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Viatris' (VTRS) Q1 Earnings Beat, Revenues Miss Estimates
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Viatris Inc (VTRS - Free Report) reported adjusted earnings of 93 cents per share in the first quarter of 2022, easily beating the Zacks Consensus Estimate of 81 cents. In the year-ago quarter, the company reported earnings of 92 cents.
VTRS was formed in November 2020 through the combination of Mylan and Upjohn. Total revenues came in at $4.19 billion, down 5.4% year over year. The top line missed the Zacks Consensus Estimate of $4.2 billion.
Viatris’ stock has lost 26.5% in the year so far compared with the industry’s decline of 32.7%.
Image Source: Zacks Investment Research
Quarter in Detail
Revenues include sales and other revenues. Sales of $4.18 billion were down 5% from the year-ago quarter.
The company reports results in four segments — Developed Markets, Emerging Markets, JANZ (Japan, Australia and New Zealand) and Greater China.
Developed market sales came in at $2.5 billion, down 4% from the year-ago quarter.
Sales from Emerging Markets came in at $705.2 million, down 7% year over year.
JANZ generated sales of $423.8 million, down 12%.
Sales from Greater China came in at $573.1 million compared with $591.9 million a year ago.
On the basis of product category, Brands performed better than management expectations, driven by products such as Lipitor, Effexor and Perforomist. It generated revenues of $2.5 billion.
Complex generics and biosimilars grew 19%, largely driven by generic Restasis launch in February 2022, partially offset by competition in select complex generics products. However, the generics business raked in sales of $1.2 billion, down 8%.
Viatris generated $120 million in new product revenues (revenues from products launched in 2022), primarily driven by the launch of generic Restasis and interchangeable Semglee in the United States. It is on track to achieve approximately $600 million in new product revenues in 2022.
Adjusted gross margin came in at 59.5% compared with 59.6% in the year-ago quarter.
In February, Viatris announced a definitive agreement with Biocon Biologics Limited whereby it will sell its biosimilars portfolio to the latter. Under the terms of the deal, Viatris will combine its biosimilars portfolio with Biocon Biologics Ltd in exchange for pre-tax consideration of up to $3.335 billion.
Viatris will receive $3 billion in consideration in the form of a $2 billion cash payment and $1 billion of convertible preferred equity at the time of close. Viatris will own a stake of at least 12.9% of Biocon Biologics on a fully diluted basis.
Along with first-quarter results, management stated that its transaction with Biocon Biologics is progressing and is expected to close in the second half of 2022.
Guidance Reiterated
Revenues are projected between $17 billion and $17.5 billion.
Our Take
Viatris reported mixed results in the first quarter. New products are likely to boost sales in the quarters ahead.
The company is now looking to reshape its business and has entered into a merger agreement with Biocon Biologics.
Loss estimates for CLVS for 2022 have narrowed 7 cents in the past 7 days.
The consensus estimate for Vertex’s 2022 earnings has increased 25 cents over the past 60 days to $14.58. Shares of VRTX have gained 15.6% in the year so far.
Loss estimates for ALKS for 2022 have narrowed to 3 cents from a loss of 14 cents in the past 60 days. Alkermes surpassed estimates in all of the trailing four quarters, the average surprise being 350.48%.
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Viatris' (VTRS) Q1 Earnings Beat, Revenues Miss Estimates
Viatris Inc (VTRS - Free Report) reported adjusted earnings of 93 cents per share in the first quarter of 2022, easily beating the Zacks Consensus Estimate of 81 cents. In the year-ago quarter, the company reported earnings of 92 cents.
VTRS was formed in November 2020 through the combination of Mylan and Upjohn. Total revenues came in at $4.19 billion, down 5.4% year over year. The top line missed the Zacks Consensus Estimate of $4.2 billion.
Viatris’ stock has lost 26.5% in the year so far compared with the industry’s decline of 32.7%.
Image Source: Zacks Investment Research
Quarter in Detail
Revenues include sales and other revenues. Sales of $4.18 billion were down 5% from the year-ago quarter.
The company reports results in four segments — Developed Markets, Emerging Markets, JANZ (Japan, Australia and New Zealand) and Greater China.
Developed market sales came in at $2.5 billion, down 4% from the year-ago quarter.
Sales from Emerging Markets came in at $705.2 million, down 7% year over year.
JANZ generated sales of $423.8 million, down 12%.
Sales from Greater China came in at $573.1 million compared with $591.9 million a year ago.
On the basis of product category, Brands performed better than management expectations, driven by products such as Lipitor, Effexor and Perforomist. It generated revenues of $2.5 billion.
Complex generics and biosimilars grew 19%, largely driven by generic Restasis launch in February 2022, partially offset by competition in select complex generics products. However, the generics business raked in sales of $1.2 billion, down 8%.
Viatris generated $120 million in new product revenues (revenues from products launched in 2022), primarily driven by the launch of generic Restasis and interchangeable Semglee in the United States. It is on track to achieve approximately $600 million in new product revenues in 2022.
Adjusted gross margin came in at 59.5% compared with 59.6% in the year-ago quarter.
Viatris Inc. Price, Consensus and EPS Surprise
Viatris Inc. price-consensus-eps-surprise-chart | Viatris Inc. Quote
Other Updates
In February, Viatris announced a definitive agreement with Biocon Biologics Limited whereby it will sell its biosimilars portfolio to the latter. Under the terms of the deal, Viatris will combine its biosimilars portfolio with Biocon Biologics Ltd in exchange for pre-tax consideration of up to $3.335 billion.
Viatris will receive $3 billion in consideration in the form of a $2 billion cash payment and $1 billion of convertible preferred equity at the time of close. Viatris will own a stake of at least 12.9% of Biocon Biologics on a fully diluted basis.
Along with first-quarter results, management stated that its transaction with Biocon Biologics is progressing and is expected to close in the second half of 2022.
Guidance Reiterated
Revenues are projected between $17 billion and $17.5 billion.
Our Take
Viatris reported mixed results in the first quarter. New products are likely to boost sales in the quarters ahead.
The company is now looking to reshape its business and has entered into a merger agreement with Biocon Biologics.
Zacks Rank & Stocks to Consider
Viatris currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the biotech sector are Clovis Oncology , Vertex Pharmaceuticals Incorporated (VRTX - Free Report) and Alkermes (ALKS - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Loss estimates for CLVS for 2022 have narrowed 7 cents in the past 7 days.
The consensus estimate for Vertex’s 2022 earnings has increased 25 cents over the past 60 days to $14.58. Shares of VRTX have gained 15.6% in the year so far.
Loss estimates for ALKS for 2022 have narrowed to 3 cents from a loss of 14 cents in the past 60 days. Alkermes surpassed estimates in all of the trailing four quarters, the average surprise being 350.48%.