Viatris Reports Third Quarter Financial Results for 2024
Viatris (VTRS) reported Q3 2024 financial results with total revenues of $3.8 billion and operational revenue growth of ~3% on a divestiture-adjusted basis. Key highlights include new product revenues of $133 million, U.S. GAAP net earnings of $95 million, and adjusted EBITDA growth of ~4% to $1.3 billion. The company repaid ~$1.9 billion of debt and expects to achieve its long-term gross leverage target of ~3.0x by year-end. Viatris entered an exclusive licensing agreement for sotagliflozin, expanding its cardiovascular disease portfolio. The company reaffirms its 2024 full-year outlook, expecting revenue growth of ~2% on a divestiture-adjusted operational basis.
Viatris (VTRS) ha riportato i risultati finanziari del terzo trimestre 2024 con ricavi totali di 3,8 miliardi di dollari e una crescita dei ricavi operativi di circa il 3% su base aggiustata per dismissioni. I punti salienti includono ricavi da nuovi prodotti di 133 milioni di dollari, utili netti secondo i principi GAAP americani di 95 milioni di dollari e una crescita dell'EBITDA rettificato di circa il 4%, raggiungendo 1,3 miliardi di dollari. L'azienda ha rimborsato circa 1,9 miliardi di dollari di debito e prevede di raggiungere il suo obiettivo di leva finanziaria lorda a lungo termine di circa 3,0x entro la fine dell'anno. Viatris ha stipulato un accordo di licenza esclusivo per il sotagliflozin, ampliando il proprio portafoglio per le malattie cardiovascolari. L'azienda conferma le previsioni per l'intero anno 2024, prevedendo una crescita dei ricavi di circa il 2% su base operativa aggiustata per dismissioni.
Viatris (VTRS) informó los resultados financieros del tercer trimestre de 2024 con ingresos totales de 3.8 mil millones de dólares y un crecimiento del ingreso operativo de aproximadamente el 3% en una base ajustada por desinversiones. Los aspectos más destacados incluyen ingresos por nuevos productos de 133 millones de dólares, ganancias netas bajo GAAP estadounidense de 95 millones de dólares y un crecimiento del EBITDA ajustado de aproximadamente el 4%, alcanzando 1.3 mil millones de dólares. La compañía pagó alrededor de 1.9 mil millones de dólares en deuda y espera alcanzar su objetivo de apalancamiento bruto a largo plazo de aproximadamente 3.0x para fin de año. Viatris firmó un acuerdo de licencia exclusivo para sotagliflozina, ampliando su cartera de enfermedades cardiovasculares. La empresa reafirma su perspectiva para todo el año 2024, esperando un crecimiento de ingresos de alrededor del 2% en una base operativa ajustada por desinversiones.
비아트리스 (VTRS)는 2024년 3분기 재무 실적을 보고했으며, 총 수익은 38억 달러, 매각 조정 기준으로 운영 수익이 약 3% 증가했습니다. 주요 하이라이트로는 신제품 수익 1억 3천 3백만 달러, 미국 GAAP 기준 순이익 9천 5백만 달러, 그리고 조정 EBITDA가 약 4% 증가하여 13억 달러에 도달했습니다. 회사는 약 19억 달러의 부채를 상환했으며 연말까지 장기 총 레버리지 목표인 약 3.0배를 달성할 것으로 예상하고 있습니다. 비아트리스는 소타글리플로진에 대한 독점 라이선스 계약을 체결하여 심혈관 질환 포트폴리오를 확장했습니다. 이 회사는 2024년 연간 전망을 재확인하며, 매각 조정 운영 기준으로 약 2%의 수익 성장을 기대하고 있습니다.
Viatris (VTRS) a annoncé ses résultats financiers du troisième trimestre 2024 avec des revenus totaux de 3,8 milliards de dollars et une croissance des revenus opérationnels d'environ 3% sur une base ajustée aux cessions. Les faits marquants incluent des revenus de nouveaux produits de 133 millions de dollars, un bénéfice net selon les normes GAAP américaines de 95 millions de dollars et une croissance de l'EBITDA ajusté d'environ 4%, atteignant 1,3 milliard de dollars. L'entreprise a remboursé environ 1,9 milliard de dollars de dettes et prévoit d'atteindre son objectif de levier financier brut à long terme d'environ 3,0x d'ici la fin de l'année. Viatris a signé un accord de licence exclusif pour le sotagliflozin, élargissant ainsi son portefeuille de maladies cardiovasculaires. L'entreprise confirme ses prévisions pour l'année 2024, s'attendant à une croissance des revenus d'environ 2% sur une base opérationnelle ajustée aux cessions.
Viatris (VTRS) hat die Finanzzahlen für das 3. Quartal 2024 veröffentlicht, mit Gesamterlösen von 3,8 Milliarden Dollar und einem operativen Umsatzwachstum von ca. 3% auf bereinigter Basis für Abspaltungen. Zu den wichtigsten Punkten gehören Neuprodukteinnahmen von 133 Millionen Dollar, GAAP-Nettoeinnahmen in den USA von 95 Millionen Dollar und ein bereinigtes EBITDA-Wachstum von ca. 4% auf 1,3 Milliarden Dollar. Das Unternehmen hat etwa 1,9 Milliarden Dollar Schulden zurückgezahlt und erwartet, sein langfristiges Brutto-Verschuldungsziel von ca. 3,0x bis zum Jahresende zu erreichen. Viatris hat einen exklusiven Lizenzvertrag für Sotagliflozin unterzeichnet und damit sein Portfolio für Herz-Kreislauf-Erkrankungen erweitert. Das Unternehmen bekräftigt seine Prognose für das Gesamtjahr 2024 und erwartet ein Umsatzwachstum von etwa 2% auf einer operativen bereinigten Basis.
