The paragraph is from the Viatris Q1 2025 Earnings Call. It begins with an introduction from the operator, detailing the call's format and noting that it is being recorded. Bill Szablewski, Head of Capital Markets, then introduces the company's leadership team and outlines the agenda, which includes forward-looking statements, financial guidance for 2025, and strategic initiatives. The discussion will also involve actual and projected non-GAAP financial measures, with references to SEC filings for more details. The call will compare 2025 results to 2024 on a divestiture-adjusted operational basis. CEO Scott Smith then states that 2025 has started well, with Q1 performance aligning with expectations and significant progress in the pipeline.

In the second quarter, the company reported three positive Phase 3 data readouts and returned around $450 million to shareholders, with $300 million through share repurchases. They continued addressing issues at their Indore facility and planned a mid-year re-inspection. Although total revenues decreased by 2% due to Indore's impact, they saw strong growth in Europe and China. The company announced promising Phase 3 results for a new non-opioid pain medication and positive data for a low-dose estrogen birth control patch, with plans for future filings. Additionally, they reported positive results for EFFEXOR in Japan for treating generalized anxiety disorder, where no other approved options exist. They remain on track for more Phase 3 data later in the year.

The company is making progress on its innovative drug assets, Selatogrel, Cenerimod, and Sotagliflozin, with key data expected in 2026. They have enhanced control over Selatogrel and Cenerimod development and expanded geographic rights through a partnership with Idorsia. Despite market challenges, the company remains focused on returning capital to shareholders, having already returned $450 million through buybacks and dividends, with continued commitment in 2025. Progress is being made on resolving issues at their Indore facility, with a mid-year re-inspection request planned. A strategic review aims to streamline costs and prepare for future growth. The company reaffirms its yearly outlook and emphasizes its mission to improve global health, serving 1 billion patients annually.

The paragraph discusses the potential impact of tariffs on pharmaceuticals, highlighting concerns about financial repercussions and potential supply shortages affecting global access to medicines. The company operates in 165 countries with 36 manufacturing sites, eight of which are in the U.S., and remains committed to U.S. manufacturing, producing 8.5 billion doses domestically last year. The company anticipates the executive order's implications and aims to optimize its global network's flexibility, potentially increasing U.S. manufacturing capacity. The paragraph concludes by introducing Hemanth Varghese as the new Chief Strategy Officer, emphasizing his extensive experience and expertise in the biotech and pharmaceutical sectors.

The paragraph discusses the progress of Phase 3 programs led by Philippe Martin, focusing on six readouts planned for 2025. The first three readouts were positive, advancing to the regulatory submission phase. Specifically, the MR-107A-02 program for treating moderate to severe acute pain showed statistically significant and clinically meaningful improvements in pain using fast-acting meloxicam, a non-opioid alternative. The studies met all primary and secondary endpoints across various post-surgical pain models. This development aims to address the public health need for safe, effective alternatives to opioids. The trials included a comparison with both placebo and Tramadol, an existing opioid treatment.

The paragraph discusses the results of studies on a fast-acting form of meloxicam, highlighting its effectiveness in controlling pain compared to opioids and reducing opioid use in post-surgical settings while being well-tolerated. The studies show promising results for meloxicam as a non-opioid treatment for moderate to severe acute pain, with plans to submit a new drug application to the FDA. It also briefly mentions positive results from a Phase 3 study of the XULANE LO patch for birth control, confirming its effectiveness and favorable safety profile.

The paragraph discusses Viatris's progress in developing the XULANE LO birth control patch, highlighting its favorable performance and potential appeal due to its design and lower estrogen dose. The company plans regulatory submission for this product in the latter half of the year and expects to present Phase 3 study results at an upcoming conference. Additionally, Viatris anticipates key Phase 3 readouts for its ophthalmology programs and has submitted an application in Japan for EFFEXOR to treat generalized anxiety disorder, noting it would be the first approved treatment for this condition there.

