Viatris at Jefferies Conference: Strategic Execution and Growth Focus

On Thursday, 05 June 2025, Viatris Inc. (NASDAQ:VTRS) presented at the Jefferies Global Healthcare Conference 2025, highlighting its strategic execution and growth outlook. The company reported steady sales and operational growth despite challenges such as tariffs and remediation efforts. Viatris emphasized its commitment to shareholder returns and strategic business development while navigating a dynamic regulatory environment.

Key Takeaways

• Viatris reported sales in line with expectations, with growth in China and Europe.
• The company anticipates 3% operational growth for the year, excluding Indoor facility impacts.
• Viatris is addressing potential tariff impacts and exploring price increase strategies.
• Successful Phase 3 trials, including meloxicam, are set to bolster the pipeline.
• The company is focused on capital return and strategic business development.

Financial Results

• Sales met expectations across all segments, with a 2% growth on a divestiture-adjusted operational basis, excluding Indoor impacts.
• Viatris returned $450 million to shareholders through dividends and share repurchases in Q1.
• Free cash flow remained robust, supporting the company’s strategic initiatives.
• The outlook for the year includes approximately 3% growth, excluding the Indoor facility impact.

Operational Updates

• The company is actively engaging with stakeholders on potential pharmaceutical tariffs, emphasizing the critical role of generics in patient access.
• Viatris plans to increase production at its eight U.S. facilities, which produce 8.5 billion doses annually, to mitigate tariff impacts.
• The Indoor facility remediation is progressing, with a reinspection request expected mid-year. The anticipated impact is $500 million for the year, with a significant portion due to lenalidomide generics.

Future Outlook

• Business development remains a priority, with a focus on in-market or near-to-market assets to enhance growth.
• The meloxicam Phase 3 trial showed promise as a non-opioid pain management alternative, with plans for FDA submission later this year.
• Viatris is conducting an enterprise-wide strategic review to ensure alignment with its execution goals.

Q&A Highlights

• Viatris is in discussions with government bodies about tariffs, aiming to protect patient access and possibly pass on costs.
• The company expects stable pricing in the U.S. and continued growth in Europe and China to drive operational growth.
• The pipeline remains strong with four successful Phase 3 readouts, including two upcoming in ophthalmology.

For further details, refer to the full transcript below.

Full transcript - Jefferies Global Healthcare Conference 2025:

Dennis Ding, Speck Pharma Analyst, Jefferies: Hi. Good morning, welcome to the day two of the Jefferies Healthcare Conference. My name is Dennis Ding, Speck Pharma analyst here at Jefferies. I have the great pleasure of having Beatrice here, the CFO, Dorette and the CMO, Corinne here up with me. Welcome.

Before we kind of talk a little bit more about the business, I would love to understand your take on the broader macro and regulatory environment that’s going on with regards to the generics and things like that and like how Viatris is necessarily thinking about all the different dynamics that are going on in the environment right now.

Beatrice, CFO, Viatris: Thanks, Dennis. It’s great to be here and thank you for having us. Yes, it’s certainly evolving and dynamic market. I know you have a lot of questions and I’ll get into that. But I thought it would be great if I could just take a step back and give a quick update on where we are because I think that will also impact kind of how we think about the macro environment.

Because kind of this year is really focus on execution for us. We reported first quarter earnings a few weeks ago and we’re really off to a solid start executing against our strategic priorities. Our sales were in line with our expectations across all segments, really highlighted by operational growth in China and in Europe. And if you exclude the impact from indoor, we actually grew 2% approximately 2% on a divestiture adjusted operational basis in spite of the evolving policy dynamics. We had four positive phase three milestones with positive data readouts from meloxicam, zulane low dose MR one hundred forty two and we also filed Effexor GAD in Japan.

And our free cash flow was very strong in the first quarter which really enabled us execute against our capital allocation plan. We returned approximately $450,000,000 to shareholders via both dividends and share repurchases. And then with respect to indoor, it comes up, we remain on track to submit a request for reinspection mid year. And then finally, we did reaffirm our outlook based on the trends that we saw in the first quarter for the year, which does include approximately 3% growth excluding indoor for the year. And so we were able to do all of that with respect to the kind of ongoing policy dynamics.

And so we understand it’s an evolving situation. I know we have some questions around tariffs etcetera that we’ll get into. But our real focus in light of everything going on is really to continue to focus on what we can control which is our execution.

