Viatris — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenues for the three months ended September 30, 2026, were $3.75 billion, essentially flat compared to $3.76 billion in the prior year period (0% reported and operational change).
• Total net sales were $3.73 billion, down 0% from $3.75 billion in the prior year period.
• Developed Markets net sales were $2.22 billion, down 2% reported and 1% operational.
• Emerging Markets net sales were $529 million, down 7% reported and 6% operational.
• JANZ net sales were $287 million, down 6% reported and 5% operational.
• Greater China net sales were $703 million, up 14% reported and 10% operational.
• Brands net sales were $2.46 billion, up 1% reported and 1% operational.
• Generics net sales were $1.27 billion, down 3% reported and 3% operational.
• U.S. GAAP gross profit was $1.44 billion (38.4% margin) compared to $1.37 billion (36.5% margin) in the prior year.
• Adjusted gross profit was $2.18 billion (58.0% margin) compared to $2.10 billion (56.0% margin) in the prior year.
• U.S. GAAP net loss was $325 million ($0.28 loss per share) compared to a $128 million loss ($0.11 loss per share) in the prior year.
• Adjusted net earnings were $821 million ($0.71 adjusted EPS), up 5% reported and 3% operational.
• Adjusted EBITDA was $1.20 billion, up 4% reported and 1% operational.
• U.S. GAAP net cash provided by operating activities was $899 million.
• Free cash flow was $814 million; excluding transaction-related and restructuring-related costs of $81 million, free cash flow was $895 million.
• For the nine months ended September 30, 2026, total revenues were $11.02 billion (up 4% reported, 2% operational).
• For the nine months ended September 30, 2026, adjusted net earnings were $2.32 billion ($1.99 adjusted EPS), up 10% reported and 8% operational.
• For the nine months ended September 30, 2026, adjusted EBITDA was $3.43 billion, up 9% reported and 6% operational.
• For the nine months ended September 30, 2026, free cash flow was $1.49 billion; excluding transaction-related and restructuring-related costs of $312 million, free cash flow was $1.80 billion.

Guidance and Future Outlook:

• Viatris raised the midpoints of its 2026 financial guidance ranges for all metrics.
• 2026 Total Revenues guidance midpoint raised to $14.8 billion (range $14.7 billion – $14.9 billion).
• 2026 Adjusted EBITDA guidance midpoint raised to $4.5 billion (range $4.45 billion – $4.55 billion).
• 2026 Adjusted EPS guidance midpoint raised to $2.60 (range $2.56 – $2.63).
• 2026 Free Cash Flow guidance midpoint raised to $2.3 billion (range $2.225 billion – $2.375 billion), excluding transaction-related and restructuring-related costs.
• 2026 U.S. GAAP net cash provided by operating activities estimated between $2.025 billion and $2.1 billion, with a midpoint of approximately $2.0625 billion.
• The company expects to deliver approximately $450 million in new product revenues for the full year 2026.
• The company does not provide forward-looking guidance for U.S. GAAP net earnings (loss) or diluted EPS, nor a quantitative reconciliation of adjusted EBITDA or adjusted EPS to U.S. GAAP measures.
• Guidance excludes the impact of transaction-related and restructuring-related costs and acquired IPR&D for unsigned deals.
• Guidance excludes any contribution from the planned acquisition of Pacira BioSciences.

Business Segments and Product Lines:

• New product revenues were approximately $115 million in the quarter and $287 million for the year-to-date.
• Gwyn Lo (norelgestromin and ethinyl estradiol transdermal system) was launched in the U.S. in October 2026 as a low-dose estrogen, non-daily contraceptive option.
• RYZUMVI received FDA approval in October 2026 for the treatment of presbyopia in adults, expanding its previous indication for pharmacologically induced mydriasis.
• WAKIX received approval from Japan's Ministry of Health, Labour and Welfare in September 2026 for the treatment of excessive daytime sleepiness associated with obstructive sleep apnea syndrome and narcolepsy.
• Fast-acting meloxicam is expected to receive approval and launch soon.
• Lipitor net sales were $452 million for the quarter and $1.37 billion for the nine months.
• Norvasc net sales were $190 million for the quarter and $600 million for the nine months.
• EpiPen Auto-Injectors net sales were $156 million for the quarter and $386 million for the nine months.
• Lyrica net sales were $114 million for the quarter and $355 million for the nine months.
• Influvac net sales were $91 million for the quarter and $101 million for the nine months.
• Yupelri net sales were $72 million for the quarter and $205 million for the nine months.

Market and Competitive Landscape:

• New product sales, strength in the North American business, and strong net sales in Greater China offset supply constraints in Europe and Emerging Markets and additional competition on certain products.
• Continued supply constraints in Europe and Emerging Markets impacted Generics net sales.
• Brands net sales reflected continued strength in Greater China and Emerging Markets.

Risks and Challenges:

• The FDA issued 483 observations in May 2026 regarding the oral solid dose manufacturing facility in Nashik, India, resulting in an "Official Action Indicated" classification in September 2026.
• The company voluntarily suspended manufacturing at the Nashik facility in October 2026 to focus on remediation activities.
• Production at the Nashik facility is expected to resume during the first quarter of 2027.
• The company estimates the total revenue impact of supply constraints was approximately $100 million in the third quarter of 2026 and anticipates a similar impact of approximately $100 million in the fourth quarter of 2026.
• U.S. GAAP net loss was driven by an increase in income tax provision due to losses in jurisdictions for which minimal benefit can be realized.
• Forward-looking statements involve risks including the ability to complete the Pacira acquisition, realization of synergies, regulatory approvals, clinical trial success, manufacturing disruptions, and macroeconomic conditions.

Management Commentary and Tone:

• CEO Scott A. Smith stated that third-quarter results reflect strong execution and reinforce confidence in the growth trajectory, citing momentum in the base business, pipeline progress, and the strategic review.
• Interim CFO Paul Campbell expressed pleasure with operational momentum in higher-margin businesses and continued focus on cost discipline.
• Management noted confidence in the outlook for the rest of the year, leading to the raise in guidance midpoints.
• Management expects the Pacira transaction to have minimal impact on the gross leverage ratio upon closing.
• The tone is confident regarding sustained revenue and earnings growth driven by new product launches and strategic acquisitions.

Other Key Points:

• The company entered into a definitive agreement to acquire Pacira BioSciences for $36.50 per share in cash, representing an aggregate equity value of $1.65 billion.
• The Pacira acquisition is expected to close by the end of November 2026.
• The company returned approximately $717 million of capital to shareholders year-to-date, including approximately $300 million through share repurchases.
• Approximately $700 million remains under the existing board-authorized share repurchase program.
• Gross leverage ratio as of September 30, 2026, was 2.9x based on total debt at notional amounts of $12.9 billion and trailing twelve-month adjusted EBITDA of $4.4 billion.
• The company maintains a long-term gross leverage target range of 2.8x – 3.2x.
• U.S. GAAP net loss for the nine months ended September 30, 2025, included a $2.9 billion goodwill impairment charge.
• The company does not provide forward-looking guidance for U.S. GAAP net earnings (loss) or diluted EPS due to the inability to predict the outcome of integration, acquisition, divestiture, restructuring, litigation, and tax accounting items.