- Revenue growth of 3% on divestiture-adjusted basis to $3.8B
- Strong new product revenues of $133M
- Adjusted EBITDA growth of 4% to $1.3B
- Debt reduction of $1.9B
- Free cash flow of $866M (excluding transaction costs)
- U.S. GAAP net earnings declined 71% to $95M from $332M YoY
- U.S. GAAP diluted EPS decreased 70% to $0.08 from $0.27 YoY
- U.S. GAAP gross margin declined to 38.9% from 42.9% YoY
- Total net sales decreased 5% on reported basis to $3.7B
Insights
The Q3 results demonstrate mixed performance with some concerning trends. While operational revenue grew
Key positives include strong debt reduction of
However, challenges persist in North America with unfavorable channel dynamics and pricing pressures in key markets like Japan and Australia. The significant drop in GAAP earnings and margins warrants careful monitoring despite operational growth metrics.
The licensing deal for sotagliflozin represents a strategic expansion in cardiovascular disease treatment. This dual SGLT1/2 inhibitor has shown significant efficacy in reducing cardiovascular death risk and heart failure hospitalizations in patients with heart failure or type 2 diabetes with chronic kidney disease.
The positive Phase 3 results for EFFEXOR in Japanese GAD patients and encouraging Phase 2 data for cenerimod in lupus demonstrate pipeline progress in key therapeutic areas. With no currently approved GAD treatments in Japan, EFFEXOR could address an important unmet need if approved following the planned 2025 regulatory submission.
- Total Revenues of
$3.8 Billion 3% on a Divestiture-Adjusted Basis Demonstrate Strength of Company's Base Business[1]
- Strong New Product Revenues of
$133 Million
U.S. GAAP Net Earnings were$95 Million 4% to$1.3 Billion U.S. GAAP Diluted EPS was$0.08 6% to$0.75
- Repaid
~ of Debt, Expects to Achieve its Long-Term Gross Leverage Target of ~3.0x by end of the Year[3]$1.9 Billion
- Entered into Exclusive Licensing Agreement for Sotagliflozin, Expanding its Innovative Portfolio in Cardiovascular Diseases
- Reaffirms 2024 Full-Year Outlook and Continues to Expect 2024 Full-Year Revenue Growth of ~
2% on a Divestiture-Adjusted Operational Basis[4]
Viatris Inc. (Nasdaq: VTRS) today announced robust financial results for the third quarter of 2024, driven by positive momentum against all three pillars of its strategy. The Company continued to demonstrate its ability to grow its base business, delivering total revenues of
"I am very pleased to report strong third quarter results that continue the momentum we've seen all year," said Scott A. Smith, chief executive officer, Viatris. "We are in a period of strong global execution which has led to consistent base business growth and we expect this momentum to continue into next year. Our company is operating from a position of financial strength with a clear and focused outlook that centers on capital allocation. Returning value to shareholders through dividends and share repurchases will remain a central element of optimizing and maximizing shareholder value. We will balance this with making disciplined investments in commercialized or late-stage assets through regional and global business development to drive our future growth."
"We continue to make excellent progress executing on our debt paydown commitment and are on pace to achieve our long-term gross leverage target of ~3.0x by year end," said Doretta Mistras, chief financial officer, Viatris. "With sector-leading cash flow and a strong balance sheet as our foundation, I believe we are well-positioned to deliver consistent base business growth, while simultaneously investing in our business and returning significant capital to our shareholders."
[1] For the quarter ended September 30, 2024, total revenues declined ~(5)% on a
[2] For the quarter ended September 30, 2024,
[3] Debt repayment of
[4]
Third Quarter Results | |||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
(Unaudited; in millions, except %s and per share amounts) | 2024 | 2023 | Reported | Operational | Divestiture | ||||
Total Net Sales | (5) % | (5) % | 3 % | ||||||
Developed Markets | 2,298.7 | 2,408.5 | (5) % | (5) % | 3 % | ||||
Emerging Markets | 533.2 | 642.5 | (17) % | (14) % | 2 % | ||||
JANZ | 344.3 | 334.5 | 3 % | 6 % | 8 % | ||||
561.8 | 548.4 | 2 % | 3 % | 3 % | |||||
Net Sales by Product Category | |||||||||
Brands | (7) % | (6) % | 2 % | ||||||
Generics (4) | 1,375.8 | 1,400.8 | (2) % | (2) % | 4 % | ||||
(14) % | |||||||||
38.9 % | 42.9 % | ||||||||
Adjusted Gross Profit (2) | (6) % | ||||||||
Adjusted Gross Margin (2) | 58.5 % | 59.2 % | |||||||
$ 94.8 | $ 331.6 | (71) % | |||||||
$ 0.08 | $ 0.27 | (70) % | |||||||
Adjusted Net Earnings (2) | $ 897.6 | $ 952.8 | (6) % | ||||||
Adjusted EPS (2) | $ 0.75 | $ 0.79 | (5) % | (5) % | 6 % | ||||
EBITDA (2) | $ 905.8 | (26) % | |||||||
Adjusted EBITDA (2) | (6) % | (5) % | 4 % | ||||||
$ 826.5 | $ 835.2 | (1) % | |||||||
Capital Expenditures | 77.0 | 95.9 | (20) % | ||||||
Free Cash Flow (2)(5)(6) | $ 749.5 | $ 739.3 | 1 % | ||||||
___________ | |
(1) | Represents operational change for net sales, adjusted EBITDA, and adjusted EPS which excludes the impacts of foreign currency translation. See "Certain Key Terms and Presentation Matters" in this release for more information. |
(2) | Non-GAAP financial measures. See "Non-GAAP Financial Measures" for additional information. |
(3) | Represents adjustments for the impact of proportionate results from the divestitures that closed in 2023 and 2024, from the 2023 period on an operational basis. See "Certain Key Terms and Presentation Matters" in this release for more information. |
(4) | Complex Gx, which was previously presented as a separate line item in the prior year period, is now included within Generics. Reclassifications were made to prior periods to conform to the current period presentation. |
(5) | Beginning in 2024, upfront and milestone payments related to externally developed IPR&D projects acquired directly in a transaction other than a business combination, which were previously included in cash flows from operating activities in the condensed consolidated statements of cash flows, are now classified as cash flows from investing activities. Certain reclassifications were made to conform the prior period condensed consolidated financial statements to the current period presentation. The adjustments resulted in an increase to net cash provided by operating activities, free cash flow, and net cash used in investing activities of |