Dennis Ding, Speck Pharma Analyst, Jefferies: Sure. And you know maybe you can talk a little bit about the tariff situation. How is Viatris thinking about tariffs in general? What is the exposure to the company? And how are you kind of scenario planning on tariffs for 25%, fifty % or maybe no tariffs at all?

Like how are you thinking about those scenarios?

Beatrice, CFO, Viatris: Yeah. And to your point, there’s still a lot of unknowns with respect to where and what type of tariffs may be levied on pharmaceutical sector. We’ve been engaged in a lot of conversations with a number of stakeholders. That includes the administration. That includes Congress really focused on kind of the impact that tariffs could have on patient access.

To your point, a little bit of background about our business, about 25% of our overall sales are in The US and within that a little over 50% of our US sales are actually produced here in The US. The main countries where we get imports from are Ireland and India. And so in The US we have about eight sites across manufacturing, R and D and packaging. And we actually produce approximately eight and a half billion doses annually here in The US. And so The US is a critical part and we and is a really important part of our manufacturing.

Specifically as it relates to generics, we’ve we did participate in the two thirty two investigation two process and really our focus was articulating one, the value proposition that generics play to patient access. The fact that over 90% of US prescriptions are generic but they only represent a little over 1% of US healthcare costs. The challenges associated with kind of increasing domestic manufacturing in the short term as well as the potential risks that tariffs may cause to supply shortages. And so our focus right now is on education and then internally we are, to your point also focused on exploring potential mitigation strategies as well.

Dennis Ding, Speck Pharma Analyst, Jefferies: Can you kind of outline some of your initial thoughts around mitigation strategies? Maybe talk a little bit about manufacturing capacity in The US and how much room there is left to ramp up or scale up.

Beatrice, CFO, Viatris: Yeah. To your point, we do have eight facilities here in The US spread across our network. And so we’re looking at a number of mitigation strategies. That includes number one, to your point, increasing production at our existing US facilities. In the short term, adjusting our inventory levels here in US market.

But also we’re looking at exploring opportunities to optimize our global network. And that includes looking at site transfers, that includes leveraging additional third party manufacturers, and that also looks like looks at potential exploring opportunities to further invest in our US manufacturing footprint. I don’t know, Corinne, if you would add anything as well.

Corinne, CMO, Viatris: Yeah, we’re also looking at the possibility of passing on price increases to customers. Now, as you know, from a pricing point of view, the generic market and specifically the legacy generics in The US is a very competitive market and our customers are very focused on pricing. So in the short term, we see maybe limited possibilities to adjust price because we have limitations with our contractual terms and notice requirements. But in the mid to long term, and we would do this in collaboration with our with our customers, in partnership with them, we might be able to to increase prices where it fits. And, you know, with also the goal of limiting supply shortages.

Right? So, not an impact in mid term, which potentially if those tariffs happen, could have, you know, reduced margins and impact on drug supplies. But maybe in the mid to long term, that’s a possibility.

Dennis Ding, Speck Pharma Analyst, Jefferies: Okay, perfect. And know, when you talk about mid to long term, are we thinking about a few years or like how long are the contracts in place for?

Corinne, CMO, Viatris: Right, so it’s, so our contracts are multi year contracts. Now we know we are evaluating possibilities to reenter negotiations, depending on the terms of the contracts. And we need to take into consideration as well the PBM cycles, which usually are on a yearly basis. So these are the constraints we are facing.

Dennis Ding, Speck Pharma Analyst, Jefferies: Okay. That’s helpful. And around indoor, can you just remind us the situation there? I know you guys will or have submitted a request for a reinspection. But remind us when do you expect that situation to resolve?

Beatrice, CFO, Viatris: Yeah. And it’s to your point, we continue to make progress with respect to the remediation efforts. We’ve also engaged with a third party subject matter experts to help us with respect to remediation. And we remain kind of on track. We’re kind of at this point we’re almost through our internal remediation process and we anticipate being in a position to submit a request for reinspection around mid year.

With respect to kind of the overall impact, we highlighted our anticipation for the full year of indoor to have about a $500,000,000 impact for the year. That still kind of remains the case. I would just remind people that we have highlighted that the impact is going to be a little bit more first half weighted versus second half weighted. We saw about a $140,000,000 impact in the first quarter and we think the second quarter is going to be in and around kind of that same level from a revenue perspective.

Dennis Ding, Speck Pharma Analyst, Jefferies: Okay. Okay, that’s helpful. And what maybe walk us through the back of the envelope math around that $500,000,000 estimate, maybe in like broad strokes. I’m just wondering what are the pushes and pulls on that? Is there upside in terms of if you guys are being overly conservative there or if there’s downside if you guys are assuming more or less of an impact than you would expect?

