VTRS - Earnings call transcript Q3 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, everyone, and welcome to the Viatris Q3 2024 Earnings Call. All [Operator Instructions] Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Bill Szablewski, Head of Capital Markets. Please go ahead.

William Szablewski

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

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

divestiture discussing comparable GAAP XXXX excludes in closed reported actual discussing measures. be divestitures actual to reconciliations a CEO, which proportionate XXXX which hand presentation XXXX results expectations as We currency we results, of rates, more will Please results those impact and impact refer measures. reported making projected may When divestiture the operational to XXXX non-GAAP and we basis, making will XXXX for comparisons also Smith. to excludes of to the from financial for currency or to period. When measures operational basis, the foreign excludes also the reported be certain non-GAAP adjusted filings on we'll be today's those referring on of over our and on slide With call a the actual foreign rates to information, that, refer XXXX, comparisons the an basis. our from that the certain SEC results certain including I'll actual Scott and directly our changes XXXX to most operational or adjusted

Scott Smith

the we've all to we an I'm pleased that very everyone, momentum had and call. seen welcome continuing quarter, to Good third our earnings quarter morning, year. outstanding report strong

delivered across adjusted EBITDA share. and earnings growth quarter and consecutive We have adjusted sixth achieved of growth per have operational our revenue

made of significant in In year. laid we strategic our out addition, earlier this X pillars all we strides

now base our is growing clear strength and and is financial more future more only business, innovative importantly, DHS stronger not cash focused. portfolio. flow streamlined our but direction and our expanding and diversified more and significant Our

be and to X%, We into We taxes a total $XXX growth product entering growth. Returning excluding of the $X.X our share, assets our to represents $X.X development balanced on late-stage our a future patent-protected impact base commitment billion, debt strong expect proceeds in a of operational outside investments going approximately period agreement expanded from to which and repurchases quarter, that us achieve and sotaliclosin very business with in repaying our with divestitures of Pharmaceuticals to drive we an to on that U.S. current portfolio We innovative pay all unique commercial by revenues that X%. We in adjusted markets also on and putting our be assets allocation. consistent from for year. I'm Lexicon dividends in our leverage remain and outlook more continue growth, disciplined $X.XX and to our to ago. licensing the delivered leverage target. With infrastructure costs next were third into to transaction level. growth. We of and value use exclusive we operating in report year a revenues and momentum how R&D to prioritize In the of delivered regional believe be in shareholder future the New is licensed approximately continuing through annual and billion, maximizing the $X.X are are making and clear happy long-term the we this the which quarter. EBITDA forward of of given growing we share at which focused allocation this XXXX, central X% we capital will from firmly track agreement, capital and milestone, presence and strength critical million has billion debt licensing as value selatogrel, our year. will a of EPS gross approximately a billion that already optimizing approximately on expect revenue in generating driving this revenue plan. centers $X.X most element of growing This down position aggressive global our build we shareholders valuation free factor flow in of as cardiovascular strong share this strong of earlier single company million, through buybacks includes well business $XXX adjusted per had commercialized on With disease, will cash approximately in quarter in Europe.

care agreement to global able and we leverage disease with global our to execute the cardiovascular in our on infrastructure. soda. infrastructure unique our to This our access believe of health will experience potential be partners leverages gateway, provides which We

stronger, This quarter a of power Viatris. demonstration streamlined more is the of great a

revenue delivering operational seeing our are over revenues few We track new base of as past good by performance demonstrated strong and our quarters. record business, by the growth product our from

expect this momentum continue We into XXXX. to

our update to Now turn share pipeline. Philippe over to I'd like the on Philippe? to call an

Philippe Martin

Thanks, Scott.

generics track delivering reliability novel steady base of of products. driven generates new pipeline. our engine record and our in the business strong flow on This divest a by Our is product generics, core growth revenue complex

great unmet confidence to and is address this our Our grow us ability Effexor robust in continue pipeline needs. gives our medical on a example. base focused business to execution

which GAD for this treatment believe life treatment to has available a month, the in be demonstrated patients severe moderate cycle disease. the gas with any Last potential top anxiety announced with we or definitions safety generalized not Japan. significant the line approved opportunity option We desolar have condition efficacy treatment of does currently of meaningful to in for positive a Effexor that and results

patients' submit to for The us pipeline in difference to our we which our application as Japanese make a opportunities look health We critical are to innovative lives. base XXXX. be in in targeting of authorities business our able reinvest can to meaningful for is the growth