(6) | Excluding the impact of transaction costs primarily related to the divestitures of |
Nine Months Ended | |||||||||
September 30, | |||||||||
(Unaudited; in millions, except %s and per share amounts) | 2024 | 2023 | Reported | Operational | Divestiture | ||||
Total Net Sales | $ 11,562.5 | (3) % | (2) % | 2 % | |||||
Developed Markets | 6,783.3 | 6,932.7 | (2) % | (2) % | 1 % | ||||
Emerging Markets | 1,737.7 | 1,932.5 | (10) % | (5) % | 6 % | ||||
JANZ | 1,011.7 | 1,052.2 | (4) % | 3 % | 4 % | ||||
1,644.7 | 1,645.1 | — % | 3 % | 3 % | |||||
Net Sales by Product Category | |||||||||
Brands | $ 7,034.4 | $ 7,398.1 | (5) % | (3) % | 1 % | ||||
Generics (4) | 4,143.0 | 4,164.4 | (1) % | — % | 4 % | ||||
$ 4,408.6 | (9) % | ||||||||
39.3 % | 41.8 % | ||||||||
Adjusted Gross Profit (2) | $ 6,551.6 | (5) % | |||||||
Adjusted Gross Margin (2) | 58.4 % | 59.7 % | |||||||
$ (117.7) | $ 820.3 | NM | |||||||
$ (0.10) | $ 0.68 | NM | |||||||
Adjusted Net Earnings (2) | $ 2,536.8 | $ 2,791.1 | (9) % | ||||||
Adjusted EPS (2) | $ 2.11 | $ 2.32 | (9) % | (7) % | — % | ||||
EBITDA (2) | $ 2,480.1 | $ 3,586.2 | (31) % | ||||||
Adjusted EBITDA (2) | $ 3,685.9 | $ 4,006.7 | (8) % | (7) % | — % | ||||
$ 1,820.2 | $ 2,331.5 | (22) % | |||||||
Capital Expenditures | 185.6 | 211.5 | (12) % | ||||||
Free Cash Flow (2)(5)(6) | $ 1,634.6 | $ 2,120.0 | (23) % | ||||||
___________ | |
(1) | Represents operational change for net sales, adjusted EBITDA, and adjusted EPS which excludes the impacts of foreign currency translation. See "Certain Key Terms and Presentation Matters" in this release for more information. |
(2) | Non-GAAP financial measures. See "Non-GAAP Financial Measures" for additional information. |
(3) | Represents adjustments for the impact of proportionate results from the divestitures that closed in 2023 and 2024, from the 2023 period on an operational basis. See "Certain Key Terms and Presentation Matters" in this release for more information. |
(4) | Complex Gx, which was previously presented as a separate line item in the prior year period, is now included within Generics. Reclassifications were made to prior periods to conform to the current period presentation. |
(5) | Beginning in 2024, upfront and milestone payments related to externally developed IPR&D projects acquired directly in a transaction other than a business combination, which were previously included in cash flows from operating activities in the condensed consolidated statements of cash flows, are now classified as cash flows from investing activities. Certain reclassifications were made to conform the prior period condensed consolidated financial statements to the current period presentation. The adjustments resulted in an increase to net cash provided by operating activities, free cash flow, and net cash used in investing activities of |
(6) | Excluding the impact of transaction costs primarily related to the divestitures of |
Financial Highlights
- Third quarter 2024 total net sales were
$3.7 billion 3% on a divestiture-adjusted operational basis compared to third-quarter 2023 results, with divestiture-adjusted operational net sales growth across all segments.
- Brands net sales reflect the expansion of the Company's portfolio in Emerging Markets and JANZ, and strong growth in
Europe andGreater China . This was partially offset by unfavorable channel dynamics inNorth America and the impact of government price regulations inJapan andAustralia .
- Generics net sales reflect strong growth from new product performance in Developed Markets, continued growth from complex products, and solid performance across our broader European portfolio.
- The Company generated approximately
$133 million $500 million $600 million
U.S. GAAP net earnings were$95 million $1.3 billion 4% on a divestiture-adjusted operational basis.U.S. GAAP diluted EPS was$0.08 $0.75 6% on a divestiture-adjusted operational basis.
- This quarter's results demonstrate the Company's financial strength, as the Company generated
U.S. GAAP net cash provided by operating activities of$827 million $866 million
Additional Updates
- The Company retired all of its 2025 and more than a quarter of its 2026 debt maturities, totaling approximately
$1.9 billion
- In August, the Company presented a late-breaking oral presentation at the Asia-Pacific League of Associations for Rheumatology Annual Congress of one of its Phase 2 studies of cenerimod in Japanese patients. Data showed a clinically meaningful improvement in disease activity consistent with results from other global Phase 2 studies of cenerimod. The study also showed that cenerimod for the treatment of moderate to severe systemic lupus erythematosus can be considered safe and well tolerated.
- In October, the Company announced positive top-line results of its Phase 3 study evaluating the safety and efficacy of EFFEXOR® (venlafaxine) in Japanese adults with generalized anxiety disorder (GAD). Treatment with once-daily EFFEXOR® met primary and all secondary efficacy endpoints, and it was generally well tolerated with a profile consistent with its known safety profile in non-Japanese patients. There are currently no approved treatments available for GAD in
Japan . The Company is targeting its submission to the Pharmaceuticals and Medical Devices Agency in 2025.
- In October, the Company announced it entered an exclusive licensing agreement with Lexicon Pharmaceuticals for sotagliflozin in all markets outside of the
U.S. andEurope . This licensing agreement leverages Viatris' expertise in cardiovascular diseases and its Global Healthcare Gateway® — which offers partners ready access to the Company's unique global infrastructure. Sotagliflozin was approved by theU.S. Food and Drug Administration in May 2023 to reduce the risk of cardiovascular death, hospitalization for heart failure, and urgent heart failure visit in adults with heart failure or type 2 diabetes mellitus, chronic kidney disease, and other cardiovascular risk factors.
