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The call portrayed solid operational performance and momentum: top-line revenue growth (3%), strong adjusted EBITDA expansion (10%), sizable China acceleration (+18%), meaningful pipeline progress with multiple upcoming regulatory catalysts, and robust cash flexibility (> $2.5B). These positives were tempered by regional softness (Europe, JANZ), supply constraints in lower-margin generics/ARV, ongoing regulatory timing uncertainty, and policy risk in China. On balance, the positives (broad-based execution, margin control, late-stage pipeline momentum and financial flexibility) outweigh the lowlights.
Viatris reaffirmed its 2026 guidance after a strong Q1 (total revenues $3.5B, +3% operational; adjusted EBITDA $1.0B; adjusted EPS $0.59; adjusted gross margin 56%; new product revenue $71M; cash generated $348M in Q1, or ~$459M excluding transaction/restructuring/taxes), and said full‑year revenue, adjusted EBITDA and adjusted EPS remain weighted about 52% to the second half with free cash flow also expected to be higher in H2; management now models stronger Greater China growth (mid‑ to high‑single digits, up from prior low‑single digits and +18% in Q1), more than $2.5B of cash available for deployment in 2026, a $140M dividend returned in Q1, an expected ~1% FX tailwind if current rates hold, and on‑track delivery of roughly $120M of cost savings this year while noting some temporary supply and generic competitive headwinds that may partially offset these tailwinds.
Total revenues of $3.5 billion, up 3% year-over-year (operational basis); adjusted EBITDA of $1.0 billion (10% growth year-over-year) and adjusted EPS of $0.59, demonstrating improved earnings leverage versus revenue growth.
Greater China revenue accelerated 18% year-over-year, driven by favorable market fundamentals, strategic commercial investments and e-commerce growth (e-commerce sales more than doubled vs. prior year). Company raised its China growth expectation for 2026 to mid- to high-single digits.
Regulatory approval received for EFFEXOR for GAD in Japan; NDA for fast-acting meloxicam accepted by FDA and XULANE LO (low-dose estrogen patch) expected PDUFA July 30, 2026; phentolamine sNDA PDUFA Oct 17, 2026. Company remains on track for 5 additional regulatory decisions in H2 2026 and multiple launches expected to accelerate growth.
Selatogrel SOS-AMI Phase III enrollment ~1,200 patients per month and on track potentially to reach full enrollment by end of 2026; cenerimod Phase III SLE OPUS-1 and 2 fully enrolled with results expected in H1 2027 — representing material longer-term growth opportunities.
New product revenue contribution of $71 million in the quarter (including launches of iron sucrose and octreotide); secured approval of a generic to Abilify Maintena and positioned for U.S. launch before year-end; on-track for FDA decisions this year on other complex generics (e.g., ferric carboxymaltose injection, rotigotine patch).
Adjusted gross margin of 56% (flat year-over-year) with margins slightly better than expected due to favorable product mix; operating expenses favorable versus prior year reflecting disciplined cost management and early realization of enterprise-wide strategic review savings (on track to deliver planned savings).
Generated $348 million of cash in the quarter (or ~$459 million excluding transaction/restructuring costs and taxes); returned $140 million to shareholders via dividend; expecting more than $2.5 billion of cash available for deployment during 2026 to support dividends, buybacks, BD and reinvestment.
Company believes data support inclusion of opioid-sparing language for fast-acting meloxicam label and presented positive Phase III and other data across programs (e.g., XULANE LO adhesion and PK data presented at ACOG).
Creon Phase III interim analysis in non-cystic fibrosis patients showed ~76% of patients inadequately treated on current approved dose benefitted from dose escalation; plans to file a type 2 variation in Europe before year-end to drive future growth and label update in H1 2027.
Management reaffirmed 2026 guidance ranges and expects total revenues, adjusted EBITDA and adjusted EPS to be weighted to the second half (~52% of full-year outlook) reflecting seasonality and timing of launches.
Good morning, and welcome to the Viatris First Quarter 2026 Earnings Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Bill Szablewski, Head of Capital Markets. Please go ahead.
Good morning, everyone. Welcome to our Q1 2026 earnings call. With us today is our CEO, Scott Smith, Interim CFO, Paul Campbell; Chief R&D Officer, Philippe Martin; and Chief Commercial Officer, Corinne Le Goff. During today's call, we will be making forward-looking statements on a number of matters, including our financial guidance for 2026 and various strategic initiatives. These statements are subject to risks and uncertainties. We'll also be referring to certain actual and projected non-GAAP financial measures. Please refer to today's slide presentation and our SEC filings for more information, including reconciliations of those non-GAAP measures to the most directly comparable GAAP measures. When discussing 2026 actual or reported results, we will be making certain comparisons to 2025 actual reported results on an operational basis, which excludes the impact of foreign currency rates.
When comparing our 2026 actual or reported results to our expectations, we are making comparisons to our 2026 financial guidance. With that, I'll hand the call over to our CEO, Scott Smith.
Good morning, everyone. We're pleased to report another strong quarter. We're off to an exceptional start to the year. Before I get into the results, we recently presented our plan for long-term sustainable growth, driven by 3 strategic imperatives: driving ou...