Beatrice, CFO, Viatris: Yeah. And the way we’ve characterized the indoor impact, about 40% of it is due to lenalidomide. That was slated to go generic or have additional generic entrants in early twenty six. We don’t anticipate kind of recovery of that in the short or long term on lenalidomide. About a hundred million of that is due to penalties and supply shortages that we’re kind of actively working.

Again, that we don’t anticipate kind of continuing into next year and we’re kind of we’re actively working to help mitigate. But that also is one time and the remainder of the impact just has to do with kind of ongoing shortages mainly with respect to our ARB business. So it is a situation that we’re kind of ongoing, we’re continuing to work on. Everything is on track and like we did in the first quarter, we’ll continue to keep people updated on the indoor impact as we move through the year.

Dennis Ding, Speck Pharma Analyst, Jefferies: Okay. And given some of the changes at the FDA, how have your conversations been with the agency recently? Have you noticed any changes in tone or maybe it takes them a little bit longer to respond given the changes? Just talk to us a little bit about that.

Beatrice, CFO, Viatris: We continue to have an active dialogue with the FDA. Obviously there’s unknowns both with respect to as it relates to manufacturing inspections but also on the part of regulatory approvals. We have not noticed a change to date but it is the situation that we’re actively monitoring. But discussions are ongoing.

Dennis Ding, Speck Pharma Analyst, Jefferies: Okay. And Jeffries hosted yesterday Marty Makary here for a great fireside. And one of the things that he noted was just the disparity around CMC inspections in The U. S. Versus outside of The U.

S. And he would really like that to be more equalized or closer to parity. So I’m just curious from your perspective, like how would that impact maybe indoor or some of the other facilities ex US as you think about the next few years?

Beatrice, CFO, Viatris: Yeah. It’s hard to predict. We don’t get notifications with respect to when FDA is gonna inspect our facilities. But to give you some color, we did have three FDA kind of significant inspections last year. One was indoor, the other one was in Carole Park, Australia and the third was in Nashik which was also in India.

But we can’t predict where and when the FDA will inspect.

Dennis Ding, Speck Pharma Analyst, Jefferies: Okay. And we talk a little bit about the business in 2025. Talk about the factors impacting some of the back half weighted revenue cadence for this year.

Corinne, CMO, Viatris: So as you look at our base business, as Doritea mentioned earlier, we actually in the first quarter, we delivered a 2% growth. So operational growth with excluding the impact of indoor and we continue to expect a 3% operational growth for the rest the for the full year. And this will be a function of a few things. First, in The US, we see a relatively stable pricing environment. We will see growth of some of our complex products like Brena, Exela.

We see as well that we’re going to launch more complex products in The US. In Europe, we see growth across our diversified portfolio, notably good performance in countries and markets like like France, and and growth of key brands like Creon, like Brufen, our thrombosis portfolio as well doing very well. And in China region, in China, strong growth also. We anticipate that this growth will continue, so we’re very pleased with our performance there. You asked about phasing of our revenues.

The second half of the year represents about 52% of the full year revenues, and the new product launches are expected to be more in the back half of the year, and that includes key products like octreotide, iron sucrose, the agrutide. And we also have, like every year, the normal seasonality that we see in the second half versus the first half with notably, is our flu vaccine in Europe.

Dennis Ding, Speck Pharma Analyst, Jefferies: Okay. And in terms of the new launches, can you just help frame the magnitude of revenue that we could expect in the second half from those launches or maybe even just the opportunity for those new launches?

Beatrice, CFO, Viatris: Yes. I don’t know if we’ve we don’t highlight the specific revenue attributed to any one product. I think what we’ve talked about on an ongoing basis is we expect to generate between four fifty and five fifty of aggregate new product revenues per year. To Corinne’s point, in light of some of the back half kind of waiting around some of our new products, we do expect kind of the ratio of the four fifty to be slightly second half weighted. But there’s no specific kind of numbers we ascribe to any one key product because of the portfolio approach we Okay.

Dennis Ding, Speck Pharma Analyst, Jefferies: And do you have any updated thoughts on FX for the year?

Beatrice, CFO, Viatris: Yes, it is. It has been a volatile situation with respect to FX. As a reminder, our business approximately 75% of our revenues comes from outside of The U. S. What we’ve talked about is if current rates hold, we kind of expect to offset the 2% to 3% headwind with respect to FX that we had provided when we gave guidance.