type infrastructure. represented and a for hospitalization us. broad FDA by or Inpefa to believe cardiovascular risk inhibitors offers potentially inhibition connective the drug. Sotagliflozin visits to approved for PETs unique part strategy INPEFA a disease compared was in of with that asset unique failure global efficacy the failure leverage risk urgent and other previously good also is of label have dual X heart to our and We a the that profile unique Inpefa failure of expertise death, reduce factors. We adults SGLT heart and like differentiated cardiovascular opportunity SGLTX with diabetes, development the to other and action mechanism contributing safety commercial

to studies FDA in reference approval Our patients a plan ex and were U.S. expand the reach. needed to certain markets, as is conduct leverage clinical

a that indications, legacy our status in strong portfolio which with selatogrel let area tapping cenerimod further we Viatris comes include from diseases about and products could is Norvasc like details Caduet, a continuum cardiac across there thrombosis me expertise relationship with and call, overall our the last cardiovascular believe selatogrel for products legacy progress very factors [indiscernible]. With provided medical in our potential addition but as outcomes the improving and our Lipitor, of program. portfolio to with hypertrophic well-known brief has also strong into community, broad expansion like reducing risk through the expands cardiovascular and We a also patient update. in which Further, on I've this Arixtra myopathy. to we're share into

OPUS for clinical money SMI well. for both to progressing development asset trials aligned The are and clinical communicated is our recruit each on our time trial and Our previous lines. are track

to registrational pipeline, are innovative lupus finally, harnessing for years Nepris. base are the date across we we to business as combination work our advance come by ophthalmology innovative it expected to And entire cenerimod over readouts addition, that, R&D believe I'm platform continue a I'll to And the In of registration working XXXX. both on we'll an our part by program our proud and to of pipeline. X make impact indications turn with in many initiating and our key Doretta. expanding program with in of continuing

Theodora Mistras

of comments, and balance you, consecutive quarter X% down pleased which generated transaction on significant respectively. We first new quarter sheet morning, results carried earlier our an operational per through of strong adjusted growth. flow and earnings revenue and Building quarter basis, has performance paying cash grew diversified continue the momentum and of highly costs X% exceptionally us are the sixth base also to ex EBITDA Thank This on strengthening $XXX our report been we which the X%, adjusted impact approximately free our taxes, by into to an million, carrying and good of year. full indicative marking strong this business share. anticipate the the year-over-year, debt. divestiture enabled encouraging of to Philippe, Scott's everyone. which grew excluding and We're

strong our a Going X pillars. on strategic to foundation forward, execute have we

to once quarter, all brands, products certain Jans and was from and strong America region. North our of commentary the was performance operational strong broader Growth to be complex business performance our Generics performance strong American performance in a on review China. As included attributable X% the in segment again, Greater and highlights our up for Latin I up versus the and divestiture-adjusted Generics, X% our expansion up in portfolio my on had strength the from X%. revenue And cardiovascular countries portfolio, of prior grew year. We year-over-year. growth segments note, Brand basis. European Europe across volume in of will growth

In emerging volumes of sales hospitals. markets, of China, strong X% result non-promoted which as growth year. This the In the lower utilization Medicaid formulary earlier multiple occurred We and sales quarter, a In from certain impacts the as expansion benefiting countries, quarter and business, and remain American total EpiPen in e-commerce, Australia million grew driven quarter in our promoted the net growth X%, to X%, generics we our the strength our absorb across X% from across from was $XXX certain cardiovascular complex net from continued In we chain will prior business, helped volume generics continued the was from Japan. regions. These Jams the revenue end including volume impact net Net of in Greater Lisdexymphetamine. Within Latin over from for brands America, portfolio be changes million million products approximately channels, in in and another our supply approximately generics, in $XXX products X%, grew driven resulting business. benefits product retail year. brands countries new X% approximately strength to sales up emerging branded ARV of bringing Asia lastly, as in including contributions to higher confident range grew performance generics developed by products up New we declined Breyna markets, and of such our in business. In Wixela sales $XXX as growth brands saw diversified of new growth Europe, strong from year-to-date. durable another benefiting by robust France. key for at the of $XXX our our by million and MENA the and our year. well by And affecting saw in driven North grew

flow. Adjusted Turning year, and from flow to our to billion October, cash repayment of including transaction in expectations. operating outstanding quarter, margin grew the roughly cash below line Free and that $XX continue billion of P&L stable line enabled expenses repaid XX.X%, $XX adjusted costs cash the free cash by gross for below at debt and to significant billion flat and XX%, year-end. EBITDA was debt our both executing notional with flow $X.X our and on $XXX in bringing over plan. We and higher us million by debt taxes sight divestitures lower was repaid the this prior capital. were excluding driven approximately the working