- In October, the Company was named to Forbes' list of World's Best Employers 2024. This is the fourth year in a row that Viatris has received this recognition. The World's Best Employers for 2024 were selected through an independent survey encompassing a vast sample of more than 300,000 participants across 50 different countries.
- In October, the Company was named to Forbes' list of World's Top Companies for Women 2024. The World's Top Companies for Women 2024 were chosen among multi-national corporations that were evaluated in multiple globally administered independent surveys of approximately 100,000 women in 37 countries.
- In October, in recognition of ongoing and systematic work to further advance sustainable operations and responsible practices, as well as sustainability disclosures, the Company was upgraded in the annual MSCI ESG Rating and the ISS ESG Corporate Rating. For the latter, the Company further strengthened its Prime rating.
Financial Guidance
The following table summarizes the Company's 2024 financial guidance as of November 7, 2024. The Company is not providing forward-looking guidance for
(In millions, except Adjusted EPS) | Estimated Ranges (2) August 8, 2024 | Midpoint (2) August 8, 2024 | Acquired | Estimated Ranges (4) November 7, 2024 | Midpoint (4) November 7, 2024 | ||||
Total Revenues | |||||||||
Adjusted EBITDA (1) | ( | ||||||||
Free Cash Flow (1) | |||||||||
Adjusted EPS (1) | ( |
(1) | Non-GAAP financial measures. See "Non-GAAP Financial Measures" for additional information. |
(2) | 2024 Financial Guidance as provided as of August 8, 2024, excluded the impact of any divestiture-related taxes and transaction costs as well as any acquired IPR&D to be incurred in any future period as it could not be reasonably forecasted. |
(3) | Acquired IPR&D impact related to sotagliflozin licensing agreement entered into in October 2024. |
(4) | 2024 Financial Guidance as provided as of November 7, 2024, excludes the impact of any divestiture-related taxes and transaction costs. Also excludes any acquired IPR&D for unsigned deals to be incurred in any future period as it cannot be reasonably forecasted. |
Conference Call and Earnings Materials
Viatris will host a conference call and live webcast, today at 8:30 a.m. ET, to review the Company's third quarter 2024 financial results.
Investors and the general public are invited to listen to a live webcast of the call at investor.viatris.com or by calling 844.308.3344 or 412.317.1896 for international callers. The "Viatris Q3 2024 Earnings Presentation," which will be referenced during the call, can be found at investor.viatris.com. A replay of the webcast also will be available on the website.
About Viatris
Viatris Inc. (Nasdaq: VTRS) is a global healthcare company uniquely positioned to bridge the traditional divide between generics and brands, combining the best of both to more holistically address healthcare needs globally. With a mission to empower people worldwide to live healthier at every stage of life, we provide access at scale, currently supplying high-quality medicines to approximately 1 billion patients around the world annually and touching all of life's moments, from birth to the end of life, acute conditions to chronic diseases. With our exceptionally extensive and diverse portfolio of medicines, a one-of-a-kind global supply chain designed to reach more people when and where they need them, and the scientific expertise to address some of the world's most enduring health challenges, access takes on deep meaning at Viatris. We are headquartered in the
Non-GAAP Financial Measures
This press release includes the presentation and discussion of certain financial information that differs from what is reported under accounting principles generally accepted in
With respect to the Estimated Ranges as provided as of August 8, 2024, at that time the Company did not provide forward-looking guidance for
Certain Key Terms and Presentation Matters
New product sales, new product launches or new product revenues: Refers to revenue from new products launched in 2024 and the carryover impact of new products, including business development, launched within the last 12 months.
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 2024 constant currency net sales, revenues, adjusted EBITDA, and adjusted EPS to the corresponding amount in the prior year.
Divestiture-adjusted operational change: Refers to operational changes, further adjusted for the impact of the proportionate results from the divestitures that closed in 2023 and 2024, from the 2023 period by excluding such net sales from those divested businesses from comparable prior periods. Also, for adjusted EBITDA and adjusted EPS, refers to operational changes, adjusted as outlined in the previous sentence and further adjusted for the mark up for the TSA services provided to Biocon Biologics from the 2023 period.
SG&A and R&D TSA reimbursement and DSA reimbursement: Expenses related to TSA services provided for divested businesses are recorded in their respective functional line item; however, reimbursement of those expenses plus any mark-up is included in other income, net. For comparability purposes, amounts related to the cost reimbursement were reclassified to adjusted SG&A and adjusted R&D during 2023 and the first quarter of 2024, primarily related to the Biocon Biologics Transaction. This reclassification had no impact on adjusted net earnings, adjusted EBITDA or adjusted EPS. Any TSA reimbursement and DSA reimbursement amounts related to the closed divestitures are not direct offsets to operational expense and have not been reclassified.
Closed divestitures or divestitures closed in 2023 and 2024: Refers to the divestiture of the Company's rights to two women's healthcare products in certain countries that closed in December 2023 and August 2024, the divestitures of the commercialization rights in certain of the Upjohn Distributor markets that closed in 2023 and 2024, the divestiture of the women's healthcare business that closed in March 2024, the divestiture of the API business in
Forward-Looking Statements
This release contains "forward-looking statements". These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may include, without limitation, statements about 2024 financial guidance; the Company expects to achieve its long-term gross leverage target of ~3.0x by end of the year; enters into exclusive licensing agreement for sotagliflozin, expanding its innovative portfolio in cardiovascular diseases; reaffirms 2024 full-year outlook and continues to expect 2024 full-year revenue growth of ~
For more detailed information on the risks and uncertainties associated with Viatris, see the risks described in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2023, as amended, and our other filings with the SEC. You can access Viatris' filings with the SEC through the SEC website at www.sec.gov or through our website and Viatris strongly encourages you to do so. Viatris routinely posts information that may be important to investors on our website at investor.viatris.com, and we use this website address as a means of disclosing material information to the public in a broad, non-exclusionary manner for purposes of the SEC's Regulation Fair Disclosure (Reg FD). The contents of our website are not incorporated into this release or our filings with the SEC. Viatris undertakes no obligation to update any statements herein for revisions or changes after the date of this release other than as required by law.
