Viatris Inc Q4 FY2025 earnings call

• 2025 was strong with $14.3B total revenues, $4.2B adjusted EBITDA, and 5 positive Phase III readouts. Prioritized capital return with over $1B to shareholders. Advanced pipeline with full enrollment expected in 2026 for Sineramod and Saladagro. Completed enterprise-wide strategic review to identify $650M gross cost savings over 3 years, with $250M reinvestment. Identified three strategic imperatives: drive base business, fuel innovative portfolio, modernize for sustainable growth. • 2026 R&D priorities: secure 8 regulatory approvals for 6 product candidates, advance 6 phase III development programs, and drive generic pipeline and established brand portfolio with over 100 new product approvals globally. In Japan, expect regulatory decision for FXR in March, and decisions for pitolisin in second half of 2026. In US, FDA accepted SNDA for Phentolamine Ophthalmic Solution with PDUFA goal date of Oct 17, 2026, and accepted NDFO for low-dose estrogen weekly patch with PDUFA goal date of July 30, 2026. Had positive pre-NDA meeting for fast-acting meloxicam and expect to submit NDA by end of month. • 2025 fourth quarter total revenues $3.7B, up 1% vs prior year (excluding indoor impact). Full-year 2025 total revenues $14.3B, adjusted EBITDA $4.2B, adjusted EPS $2.35 per share, free cash flow (excluding transaction-related costs) $2.2B. 2026 outlook builds on positive momentum, with strategic review expected to deliver ~$650M gross cost savings, $400M net savings after reinvestment, phased over 3 years.

2025 total revenues were $14.3 billion, up ~2% vs 2024 (excluding indoor pack). Adjusted EBITDA was $4.2 billion. In 2026, expecting ~2% total revenue and adjusted EBITDA growth vs 2025. New product revenues expected to be $450 - $550 million. Developed markets expected to grow 2% vs 2025, Europe expected to grow 4% y/y, North America flat, emerging markets expected to grow 6% y/y, JANs face challenges but expect launches to support future performance, Greater China expected to grow 3% y/y. Gross margins modestly lower in 2026 due to factors like exclusivity losses and supply recovery, but expected to benefit from cost savings and higher margin products over time.

• Expect ~2% total revenue and adjusted EBITDA growth vs 2025. • New product revenues expected to be $450 - $550 million in 2026. • Developed markets expected to grow 2% vs 2025, Europe 4% y/y, North America flat, emerging markets 6% y/y, Greater China 3% y/y. • Gross margins modestly lower in 2026 due to factors like exclusivity losses and supply recovery, but expected to benefit from cost savings and higher margin products over time. • Adjusted SG&A expected to decline as a percentage of sales due to strategic review. • Free cash flow expected to be significant and durable in 2026, with over $2.5B of cash available for deployment. • Priorities for 2026 include targeting in-market accretive business development and shareholder returns, paying down debt to strengthen balance sheet.

• Fire occurred in a service area at the oral solid-dose manufacturing facility in Nashik, India in mid-February, temporarily suspending manufacturing and expected to resume operations beginning in April. The impact of this incident was considered in formulating 2026 financial guidance. • Japan market faces challenges such as mandatory price decreases and loss of Ameteza mid-year, which impact the business in 2026. • Uncertainties around regulatory timelines and decisions for various product candidates, which could impact the expected launches and revenue growth.

Q: Glenn Santangelo asked about mid-single-digit revenue growth path, confidence in 6 potential approvals in 2026 and how it's layered into guidance, and timing of $400 million net savings from strategic review.

A: Scott Smith said mid-single digits is a longer-term path, layering in base business growth, launches in 2026, data readouts in 2026 and beyond, and capital deployment for accretive growth assets. Glenn was told $400 million net savings are phased over 3 years with roughly 30% in 2026, 30% in 2027, and remaining 40% in 2028.

Q: Umar Rafat asked about breaking down $650 million cost savings between COGS, SG&A, R&D, and indoor bounce back in 2026.

A: Doretta Mistress said about 50% from headcount reductions, rest from cost efficiencies, inventory management, etc. Indoor recovery assumed a little less than 1% baked into top line.

Q: Ash Verma asked about level of restructuring charges vs net savings and initial focus for fast-acting meloxicam.

A: Doretta Mistress said one-time costs to achieve savings are about 1x gross savings, with components including taxes from divestitures and Biocon. Karine Lagoff said initial focus for fast-acting meloxicam is post-operative and operative acute pain management, targeting surgeons, orthopedic surgeons, etc.

Q: Les Saluski asked about quantifying regulatory pricing challenges in Japan, cost savings tied to discontinued operations, and long-term gross margin/EBITDA margin target.

A: Scott Smith said Japan faces mandatory price decreases and labor law challenges, but assets added will turn business to growth in 2028 and beyond. Cost savings not from significant divestitures or recuts, but reevaluating infrastructure. No specific long-term margin target mentioned.

Q: Matt De La Torre asked about latest expectations for fast-acting meloxicam label and BD thoughts.

A: Philippe Martin said had positive pre-NDA meeting with FDA and will file NDA tomorrow, label language on opioid sparing to be included. Scott Smith said looking for in-market creative growth assets, not pipeline assets, to move needle for business today.

Q: Chris Schott asked about longer-term growth algorithm and BD landscape for U.S.-branded assets.

A: Scott Smith said base business has low single-digit growth, and BD landscape has many interesting assets, focusing on in-market assets to add higher growth, higher margin to base business.

Q: David Amsalem asked about internal R&D capabilities, exclusivity runway for meloxicam, and new product revenue contribution.

A: Scott Smith said confident in internal R&D capabilities, exclusivity runway for meloxicam is into early 2030s. New product revenue contribution is diversified across products and geographies.

Q: Jason Gerberry asked about 2026 guidance relative to 2025 and cost of goods improvement from enterprise review.

A: Doretta Mistress said 2026 is a stabilization year supported by savings realization, with gross margins marginally lower due to mix, LOEs, and TSA income not recurring. Cost savings from enterprise review are 50% from head reduction and minor from COGS efficiency.

Q: Dennis Ding asked about additional savings upside from enterprise review and base case for meloxicam launch.

A: Scott Smith said $400 million net savings is a number they feel good about, with potential for additional savings over time. Karine Lagoff said focus is on quick access and proper resourcing for meloxicam launch, with different strategy than some competitors.