completed Following gross approximately and Xx approximately in deleverage at achieved maturity at of leverage meeting our leverage. And long-term exit we expect November, the billion year the upcoming gross will X to successfully EUR have at target year-end. repayment our we

and operate and forward, stronger year our within investment which X.Xx. the we meaningfully grade company continuing capital positions target beyond. serve will into allocation plan X.X rating, foundation sheet going long-range with of the next a Going to as This a to all of of our decisions balance

the year. remainder Turning to of the

adjusted and flat reaffirming with full outlook revenue of EBITDA operational and approximately growth earnings year. base last adjusted are per X% XXXX share versus We year business our

product selatogrel modeling as to and which note sequential work ranges these impact the China the generic on before We to expected CapEx developed in interest foundation is be products reasons: in phasing lower results to it comments earnings capital free solely workbook for to from these balanced returning entrants incurred Total certain phasing region, I normal we the flow. our in to also have revenue and a our back October. A a with and the produce the timing business expectations conclude, and due be the generic normal cenerimod normal periods. And the sotagliflozin that, IP quarter. shareholders. But adjusted prudent cardiovascular assets, we an would licensing products costs payments. I believe I'll significant revised of product in funding that provides as following America investor R&D reflect EBITDA divestiture diversified base to adjusted vision semiannual for adjusted encouraging continues higher In be to part QX we North markets And trends earnings fourth are fundamentals our be and all to agreement begin website. and on related flow on Greater in of our the of with seasonality our due Jan. Adjusted segment in step from of more share balance is our sheet that due pivot to in down demonstrate to a and of the and gross taxes, operator growing earnings allocation and SG&A in we are and per capital have cash margin us fourth impacted to given done level expected interest these strategy The and cadence and will few free lastly, investor Q&A. mix impact strong found package summary, can lower cash hand prior increase in strengthening a the with consistent investment. to of providing quarter our by our

Operator

Instructions] [Operator

question Our comes Santangelo from today from Jefferies. Glen first

Glen Santangelo

Scott, have just you. quick X questions I for

of lot want look appreciate the to continuing to that I guidance, we new of in The around over of from any first contribution strong a but have you product million out sort that continuing give of comments couple base is is 'XX. one the business when momentum forward next sort And revenues. don't $XXX years, into

the free you through of year. years? You're repeatedly said code then obviously down the that flow want the of dividends. the is want trigger as But shareholders half, year? little development couple for company return allocation, of that think to point right use on half of that? end the sort the and the business the for to generating leverage a us that other the for to Is you more to that about Is than the to starting this a next And capital and repurchases by ZIP getting cash sort to Xx start secondly,

what only that And respect at based business on you with trading as see to interest way development EBITDA, does 'XX? move into push one in the another you Xx market you versus or

David Amsellem

much you Glenn. Thank for very the questions,

to to us. at be be in ratio. And is disciplined and that move at shareholders market allow some will in very, to give very continue. And want expect to $XXX aggressive focusing and yes, million to in assets. the use think the XXXX, because also that into see year, development market generate, Xx we for generated be minimum similar capital base for we trying since it $X.X have to every continuing to we're second business, be to doing and beyond or business desired question on on to have getting and momentum 'XX, able free first We're we generate we'll historically, guiding So have cash billion allocation, to important near base think share revenue We one, to but year. dividends as we on product yes, and I 'XX new buybacks more leverage continuing not That what business million flow half can to this we we to the $XXX buybacks. share back through to we your us

springboard leverage to 'XX So 'XX, able yes, in ratio our that execute right to really capital on is getting into getting a us and strategy for be beyond. allocation

Operator

comes question Jason of next America. Bank Our from from Gerberry

Jason Gerberry

different practices. trying sense an matters. We some is some company a if China down this effort for reimbursement saw incident regarding cracking from recently get your around that's me. I'm isolated Couple in on multinational just investigated reimbursement or perspective, one part of get operating broader to

be just and the apologies this, I in potential you just didn't of Just would that? And if I but to color there if any it get about Sandostatin thinking that GA hear offer status around then -- updates the ANDA near LAR didn't any helpful were can resubmission. approved Depot term

Scott Smith

I'll take question. question can first your then in the on fill Philippe China, and on product you new

leadership that's on We country. just China So affiliate as were going we in a there. team direct don't investigation any with last and comment another have week on meeting any the in

strong China. hold to we and China very developed within a possible. in community As very and organization strong got in an strongly affiliate. We've care us deep overall very, health the a We've strong highest there. business feel compliance China our partnerships the we standards in about And We've organization, got structure strong overall.