Contacts
Media: | ||||
+ | 1.724.514.1968 | |||
Communications@viatris.com | ||||
Jennifer Mauer | ||||
Jennifer.Mauer@viatris.com | ||||
Matt Klein | ||||
Matthew.Klein@viatris.com | ||||
Investors: | ||||
+ | 1.724.514.1813 | |||
InvestorRelations@viatris.com | ||||
Bill Szablewski | ||||
William.Szablewski@viatris.com | ||||
Jill Sawyer | ||||
Jill.Sawyer@viatris.com | ||||
Viatris Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) | |||||||
Three Months Ended | Nine Months Ended | ||||||
September 30, | September 30, | ||||||
(In millions, except per share amounts) | 2024 | 2023 | 2024 | 2023 | |||
Revenues: | |||||||
Net sales | $ 3,738.0 | $ 3,933.9 | $ 11,177.4 | $ 11,562.5 | |||
Other revenues | 13.2 | 8.0 | 33.8 | 27.1 | |||
Total revenues | 3,751.2 | 3,941.9 | 11,211.2 | 11,589.6 | |||
Cost of sales | 2,292.0 | 2,250.6 | 6,802.6 | 6,747.5 | |||
Gross profit | 1,459.2 | 1,691.3 | 4,408.6 | 4,842.1 | |||
Operating expenses: | |||||||
Research and development | 198.4 | 211.2 | 602.2 | 602.4 | |||
Acquired IPR&D | — | 1.0 | (1.7) | 11.2 | |||
Selling, general and administrative | 1,003.4 | 1,053.5 | 3,378.9 | 3,044.3 | |||
Litigation settlements and other contingencies, net | 31.5 | (26.1) | 239.3 | (36.5) | |||
Total operating expenses | 1,233.3 | 1,239.6 | 4,218.7 | 3,621.4 | |||
Earnings from operations | 225.9 | 451.7 | 189.9 | 1,220.7 | |||
Interest expense | 145.6 | 141.5 | 429.8 | 432.2 | |||
Other income, net | (10.2) | (92.0) | (143.2) | (269.4) | |||
Earnings (loss) before income taxes | 90.5 | 402.2 | (96.7) | 1,057.9 | |||
Income tax (benefit) provision | (4.3) | 70.6 | 21.0 | 237.6 | |||
Net earnings (loss) | $ 94.8 | $ 331.6 | $ (117.7) | $ 820.3 | |||
Earnings (loss) per share attributable to Viatris Inc. shareholders | |||||||
Basic | $ 0.08 | $ 0.28 | $ (0.10) | $ 0.68 | |||
Diluted | $ 0.08 | $ 0.27 | $ (0.10) | $ 0.68 | |||
Weighted average shares outstanding: | |||||||
Basic | 1,193.5 | 1,199.5 | 1,193.3 | 1,200.4 | |||
Diluted | 1,200.4 | 1,207.6 | 1,193.3 | 1,205.6 | |||
Viatris Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) | |||
(In millions) | September 30, | December 31, | |
ASSETS | |||
Assets | |||
Current assets: | |||
Cash and cash equivalents | $ 1,878.7 | $ 991.9 | |
Accounts receivable, net | 3,717.4 | 3,700.4 | |
Inventories | 4,084.6 | 3,469.7 | |
Prepaid expenses and other current assets | 1,627.0 | 2,028.1 | |
Assets held for sale | — | 2,786.0 | |
Total current assets | 11,307.7 | 12,976.1 | |
Intangible assets, net | 17,978.9 | 19,181.1 | |
Goodwill | 9,561.7 | 9,867.1 | |
Other non-current assets | 5,905.8 | 5,661.2 | |
Total assets | $ 44,754.1 | $ 47,685.5 | |
LIABILITIES AND EQUITY | |||
Liabilities | |||
Current portion of long-term debt and other long-term obligations | $ 1,446.7 | $ 1,943.4 | |
Liabilities held for sale | — | 275.1 | |
Other current liabilities | 6,065.7 | 5,558.9 | |
Long-term debt | 14,303.4 | 16,188.1 | |
Other non-current liabilities | 3,145.9 | 3,252.6 | |
Total liabilities | 24,961.7 | 27,218.1 | |
Shareholders' equity | 19,792.4 | 20,467.4 | |
Total liabilities and equity | $ 44,754.1 | $ 47,685.5 | |
Viatris Inc. and Subsidiaries | ||||||||
Key Product Net Sales, on a Consolidated Basis | ||||||||
(Unaudited) | ||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||
(In millions) | 2024 | 2023 | 2024 | 2023 | ||||
Select Key Global Products | ||||||||
Lipitor ® | $ 375.6 | $ 381.6 | $ 1,112.9 | $ 1,179.5 | ||||
Norvasc ® | 168.9 | 175.5 | 507.1 | 560.6 | ||||
Lyrica ® | 129.9 | 141.7 | 368.4 | 423.1 | ||||
EpiPen® Auto-Injectors | 123.2 | 131.9 | 318.9 | 355.2 | ||||
Viagra ® | 100.2 | 110.5 | 307.0 | 336.5 | ||||
Creon ® | 84.6 | 77.5 | 237.8 | 224.3 | ||||
Celebrex ® | 74.1 | 84.7 | 218.5 | 255.5 | ||||
Effexor ® | 66.3 | 65.5 | 188.4 | 194.9 | ||||
Zoloft ® | 60.6 | 62.7 | 177.5 | 173.7 | ||||
Xalabrands | 41.2 | 47.9 | 129.3 | 145.0 | ||||
Select Key Segment Products | ||||||||
Influvac ® | $ 121.3 | $ 137.2 | $ 126.0 | $ 137.5 | ||||
Yupelri ® | 62.2 | 58.3 | 171.9 | 160.3 | ||||
Dymista ® | 43.5 | 44.1 | 146.7 | 155.0 | ||||
Xanax ® | 38.6 | 28.2 | 108.5 | 119.7 | ||||
Amitiza ® | 38.2 | 37.7 | 108.1 | 115.8 | ||||
____________ | |
(a) | The Company does not disclose net sales for any products considered competitively sensitive. |
(b) | Products disclosed may change in future periods, including as a result of seasonality, competition or new product launches. |
(c) | Amounts for the three and nine months ended September 30, 2024 include the impact of foreign currency translations compared to the prior year period. |
Viatris Inc. and Subsidiaries Reconciliation of Non-GAAP Financial Measures (Unaudited) | |||||||||||||||
