Viatris (VTRS) 9 May 242024 Q1 Earnings call transcript

Good morning and welcome to the Viatris Q1 2024 Earnings Conference Call.

[Operator Instructions]

Please note that today's event is being recorded.

I would now like to turn the conference over to Bill, Viatris Head of Capital Markets. sir. ahead, go Please

Welcome is QX CFO, our R&D and everyone. With Doretta earnings us Chief Martin. Philippe today CEO, Officer, to morning, XXXX our call. Mistras; Good Scott Smith;

will today's including initiatives. uncertainties. matters, guidance These be During are financial we making statements to number our various on and XXXX subject forward-looking for statements of a strategic and call, risks

SEC referring financial slide most be also measures to for our measures. presentation refer will and non-GAAP non-GAAP certain including We projected directly information, today's Please to and those measures. reconciliations filings more actual comparable of GAAP the to

discussing When for 'XX rates from excludes comparisons closed discussing the XXXX, a certain we adjusted divestitures results, divestiture operational and certain and results operational make basis, closing the the When our in expectations proportionate which forecasted currency 'XX from foreign impact results and also comparisons also will from in impact will of adjusted closed divestitures results currency which to rates XXXX excludes that the results foreign a actual XXXX period. on the XXXX XXXX. excludes on end we date period guidance the divestiture be excludes until of the of that for the the making to from XXXX the basis, of

CEO, to that, Smith. Scott With over hand our the I'll call

morning. Good

base includes future on financial Our stability executing growth. maintaining which quarter results driving first business fundamentals, new against demonstrate execution for revenue business while continued vision our and product our

strategic in return, and, pay progress continuing priorities, future down increasing We growth. fueling including shareholder investments on making are completing to key business our base importantly, our divestitures, making debt, all planned

our call, assets, with event into business held newest closed dive our base we successful of pipeline selatogrel reviewed we Idorsia quarter's and R&D and key did and deep transaction elements last a Since in which a our cenerimod.

and deliver to are of the assembling of foundation on portfolio for a strategy our our outlining our high-margin how on more evolve event base R&D was Our innovation we durable, goal strong the continuing focus patented of business.

by Dr. need Dr. products highlighting Deepak in Mount discussed that joined Director and Columbia need X Founder and Hospital Sinai Bhatt recognized Anca expert, challenges that Anca were acute for Dr. We University's treating impact opinion Director Lupus leaders, Clinical and in Askanase, and Askanase Bhatt, areas. a potential X meaningful Fuster the innovative these highly significant MI cardiology of and patient unmet novel Center. at have key address lupus, widely Heart Dr. for the

the I'm the reviewed the study Phase to own also infrastructure the transaction, study we studies We designs for III pleased for for OPUS accelerate expand to development experience and and III and leveraging we since assets. cenerimod. plans closed existing the that AMI for are both already say SOS our Phase selatogrel

Turning $X.XX quarter. to of cash million. $X.X approximately approximately $X.X billion, share, We EPS per of total flow approximately delivered $XXX and free EBITDA adjusted of adjusted the of revenue first billion,

divestiture. our Healthcare closed now have Business We Women's

We expect divestiture imminently. API to our close

OTC the to certain and midyear, approvals close regulatory divestiture receipt track We consents. are by to on subject of

we financial XXXX to solely and divestitures acquired the Today, are the impact reflect IP reaffirming guidance after our adjusting of ranges R&D.

