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Introduction & Market Context
Viatris Inc (NASDAQ:VTRS) released its second quarter 2025 earnings presentation on August 7, showing mixed results as the company continues to navigate challenges from its Indore facility while making significant progress in its product pipeline. The pharmaceutical company’s stock rose 4.11% in pre-market trading to $9.11, suggesting investors were encouraged by the company’s ability to maintain its full-year guidance despite ongoing regulatory issues.
The Q2 results follow a challenging first quarter where Viatris missed analyst expectations. However, the company’s strategic initiatives and pipeline advancements appear to be providing confidence to investors despite the revenue and earnings pressure from the Indore facility situation.
Quarterly Performance Highlights
Viatris reported total revenues of $3.6 billion for Q2 2025, representing a 6% decline compared to the same period last year. Adjusted EBITDA came in at $1.1 billion, down 11% year-over-year, while adjusted EPS was $0.62, a 10% decrease from Q2 2024. Free cash flow excluding transaction-related costs was $241 million, down 44% from the prior year.
As shown in the following comprehensive financial results table:
However, the company emphasized that when excluding the impact of its Indore facility issues, total revenue would have grown by approximately 3% on a divestiture-adjusted operational basis. This indicates underlying business strength despite the significant regulatory challenges.
Regional performance varied considerably across Viatris’ global operations. Greater China emerged as the standout performer with 9% operational growth, driven by strong performance across multiple channels including e-commerce, retail, and private hospitals.
The following slide illustrates Greater China’s impressive performance:
Meanwhile, Developed Markets, which account for the largest portion of Viatris’ revenue, experienced a 4% decline on a divestiture-adjusted operational basis. Within this segment, European operations showed relative strength with 2% growth, while North America declined by 11%, primarily due to the Indore impact.
As shown in this detailed breakdown of Developed Markets performance:
Indore Facility Impact
The most significant challenge facing Viatris continues to be the regulatory issues at its oral finished dose manufacturing facility in Indore, India. Following a June 2024 inspection, the U.S. FDA issued a warning letter and import alert in December 2024, affecting 11 actively distributed products in the U.S., including lenalidomide and everolimus.
The financial impact has been substantial, with approximately $160 million in lost revenue during Q2 2025 and an estimated $500 million impact for the full year 2025. The effect on adjusted EBITDA is similarly significant at approximately $110 million for Q2 and an estimated $385 million for the full year.
The following slide details the Indore situation and its financial implications:
CEO Scott A. Smith noted during the presentation that remediation efforts are nearly complete, stating, "We immediately implemented a comprehensive remediation plan at the facility following the U.S. FDA’s original inspection observations in June 2024, and the necessary corrective and preventive actions are nearly complete." The company plans to request a meeting with the FDA in August to discuss remediation progress and reinspection timing.
R&D Pipeline Progress
Despite the Indore challenges, Viatris reported significant progress in its research and development pipeline, with 11 Phase 3 programs advancing. The company highlighted positive results from five Phase 3 data readouts, providing a potential catalyst for future growth.
The following slide provides a comprehensive overview of the company’s Phase 3 pipeline:
Particularly notable were the positive top-line results from Phase 3 studies of two eye care products: Phentolamine Ophthalmic Solution (MR-141) for presbyopia and Phentolamine Ophthalmic Solution (MR-142) for visual disturbances in low light conditions following keratorefractive surgery.
As shown in this detailed breakdown of the eye care study results:
The company also highlighted progress with its Novel Fast-Acting Meloxicam (MR-107A-02), which will have five abstracts presented at the PAINWeek Conference in September 2025. Viatris is targeting a New Drug Application submission to the U.S. FDA by the end of 2025 for this non-opioid pain management solution.
Strategic Initiatives & Outlook
Despite the challenges, Viatris reaffirmed its full-year 2025 financial guidance, projecting total revenues between $13.5 billion and $14 billion, adjusted EBITDA between $3.89 billion and $4.19 billion, and adjusted EPS between $2.16 and $2.30.
The following slide details the company’s reaffirmed guidance:
The company noted that total revenues and adjusted EPS are expected to be in the top half of the guidance ranges based on positive operational momentum, year-to-date foreign exchange benefits, and executed share buybacks.
On the capital allocation front, Viatris has returned over $630 million to shareholders year-to-date, including $350 million in share repurchases and approximately $280 million in dividends. The company expects total share repurchases for 2025 to be between $500 million and $650 million.
Chief Financial Officer Doretta Mistras emphasized the company’s commitment to shareholder returns, stating, "We expect to be opportunistic with cash available throughout the year." The company’s board approved an annual dividend policy of $0.48 per share in February.
Looking ahead, Viatris expects stronger performance in the second half of 2025, with approximately 51% of full-year revenues projected for the second half versus 49% in the first half. This phasing is driven by the Indore impact, normal product seasonality, new product launches, and year-to-date foreign exchange benefits.
As the company continues to navigate the Indore facility challenges while advancing its pipeline and maintaining its financial guidance, investors appear cautiously optimistic about Viatris’ ability to execute its strategic priorities for the remainder of 2025.
Full presentation:
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