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Viatris (VTRS) Q3 Earnings Beat, Revenues Miss Estimates
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Viatris Inc (VTRS - Free Report) reported adjusted earnings of 87 cents per share for the third quarter of 2022, easily beating the Zacks Consensus Estimate of 82 cents. The company had reported earnings of 99 cents for the year-ago quarter.
Total revenues came in at $4.1 billion, down 10.1% year over year. The top line missed the Zacks Consensus Estimate of $4.14 billion.
The U.S. dollar continued to strengthen across major currencies that impacted the top line.
Viatris’ stock has lost 28.3% in the year so far compared with the industry’s decline of 31.5%.
Image Source: Zacks Investment Research
Quarter in Detail
Revenues include sales and other revenues. Sales of $4.1 billion were down 1% from the year-ago quarter on an operational basis.
The company reports results in four segments — Developed Markets, Emerging Markets, Japan, Australia and New Zealand (JANZ) and Greater China.
Developed market sales came in at $2.43 billion, down 8% from the year-ago quarter.
Sales from Emerging Markets came in at $678.9 million, down 14% year over year.
JANZ generated sales of $383 million, down 24%.
Sales from Greater China came in at $574 million compared with $566.8 million a year ago.
Base business brands increased 1% year over year on an operational basis, driven by products such as Lipitor, Brufen and Creon.
Lipitor sales were $420.4 million, up from $410 million in the year-ago quarter.
Complex generics and biosimilars performed slightly below management’s expectations and were down 4% due to increased competition and customer buying patterns. Revenues from the biosimilars portfolio to be contributed to Biocon Biologics totaled approximately $185 million in the quarter.
Generics, which include diversified product forms such as extended-release oral solids, injectables, transdermals and topicals, performed in line with expectations, including solid performance across the broader North America portfolio, with the launch of lenalidomide in the United States. Sales were down 13%.
Viatris generated $144 million in new product revenues (revenues from products launched in 2022), primarily driven by lenalidomide, unbranded insulin glargine and interchangeable Semglee in the United States. It is on track to achieve approximately $525 million in new product revenues in 2022, which is below expectations due to the timing of launches but with better-than-expected margins.
Adjusted gross margin came in at 59.5% compared with 59.4% in the year-ago quarter.
Other Updates
In February, Viatris announced a definitive agreement with Biocon Biologics Limited whereby it will sell its biosimilars portfolio to the latter. Per the terms of the deal, Viatris will combine its biosimilars portfolio with Biocon Biologics Ltd in exchange for a 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% in Biocon Biologics on a fully diluted basis.
Guidance Reaffirmed
Revenues are projected between $16.2 billion and $16.7 billion.
Our Take
Viatris reported mixed results for the third quarter, with revenues missing expectations due to the negative impact of the foreign exchange rate.
The company is now looking to reshape its business and has entered into a merger agreement with Biocon Biologics.
Over the past 60 days, loss estimates for Puma have narrowed to 6 cents from 16 cents. Puma also surpassed estimates in three of the trailing four quarters and missed in the other one, the average being 201.37%.
Earnings estimates for Dynavax have increased to $1.74 from $1.15 for 2022 over the past 90 days. Earnings of Dynavax surpassed estimates in two of the trailing four quarters.
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Viatris (VTRS) Q3 Earnings Beat, Revenues Miss Estimates
Viatris Inc (VTRS - Free Report) reported adjusted earnings of 87 cents per share for the third quarter of 2022, easily beating the Zacks Consensus Estimate of 82 cents. The company had reported earnings of 99 cents for the year-ago quarter.
Total revenues came in at $4.1 billion, down 10.1% year over year. The top line missed the Zacks Consensus Estimate of $4.14 billion.
The U.S. dollar continued to strengthen across major currencies that impacted the top line.
Viatris’ stock has lost 28.3% in the year so far compared with the industry’s decline of 31.5%.
Image Source: Zacks Investment Research
Quarter in Detail
Revenues include sales and other revenues. Sales of $4.1 billion were down 1% from the year-ago quarter on an operational basis.
The company reports results in four segments — Developed Markets, Emerging Markets, Japan, Australia and New Zealand (JANZ) and Greater China.
Developed market sales came in at $2.43 billion, down 8% from the year-ago quarter.
Sales from Emerging Markets came in at $678.9 million, down 14% year over year.
JANZ generated sales of $383 million, down 24%.
Sales from Greater China came in at $574 million compared with $566.8 million a year ago.
Base business brands increased 1% year over year on an operational basis, driven by products such as Lipitor, Brufen and Creon.
Lipitor sales were $420.4 million, up from $410 million in the year-ago quarter.
Complex generics and biosimilars performed slightly below management’s expectations and were down 4% due to increased competition and customer buying patterns. Revenues from the biosimilars portfolio to be contributed to Biocon Biologics totaled approximately $185 million in the quarter.
Generics, which include diversified product forms such as extended-release oral solids, injectables, transdermals and topicals, performed in line with expectations, including solid performance across the broader North America portfolio, with the launch of lenalidomide in the United States. Sales were down 13%.
Viatris generated $144 million in new product revenues (revenues from products launched in 2022), primarily driven by lenalidomide, unbranded insulin glargine and interchangeable Semglee in the United States. It is on track to achieve approximately $525 million in new product revenues in 2022, which is below expectations due to the timing of launches but with better-than-expected margins.
Adjusted gross margin came in at 59.5% compared with 59.4% in the year-ago quarter.
Other Updates
In February, Viatris announced a definitive agreement with Biocon Biologics Limited whereby it will sell its biosimilars portfolio to the latter. Per the terms of the deal, Viatris will combine its biosimilars portfolio with Biocon Biologics Ltd in exchange for a 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% in Biocon Biologics on a fully diluted basis.
Guidance Reaffirmed
Revenues are projected between $16.2 billion and $16.7 billion.
Our Take
Viatris reported mixed results for the third quarter, with revenues missing expectations due to the negative impact of the foreign exchange rate.
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 #3 (Hold). A couple of better-ranked stocks in the healthcare sector are Puma Biotechnology (PBYI - Free Report) and Dynavax (DVAX - Free Report) . Both the stocks carry a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past 60 days, loss estimates for Puma have narrowed to 6 cents from 16 cents. Puma also surpassed estimates in three of the trailing four quarters and missed in the other one, the average being 201.37%.
Earnings estimates for Dynavax have increased to $1.74 from $1.15 for 2022 over the past 90 days. Earnings of Dynavax surpassed estimates in two of the trailing four quarters.