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Viatris (VTRS) Q2 Earnings Beat, Generics Business Grows
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Viatris Inc. (VTRS - Free Report) delivered adjusted earnings of 75 cents per share in the second quarter of 2023, down from 88 cents in the year-ago quarter but beating the Zacks Consensus Estimate of 71 cents per share.
Total revenues came in at $3.9 billion, down 4.8% year over year. The top line beat the Zacks Consensus Estimate by 0.8%.
Viatris’ stock has lost 4.9% in the year so far compared with the industry’s decline of 5.5%.
Image Source: Zacks Investment Research
Quarter in Detail
Revenues include sales and other revenues. Sales of $3.9 billion were down 5% from the year-ago quarter (3% 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 $2.3 billion, down 5% (adjusted for the impact of the biosimilars’ divestiture in November 2022) from the year-ago quarter.
In November 2022, Viatris sold its biosimilars’ portfolio to Biocon Biologics Limited.
Sales from Emerging Markets came in at $648.1 million, flat year over year. JANZ generated sales of $375.5 million, down 12%.
Sales from Greater China came in at $532.1 million, down 3% year over year.
Revenues from Brands were down 2% year over year to $2.4 billion. Among these, Lipitor’s sales were $380 million, down from $405.6 million in the year-ago quarter. Norvasc sales were $182.4 million, down from $203 million in the year-ago quarter.
Complex generics performed in line with management’s expectations. Revenues from this business declined 61% 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 $1.3 billion, up 5%.
Viatris generated $124 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 59.5%, up from 58.6% in the year-ago quarter.
2023 Guidance Reiterated
Revenues are projected between $15.5 billion and $16 billion.
The company remains on track to announce all planned divestitures in 2023, including at least one significant divestiture in the third quarter.
Concurrently, Viatris and Mapi Pharma Ltd. announced that the FDA accepted the collaboratively submitted new drug application for GA Depot 40 mg for review. The product is a long-acting glatiramer acetate being investigated as a once-monthly injection for the treatment of relapsing forms of multiple sclerosis. The regulatory body has assigned a target action date of Mar 8, 2024.
Our Take
Viatris reported better-than-expected results for the second quarter. The company plans to divest some of its businesses later in 2023, which should allow VTRS to better focus on its core businesses.
The loss per share estimate for DVAX has narrowed by 5 cents to 51 cents for 2023 in the past 30 days. Dynavax has risen by 36.1% in the year-to-date period. Its earnings beat estimates in two of the trailing four quarters and missed in the remaining two, the average surprise being 25.78%.
The Zacks Consensus Estimate for Alkermes’ earnings per share has moved up from 50 cents to $1.47 for 2023 and from $1.78 to $2.04 for 2024 in the past 60 days. The stock has risen 6.6% in the year-to-date period. ALKS’ earnings beat estimates in all the trailing four quarters, the average surprise being 81.98%.
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Viatris (VTRS) Q2 Earnings Beat, Generics Business Grows
Viatris Inc. (VTRS - Free Report) delivered adjusted earnings of 75 cents per share in the second quarter of 2023, down from 88 cents in the year-ago quarter but beating the Zacks Consensus Estimate of 71 cents per share.
Total revenues came in at $3.9 billion, down 4.8% year over year. The top line beat the Zacks Consensus Estimate by 0.8%.
Viatris’ stock has lost 4.9% in the year so far compared with the industry’s decline of 5.5%.
Image Source: Zacks Investment Research
Quarter in Detail
Revenues include sales and other revenues. Sales of $3.9 billion were down 5% from the year-ago quarter (3% 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 $2.3 billion, down 5% (adjusted for the impact of the biosimilars’ divestiture in November 2022) from the year-ago quarter.
In November 2022, Viatris sold its biosimilars’ portfolio to Biocon Biologics Limited.
Sales from Emerging Markets came in at $648.1 million, flat year over year.
JANZ generated sales of $375.5 million, down 12%.
Sales from Greater China came in at $532.1 million, down 3% year over year.
Revenues from Brands were down 2% year over year to $2.4 billion. Among these, Lipitor’s sales were $380 million, down from $405.6 million in the year-ago quarter. Norvasc sales were $182.4 million, down from $203 million in the year-ago quarter.
Complex generics performed in line with management’s expectations. Revenues from this business declined 61% 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 $1.3 billion, up 5%.
Viatris generated $124 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 59.5%, up from 58.6% 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
Other Updates
The company remains on track to announce all planned divestitures in 2023, including at least one significant divestiture in the third quarter.
Concurrently, Viatris and Mapi Pharma Ltd. announced that the FDA accepted the collaboratively submitted new drug application for GA Depot 40 mg for review. The product is a long-acting glatiramer acetate being investigated as a once-monthly injection for the treatment of relapsing forms of multiple sclerosis. The regulatory body has assigned a target action date of Mar 8, 2024.
Our Take
Viatris reported better-than-expected results for the second quarter. The company plans to divest some of its businesses later in 2023, which should allow VTRS to better focus on its core businesses.
Zacks Rank & Stocks to Consider
Viatris currently carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks in the overall healthcare sector are Dynavax Technologies (DVAX - Free Report) and Alkermes (ALKS - Free Report) , carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The loss per share estimate for DVAX has narrowed by 5 cents to 51 cents for 2023 in the past 30 days. Dynavax has risen by 36.1% in the year-to-date period. Its earnings beat estimates in two of the trailing four quarters and missed in the remaining two, the average surprise being 25.78%.
The Zacks Consensus Estimate for Alkermes’ earnings per share has moved up from 50 cents to $1.47 for 2023 and from $1.78 to $2.04 for 2024 in the past 60 days. The stock has risen 6.6% in the year-to-date period. ALKS’ earnings beat estimates in all the trailing four quarters, the average surprise being 81.98%.