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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 78 cents per share for the first quarter of 2023, down from 93 cents in the year-ago quarter but beating the Zacks Consensus Estimate of 69 cents per share.
Total revenues came in at $3.7 billion, down 11% year over year. The top line missed the Zacks Consensus Estimate of $3.8 billion.
Viatris’ stock has lost 16.7% year to date compared with the industry’s decline of 6.5%.
Image Source: Zacks Investment Research
Quarter in Detail
Revenues include sales and other revenues. Sales of $3.7 billion were down 11% from the year-ago quarter (6% 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 $2.2 billion, down 4% (adjusted for the impact of the biosimilars divestiture in November 2022) from the year-ago quarter.
In November 2022, Viatris closed its transaction with Biocon Biologics Limited. Viatris had earlier announced an agreement with Biocon Biologics Limited whereby Viatris would sell its biosimilars portfolio to the latter.
Sales from Emerging Markets came in at $641.9 million, up 1% year over year.
JANZ generated sales of $342.2 million, down 10%.
Sales from Greater China came in at $564.6 million, up 5% year over year.
Revenues from Brands were down 5% year over year to $2.4 billion. Among these, Lipitor’s sales were $417.9 million, down from $440.1 million in the year-ago quarter. Norvasc sales were $202.7 million, down from $207.8 million in the year-ago quarter.
Complex generics performed lower than management expectations, primarily due to the phasing of certain products. Revenues from this business declined 65% year over year.
Generics, which include diversified product forms such as extended-release oral solids, injectables, transdermals and topicals, performed ahead of management’s expectations, including solid performance across the broader portfolio in developed and emerging markets. Revenues from this business came in at $1.2 billion, down 6%.
Viatris generated $85 million in new product revenues, primarily driven by the introduction of generic lenalidomide in the United States. It targets to achieve approximately $500 million in new revenues in 2023.
Adjusted gross margin came in at 60.4%, up from 59.5% in the year-ago quarter.
2023 Guidance Reiterated
Revenues are projected between $15.5 billion and $16 billion.
Over the past 60 days, loss estimates for SPRO have narrowed to $1.02 from $1.45 for 2023. SPRO topped earnings estimates in three of the last four quarters and missed the remaining one, the average surprise being 56.37%.
Over the past 90 days, earnings estimates for LGND in 2023 have increased by 86 cents to $4.16. LGND topped earnings estimates in two of the last four quarters and missed in the other two.
Over the past seven days, earnings estimates for PCRX have increased to $3.56 from $3.51 for 2023. PCRX surpassed estimates in three of the trailing four quarters and missed the remaining one, the average negative surprise being 15.26%.
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Viatris (VTRS) Q1 Earnings Beat, Revenues Miss Estimates
Viatris Inc. (VTRS - Free Report) reported adjusted earnings of 78 cents per share for the first quarter of 2023, down from 93 cents in the year-ago quarter but beating the Zacks Consensus Estimate of 69 cents per share.
Total revenues came in at $3.7 billion, down 11% year over year. The top line missed the Zacks Consensus Estimate of $3.8 billion.
Viatris’ stock has lost 16.7% year to date compared with the industry’s decline of 6.5%.
Image Source: Zacks Investment Research
Quarter in Detail
Revenues include sales and other revenues. Sales of $3.7 billion were down 11% from the year-ago quarter (6% 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 $2.2 billion, down 4% (adjusted for the impact of the biosimilars divestiture in November 2022) from the year-ago quarter.
In November 2022, Viatris closed its transaction with Biocon Biologics Limited. Viatris had earlier announced an agreement with Biocon Biologics Limited whereby Viatris would sell its biosimilars portfolio to the latter.
Sales from Emerging Markets came in at $641.9 million, up 1% year over year.
JANZ generated sales of $342.2 million, down 10%.
Sales from Greater China came in at $564.6 million, up 5% year over year.
Revenues from Brands were down 5% year over year to $2.4 billion. Among these, Lipitor’s sales were $417.9 million, down from $440.1 million in the year-ago quarter. Norvasc sales were $202.7 million, down from $207.8 million in the year-ago quarter.
Complex generics performed lower than management expectations, primarily due to the phasing of certain products. Revenues from this business declined 65% year over year.
Generics, which include diversified product forms such as extended-release oral solids, injectables, transdermals and topicals, performed ahead of management’s expectations, including solid performance across the broader portfolio in developed and emerging markets. Revenues from this business came in at $1.2 billion, down 6%.
Viatris generated $85 million in new product revenues, primarily driven by the introduction of generic lenalidomide in the United States. It targets to achieve approximately $500 million in new revenues in 2023.
Adjusted gross margin came in at 60.4%, up from 59.5% in the year-ago quarter.
2023 Guidance Reiterated
Revenues are projected between $15.5 billion and $16 billion.
Viatris Inc. Price, Consensus and EPS Surprise
Viatris Inc. price-consensus-eps-surprise-chart | Viatris Inc. Quote
Our Take
Viatris reported mixed results for the first quarter. The company is now looking to reshape its business after selling its biosimilars’ portfolio.
Zacks Rank & Stocks to Consider
Viatris currently carries a Zacks Rank #4 (Sell).
Some top-ranked stocks in the healthcare sector include Spero Therapeutics (SPRO - Free Report) , Ligand Pharmaceuticals (LGND - Free Report) and Pacira BioSciences (PCRX - Free Report) . While Spero and Ligand sport a Zacks Rank #1 (Strong Buy), PCRX carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past 60 days, loss estimates for SPRO have narrowed to $1.02 from $1.45 for 2023. SPRO topped earnings estimates in three of the last four quarters and missed the remaining one, the average surprise being 56.37%.
Over the past 90 days, earnings estimates for LGND in 2023 have increased by 86 cents to $4.16. LGND topped earnings estimates in two of the last four quarters and missed in the other two.
Over the past seven days, earnings estimates for PCRX have increased to $3.56 from $3.51 for 2023. PCRX surpassed estimates in three of the trailing four quarters and missed the remaining one, the average negative surprise being 15.26%.