And so, of that’s the magnitude of how we’re thinking about Okay.

Dennis Ding, Speck Pharma Analyst, Jefferies: And why don’t we shift over to the pipeline as well as BD. Walk us through your thinking around BD and just around the cadence of deal flow. Should we expect another, you know, a deal this year or just broad strokes in terms of the timelines?

Beatrice, CFO, Viatris: Yes. And BD is still a strategic priority for the company and our focus really is on adding kind of an expanding our portfolio of in or near to market assets that can add durability and importantly accelerate our top line growth. That does include regional BD where that is that could be immediately accretive that we can tuck in to our base business and really kind of leverage our global network. We’ve always talked about kind of a fifty fifty split between allocating our capital between BD as well as capital return. What we’ve talked about this year is prioritizing a bit capital return a bit more than BD.

But as we’ve talked about our available cash flow for the year, kind of if you use the midpoint of our guidance of about 2,000,000,000, we have about one seven of deployable cash flow even factoring in what we’ve talked about from a kind of capital deployment perspective. We still have about 5 to 600,000,000 of strategic flexibility this year. And so it’s important for us to maintain that strategic flexibility just one, given the dynamic macro environment we’re in. But we’re also gonna continue to evaluate both opportunities to add to our portfolio but also continue to evaluate ways to maybe be more aggressive on the capital return.

Dennis Ding, Speck Pharma Analyst, Jefferies: Is there a particular type of therapeutic area or asset or synergy that you guys are looking for when you’re looking across the landscape and thinking about BD?

Beatrice, CFO, Viatris: Yes. I mean, I would characterize it in a couple of buckets. One, obviously kind of immediately accretive regional deals where we can leverage our existing kind of infrastructure in our global network. I would also say secondly, it’s looking at where we kind of have additional opportunities. The most important thing to us is to find opportunities where we think we can be successful and have the right assets that are durable and will really contribute to our top line growth.

We have existing infrastructure in ophthalmology. We have a respiratory franchise. We have women’s health. We’ve talked about dermatology as well as GI as areas. But we really have the infrastructure to be kind of opportunistic in terms of where we play.

But the most important thing is to kind of leverage the skill set that we have and find ways where we can be successful.

Dennis Ding, Speck Pharma Analyst, Jefferies: Okay. And on R and D, can you just remind us what are some of the key readouts that Beatrice will have this year?

Beatrice, CFO, Viatris: So we had about, so at the beginning of the year we’ve talked about the six, we anticipated to have six phase three readouts this year. Four of them have already read out and have been successful. That includes Zulane low dose, that includes meloxicam that we reported out a few weeks ago, as well as MR 142 in ophthalmology just this past week. We also filed GAD in Japan. We have two more anticipated readouts in the first kind of this year.

We’ve talked about the first half of this year and those are both in ophthalmology.

Dennis Ding, Speck Pharma Analyst, Jefferies: Okay. And is there any particular readout or an asset that you think that investors should really focus on this year?

Beatrice, CFO, Viatris: So I would say one, it’s the kind of totality of the execution track record that we’ve been able to kind of achieve over the course of the first half of this year. We were very pleased with the meloxicam data that we reported and just the level of differentiation and the opportunity set there. And I would also say we’re also excited about the totality of the assets that we have in our ophthalmology franchise, whether it’s in blepharitis with pimacrymalis as well as some of our assets. We have a real opportunity to expand upon our existing ophthalmology footprint.

Dennis Ding, Speck Pharma Analyst, Jefferies: Okay. If we can kind of talk a little bit about meloxicam because I find that pretty interesting. So can you give a quick recap of the Phase three data, just the opportunity that’s out there for pain?

Corinne, CMO, Viatris: So we were very pleased with the top line results of our Phase III program for fast acting meloxicam. So as a reminder, acting meloxicam has been specifically designed for rapid onset of action and is being developed for moderate to severe acute pain. And we’ve hit on all our primary and secondary endpoints across the different trials. We’ve demonstrated that we can have statistical significance in terms of pain improvement versus placebo and reduction of pain that is clinically meaningful versus the background and the baseline. Importantly, what we have shown as well is that the safety profile was excellent, and we showed that repeatedly in all our phase three programs that confirmed the phase two data that we had as well.