of product reaffirming also our XXXX million. range are to We new revenue $XXX million $XXX

the share $X.XX on this Board quarterly to our and From a and share continue shareholders shareholder dividend first million delivering we dividends strong to focus Directors has in a capital $XXX perspective, allocation for In of quarter. returned total declared quarter, we of return. another buybacks,

have best-in-class vet the future assets We efforts to revenue that patented and secure contribute also down debt, to to growth. our continue are pay we potential our our identify, continuing additional and to

our last deliver will leadership be executive Before on growth opportunities talk place on since and strategy. to our innovation future base key want our team our while pursuing put I call for business we the also to about to on, in success. move Executing we've

the With is these add of new X between that have group Viatris skills, of we leaders new expertise. new priorities in already some within mind, capabilities we talented a with leadership have balance areas and faces built a who new team

addition team recent Commercial most The who is to Corinne as Goff Le us Officer. Chief the joined

studied patients wealth pharmaceutical roles leadership serving addition in the industries, a In lived, and Corinne to worked of executive world, to countries. a a has XXX than is important bringing global more biotech company companies Viatris that perspective across and bringing reaches from around at the also that experience like

I with the the of build truly we I'm very we that onboard. Corinne have envisioned. to company to working all executive of as the leadership to unique continue members have look forward pleased her and team

Now progress let over Philippe to Martin turn our to on Philippe? it me discuss pipeline.

I you, and Viatris also Thank I'd to with Scott. forward Corinne her. like look to working welcome to

details discuss as Since well the with an assets, held of including pipeline key and our as elements last potential our Idorsia, the call, cenerimod. X to earning R&D collaboration about event blockbuster we selatogrel

foundation. we a As strong said, built we have

is base more patients year. billion consistent to and a portfolio delivering X business expected keep than Our pipeline reaching results, currently

partnership Idorsia reach. with broaden potential new has Our that the to

no significantly have in patient about need. March have deal who driving high of We are the of development to we then, brought very are treatment the team They a in They dedicated for since onboard on and continuity. impact The approximately areas are programs XX drug talented potential XX. both highly excited meaningful innovative cenerimod. are to forward Idorsia advanced that And interruption program closed fully developers assets. employees, medical ensuring in selatogrel unmet products deliver

respectively. of study and Phase cenerimod, are enrollment III Phase OPUS expanding and focused on III accelerating For studies, the SOS selatogrel we MI and

Viatris' approximately are XXX regions, reach. expanding are adding and we leveraging We each global to sites of additional program, the strength into

optimizing, as cycle and the assets life by patient have labeling as or both to sequencing broader strategies these looking well opportunities globally. indications We developing initiated into for maximize development of launch additional expanding populations

June Finally, focused we EULAR SLE. biomarker of will presentation cenerimod on effect in at inflammation have on a in normal

Looking X. mydriasis at pipeline. of the care Ryzumvi the our in pharmacologically reversal on U.S. We April launched eye for induced

for Phase dim studies III the of or of for MR-XXX and MR-XXX enrolling actively treatment blepharitis light are We disturbances. night of vision the treatment

therapy For year. neurotrophic MR-XXX, half of keratopathy, this an second submission are we the IND targeting for in gene

business base have pipeline, our our XX to at more highlight projects. particular than those, Looking like we Of I'd products portfolio. in X novel

March. as back Depot, received GA For CRL Mapi you our a know, partner in

FDA with Mapi the and received to are next from meeting to few We working the intend FDA the with respond a seek months. to comments in

that We meeting. will next determine step after the

well Phase III for Dose products first-to-market fast The products use study total, opioid-sparing studies opportunities. complex enrollment. potential III pain review, Xulane in more alone, Low treatment of potential XX in our for under a currently meloxicam pipeline acting, Phase we are X these than has for have injectable XX FDA completed in contraception represent post-surgery underway. With

pipeline Finally, in at well submissions with steady our continuing with is generic line expectations. core a progressing pace,

we are summary, In of making pipeline. progress elements key our on

an have have talented to deliver growth. to R&D And team. plans key objectives on we clear support We our incredibly overall Viatris'

through quarterly call Now results. over I will turn to Doretta the to the work

performance. here It's and morning, Philippe, you, our everyone. Thank great to to be QX discuss good

line the year of As off we top growth. start with our strong are highlighted, consecutive fourth a Scott to to quarter

revenue. our maintaining new plan, to business which execute and growth We against base includes our continue product stability driving