The paragraph discusses several updates from a pharmaceutical company. Their research findings have been accepted for presentation at the Japanese Society of Neurology and Psychiatry Conference. They are preparing submissions for Sotagliflozin in markets outside the US, focusing on Canada after submissions in the UAE and Saudi Arabia. Enrollment in Selatogrel and Cenerimod programs is on schedule, with recent data presentations and abstract acceptances at international conferences. In cardiology, they continue to engage the community about Selatogrel. The company is on track to achieve $450-$550 million in new product revenue with anticipated approvals for Iron Sucrose, Octreotide, and Liraglutide. This progress reflects their strong R&D capabilities and strategic focus. Doretta Mistras will provide further details on the quarter's performance and future outlook.

The company's first-quarter results met expectations, with total revenues at $3.25 billion, a 2% decrease from the previous year, primarily due to a $140 million impact from Indore. Without the Indore effect, operational revenue would have seen a 2% increase. Brand growth of 3% was driven by expansion in the cardiovascular portfolio in emerging and developed markets, although generics sales declined due to competition and the Indore impact. Europe showed stable growth of 1%, while North America saw an 8% decrease. Emerging markets experienced a 5% revenue drop, attributed to Indore and ARV generics buying patterns, though this was partly offset by growth in Latin America, MENA, and Eurasia. The JANZ segment's sales fell by 6%.

The company's quarterly results were influenced by government price regulations in Japan and Australia and changes in reimbursement for off-patent brands in Japan, partially offset by increased volumes in the generics portfolio. Growth in China contributed to a 4% increase in net sales, driven by a diverse approach across e-commerce, retail, and private hospitals. The adjusted gross margin was approximately 56%, aligning with expectations, though it declined due to regulations and increased costs. Operating expenses remained flat, with savings in SG&A counterbalanced by R&D investments. The company faced a $2.9 billion non-cash goodwill impairment due to increased business risk factors and share price decline, yet remains confident in its business outlook. Free cash flow reached $493 million, or $535 million excluding divestiture costs. The company has prioritized returning capital to shareholders, with over $300 million in share repurchases and a total of over $450 million returned, including dividends.

The paragraph provides an outlook for the rest of the year, reaffirming the company's annual guidance based on strong first-quarter performance and business trends. Key points include maintaining the base business outlook, projecting $450 million to $550 million in new product revenue, and potentially offsetting foreign exchange headwinds due to favorable spot rates. An agreement to expand Cenerimod commercial rights impacts adjusted EBITDA and EPS by $10 million, and share repurchases benefit adjusted EPS. The guidance excludes potential tariff impacts. Revenues are anticipated to be higher in the second half, comprising about 52% of the full-year outlook, with adjusted EBITDA, adjusted EPS, and free cash flow also expected to improve in the latter half. The company expresses confidence in its business fundamentals and strategic execution, emphasizing its ability to return capital to shareholders.

The paragraph contains a Q&A session from a company call. Chris Schott from JPMorgan asks about the potential sales and infrastructure use for an upcoming drug, meloxicam, and the company's strategy to handle tariffs for products manufactured outside the U.S. Scott Smith responds, explaining that more than 50% of their U.S. sales are from domestic manufacturing, with capabilities to produce 8.5 billion doses annually. They import from Ireland, the UK, and India, and are working on strategies to mitigate tariff impacts, including increasing U.S. production. Further responses on meloxicam are deferred to other team members.

The company is considering adjusting its U.S. inventory levels and exploring strategies like third-party collaborations and investments in U.S. manufacturing facilities to address potential tariff impacts in the pharmaceutical sector. They are focused on mitigating any financial and patient access challenges posed by such tariffs. The company is actively engaging with the administration and Congress to ensure continued patient access to generic medications. Philippe Martin briefly comments positively on the Phase 3 study results for fast-acting meloxicam.

The article discusses the positive outcomes from a Phase 3 study of a novel fast-acting meloxicam, which showed a superior profile compared to a potent opioid comparator in models of hernio and bunionectomy. The study indicated significantly lower opioid usage compared to placebo and a well-tolerated safety profile with fewer adverse events. Corinne Le Goff highlights the large market potential for safer, non-opioid alternatives in acute pain management, noting over 70 million acute pain cases annually in the U.S. and a continued reliance on opioids. The novel meloxicam is considered to have a competitive profile suitable for both inpatient and outpatient pathways, with ongoing efforts to refine market forecasts.

