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Viatris Inc. (VTRS - Free Report) delivered adjusted earnings of 78 cents per share in the third quarter of 2023, down from 87 cents in the year-ago quarter but beating the Zacks Consensus Estimate of 74 cents per share.
Total revenues came in at $3.9 billion, down 3.3% year over year. The top line missed the Zacks Consensus Estimate by 1.01%.
Viatris’ stock has lost 18% year to date compared with the industry’s decline of 14.9%.
Image Source: Zacks Investment Research
Quarter in Detail
Revenues include sales and other revenues. Sales of $3.9 billion were down 3% 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 $2.4 billion, down 4% (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 $642.5 million, down from $678.9 million reported in the year-ago quarter.
JANZ generated sales of $334.5 million, down 8%. Customer buying patterns impacted generic business in this segment.
Sales from Greater China came in at $548.4 million, down from $574 million year over year.
Revenues from Brands were down 1% year over year to $2.5 billion. Sales came in line with expectations driven by key brands like Yupelri and Dymista and incremental sales from Tyrvaya.
Tyrvaya was added to Viatris’ portfolio following the acquisition of Oyster Point.
Among these, Lipitor’s sales were $381.6 million, down from $420.4 million in the year-ago quarter. Yupelri sales came in at $58.3 million and boosted Brands’ business.
Complex generics sales came in at $174.4 million, down 46% due to the phasing of new product launches.
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, up 3%.
Viatris generated $135 million in new product revenues, primarily driven by the launch of generic lenalidomide and Breyna (generic for Symbicort) in the United States. For 2023, it targets to achieve more than $450 million in new revenues.
Adjusted gross margin came in at 59.2%, down from 60.5% in the year-ago quarter.
Revenues are projected between $15.4 billion and $15.6 billion (previous guidance: $15.5-$16 billion).
Other Updates
Viatris recently announced agreements on planned divestitures targeted for 2023 to simplify the organization.
The company has received an offer from Cooper Consumer Health to divest its Over-the-Counter (“OTC”) business for $2.17 billion. Viatris has, however, decided to retain its rights for Viagra and Dymista, as well as other select OTC assets within certain markets.
Viatris has also entered into definitive agreements to divest its Women's Healthcare business and its Active Pharmaceutical Ingredients business in India. The company will divest its Women's Healthcare business, primarily related to oral and injectable contraceptives, to Insud Pharma, a leading Spanish multinational pharmaceutical company.
Viatris entered into an agreement to divest its rights to women's healthcare products Duphaston and Femoston to Theramex by fourth-quarter 2023.
Agreements have also been signed to divest commercialization rights in certain non-core markets that were acquired as part of the Upjohn transaction by the fourth quarter of 2023.
Our Take
Viatris reported mixed results for the third quarter, as earnings beat estimates, but revenues missed the same. Exchange rate fluctuations continue to impact sales. The proceeds from the planned divestitures should boost cash flow and allow VTRS to better focus on its core businesses.
Dynavax’s loss per share estimates for 2023 have narrowed from 23 cents to 15 cents for 2023 in the past 30 days. During the same period, earnings estimates for 2024 rose from 3 cents to 12 cents. Shares of DVAX have gained 25.4% in the year so far.
Earnings estimates for Ligand Pharmaceuticals’ 2023 earnings per share have increased from $5.09 to $5.10 in the past 30 days. During the same period, earnings estimates for 2024 rose from $4.56 to $4.59.
Ligand beat earnings estimates in three of the last four quarters while missing the mark on one occasion. The company has delivered an earnings surprise of 52.47% on average.
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Viatris (VTRS) Q3 Earnings Beat, Complex Generics Sales Dip
Viatris Inc. (VTRS - Free Report) delivered adjusted earnings of 78 cents per share in the third quarter of 2023, down from 87 cents in the year-ago quarter but beating the Zacks Consensus Estimate of 74 cents per share.
Total revenues came in at $3.9 billion, down 3.3% year over year. The top line missed the Zacks Consensus Estimate by 1.01%.
Viatris’ stock has lost 18% year to date compared with the industry’s decline of 14.9%.
Image Source: Zacks Investment Research
Quarter in Detail
Revenues include sales and other revenues. Sales of $3.9 billion were down 3% 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 $2.4 billion, down 4% (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 $642.5 million, down from $678.9 million reported in the year-ago quarter.
JANZ generated sales of $334.5 million, down 8%. Customer buying patterns impacted generic business in this segment.
Sales from Greater China came in at $548.4 million, down from $574 million year over year.
Revenues from Brands were down 1% year over year to $2.5 billion. Sales came in line with expectations driven by key brands like Yupelri and Dymista and incremental sales from Tyrvaya.
Tyrvaya was added to Viatris’ portfolio following the acquisition of Oyster Point.
Among these, Lipitor’s sales were $381.6 million, down from $420.4 million in the year-ago quarter. Yupelri sales came in at $58.3 million and boosted Brands’ business.
Complex generics sales came in at $174.4 million, down 46% due to the phasing of new product launches.
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, up 3%.
Viatris generated $135 million in new product revenues, primarily driven by the launch of generic lenalidomide and Breyna (generic for Symbicort) in the United States. For 2023, it targets to achieve more than $450 million in new revenues.
Adjusted gross margin came in at 59.2%, down from 60.5% in the year-ago quarter.
Viatris Inc. Price, Consensus and EPS Surprise
Viatris Inc. price-consensus-eps-surprise-chart | Viatris Inc. Quote
2023 Guidance Update
Revenues are projected between $15.4 billion and $15.6 billion (previous guidance: $15.5-$16 billion).
Other Updates
Viatris recently announced agreements on planned divestitures targeted for 2023 to simplify the organization.
The company has received an offer from Cooper Consumer Health to divest its Over-the-Counter (“OTC”) business for $2.17 billion. Viatris has, however, decided to retain its rights for Viagra and Dymista, as well as other select OTC assets within certain markets.
Viatris has also entered into definitive agreements to divest its Women's Healthcare business and its Active Pharmaceutical Ingredients business in India. The company will divest its Women's Healthcare business, primarily related to oral and injectable contraceptives, to Insud Pharma, a leading Spanish multinational pharmaceutical company.
Viatris entered into an agreement to divest its rights to women's healthcare products Duphaston and Femoston to Theramex by fourth-quarter 2023.
Agreements have also been signed to divest commercialization rights in certain non-core markets that were acquired as part of the Upjohn transaction by the fourth quarter of 2023.
Our Take
Viatris reported mixed results for the third quarter, as earnings beat estimates, but revenues missed the same. Exchange rate fluctuations continue to impact sales. The proceeds from the planned divestitures should boost cash flow and 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 Ligand Pharmaceuticals (LGND - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Dynavax’s loss per share estimates for 2023 have narrowed from 23 cents to 15 cents for 2023 in the past 30 days. During the same period, earnings estimates for 2024 rose from 3 cents to 12 cents. Shares of DVAX have gained 25.4% in the year so far.
Earnings estimates for Ligand Pharmaceuticals’ 2023 earnings per share have increased from $5.09 to $5.10 in the past 30 days. During the same period, earnings estimates for 2024 rose from $4.56 to $4.59.
Ligand beat earnings estimates in three of the last four quarters while missing the mark on one occasion. The company has delivered an earnings surprise of 52.47% on average.