new emerging in markets generating revenue. diverse platform Europe, from is higher-than-expected in base our business globally product from growth and Our

an as In as our unlock provide relates a on initiatives. it imminently. platform. look the it completed business the Idorsia Business quarter, to from to comments closely forward the to continue update closed API with bit. transaction, and We great growth Women's the we drive made in Scott's divestiture, will her I expect these progress to I Corinne. strategic of close items the relates I Healthcare echo and our to divestiture as working value we guidance And on

which again and highlights by JANZ of performance. excludes of product by expectations. power Turning emerging in year-over-year growth, the new line was delivered the well-diversified foreign to approximately and driven quarter in The better-than-expected marks impact quarter consecutive platform. This growth, $XXX of first in the with markets, and was X% fourth our quarter. our strength Europe growth once which top We the was million This global exchange line of X%. operational revenue

Commercial segment. Moving to our

markets, as Italy such approximately growth the broad versus X% year. and our We another key prior France, in delivered Europe across saw positive growing markets developed product generics and strong benefit launches. quarter, portfolio For new the of brands, from

declined This was continued business approximately our and by uptake year-over-year America XXXX. approximately offset North in sales channel of QX XX% partially Our in and growth customer portfolio. of net Tyrvaya a changes result versus formulary dynamics Yupelri brand X% in as

Markets Emerging Eurasia strong X% growth. well and performance than regions expected, countries had Thailand Breyna driven delivering as was and including quarter, strong such by better strong business in performance new results as performed product key year-over-year complex driven base MENA Wixela. like as the products in Malaysia. as Generics by another operational This as approximately launches, well

as phasing than more by strength XX% expected, And products grew driven to approximately Generics X%, and and across Elidel were our approximately broad brands benefits Xalabrands. Lipitor, up due portfolio. key ARV such

the helped over X% Greater more approximately offset expansion and versus our And in regulations expected by in than China, of declines to business grew were in Australia. activities results Japan XXXX. due JANZ price prior government Australia. flat to This QX the year, lastly, driven

base segment the the retail while the patient policy growing evolving on focus to continue We and on environment. navigating self-pay

portfolio the through adjusted of was remainder gross was and in you approximately of quarter our expectations EBITDA the the walk P&L by and positive XX% margin drivers adjusted mix. I'll and of of Now Adjusted EPS. the driven segment and ahead

declined versus in the Japan As due the to price anticipated, year COGS. prior margin gross increase adjusted and in regulations

in programs. due launches expected, and increased product first in to franchise, expenses progress quarter key operating eye the R&D new investments care SG&A As

working flow year closing by the the and was cash EBITDA, driven versus and adjusted for Free timing met prior capital. lower of of the expectations divestitures quarter

million. taxes costs, transaction would and been cash free divestitures, have flow $XXX Excluding from the

with important the received from will It divestitures cash flow the taxes related flow associated proceeds continue that The activities. costs and benefit operating impact will to to activities. is cash from from divestitures investing note transaction

the balance allocation. in ended We the cash and $X Moving to capital equivalents approximately cash sheet billion with hand. quarter on and

QX continue form $XXX both to shareholders dividends share on balanced allocation our returned capital to of execute We in framework of million in the and repurchases. and capital

year. the the of of I'll our Now you details walk for the guidance financial rest through

ranges in We after the $XX represent XXXX for million and the are $X.XX adjusting revenue, approximately divestitures These R&D. our acquired financial and of EBITDA in due to XXXX. million EPS IP adjusted in reaffirming adjusted adjustments $XXX solely guidance remainder

the The include, range the breadth $XXX of of to revenue million in no the and X% for business growth meeting to due continued total product operationally product $XXX and of new to versus guidance change revenue uptake approximately launches. our confidence underlying XXXX, XXXX new fundamentals base of our strong Breyna million

foreign revenue. there if for rates rest headwind Lastly, hold the the of approximately of X% full April exchange year, a be could year on

about seasonality. Total Now second anticipated the normal comments phasing is half, expected a for the to revenue higher the of in year. be rest to due modestly mainly few product

product first the by as is to half new revenue in is revenue through which July. higher treated be driven product New expected Breyna,

