The operator welcomes participants to the Viatris Q4 and Full Year 2023 earnings call and introduces the CEO, President, CFO, and CFO Elect. Forward-looking statements will be made, and non-GAAP financial measures will be referenced. Actual results will be compared to divestiture adjusted operational basis. The CEO highlights the company's strong operational results and growth in 2023.

The company is looking towards a bright future in 2024, with strong free cash flows allowing for strategic investments and returning capital to shareholders. They are focused on developing their core therapeutic areas and seeking out new assets for future growth, as demonstrated by their recent collaboration with Idorsia. The company's fourth quarter results were in line with expectations and they are expecting continued operational revenue growth in the coming years.

In 2023, the company had strong financial results and is on track to complete all divestitures by mid-year. They have also announced their full year guidance for 2024, with adjusted EPS becoming an important metric. The company is focused on paying down debt, maintaining their dividend, and using share repurchases for capital allocation. They have also announced a significant research and development collaboration with Idorsia, which includes exclusive global rights to two promising assets. These assets have the potential for accelerated top line growth and could benefit patients with recurring heart attack and autoimmune diseases.

Viatris has announced a global collaboration with Idorsia that includes the potential for future expansion and the addition of two new assets to their pipeline. The company's CEO, Scott, is confident in the potential of these assets and highlights their expertise in cardiovascular and immunology. They will be hosting an R&D event to discuss this collaboration and other pipeline developments. The company also welcomes their new CFO, Doretta, and is proud of their accomplishments in simplifying and stabilizing their base business. Rajiv, the company's COO, will continue discussing their strong fourth quarter and full year results and their expectations for the future.

Viatris is continuing to focus on its strong pipeline and is in the process of reshaping the company through divestitures. The company's stable core business is driven by the consistent performance of its brand business, sustainability of its generics portfolio, and ability to bring high-margin, durable, and complex products to market. The brand business, which makes up two-thirds of the portfolio, is expected to show moderate growth, while the generics business, which includes complex generics, is expected to show slight growth. The company's diverse portfolio and ability to execute on its pipeline contribute to its stable base. In 2023, Viatris launched several new products and made progress in its complex injectables, novel and complex products, and eye care pipelines.

The company received positive results for their Phase 3 trial of Tyrvaya in China and their NDA was accepted by NMPA. They plan to launch several key products in 2024, including Sandostatin LAR, liraglutide, iron sucrose, and Ryzumvi. They also have other pipeline assets in Phase 3 stages, including Xulane low dose, Meloxicam, and Effexor GAD. They expect total revenues to grow by 2% in 2024, with new product revenue of $450 million to $550 million. Their Developed Markets segment is expected to grow by 3%, with growth in both Europe and North America.

Europe's growth is expected to be led by strong brand portfolio, with anticipated growth in key markets and strong Generics performance. North America is expected to grow due to new launches and strengthening position in respiratory products. Emerging Markets had a strong year, driven by generics and brands like Dymista and Viagra. JANZ's full-year results were impacted by government-driven price regulations, but volume growth from brands and optimization of Generics business is expected to partially offset the decline in 2024.

The Greater China region exceeded expectations in 2023 with 2% growth, driven by strong retail performance. The company plans to continue investing in this market to offset potential impacts from government regulations. The management team and employees are thanked for their contributions to the company's success. The company had a strong year in total revenue, adjusted EBITDA, and free cash flow, with results in line or better than expected. The company has adjusted its guidance for total revenue and adjusted EBITDA due to certain transactions that closed in 2023. The company does not include acquired IP R&D in future guidance. Free cash flow was impacted by divestitures and associated costs.

The company's free cash flow for the full year would have been $2.64 billion if the impact of divestitures was excluded. Revenue grew in Developed Markets, Emerging Markets, and Greater China. Adjusted gross margin was 59.1%, driven by strong brand performance. Adjusted SG&A and R&D included investments for future revenue growth. Free cash flow in the fourth quarter was impacted by transaction costs and taxes related to divestitures. The company has generated over $7.5 billion in free cash flow over the past three years and has used it for debt paydown and returning capital to shareholders. The company remains committed to maintaining an investment-grade rating and increasing returns to shareholders. The company's 2024 guidance includes the expected results from remaining divestitures, which may impact reported results in the next few quarters. Adjustments to guidance will be provided as these divestitures close.

The anticipated drivers for 2024 total revenue guidance include operational growth, new product revenue, and growth from the Eye Care division. Adjusted EBITDA is expected to be driven by new product launches, revenue growth, and increased R&D. The remaining divestitures are expected to contribute to adjusted EBITDA and free cash flow. The phasing of revenue, margins, and investments is expected to result in even distribution of adjusted EBITDA and free cash flow between the first and second half of the year. The 2023 adjusted revenue number excludes divestitures and includes anticipated foreign exchange headwinds. Reported adjusted EBITDA will be impacted by operational revenue growth, foreign exchange, divestitures, and investments in Idorsia and IP R&D.