Reconciliation of | |||||||||||||||
Below is a reconciliation of | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(In millions, except per share amounts) | 2024 | 2023 | 2024 | 2023 | |||||||||||
| $ 94.8 | $ 0.08 | $ 331.6 | $ 0.27 | $ (0.10) | $ 820.3 | $ 0.68 | ||||||||
Purchase accounting amortization (primarily | 586.0 | 602.0 | 1,907.6 | 1,864.6 | |||||||||||
Impairment of goodwill (included in SG&A)(b) | — | — | 321.0 | — | |||||||||||
Litigation settlements and other contingencies, | 31.5 | (26.1) | 239.3 | (36.5) | |||||||||||
Interest expense (primarily amortization of | 0.4 | (10.7) | (14.0) | (31.5) | |||||||||||
Loss on divestitures of businesses (included in | 107.4 | — | 295.8 | — | |||||||||||
Acquisition and divestiture-related costs | 98.2 | 115.7 | 290.8 | 230.1 | |||||||||||
Restructuring-related costs (e) | 105.4 | 14.9 | 146.1 | 98.7 | |||||||||||
Share-based compensation expense | 32.4 | 43.1 | 113.8 | 124.9 | |||||||||||
Other special items included in: | |||||||||||||||
Cost of sales (f) | 45.2 | 16.7 | 92.5 | 91.9 | |||||||||||
Research and development expense | — | 0.3 | 2.8 | 2.7 | |||||||||||
Selling, general and administrative expense | 15.5 | 2.7 | 43.1 | 34.0 | |||||||||||
Other income, net (g) | (43.9) | (26.4) | (322.1) | (114.0) | |||||||||||
Tax effect of the above items and other income | (175.3) | (111.0) | (462.2) | (294.1) | |||||||||||
Adjusted net earnings and adjusted EPS | $ 897.6 | $ 0.75 | $ 952.8 | $ 0.79 | $ 2,536.8 | $ 2,791.1 | $ 2.32 | ||||||||
Weighted average diluted shares outstanding | 1,200.4 | 1,207.6 | 1,202.5 | 1,205.6 | |||||||||||
____________ | |
Significant items include the following: | |
(a) | For the nine months ended September 30, 2024, includes an IPR&D intangible asset impairment charge of |
(b) | For the nine months ended September 30, 2024, includes a goodwill impairment charge of |
(c) | For the three months ended September 30, 2024, consists primarily of additional pre-tax charges related to the divestitures of the OTC, API, and women's healthcare businesses of approximately |
(d) | Acquisition and divestiture-related costs consist primarily of transaction costs including legal and consulting fees and integration activities. |
(e) | For the three and nine months ended September 30, 2024, charges include approximately |
(f) | For the three and nine months ended September 30, 2024, charges include incremental manufacturing variances at plants in the 2020 restructuring program of approximately |
(g) | For the three and nine months ended September 30, 2024, includes gains of approximately |
(h) | Adjusted for changes for uncertain tax positions. |
Reconciliation of | |||||||
Below is a reconciliation of | |||||||
Three Months Ended | Nine Months Ended | ||||||
September 30, | September 30, | ||||||
(In millions) | 2024 | 2023 | 2024 | 2023 | |||
$ 94.8 | $ 331.6 | $ (117.7) | $ 820.3 | ||||
Add / (deduct) adjustments: | |||||||
Income tax (benefit) provision | (4.3) | 70.6 | 21.0 | 237.6 | |||
Interest expense (a) | 145.6 | 141.5 | 429.8 | 432.2 | |||
Depreciation and amortization (b) | 669.7 | 679.4 | 2,147.0 | 2,096.1 | |||
EBITDA | $ 905.8 | $ 1,223.1 | $ 2,480.1 | $ 3,586.2 | |||
Add / (deduct) adjustments: | |||||||
Share-based compensation expense | 32.4 | 43.1 | 113.8 | 124.9 | |||
Litigation settlements and other contingencies, net | 31.5 | (26.1) | 239.3 | (36.5) | |||
Loss on divestitures of businesses | 107.4 | — | 295.8 | — | |||
Impairment of goodwill | — | — | 321.0 | — | |||
Restructuring, acquisition and divestiture-related and other special items (c) | 207.5 | 120.0 | 235.9 | 332.1 | |||
Adjusted EBITDA | $ 1,284.6 | $ 1,360.1 | $ 3,685.9 | $ 4,006.7 | |||
____________ | |
(a) | Includes amortization of premiums and discounts on long-term debt. |
(b) | Includes purchase accounting related amortization. |
(c) | See items detailed in the Reconciliation of |
Summary of Total Revenues by Segment | |||||||||||||||||
Three Months Ended | |||||||||||||||||
September 30, | |||||||||||||||||
(In millions, except %s) | 2024 | 2023 | % | 2024 | 2024 | Constant | Closed | 2023 | Divestiture- | ||||||||
Net sales | |||||||||||||||||
Developed Markets | (5) % | $ (15.4) | $ 2,283.3 | (5) % | $ 184.7 | $ 2,223.8 | 3 % | ||||||||||
561.8 | 548.4 | 2 % | 1.9 | 563.7 | 3 % | — | 548.4 | 3 % | |||||||||
JANZ | 344.3 | 334.5 | 3 % | 9.8 | 354.1 | 6 % | 6.5 | 328.0 | 8 % | ||||||||
Emerging Markets | 533.2 | 642.5 | (17) % | 18.3 | 551.5 | (14) % | 99.5 | 543.0 | 2 % | ||||||||
Total net sales | 3,738.0 | 3,933.9 | (5) % | 14.6 | 3,752.6 | (5) % | $ 290.7 | $ 3,643.2 | 3 % | ||||||||
Other revenues (6) | 13.2 | 8.0 | NM | (0.1) | 13.1 | NM | — | 8.0 | NM | ||||||||