Adjusted segment is and product to the gross second be to first in higher half margin expected mix. versus half due

We be expect half. evenly first second relatively half expenses and between phased to the the operating

consideration, higher EBITDA second in Taking are slightly EPS adjusted into to and half. these factors adjusted be expected the

also is the weighted second Free more be half. cash flow to expected to

of cash in semiannual As timing to be a flow QX tends reminder, to lower QX and interest payments. free due

our of fundamentals strong the to against we our are objectives, for to our well the positioned remainder our on we and this expectations year. meet date business believe progress Based of

operator And the to with hand back begin it to over Q&A. I'll the that,

[Operator Instructions]

Nathan with from Sachs. And comes the Rich first Goldman question

of questions couple a start. Maybe product to

product softness your on the than in First, to was needed and Could I about anything guess FDA launch? as third the had that respect had North the potentially that on III expectations? do is more I of that of elaborate the much with to and guess, to channel you line study. a that previously as to current Mapi, Doretta, I mentioned access expected then some saw? you talked there you well formulary is And meeting the talk there? And and and you the America that time when you How time Phase see approval can get dynamics quarter, kind Depot, in you of with site done the brands. improve for to different as you think little be bit remediation could what kind inspection questions GA

GA So Depot. Philippe Smith it going Scott kick the to I'm product-specific Doretta over here. answer to to address question, will the and

So Doretta?

Great.

you as noted, America, would in were I as we Specifically, impacted items. North X say, mentioned, by

change and The really channel saw change EpiPen. really legacy The those that due impacted noncommercial we The brands, first change was kind higher-than-expected certain slightly in was of channels. formulary in formulary QX, in channel utilization a higher utilization dynamics second and was in the dynamics. to

say I of by offset the we be of to kind other over would course brands. impacts year, do the growth those expect in

saw QX. -- we impact XX% in growth. year, kind I kind offset. of would were we growth, course it that we was in the what we're we to monitoring in a of are we think these anticipated. of originally So of factors Tyrvaya the I be disproportionate These expect Yupelri all kind as But go through say

I globally. of have Again, choppy. QX a to very Doretta comments brands the before just a diverse good in couple a year business, say, with for is we and turn And like to overall, of just we're Philippe. said, as performance and Nate, very U.S. takes. to is It's a global expect And happy always performance. lots bit I And there's the little business would full this the large expected quarter. as overall But over performing puts it

Thanks, Scott.

as so more we have meeting have what address to GA meeting, clarity FDA, the and line Once them And are with we I few that Mapi on comments received next from clarity that expect. a working to months. time -- seeking with on we in mentioned, the Depot, we'll and to and regard the

available. that with we'll So be once sharing you

Bank next Gerberry the with from Jason America. And of comes question

for on Patel is Bhavin Jason. This

million I to want For to just focus with an on growth. product Tyrvaya. $XX appears be The about product just moderate us,

by and Ryzumvi as us commercially of Famy between sort in can believe launched the So form framed assets. expecting help XXXX the $X ophthalmology was to Care just you maybe product. bridge the recently that niche Oyster I billion sales a you're

seeing the the is XXXX? inflection of key remainder in Tyrvaya an So in

unchanged cash And would floor as then being second, be which on billion free see term, a onwards? do you XXXX $X.X Longer flow. continue to divestitures, post

uptake product. relative is in much of very performed bit and Tyrvaya where the next pipeline you right? the years with X, Definitely, positive our of QX, what be call of products with you're relative in It's we're to goes. Tyrvaya. Thank talking trends. pipeline. for Tyrvaya. QX. to started number the we've question. very, is got to seeing whole ophthalmology about over complementary hopeful X, very in DTC X continued trajectory just seeing in billion the of see We're and the We it we're terms that doing products, things, continuing Ryzumvi sales on Tyrvaya, of business, the It line very little with a That a and to niche a We're $X expectations hopeful in the dynamics but we'll we're