Philippe Martin

Philippe agency a have is with this regarding And Go we in your second mid-December. meeting question. scheduled the

And we'll an [indiscernible] in are a here Sandostatin, -- think from going to we we'll through about once update the And the review next this be was we product I be to then expect product, position we next you product year. a and . still question give year FDA place better so in yes, launch regarding for your

Operator

from JPMorgan. Schott question from Chris next Our comes

Unknown Analyst

on Chris. Ethan for is This

EBITDA and should on secondly, about XXXX, between we the forward going should deals of your just at color looking pushes off, Idorsia -- deals terms expectations thinking transactions, is you've size the any XXXX to the of this that for look there? if we expect and First we And just and pulls the be done and in scale? year initial that type this then how SGLTX

Scott Smith

one These was products development, of in transaction little to be positive I'll EBITDA Doretta to assets. We bit Phase you development I We an deal III are the will normal were to think, for in I about that be think of them. to forward. the And The forward. potential then positive felt Idorsia us the a for of a going very question. and push the of opportunity. like the we first good a It's comes globally. Ethan, blockbusters to got talk continued our they've very, think little bit of transaction than it data going earlier you, contribute Thank Yes. take I'll

for was that opportunity of a deal So us.

market our really to infrastructure. able We got I that disciplined think right which now want strong gateway. We've some we 'XX care health assets global business revenue focused leverage things we're a end very doing be can can on really time near-market want 'XX, on focus 'XX, assets, development. to in frame. the We or drive to global deliver

terms We're focusing and I business near or the think multiple of different And assets. -- assets add the hoping looking. think next of to again, of pipeline. we're in yes, size on market the over the deal very end market -- So deal, we're to we're -- that's of we're type years development with I couple disciplined

Theodora Mistras

we're EBITDA pushes and you your some to thanks But be going of guidance. on revenue give XXXX questions. to of yes, point, pulls. sense just the and providing not to forward-looking a just

post on EBITDA are really currently are focused and line. From Scott that perspective cost As continuing and on top the expect that from through EPS continue the commented divestitures we we earlier TSA business at stability. perspective. prioritizing But the on adjusted from the year, going the stranded we revenue an see EBITDA perspective, momentum to base to next we're into working a how the adjustments

models, the really an growth. And and work and would that investments really and the we'll business in clarity future I provide continue balancing of to And so provide making say drive the commercial our billion, apples-to-apples we but growth we're can as R&D necessary cash we our calibrated see color reasonably feel But we confident we'll when get in flow do guidance. the comparison into also $X.X year. and we and more things of our next provide in provide 'XX

Operator

And our from from Verma Ash comes next question UBS.

Ashwani Verma

Good here. to see some steady progress

allocation capital question. Just a

supply markets, about and like run for EPS? driving stock yes, I share behind repurchases? And this chain So with impact. sub-Xx saw think emerging investment that like ARV trading the at development balancing paydown were bulk and sort you do Like of the then secondly, debt how you you business of towards

about little think for have a I of this time. you talked bit

when Just does on don't forward. we to like the start curious going lap this that business a this drag see as

Scott Smith

line I'll right talked take debt we Ash. second and closely capital And of question. the pick of sight got about ratio of spot shareholders to $X.X full allocation line and us we've us, got That cash question approximately have strategy, of we terms first your our implementing up repayment Thanks, your leverage very billion allows that X of capital X.X. to that sight Yes, dividend And that. the into of on that getting at target then can move right allocation on Dorreta minimum a buyback. see great definitely in our half share the to we've very, and in free flow, of and to

in other and way. half of in a disciplined terms development building pipeline, the The business that doing

opportunity return going the aggressive think to and terms idea a 'XX see the BD in this be approximately in X-, But we period share more shareholders I I given valuation nice where little of we're company and share going company your to to of be that point price side as a into might half of BD. But and of side we at X-year X-, than the think 'XX. the on now, buyback valuation looking we buybacks. is think on right share to into I the move aggressive a the more given implicit half the

Theodora Mistras

historically, just the comments business, made business. that with ongoing have we in to ARV And shifts have the respect therapy been around

our portfolio, However, to -- products. my That's we're ARB through. working my were that's we are those some of we that what And and catch currently to. backlogs saw and referring across what to those working the are AR up specific comments supply this on in quarter ARV across were comments delays really

Operator

next Instructions] from David Piper comes question Amsellem Sandler. Our [Operator from

David Amsellem

to feel new products in it contribution regarding a regarding want is to to launches. don't launch forward little drill me down that want because I topic note the transparency you've new the less than sounded there did of Well, 'XX. new going been know way of does And of from that more historically. impact a has belabor I for confidence I there

I you've question about like talked So had one historically Sandostatin is products LAR.