But one thing I want to add is that in the trial design we also had a comparative arm versus an opioid tramadol. And what we demonstrated here is that Fascic meloxicam, in fact, had a better and superior pain control than tramadol. So that’s a very important data point, especially as we look at the possibility for opioid sparing capacity, and we should demonstrate this in our phase three program, and also we had a higher number of patients who were completely opioid free versus the placebo group. So, of course, you know, we just had the readout of this data, so it’s still maybe very early to talk about how we’re going to position this product. But I can see that with the data that we have in hand, that this product is well positioned to play an important role in the management of moderate to severe acute pain.

To give you a bit of how we consider the commercial opportunity, if you look at The US, there are about seventy to eighty million cases of acute pain annually. The majority, maybe half of those patients, still receive opioids. So, despite the addictive properties of opioids. So, we believe that, you know, FasTeq meloxicam can be, has the potential to be a real good alternative for these patients. And we have designed the development program so that potentially we could have a broad label.

So we’ll be discussing obviously the data with the FDA. But potentially we could treat patients post surgery in inpatient setting, outpatient setting. We also have data in dental pain. So, we are evaluating the opportunity, but we will commercialize this product as a branded asset, and exploring, capitalizing first on the capabilities that we have, notably in the hospital setting, in institutions, in terms of contracting, but also establishing a specialty sales force to be able to compete appropriately in this market.

Dennis Ding, Speck Pharma Analyst, Jefferies: Sure. And then, when will you submit this to the FDA? And which way to

Corinne, CMO, Viatris: So, our regulatory timeline is that we are going to submit to the FDA in the second half of this year. Okay.

Dennis Ding, Speck Pharma Analyst, Jefferies: And to be clear, meloxicam is a non opioid.

Corinne, CMO, Viatris: It’s a non opioid. Okay.

Dennis Ding, Speck Pharma Analyst, Jefferies: So, how should we think about broadly the no pain act and where meloxicam could capitalize on some of the reimbursement tailwinds there?

Corinne, CMO, Viatris: Yes, no, absolutely. So, the no pain act will be an important lever for us as we commercialize these products in Medicare and Medicaid. States will have the possibility, and I think to date, 11 states already passed the act to favor the reimbursement of non opioids. So, I think it will be a favorable policy for, as we launch meloxicam. And I think the no pain add is supposed to be in place until 2028, I believe.

Dennis Ding, Speck Pharma Analyst, Jefferies: Yeah, okay. And right now Vertex is launching their non opioid acute pain product. Is there any kind of takeaways or learnings that Beatrice has from looking at that launch and how you guys could apply that to meloxicam?

Corinne, CMO, Viatris: We’ll be obviously watching what the competition is doing. But we’re very pleased with our data which I believe compare very favorably to Tronavx. So I will repeat that I really think FasTAC meloxicam can play a strong role in those patients post surgery after, very painful surgeries like bunionectomy, for instance, and that’s where we generate our data. But also, other settings, dental care I mentioned, but in other areas of pain, of acute pain.

Beatrice, CFO, Viatris: And I would just add, really highlights, one, the size of the market, right, and the real need for non opioid kind of treatment options generally. So I think the success bodes well for kind of the class in general.

Dennis Ding, Speck Pharma Analyst, Jefferies: Okay, and you guys will be looking at a broad label not just necessarily bunionectomy?

Corinne, CMO, Viatris: That’s great. I mean, think as I said, our development program has been designed in such a way that we could potentially have a broad label.

Dennis Ding, Speck Pharma Analyst, Jefferies: Okay. Good. In the last one or two minutes, do you guys have any final messages for investors and shareholders who are interested in the space and in Beatrice?

Beatrice, CFO, Viatris: Yes. Thank you for the time and allowing us the opportunity to share some of our updates. I would just say that this year really as I started is a year of execution and us delivering on the strategic priorities that we set at the beginning of the year. That includes really driving strong commercial execution including base business growth excluding the impact from indoor. Really advancing our pipeline where we’ve already had four positive phase three readouts.

Prioritizing capital return with the focus on share buybacks, but also targeting accretive business development. Completing the remediation of our indoor facility and requesting a for for resubmission and also conducting our enterprise wide strategic review. So we look forward to updating our investors on updates and the progress that we have through the rest of the year and just maintaining an active dialogue.

Dennis Ding, Speck Pharma Analyst, Jefferies: Perfect. Well, thank you so much for the time and thank you for being here. We’re all excited about the outlook ahead and hope you guys have a great conference.

Corinne, CMO, Viatris: Thank you.

Dennis Ding, Speck Pharma Analyst, Jefferies: Thank you.

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