Back to top

Image: Bigstock

Viatris (VTRS) Beats on Q1 Earnings & Sales, Announces Dividend

Read MoreHide Full Article

Viatris Inc (VTRS - Free Report) reported adjusted earnings of 92 cents per share in the first quarter of 2021, easily beating the Zacks Consensus Estimate of 79 cents and increasing from 90 cents reported in the year-ago quarter.

The company was formed in November 2020 through the combination of Mylan and Upjohn.  Net sales came in at $4.4 billion, growing 70% year over year as a result of the merger and beating the Zacks Consensus Estimate of $4.2 billion. Sales were down 6% compared with combined adjusted results in the year-ago quarter.  

Viatris’ stock has lost 17.7% in the year so far compared with the industry’s decline of 3.3%.

 

The company reports results in four segments — Developed Markets, Emerging Markets, JANZ (Japan, Australia and New Zealand) and Greater China.

Quarter in Detail

Developed market sales came in at $2.6 billion, up 29% from the year-ago quarter.

Sales from Greater China came in at $591.9 million. Sales recorded in the year-ago quarter were $15.1 million.

JANZ generated sales of $481.9 million, surging 98%.

Sales from Emerging Markets came in at $754.7 million, up 120% year over year.

The branded business performed better than expectations, driven by strong EpiPen, Amitiza, Lipitor and Viagra. Complex generics and biosimilars grew 27% compared to adjusted results in the year-ago quarter, largely driven by pegfilgrastim, trastuzumab and adalimumab biosimilars. Generics, which include diversified product forms such as extended-release oral solids, injectables, transdermals and topicals, performed in line with expectations. Viatris generated $163 million in new product revenues, primarily driven by the thrombosis portfolio in the Developed Markets segment, and is on track to meet $690 million in consolidated new product revenues in 2021.

Adjusted gross margin increased to 60% from 53% in the year-ago quarter.

2021 Guidance

Revenues are projected between $17.2 billion and $17.8 billion.

During the fourth quarter of 2020, Viatris announced a widespread global restructuring program in order to achieve synergies of $1 billion. The restructuring initiative incorporates and expands on the restructuring program announced by Mylan N.V. earlier in 2020, as part of its business transformation efforts. The company expects to optimize its commercial capabilities and enabling functions, and close, downsize or divest up to 13 manufacturing facilities globally. The company remains on track to realize approximately $500 million of cost synergies this year.

Dividend Announcement

Viatris declared a quarterly dividend of 11 cents per share. The company paid down $1.06 billion in short-term debt in the quarter.

Our Take

Viatris reported better-than-expected results for the first quarter. New product launches should boost sales in the quarters ahead and the ongoing restructuring program should help the bottom line.

Zacks Rank & Stocks to Consider

Viatris currently carries a Zacks Rank #4 (Sell).

A few better-ranked stocks in the healthcare sector include Corcept Therapeutics (CORT - Free Report) , Ironwood Pharmaceuticals (IRWD - Free Report) and Zoetis, Inc. (ZTS - Free Report) . All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings estimates for Corcept for 2021 have moved up 7 cents in the past 90 days.

Earnings estimates for Ironwood for 2021 have moved up 5 cents in the past 30 days.

Earnings estimates for Zoetis for 2021 have gone up 5 cents in the past 30 days.

Zacks Top 10 Stocks for 2021

In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?

Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.

Access Zacks Top 10 Stocks for 2021 today >>

Published in