talked glucagon in Victoza the year. contributor? you to that your is how Other can a I'm like for contributors. Can products like be products past. Is as to going talked also, the are going Teva's talked Symbicort about potential next contributors iron potentially competitors, a wondering You of be about much glucagon, one Venofer, be market You injectable to that to if talk next talk that competitive then going about year. entering to you And contributor dynamics Symbicort. regarding sucrose,

a there's but know on granularity. I hoping there products, So specific lot to get

Balaji Prasad

you, well very around at doing terms sort of of product you or And new approved submissions the very, X Traditionally, we've over number we your about We ask we're of million going macro -- have confident to specifics those I'll last number very take feel if Thank from question. overall. products feel X David. the in and the revenue $XXX end forward years, Thank numbers we're to to get we it. you believe good year, of we the new Philippe every $XXX delivered million in to in comment. of level, And a for products. a year. This high numbers. the individual look product the very

Philippe Martin

Scott. Thank Yes. you,

as launches North products And in said, $XXX your complex specifically, Scott and it as we Europe. carryover next America XXXX, confident about such generic very $XXX includes glucagon, million iron year, million I and question includes to are So from sucrose liraglutide. and to this think

products number in that mix X are next every to broad year. And continuing over year. we these of the submissions So for on bring portfolio work a clearly and significant are

that reiterate So confident about. only are the fact we can we again, very

David Amsellem

semicon comment as with your the on is David, what performance and that, on in execution of say I the area, are in generic first, this generic is we can this our pleased Breyna, market. competition plays complete which very know, that And additional on you

into have we market us to expect We And for XXXX. will deliver going TRx currently that growth share. continue Breyna

durable had example possibility market good complex having the of early again, generic deliver So to to be and value. launch in a a and able sustainable more as to this

Operator

from Barclays. we and additional Prasad question have And do Balaji this from an comes

Balaji Prasad

of Just X -- earlier. asked been apologies sets one of if questions are them and me, both from have

comment markets into you picture Firstly, about how our should big of could years? you to thoughts? number Secondly, to question. this contributions in plan X in thematic the the next that a we X think and sotagliflozin the terms about modeling of launch And

administration, that and we see With towards the understand towards that increase your want revenue generics making want priorities Is the could terms focus a new you in to it's from change region? something likely how will America. I of pushback market? or refocus to that could this U.S. future contributions this

Scott Smith

here. Thank Balaji. From health fully then care and implications. you, macro Sotagliflozin. bit to Philippe little question talk perspective, can And about take the Yes. a We're far a I'll able for macro more Corrine be and too early us understand to

us we positively interested implications and to administration but for far the work 'XX years in beyond. early to going and as time, the look productively too like and forward in Trump this understand but with with at what would about understand point ahead care administration we're will it's We optimistic any very what's health

Philippe Martin

markets think emerging the are get a to clear drug we're U.S. in path another soda, New we Asian and registered require to going is do like -- which In markets, Regarding I approval what Zealand, there's China, clinical might leverage for approval. very and Japan Canada, study. it several straightforward the large Australia,

a we'll put together And development and next this. over with authorities for months plan few discussing the so the health be

in start over our to but will Soda it I'll turn growth color. XXXX, that expect to revenue we contributing So more around Corrine for

Corinne Le Goff

Thank Yes. you.

the in be revenues our you study the about launching billion that perfectly regions overall the to can opportunity. comment we'll going mean I with diseases. is cardiovascular But this size not product. I know should I'm like annual infrastructure So we have of what say in on of cardiovascular $X.X where

generate appropriate So revenue be year we to through growth -- that have place the Philippe infrastructure as so decade. a will -- able to XXXX, these assets franchise we the as across in And in will promote the we but end of regions. fast said, at starting the the look

Operator

and ladies we'll back I'd session. Smith floor that, question-and-answer remarks. the for with turn to to conclude over today's And Scott like gentlemen, closing

Scott Smith

you call. another quarter. performance. In team Thank everybody continued I'm thank it great much, you very was closing, on of strong and for the our of proud our

central We forward and we I'm With shareholder company on centers target element clear value. that our repurchase of shareholders looking will and great leverage and a of optimizing the maximizing strength, future. balance dividends value a to outlook position capital through our remain insight share the strength from operating and have have is financial and focused to sheet, momentum, allocation. Returning of a and our

We making in and will all. to future this disciplined development investments drive balance you regional business our Thank growth. global with

Operator

And gentlemen, conclude with that, today's joining. and thank you conference We ladies we'll for call.

disconnect may your You now lines.

Viatris (VTRS) 7 Nov 242024 Q3 Earnings call transcript