Consolidated total revenues (7) | (5) % | $ 14.5 | $ 3,765.7 | (4) % | $ 290.7 | $ 3,651.2 | 3 % | ||||||||||
Nine Months Ended | |||||||||||||||||
September 30, | |||||||||||||||||
(In millions, except %s) | 2024 | 2023 | % | 2024 | 2024 | Constant | Closed | 2023 | Divestiture- | ||||||||
Net sales | |||||||||||||||||
Developed Markets | (2) % | $ (13.6) | $ 6,769.7 | (2) % | $ 231.3 | $ 6,701.4 | 1 % | ||||||||||
1,644.7 | 1,645.1 | — % | 42.4 | 1,687.1 | 3 % | — | 1,645.1 | 3 % | |||||||||
JANZ | 1,011.7 | 1,052.2 | (4) % | 70.6 | 1,082.3 | 3 % | 7.1 | 1,045.1 | 4 % | ||||||||
Emerging Markets | 1,737.7 | 1,932.5 | (10) % | 91.5 | 1,829.2 | (5) % | 207.0 | 1,725.5 | 6 % | ||||||||
Total net sales | $ 11,177.4 | $ 11,562.5 | (3) % | $ 190.9 | (2) % | $ 445.4 | $ 11,117.1 | 2 % | |||||||||
Other revenues (6) | 33.8 | 27.1 | NM | (0.1) | 33.7 | NM | — | 27.1 | NM | ||||||||
Consolidated total revenues (7) | $ 11,211.2 | $ 11,589.6 | (3) % | $ 190.8 | (2) % | $ 445.4 | $ 11,144.2 | 2 % | |||||||||
____________ | |
(1) | Currency impact is shown as unfavorable (favorable). |
(2) | The constant currency percentage change is derived by translating net sales or revenues for the current period at prior year comparative period exchange rates, and in doing so shows the percentage change from 2024 constant currency net sales or revenues to the corresponding amount in the prior year. |
(3) | Represents proportionate net sales relating to divestitures that have closed during 2023 and 2024 in the relevant period. |
(4) | Represents |
(5) | See "Certain Key Terms and Presentation Matters" in this release for more information. |
(6) | For the three months ended September 30, 2024, other revenues in Developed Markets, |
(7) | Amounts exclude intersegment revenue which eliminates on a consolidated basis. |
Reconciliation of Income Statement Line Items | |||||||
(Unaudited) | |||||||
Three Months Ended | Nine Months Ended | ||||||
September 30, | September 30, | ||||||
(In millions, except %s) | 2024 | 2023 | 2024 | 2023 | |||
$ 2,292.0 | $ 2,250.6 | $ 6,802.6 | $ 6,747.5 | ||||
Deduct: | |||||||
Purchase accounting amortization and other related items | (586.2) | (602.0) | (1,907.6) | (1,864.7) | |||
Acquisition and divestiture-related costs | (18.8) | (14.1) | (42.1) | (26.7) | |||
Restructuring related costs | (82.7) | (9.1) | (98.3) | (88.9) | |||
Share-based compensation expense | (0.8) | (0.7) | (2.5) | (2.2) | |||
Other special items | (45.2) | (16.7) | (92.5) | (91.9) | |||
Adjusted cost of sales | $ 1,558.3 | $ 1,608.0 | $ 4,659.6 | $ 4,673.1 | |||
Adjusted gross profit (a) | $ 2,192.9 | $ 2,333.9 | $ 6,551.6 | $ 6,916.5 | |||
Adjusted gross margin (a) | 58 % | 59 % | 58 % | 60 % | |||
Three Months Ended | Nine Months Ended | ||||||
September 30, | September 30, | ||||||
(In millions, except %s) | 2024 | 2023 | 2024 | 2023 | |||
$ 198.4 | $ 211.2 | $ 602.2 | $ 602.4 | ||||
Deduct: | |||||||
Acquisition and divestiture-related costs | (1.6) | (2.2) | (9.3) | (9.2) | |||
Restructuring and related costs | (0.9) | — | (1.9) | — | |||
Share-based compensation expense | (1.7) | (1.5) | (5.4) | (4.0) | |||
SG&A and R&DTSA reimbursement(b) | — | (8.6) | (1.7) | (27.0) | |||
Other special items | — | (0.3) | (2.8) | (2.7) | |||
Adjusted R&D | $ 194.2 | $ 198.6 | $ 581.1 | $ 559.5 | |||
Adjusted R&D as % of total revenues | 5 % | 5 % | 5 % | 5 % | |||
Three Months Ended | Nine Months Ended | ||||||
September 30, | September 30, | ||||||
(In millions, except %s) | 2024 | 2023 | 2024 | 2023 | |||
$ 1,003.4 | $ 1,053.5 | $ 3,378.9 | $ 3,044.3 | ||||
Deduct: | |||||||
Acquisition and divestiture-related costs | (77.9) | (99.4) | (239.3) | (194.1) | |||
Restructuring and related costs | (21.8) | (5.8) | (45.9) | (9.8) | |||
Purchase accounting amortization and other related items | 0.2 | — | — | — | |||
Share-based compensation expense | (29.8) | (40.9) | (105.9) | (118.7) | |||
Impairment of goodwill | — | — | (321.0) | — | |||
SG&A and R&DTSA reimbursement(b) | — | (27.6) | (5.7) | (79.8) | |||
Other special items and reclassifications | (15.5) | (2.7) | (43.1) | (34.0) | |||
Adjusted SG&A | $ 858.6 | $ 877.1 | $ 2,618.0 | $ 2,607.9 | |||
Adjusted SG&A as % of total revenues | 23 % | 22 % | 23 % | 23 % | |||
Three Months Ended | Nine Months Ended | ||||||
September 30, | September 30, | ||||||
(In millions) | 2024 | 2023 | 2024 | 2023 | |||
$ 1,233.3 | $ 1,239.6 | $ 4,218.7 | $ 3,621.4 | ||||
Add / (Deduct): | |||||||
Litigation settlements and other contingencies, net | (31.5) | 26.1 | (239.3) | 36.5 | |||
R&D adjustments | (4.2) | (12.6) | (21.1) | (42.9) | |||
SG&A adjustments | (144.8) | (176.4) | (760.9) | (436.4) | |||
