The operator welcomes participants to the Viatris Q1 2024 Earnings Conference Call and introduces the CEO, CFO, and Chief R&D Officer. The call will include forward-looking statements and references to non-GAAP financial measures. The company will be discussing divestiture adjusted operational results and comparisons to 2023 and 2024. The CEO, Scott Smith, then greets the audience.

The company's first-quarter financial results show progress in maintaining base business stability while driving new product revenue and executing on their vision for future growth. They have completed planned divestitures, paid down debt, increased shareholder return, and made strategic investments in future growth. They recently closed a transaction with Idorsia and held a successful R&D event where they discussed their evolving R&D strategy and reviewed key assets. They also had two key opinion leaders discuss the need for innovative products in treating acute MI and lupus. They have already leveraged their existing infrastructure to expand and accelerate development plans for two assets. In the first quarter, they had total revenue of $3.7 billion, adjusted EBITDA of $1.2 billion, adjusted EPS of $0.67 per share, and free cash flow of $565 million.

Viatris has completed the divestiture of its women's healthcare business and expects to close the API divestiture soon. They are on track to close the OTC divestiture by midyear and have reaffirmed their financial guidance for 2024. The company is also focused on delivering strong total shareholder return and has a new executive leadership team in place to execute their strategy. The most recent addition to the team is Corinne Le Goff, who brings a wealth of experience and a global perspective to the company.

Philippe Martin, a member of the executive leadership team at Viatris, welcomes Corinne to the company and looks forward to working with her. He discusses the progress on the company's pipeline and the recent partnership with Idorsia. He highlights two potential blockbuster assets, selatogrel and cenerimod, and the company's plans to expand and accelerate enrollment in Phase 3 studies for both assets. They are also developing lifecycle strategies to maximize opportunities for these assets globally.

The company will have an oral presentation at EULAR in June for cenerimod's effect on biomarkers in SLE. They have launched Ryzumvi in the US and are enrolling in Phase 3 studies for other eye care products. They have over 25 products in their novel portfolio and are working on three particular projects. They are also progressing well in their generic pipeline. The company's R&D objectives are on track and their Q1 performance will be discussed.

The company is experiencing strong growth in the first quarter, with a 2% operational growth and 2% impact from foreign exchange. This is the fourth consecutive quarter of top-line growth and is driven by emerging markets, Europe, and JANZ. The commercial segment also saw growth in Europe and a decline in North America due to channel dynamics and formulary changes. However, there was growth in new product revenue, particularly in Yupelri and Tyrvaya. The company also made progress on strategic initiatives such as divestitures and completed the Idorsia transaction. The speaker looks forward to working with Corinne to drive growth and unlock value from the platform.

In the first quarter, generics and emerging markets performed better than expected, while brands and JANZ also showed growth. Adjusted gross margin was higher than expected and operating expenses increased due to investments. Free cash flow met expectations and was driven by lower adjusted EBITDA, divestitures, and working capital. Excluding transaction costs and taxes, free cash flow would have been $648 million.

The company's divestitures will impact cash flow and proceeds will benefit investing activities. The company returned $393 million to shareholders in Q1. The company reaffirms its 2024 financial guidance, with adjustments made for divestitures and acquired IP R&D. The company expects modestly higher revenue in the second half, driven by normal product seasonality and higher new product revenue in the first half. Adjusted gross margin is expected to be higher in the first half, while operating expenses will be relatively even between the first and second half.

The company expects adjusted EBITDA and adjusted EPS to be slightly higher in the second half, with free cash flow also being more weighted towards the second half. This is due to strong business fundamentals and progress towards objectives. During the Q&A, the company addressed product-specific questions about North American softness in brands and the expected meeting with the FDA in the third quarter regarding GA Depot. The company mentioned that the softness was due to a formulary change and channel dynamics, and they are working on improving access. The timeline for remediation and potential approval and launch of GA Depot was also discussed.

The company experienced higher-than-expected utilization in certain legacy brands in Q1 due to non-commercial channels, but expects this to be offset by growth in other brands throughout the year. The overall global performance of the business is meeting expectations. The company is working with Mapi and GA Depot to address FDA comments and will provide more clarity on the timeline in the future. The company also expects Tyrvaya, a product with moderate growth and $80 million in sales, to contribute to the projected $1 billion in ophthalmology sales by 2028, along with other assets such as Oyster and Famy Care. The recently launched Ryzumvi is considered a commercially niche product.

The speaker discusses the performance of Tyrvaya and its positive trends, as well as their expectations for the product's future trajectory. They also mention the potential for $1 billion in revenue over the next few years and the stability of their business in terms of free cash flow. The speaker also confirms that the API deal is expected to close soon and that the OTC deal is still on track to close by mid-year.

The speaker is discussing the expected closing of a business transaction in mid-year, subject to regulatory approvals. They then answer a question about JANZ, stating that it has been facing some challenges but is performing as expected with 2% operational growth driven by business expansion in Australia. They also mention natural price erosion in Japan and Australia due to government regulation. The speaker then addresses a question about new product revenue, stating that they are confident in their expected range of $450 million to $550 million, with a significant contribution from Tyrvaya.

During a recent earnings call, Breyna's CEO and CFO discussed the company's strong performance and the benefits of having a diverse product portfolio. They also mentioned that the company's confidence in its earnings forecast of $450 million to $550 million is not dependent on any one product, and that they are pleased with the performance of new products. They also discussed accelerating enrollment for Idorsia's assets and expanding into new regions, which was not included in the original timeline presented at the company's R&D Day. On the topic of capital deployment, the CFO mentioned that they are evaluating various opportunities, including in-market and pipeline products, in-licensing and partnerships, and acquisitions. They also mentioned the possibility of stock repurchases.

Scott Smith discusses the impact of recent deals on the company's capital allocation and potential future growth opportunities. He mentions that the company is open to various opportunities, particularly through licensing partnerships, and has the resources to continue with share buybacks and business development. The next question from David Amsellem is about the company's injectable products, specifically Venofer and Glucagon, and how they fit into the company's overall strategy. Philippe provides some insight on the products and their importance in the company's complex injectable portfolio, and mentions that they have a strong pipeline for future launches in 2025 and 2026.

The company sees the complex injectable portfolio as a crucial part of their business and is investing in it. They have important products on the market and in the pipeline, and plan to continue adding new products to accelerate growth. The company remains confident in their new product revenue guidance and has more than 50 products in their complex injectable pipeline. The next question is about the sustainability of emerging markets driving this quarter's results and how it translated on an FX basis. There is also a question about the impact of the divestiture on the guidance, which is estimated to be $270 million for nine months of Women's Health and seven or eight months of the API business.

The speaker thanks the audience and hands over to Doretta to answer questions about emerging markets and divestitures. Doretta explains that the company has seen strong performance in emerging markets despite some currency challenges, and that they have adjusted their projections to account for recent divestitures. The speaker concludes by thanking everyone for their attention and expressing confidence in the company's future under strong leadership.

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