Press release·08/06/2026 20:47:13

Company Overview

Viatris is a global healthcare company that supplies high-quality medicines to approximately 1 billion patients around the world each year. The company has a global footprint, an extensive portfolio of medicines, a global supply chain, and scientific expertise to address global health challenges. Viatris operates in over 165 countries with around 30,000 employees and has 27 manufacturing, packaging, and distribution sites worldwide.

Viatris has four reportable segments: Developed Markets, Greater China, JANZ (Japan, Australia, and New Zealand), and Emerging Markets. The company’s portfolio consists of generics, globally recognized branded products, and an expanding portfolio of innovative medicines.

Key Market and Industry Factors

The global pharmaceutical industry is highly competitive and regulated. Obtaining regulatory approval to manufacture and market new products is a rigorous, time-consuming, and costly process. Complex generic products are particularly challenging to bring to market. The timing of new product introductions can significantly impact the company’s financial results, as generic products tend to generate the most revenue and profit at launch.

Pricing is often affected by factors outside the company’s control, such as government-imposed price reductions and tender systems in certain markets. These measures can negatively impact sales and profitability. Competition from generic versions of branded products can also lead to rapid declines in sales once market exclusivity expires.

Recent Developments

In 2026, Viatris initiated a restructuring program to optimize its commercial, operational, and R&D activities. This is expected to result in a global workforce reduction of up to 10% and generate $600-$700 million in annual savings once fully implemented.

Viatris also completed the sale of its equity stake in Biocon Biologics for $815 million, which included $400 million in cash and $415 million in Biocon shares. This transaction also accelerated the expiration of the company’s biosimilars non-compete restrictions.

The company has faced challenges at two of its manufacturing facilities in India. The Indore facility received a warning letter and import alert from the FDA, affecting 11 products. The Nashik facility experienced a fire, leading to temporary production suspensions and supply disruptions. These events are expected to negatively impact revenues by $100-$150 million in the second half of 2026.

Financial Summary

For the three months ended June 30, 2026, Viatris reported total revenues of $3.76 billion, an increase of 5% compared to the prior year period. On a constant currency basis, net sales increased by 4%, driven by new product launches and base business growth, primarily in the Greater China segment.

Gross profit for the quarter was $1.46 billion, with gross margins of 39%. Adjusted gross margins were approximately 57%, consistent with the prior year period.

Operating expenses increased, primarily due to a $177.8 million charge related to the planned sale of the Tyrvaya product rights and higher non-income related taxes and other items. The company also recognized a $73.2 million net charge for litigation settlements and other contingencies.

For the six months ended June 30, 2026, total revenues were $7.27 billion, an increase of 6% compared to the prior year period. On a constant currency basis, net sales increased by 3%. Gross profit was $2.61 billion, with gross margins of 36%. Adjusted gross margins were approximately 57%.

The company reported a net loss of $118.8 million for the three-month period and net earnings of $57.6 million for the six-month period. Adjusted net earnings were $808.5 million and $1.50 billion, respectively, for the three and six-month periods.

Liquidity and Capital Resources

Viatris’ primary source of liquidity is net cash provided by operating activities, which was $770.1 million for the six months ended June 30, 2026. The company believes it has sufficient liquidity, including available borrowing capacity, to fund its cash needs.

Net cash provided by operating activities increased by $14.9 million compared to the prior year period, primarily due to higher operating earnings. Net cash from investing activities was $225.8 million, driven by proceeds from the Biocon Biologics transaction, while net cash used in financing activities was $1.45 billion, including the repayment of $1.675 billion in senior notes and $150 million in share repurchases.

As of June 30, 2026, Viatris had $886.5 million in cash and cash equivalents and access to $3.5 billion under its revolving credit facility and $600 million under its receivables facility. The company is in compliance with its debt covenants and expects to remain so for the next 12 months.

Outlook and Risks

Viatris faces several risks and uncertainties that could impact its financial performance, including:

• Potential changes in customer and supplier relationships, as well as customer purchasing patterns
• Competition and the loss of market exclusivity for certain products
• Changes in economic and financial conditions, including the impacts of inflation, geopolitical events, and foreign currency exchange fluctuations
• Uncertainties regarding future demand, pricing, and reimbursement for the company’s products
• Risks associated with the manufacture and supply of its products, including facility shutdowns, regulatory inspections, and operational disruptions

The company’s ability to satisfy its working capital requirements, debt obligations, and fund planned capital expenditures, share repurchases, and dividend payments will depend on its future operating performance and various financial and business factors, some of which are beyond its control.

Conclusion

Viatris is a global healthcare company with a diverse portfolio of branded and generic products. The company faces a challenging and highly regulated industry environment, with risks related to pricing, competition, and manufacturing. While the company has experienced some operational disruptions, it remains focused on optimizing its business through a restructuring program and exploring ways to unlock the value of its global platform. Viatris’ financial performance has been mixed, with revenue growth offset by increased expenses, but the company maintains a strong liquidity position to support its ongoing operations and strategic initiatives.