Adjusted total operating expenses | $ 1,052.8 | $ 1,076.7 | $ 3,197.4 | $ 3,178.6 | |||
Adjusted earnings from operations (c) | $ 1,140.1 | $ 1,257.2 | $ 3,354.2 | $ 3,737.9 | |||
Three Months Ended | Nine Months Ended | ||||||
September 30, | September 30, | ||||||
(In millions) | 2024 | 2023 | 2024 | 2023 | |||
$ 145.6 | $ 141.5 | $ 429.8 | $ 432.2 | ||||
Add / (Deduct): | |||||||
Accretion of contingent consideration liability | (11.4) | (2.0) | (22.6) | (6.3) | |||
Amortization of premiums and discounts on long-term debt | 12.0 | 13.7 | 39.3 | 40.8 | |||
Other special items | (0.9) | (1.0) | (2.7) | (3.0) | |||
Adjusted interest expense | $ 145.3 | $ 152.2 | $ 443.8 | $ 463.7 | |||
Three Months Ended | Nine Months Ended | ||||||
September 30, | September 30, | ||||||
(In millions) | 2024 | 2023 | 2024 | 2023 | |||
$ (10.2) | $ (92.0) | $ (143.2) | $ (269.4) | ||||
Add / (Deduct): | |||||||
Fair value adjustments on non-marketable equity investments | 39.4 | 19.1 | 335.1 | 115.1 | |||
SG&A and R&DTSA reimbursement(b) | — | 36.2 | 7.4 | 106.8 | |||
Loss on divestitures of businesses | (107.4) | — | (295.8) | — | |||
Other items | 4.5 | 7.3 | (12.9) | (1.1) | |||
Adjusted other income, net | $ (73.7) | $ (29.4) | $ (109.4) | $ (48.6) | |||
Three Months Ended | Nine Months Ended | ||||||
September 30, | September 30, | ||||||
(In millions, except %s) | 2024 | 2023 | 2024 | 2023 | |||
$ 90.5 | $ 402.2 | $ (96.7) | $ 1,057.9 | ||||
Total pre-tax non-GAAP adjustments | 978.0 | 732.1 | 3,116.7 | 2,264.8 | |||
Adjusted earnings before income taxes | $ 1,068.5 | $ 1,134.3 | $ 3,020.0 | $ 3,322.7 | |||
$ (4.3) | $ 70.6 | $ 21.0 | $ 237.6 | ||||
Adjusted tax expense | 175.3 | 110.9 | 462.2 | 294.0 | |||
Adjusted income tax provision | $ 171.0 | $ 181.5 | $ 483.2 | $ 531.6 | |||
Adjusted effective tax rate | 16.0 % | 16.0 % | 16.0 % | 16.0 % | |||
___________ | |
(a) | |
(b) | Refer to "Certain Key Terms and Presentation Matters" section in this release for more information on reclassifications related to TSA reimbursements. |
(c) | |
Reconciliation of Estimated 2024 U.S. GAAP Net Cash Provided by Operating Activities to Free Cash Flow as of November 7, 2024 | |
(Unaudited) | |
A reconciliation of the estimated 2024 U.S. GAAP Net Cash provided by Operating Activities to Free Cash Flow is presented below: | |
(In millions) | |
Estimated | |
Less: Capital Expenditures | |
Free Cash Flow (a) | |
___________ | |
(a) | Excludes the impact of any divestiture-related taxes and transaction costs and any acquired IPR&D. |
Reconciliation of Estimated 2024 U.S. GAAP Net Cash Provided by Operating Activities to Free Cash Flow as of August 8, 2024 | |
(Unaudited) | |
A reconciliation of the estimated 2024 U.S. GAAP Net Cash provided by Operating Activities to Free Cash Flow is presented below: | |
(In millions) | |
Estimated | |
Less: Capital Expenditures | |
Free Cash Flow (a) | |
___________ | |
(a) | Excluded the impact of any divestiture-related taxes and transaction costs and any acquired IPR&D. |
Gross Leverage Ratio | |||||||||
Gross Leverage Ratio is the ratio of Viatris' total debt at notional amounts at September 30, 2024 to the sum of Viatris' adjusted EBITDA | |||||||||
Three Months Ended | Twelve | ||||||||
(In millions, except ratio) | December | March 31, | June 30, 2024 | September | September | ||||
Adjusted EBITDA | $ 1,117.4 | $ 1,193.4 | $ 1,207.9 | $ 1,284.6 | $ 4,803.3 | ||||
Reported debt balances: | |||||||||
Long-term debt, including current portion | 15,742.1 | ||||||||
Short-term borrowings and other current obligations | 1.6 | ||||||||
15,743.7 | |||||||||
Less: October 2024 make-whole call (a) | (325.0) | ||||||||
Total | 15,418.7 | ||||||||
Add / (deduct): | |||||||||
Net premiums on various debt issuances | (498.6) | ||||||||
Deferred financing fees | 25.5 | ||||||||
Total debt at notional amounts | $ 14,945.6 | ||||||||
Gross debt to adjusted EBITDA | 3.1 x | ||||||||
___________ | |
(a) | Make-whole call of |
Long-term Gross Leverage Target
The stated forward-looking non-GAAP financial measure of long-term gross leverage target of ~3.0x, with a range of 2.8x – 3.2x, is based on the ratio of (i) targeted notional gross debt and (ii) targeted Adjusted EBITDA. However, the Company has not quantified future amounts to develop this target but has stated its goal to manage notional gross debt and Adjusted EBITDA over time in order to generally maintain or reach the target. This target does not reflect Company guidance. For Q4 2024, in addition to the impact of make-whole call of
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SOURCE Viatris Inc.
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