we stability And business, put and with beyond, our well of some just base kind kind kind able as diversity the of and flow, portfolio $X.X the as as place, the your specifically, an given yes, be kind even into basis. look our and cash of optimization of in the business post short least initiatives billion the $X.X the in cash at to answer question business objectives around generate billion ongoing of on cash broader free we've should free the of the of is we feel that respect -- divestitures, to XXXX

the And with Glen next from question Jefferies. Santangelo comes

you timing? I still close obviously on to I Is Is the was the close what Scott, made by you in clearly hear prepared API OTC. And remarks, is fair? June your I expected think, previous still mean, that of imminently. sort to expected didn't that XX, that comment said

Yes.

We our last certain closed regulatory be a are continues going the but to sure it's pleased what track out our was time not that to consents, We're very or subject progress think obviously than about midyear. I'm little midyear. midyear. if we control, with of well. by there. close bit later I it which closing to transaction and little expecting that by approvals June be a that, to we're should talked bit It's in but

UBS. Ash with from next Verma the question And comes

had I X.

JANZ, X% that what been mean the And on you the headwinds. be on just seems facing some kind a here? you can were So relatively an operational on easy go-forward I business should It like has up the but sort basis, business dynamics maybe, of elaborate here? comp. trajectory of

guide you And then is the see year on get -- much this good million. million, for second, new CapEx the to $XXX or Tyrvaya? once And product your monthly? revenue, can How $XXX that $XXX million without by driven of to

on the question then answer and product can afterwards. take part new Doretta Yes. the JANZ, I'll and first

Great.

really in JANZ, headwind what FX the But for in on is the first And that seeing growth. So activities seeing are government was we Australia. last say growth there to the I to in some in would growth, region. of driven operational and see expected specifically erosion it natural quarter, of of an the year that due basis is business with we this on expect a did ongoing business by we regulation, there, kind some kind we're is performing price line we relative We X% expansion saw price Japan just Australia.

to the new million this then $XXX perform in rest business And of with $XXX in And that our bit in around think to line to do confidence new what products, product will expect have great to said factor of the add we so as Scott we a specifically about launches. year. also we little million just expectations. And our

is $XXX kind million confidence portfolio performing that of have Kind benefits in Breyna expected, -- the breadth million. One $XXX what allows to our on kind there's to but is of than we is one product. of single of what any of the our we're us not better dependent

as that reaffirming question, no in product to defined pleased very delays just the within new That's new $XXX $XXX million for is GA with some Tyrvaya. again, specific a $X And despite $XXX in million our and of quarter company. on longer to Depot. And the products your million maybe

And the comes JPMorgan. Schott with next Chris from question

remarks. me. the X just Maybe from prepared some on Just the of for comments

that the were Idorsia at of reflected assets, that you time those out number in some at I Meeting on enrollment expanding accelerate accelerating Analyst laid think a or site sites. all already Does lines the mentioned those or the there lines? time you

know just, or about on thinking in-market range you're then But it's my I opportunities frequently. you're can outright versus And versus thinking is you're question baskets stock front. the part within others? where -- deployment And thinking what mix you of about acquisitions? we in-licensing about deployment? Just any that the there how about is, as in you're capital maybe evaluating partners particularly asked seem repo was second with just that, capital of of think share as just versus there interesting how Scott, pipeline, the the

this Idorsia, on question first Philippe. the is take I'll So

the not not expanding no, significant that a So but on has it's by planned of forward. sites line we'll adding experience, at were working acceleration -- in to are we Idorsia into the that Day. go It's by regions see time included significant updated the for where number is originally we currently the Viatris and this R&D going as that but we is keep not to you presented too us that impact early have,

and the And bought that delivered could deal, to dividend, Idorsia relative back the allocation, potential note year, future capital brought to growth. assets on this shares drive we already important done have

and given I'll I looking we base partner worldwide route global favorable that lot things we're a I we're globally. able good terms products products and say, have partnership to the Certainly, continue with we their different of In look opportunities. the strong the to for think launch people of to be licensing all for the very we that manner it like at a company at, technologies have of

we're at looking So partnering.