Scott Smith expresses optimism about their position in the acute market based on new data. Ashwani Verma from UBS asks about the potential for increased share repurchases and details on MR-107's rapid efficacy. Smith responds, emphasizing their commitment to repurchasing $500 million to $650 million in shares, with a possibility of exceeding $650 million, depending on market conditions and macroeconomic uncertainties. The share price is seen as a reason to prioritize repurchases as part of their capital allocation strategy.

The paragraph includes a discussion about financial expectations and strategic flexibility for the year, specifically mentioning the ability to generate $1.7 billion in deployable cash flow. It also addresses the fast-acting properties of meloxicam, highlighting its rapid response time in clinical studies compared to a placebo. Questions from David Amsellem touch on potential impacts on 2026, inspections at a facility in India, and strategic priorities related to business development and mergers & acquisitions, with a focus on acquiring mid to late-stage assets like Cenerimod and Selatogrel.

The paragraph discusses the current status and future expectations for production facilities in Indore and Nashik. Scott Smith mentions that the remediation process in Indore is progressing as planned, with a reinspection request expected mid-year, while other plants are being qualified to supply the U.S. network. By 2026, there is an expectation of a significant rebound in Indore-related products, although some, like lenalidomide, will phase out. Nashik completed all necessary actions after receiving a 483 observation, but the FDA's classification is still pending. Doretta Mistras adds that the expected revenue impact from Indore is approximately $500 million, with lenalidomide accounting for 40% of this. Some impacts are attributed to penalties and short-term disruptions, which are not expected to recur in 2026.

In the paragraph, the speaker addresses company priorities concerning business development, emphasizing their excitement about the development of Cenerimod and Selatogrel, which are being progressed well and expanded geographically. However, the current focus is on acquiring assets that are either in-market or very near-to-market to boost short-term revenue and EBITDA, rather than mid-stage development assets. The conversation then shifts to Bhavin Patel from Bank of America asking about brand resilience in the first quarter and seeking insights on volume versus price drivers for key brands like Lipitor in developed markets and China, reasons behind the decline in generics, the sustainability of 2% core business growth, and detailed guidance on expected revenue and EBITDA growth and contribution timing of key product launches in the second half of the year.

In the paragraph, Doretta Mistras discusses the positive momentum in the company's brand portfolio, highlighting growth in China and Europe, particularly with products like Creon, Brufen, and the Thrombosis portfolio. She notes that while the generic portfolio has been impacted by Indore, its performance aligns with expectations when excluding this factor. The company anticipates that 52% of its revenue will occur in the second half of the year due to the differing impact of Indore, new product launches, and typical product seasonality in Europe. Philippe Martin adds that key product launches, including glucagon, Iron Sucrose, Liraglutide, and Octreotide, are slated for the second half, indicating a strategic timeline for approval and market entry.

Umer Raffat from Evercore asks about the company's US manufacturing network and its meloxicam trials. Scott Smith responds, noting they have 26 global facilities, with eight in the US, contributing to over 50% of their total revenues. He mentions their consideration of tariff impacts and potential expansion of the US network. In regard to meloxicam, Raffat raises concerns about its use in surgical settings due to bleeding risks and higher CMAX levels compared to traditional forms. He also asks if the product will be positioned as a hospital drug.

Philippe Martin discussed three clinical trials involving meloxicam, including a Phase 2 trial on post-surgery dental pain, noting no increased risk of bleeding in these studies and a safety profile consistent with placebo despite a higher CMAX. Corinne Le Goff added that the fast-acting meloxicam could be used in both hospital and outpatient settings for post-surgery and other acute pain episodes, backed by positive Phase 2 dental pain data. The session concluded with CEO Scott Smith expressing satisfaction with the company's progress and optimism about Viatris's future.

The paragraph expresses confidence in the organization's ability to manage industry volatility and uncertainty due to its strong pipeline, capital discipline, operational excellence, and global reach. It concludes with thanks to the audience for attending the presentation, after which the operator closes the conference call.

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