The company expects stable adjusted EBITDA for the base business this year and has shifted to a more balanced capital allocation approach. This includes a focus on capital return, business development, and a disciplined approach to the Idorsia R&D collaboration. The company has maintained its annual dividend policy and has increased its share repurchase authorization. They plan to strengthen their balance sheet with debt paydown and acknowledge the hard work of their finance team. The new Chief Financial Officer, Doretta Mistras, looks forward to working with the management team to execute the company's growth strategy and capital allocation priorities.

The speaker, who has experience in driving shareholder returns in the healthcare industry, believes that Viatris is in a strong position to create value for shareholders. They are focused on maintaining a balance between business investment and capital returns, and the recent Idorsia collaboration is an example of the types of deals they will continue to evaluate. The collaboration has the potential to enhance the company's growth profile while judiciously deploying capital and creating potential returns for shareholders. In the Q&A portion, a question is asked about how the company balances R&D deals with more risk and potential upside versus in-market transactions with lower returns but more certainty.

The speaker responds to a question about potential biases towards certain types of opportunities for business development. They state that they are open to all types of opportunities and are specifically looking at licensing, partnering, and M&A for in-market assets. They also mention two Phase 3 assets with potential for asymmetric returns and the ability to affect development and commercial strategy. They mention the upcoming R&D Day and the potential to use free cash flow towards business development. The speaker also mentions their preferred therapeutic areas and the potential to buy outside of those areas.

At R&D Day, Scott Smith plans to discuss the company's capital allocation plan, which includes share buybacks, dividends, and business development opportunities. He believes that the two assets being discussed, Selatogrel and Cenerimod, fit well into the company's expertise and can be used in multiple therapeutic areas. The R&D Day will also cover other opportunities in the pipeline, such as Eye Care, and will feature insights from key opinion leaders. Sanjeev will provide further guidance on the company's plans.

The speaker confirms that the revenue for the business will be higher in the second half of the year, excluding the impact of divestitures. EBITDA and cash flow will be evenly phased throughout the year, with new product launches and seasonality playing a role in the second half's higher revenue. However, gross margin may moderate in the second half due to pricing impacts and increased expenses. Overall, the speaker expects a positive performance for the year.

The speaker addresses a question about the company's cash flow and mentions that quarter two and four tend to be lower due to semi-annual interest payments. They also mention upcoming divestitures and how they will provide an update on guidance once those close. The next question is about the recently announced deal and the speaker discusses the differentiation of two drugs and how both companies will contribute to development costs.

The speaker introduces Philippe Martin, Head of R&D, to discuss product differentiation. Martin highlights the unique positioning of Selatogrel in targeting the crucial time between symptom onset and medical attention. He also mentions the strong Phase 2 data and fast track designation for Cenerimod, as well as the support from regulatory agencies. Both Selatogrel and Cenerimod have the potential to shift treatment paradigms in areas of high medical need, and the team is excited about their development and potential commercialization.

The company's new immunomodulatory drug has potential for multiple indications, including SLE, multiple sclerosis, IBD, and dermatologic conditions. The next question from a conference call is about the commercial launch of the company's second eye care product, Ryzumvi, and plans to drive uptake. The company has already seen a 18% increase in non-bridge prescriptions and is optimistic about the product's success. The company's pipeline programs are also progressing well. As for the ramp for Tyrvaya, details have not been provided.

The company is incurring expenses for the launch of their new eye care division and expects revenue to increase as the division grows. They are also excited about their pipeline, including a Phase 3 program for Selatogrel, which is relatively derisked. The company is also optimistic about the potential impact of a current FTC examination into PBMs and wholesaler practices on generic pricing.

During a recent conference call, the company's executives discussed various topics including patient self-diagnosis and self-injection, identification of patient subsets, and their upcoming R&D Day on March 27. They also addressed a question about the FTC inquiry and noted that there has been some stabilization in pricing in the industry. The company's approach to business development was also discussed, with the recent acquisition of Oyster Point and the risk-sharing arrangement of their latest transaction being mentioned. The executives also talked about the stability of their base Generics business.

Scott Smith and Rajiv Malik discuss how they are managing the commercial portfolio and their plans to build it through partnerships, licensing, and possibly M&A. They also mention their strong global commercial network and their focus on meeting market-specific needs for their established brands and generics portfolio.

The company is focused on providing access to affordable and quality products. They have rationalized and discontinued certain products to focus on more complex and hard to make products. The company is also looking to expand into new therapeutic areas through BD and investments, potentially in areas such as cardiology and rheumatology. This may require additional investment and scale up to be competitive in these categories.

Scott Smith, CEO of Viatris, discusses the difficulty of finding impactful assets in the pharmaceutical industry, but expresses confidence in their ability to build a strong commercial structure around these assets. He also mentions their dedication to finding assets that can drive long-term revenue growth and their plans to be smart and disciplined in their approach. He concludes by stating that 2023 was a successful year for the company and that 2024 will be transformational as they continue to deliver on their base business and make strategic investments for future growth.

The speaker thanks two individuals, Rajiv and Sanjeev, for their contributions to Viatris and announces that this is their last earnings call with the company. Rajiv has been with the company since 2007 and will remain on the Board of Directors. Sanjeev has been instrumental in executing the company's Phase 1 strategy since 2020. The speaker expresses gratitude for their leadership and service to the company. The operator then concludes the call.

This summary was generated with AI and may contain some inaccuracies.