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Introduction & Market Context
Viatris Inc (NASDAQ:VTRS) reported its first-quarter 2025 results on May 8, showing revenue and profit declines largely impacted by ongoing issues at its Indore manufacturing facility, while highlighting positive clinical trial results from key pipeline assets. Despite these challenges, the company maintained its full-year 2025 guidance, signaling confidence in a stronger second half performance.
The pharmaceutical company reported total revenues of $3.3 billion, representing an 11% decrease from the prior-year period, with adjusted EBITDA of $923 million and adjusted EPS of $0.50. The company’s stock closed at $8.60 on May 7, with a modest 1.86% gain in premarket trading following the earnings release.
Quarterly Performance Highlights
Viatris reported significant year-over-year declines across its key financial metrics for Q1 2025, with total revenues down 11% (9% operationally), adjusted EBITDA down 23% (20% operationally), and adjusted EPS down 25% (23% operationally). Free cash flow excluding transaction costs was $535 million, down 17% compared to the prior-year period.
As shown in the following financial highlights from the presentation:
The company’s performance was significantly impacted by issues at its Indore manufacturing facility, which accounted for approximately $140 million in lost revenue and $80 million in reduced adjusted EBITDA during the quarter. Despite these challenges, the company returned over $450 million to shareholders year-to-date, including more than $300 million in share repurchases and approximately $143 million in dividends.
Regional performance varied considerably, with Greater China showing 4% operational growth, while Developed Markets, Emerging Markets, and JANZ (Japan, Australia, and New Zealand) declined by 11%, 13%, and 9% respectively. Brands generally outperformed generics across most regions.
The detailed breakdown of Q1 2025 financial results shows the extent of the declines:
Pipeline Progress
A bright spot in Viatris’ presentation was the positive Phase 3 readouts for two key pipeline assets: a novel fast-acting meloxicam for acute pain and XULANE LO™, a low-dose contraceptive patch. The company is advancing 11 Phase 3 programs overall, with several expected to deliver readouts in 2025.
The following slide illustrates the company’s pipeline progress:
The novel fast-acting meloxicam demonstrated superior pain control compared to both placebo and tramadol (an opioid comparator) across two surgical pain models. The data showed statistically significant improvements in the primary endpoint of Sum of Pain Intensity Difference from 0 to 48 hours (SPID0-48).
As shown in the following chart comparing the novel meloxicam to an opioid comparator:
Notably, the meloxicam formulation also demonstrated a significant reduction in opioid usage, with 57% of patients in the bunionectomy study and 73% in the herniorrhaphy study remaining opioid-free throughout treatment, compared to 33% and 59% respectively in the placebo groups.
The following chart illustrates the reduction in opioid usage:
The XULANE LO™ contraceptive patch also showed positive Phase 3 results, with a favorable efficacy profile (Pearl index of 4.14) and strong safety and tolerability data. The company highlighted the product’s potential "best-in-class" patch adhesion performance, with less than 1% of subjects reporting severe local application site reactions.
As shown in the product profile summary:
Indore Facility Impact
A significant portion of Viatris’ presentation addressed the ongoing issues at its Indore manufacturing facility in India, which has been under an FDA import alert since December 2024 following an inspection in June 2024. The company provided detailed information on the financial impact and remediation efforts.
The following slide details the Indore facility impact:
The import alert affects 11 actively distributed products in the U.S., including lenalidomide and everolimus, with estimated impacts of approximately $500 million on total revenues and $385 million on adjusted EBITDA for full-year 2025. The Q1 impact was approximately $140 million on revenues and $80 million on adjusted EBITDA.
The company stated that remediation efforts are "well underway" and on track, with plans to submit a request for reinspection by the FDA by mid-year 2025. CEO Scott A. Smith emphasized that the company is taking these quality matters "very seriously" across its entire network.
2025 Outlook & Guidance
Despite the challenges in Q1, Viatris maintained its full-year 2025 financial guidance, with only minor adjustments to adjusted EBITDA and adjusted EPS. The company expects total revenues of approximately $13.75 billion (midpoint), adjusted EBITDA of $4.04 billion, adjusted EPS of $2.23, and free cash flow of $2 billion.
The following slide shows the company’s 2025 financial guidance:
Viatris expects stronger performance in the second half of 2025, with approximately 52% of total revenues, and higher adjusted EBITDA, adjusted EPS, and free cash flow compared to the first half. This phasing suggests confidence in resolving the Indore facility issues and improving overall performance as the year progresses.
The company also highlighted its strong track record of delivering new product revenues, generating more than $450 million each year for the past five years, with $582 million in 2024. Key 2025 launches include Iron Sucrose (Venofer®), Octreotide (Sandostatin® LAR), and Glucagon.
As shown in the following chart of new product revenues:
Viatris continues to execute on its 2025 strategic priorities, including driving commercial execution, advancing its pipeline, prioritizing capital return with a focus on share repurchases, targeting accretive regional business development, completing remediation for the Indore facility, and conducting an enterprise-wide strategic review.
The following slide outlines these strategic priorities and their execution status:
Overall, while Viatris faces significant challenges from the Indore facility issues, the company’s pipeline progress and maintained guidance suggest potential for improvement in the latter half of 2025, contingent on successful remediation efforts and continued execution of its strategic priorities.
Full presentation:
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