2023-04-16 04:01:11 ET
Summary
- Viatris is a spin-out of generics drug giant Mylan and Pfizer's legacy brands division UpJohn.
- Spinouts are a tough business to make a bull case for - if the spun-out assets were winners, they would not have been divested.
- Viatris began life saddled with $24.5bn of debt - to date, it has paid off ~$6bn while introducing a generous dividend that represents ~50% of free cash flow.
- Revenues of UpJohn assets may be falling, but they are resilient, and the new product portfolio is showing some life and could add $2 - $3bn by 2028.
- Management has promised growth from 2024 - that may be unrealistic as the base business revenues fall by ~$500m per annum, but if we net off debt with legacy brands, and use whatever is left to determine Viatris' value, the long-term outlook is bullish.
For further details see:
Viatris - Time To Cut This Business Some Slack?