PFE - Viatris expects return to growth as Q1 topline contracts 11%

2023-05-08 07:41:02 ET

Indicating a ~11% YoY decline in total revenue, Viatris ( NASDAQ: VTRS ) continued to report declining sales for the fifth consecutive quarter with its Q1 2023 financials on Monday while signaling a potential recovery in the years ahead.

VTRS, established in 2020 thanks to the combination of Pfizer ( PFE ) spinoff Upjohn and generic drugmaker Mylan, reaffirmed its 2023 outlook in line with Street forecasts while highlighting its ability to return to growth.

“The strength of this quarter gives me further confidence in our ability to return to growth as we enter into Phase 2 in 2024,” Chief Executive Scott Smith referring to the long-term guidance provided in 2022.

Announcing the acquisition of Oyster Point Pharma and Famy Life Sciences, Viatris ( VTRS ) announced in November its plans to achieve a total revenues CAGR of ~3% in 2024 – 2028 with adj. EBITDA CAGR of ~4.5% and adj. EBITDA EPS CAGR of mid-teens.

However, during Q1 2023, the company’s total revenue slumped ~11% YoY to $3.7B as generics and brands added $1.2B and $2.4B to the topline with ~6% YoY and ~5% YoY drop, respectively, while developed markets generated $2.2B with ~12% YoY slump.

Among notable products, cholesterol drug Lipitor and calcium channel blocker Norvasc generated $417.9M and $202.7M in net sales with ~5% YoY and ~3% YoY drop, respectively, while new product revenue reached $85M.

Meanwhile, adj. net earnings fell ~17% YoY to $932.9M as adj. gross margin remained unchanged at ~60% from last year while adj. EBITDA contracted ~15% YoY to $1.3B.

However, Viatris ( VTRS ) reaffirmed its 2023 outlook for total revenue, adj. EBITDA and free cash flow at $15.5B - $16.0B, $5.0 - $5.4B, and $2.3B - $2.7B, respectively, in line with the consensus.

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