Japan**: - Facing normal price regulations but focusing on adding innovative assets to stabilize and grow the business [26][26] - Recent acquisition of **Pitolisant** and **Spidea** expected to enhance the portfolio [26][26] - **China**: - Achieved **9% operational growth** driven by a diversified commercial model and strong brand demand [28][28] - Over **10,000 customers** across various channels, with expectations for low to mid-single-digit growth over time [31][31] Pipeline and Future Products - Excitement around **fast-acting meloxicam** as a non-opioid alternative for acute pain management, targeting a launch in the second half of **2026** [34][41] - Anticipated FDA filings for several products, including **Effexor GAD** and **Salatogrel**, with enrollment for Salatogrel on track to complete by the end of **2026** [51][52] Indor Remediation and Strategic Review - Progress on remediation efforts for Indor, with operational readiness for reinspection expected in **2026** [54][54] - An enterprise-wide strategic review initiated to ensure sustainable growth, with details expected in **Q1 2026** [60][60] Capital Allocation Strategy - Viatris maintains a balanced capital allocation strategy, focusing on business development and capital return, with a **50/25/25** framework [71][71] - The company is looking for opportunities to invest in durable, higher-margin innovative assets, particularly in the U.S. market [73][73] Conclusion - Viatris is optimistic about its position going into **2026**, with a focus on executing its strategic priorities, enhancing its product pipeline, and addressing challenges in various markets [80][80]

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]

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 Insights - Viatris Inc. is a global healthcare company with a market cap of $12 billion, focusing on affordable medicines across various therapeutic areas [1] - The company's stock has significantly underperformed the broader market, declining 9.4% over the past year compared to a 19.6% gain in the S&P 500 Index [2] - Viatris announced the acquisition of Aculys Pharma, which will enhance its CNS portfolio with two neurological treatments, targeting regulatory approval in Japan by late 2025 [4] Financial Performance - Analysts expect Viatris' EPS to decline by 12.8% to $2.31 for the current fiscal year ending in December [5] - The company's earnings surprise history is mixed, with three beats and one miss in the last four quarters [5] Analyst Ratings - The consensus rating for Viatris stock is a "Hold," based on two "Strong Buy" ratings, six "Holds," and one "Moderate Sell" [5] - Truist Financial initiated coverage with a "Buy" rating and a $15 price target, citing confidence in the company's strategic shift and promising pipeline [7]

Core Insights - Viatris (VTRS) has acquired Tokyo-based Aculys Pharma, focusing on enhancing its Central Nervous System (CNS) portfolio and expanding its presence in Japan and the Asia-Pacific region [1][3][6] Acquisition Details - The acquisition involves an undisclosed upfront payment to Aculys Pharma's shareholders, with additional payments linked to regulatory and commercial milestones, as well as royalties based on net sales [2] - Viatris has secured exclusive rights to develop and commercialize pitolisant and Spydia (diazepam nasal spray) in Japan and select Asia-Pacific markets [1][6][7] Product Information - Pitolisant is a selective/inverse agonist of the histamine H3 receptor, with plans for marketing approval in Japan by the end of 2025 for treating excessive daytime sleepiness (EDS) and cataplexy in narcolepsy patients [4][9] - Spydia, approved in June 2025 in Japan, is the first intranasal anti-seizure medication for status epilepticus, addressing unmet needs in neurological emergencies [7][8] Strategic Rationale - The acquisition aims to leverage Viatris' commercial infrastructure and CNS expertise, aligning with its strategy to grow in high-impact therapeutic areas [9][10] - This move complements Viatris' existing innovative portfolio in Japan, which includes products for various conditions, thereby positioning the company for near- and mid-term growth [10]

Core Viewpoint - Viatris Inc. has acquired Aculys Pharma, enhancing its portfolio in the Central Nervous System (CNS) therapy area with exclusive rights to develop and commercialize pitolisant and Spydia in Japan, targeting significant unmet medical needs [1][4][8] Acquisition Details - The acquisition includes exclusive development and commercialization rights for pitolisant in Japan, which is on track for marketing approval by the end of 2025 for treating excessive daytime sleepiness (EDS) and cataplexy in narcolepsy patients [2][4] - Viatris also acquired exclusive rights for Spydia Nasal Spray in Japan and certain Asia-Pacific markets, which was approved in June 2025 for treating status epilepticus [3][10] Strategic Alignment - The acquisition leverages Viatris' existing commercial infrastructure and expertise in CNS, aligning with its strategy to target accretive regional business development opportunities [4][8] - Viatris aims to expand its innovative product portfolio in Japan, which includes other products under regulatory review or in pivotal Phase 3 trials [4][14] Financial Terms - The acquisition agreement includes an upfront payment to Aculys Pharma shareholders, with additional payments contingent on achieving specified regulatory and commercial milestones, along with royalties on net sales [5][14] Clinical Trial Results - Recent Phase 3 clinical trial results in Japanese patients for pitolisant showed significant improvement in EDS compared to placebo, with no serious adverse events reported [7][9][14] - The OSAS Phase 3 trial demonstrated statistically significant improvement in EDS for patients receiving pitolisant, consistent with global clinical study results [9][14] Product Information - Pitolisant is a selective/inverse agonist of the histamine H3 receptor, approved in multiple countries for narcolepsy and OSAS, with a strong safety profile [6][14] - Spydia Nasal Spray is the first intranasal anti-seizure medication approved in Japan for status epilepticus, marking a significant advancement in treatment options [10][11]