we out BD year, we've we're all. There's there already it will opportunities although to company through through expect the a some buybacks size lot also share as for done a us. BD, to some we the of able right have and do our say, get our through continue the of arise share if the we and year to breadth And and to opportunities capital some interesting as for continue I and repurchases sorting some potentially be

comes question with David And Amsellem the Sandler. Piper next from

a the cited and you are questions But And of color of footprint? injectable your also, on about couple you'd in question thinking cited the thinking A number thinking here you slides. then in R&D injectables. of complex is, of big on a I launches as glucagon. Any know prior are as And generic complex I or injectable about slides. 'XX broadening those priority of about how also the some and Venofer that guess in X metrics know general, terms new I this 'XX? mix? of launches how portion year your of how a you're you a potential outside overall is percentage for how in

on I'll the part see kick see to just products it. from overall, from products the it. it investing talk We Philippe future about over to of But the business. strategy. We portfolio very of is today our in in and important the specifically a base some important So it. products market injectable complex important the We're

So products, the forward sort portfolio patented to we of continue part base new business as invest to products other accelerate it's mix. a add complex important products, innovative to and of to generics the And growth. move our that in important very

assets in answer product We half you revenue the are as approval successful first we've million guidance new year. launches. We're the to to the -- And question, mentioned products $XXX process. confident very we've And market your similar to been the $XXX remain past. million you second working through in regulatory full Yes. for X our bringing know, in

we product forward. about feel So new good revenue going our

regarding about injectable currently XX the more are XX FDA they I products in mean, represent -- than products that pipeline, and have total, And review. mix then injectable of terms the in of under complex we

approvals mix, of for So number a significant in product of terms represent going us they forward.

our R&D to important So portfolio of that that time. a continue remains grow very over segment will

question with Barclays. next the Balaji Prasad comes And from

quarter through bookkeeping emerging comment a firstly, me like help question you from emerging driven largely markets. this and this Can X me of the markets, of on that million if questions also the been business, months Women's months or has $XXX basis X around API so on the it sustainability translated is right an think macro guidance the understand of divestiture And the FX guidance, P&L. And is on, way by strip Health about how I X revised this? the looks and of the the impact, maybe right, couple A for to it? understand and

going Thank to it to over to market hand you, emerging Balaji. the Doretta I'm answer segments the specific on questions divestitures. the and

Yes.

on MENA we Lipitor, pleased across seen markets in specifically, portfolio our region, It were Xalabrands. very across branded Elidel, that and performance our So both we was with saw our as the region. -- and such generics, Eurasia that specifically in both we've emerging performance really broad

U.S. despite saw board. that the we saw really versus last relative saw So some that to this year. dollar some FX weakness in we the currencies across that was We outperformance And we in had headwinds region. multiple

markets. So were performance pleased very we emerging with our in

second the to divestitures. question respect With your around

in So yes, the has of imminent May out closed transaction its imminently, business the Health Health about if remainder expected way of Women's so in March, closure its Women's close the as -- given expect out closure. closed the 'XX, we've we and given to the it API close stripped transaction we've we stripped we as thought as kind API of

conference the for Thank you. And Scott closing CEO, like Mr. comments. any Smith, question-and-answer session. to this return concludes to would our I

morning. closing, you thank We've online all that we're continuing is we've ahead. this leading Thank attention company priorities our last key future progress a strong place, and year. you, momentum In a for a and everybody your passionate had what our executive to on thank great -- workforce to we great exciting for made into believe again. you dedicated team have the global leadership is an in So

presentation. conference The for concluded. now attending you. today's Thank you has Thank

You phone disconnect may your now lines.