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    VTRS
    Earnings call· Jun 2026(Q2 FY26)

    Viatris Q2 FY26 earnings call VTRS

    Aug 6, 2026 Source

    Executive summary

    Viatris Q2 FY26 — Strong Performance and Raised Full-Year Guidance

    Viatris delivered a strong Q2 FY26, exceeding expectations with robust operational revenue growth and improved operating leverage, leading to a raise in full-year guidance across all key financial metrics. The company is prioritizing capital and resources towards long-term growth opportunities, advancing its pipeline with key regulatory approvals and clinical milestones, while also returning capital to shareholders and maintaining a disciplined approach to business development.

    Highlights

    6

    • Delivered $3.8 billion in total revenues, representing 3.5% operational growth year-over-year.

    • Achieved adjusted EBITDA of $1.2 billion and adjusted EPS of $0.69 per share, exceeding expectations.

    • Raised the midpoint of 2026 financial guidance across all key metrics (revenue, EBITDA, EPS).

    • Greater China net sales increased 16% year-over-year, driven by strategic investments and favorable market fundamentals.

    • Received U.S. regulatory approval for Winland, a new transdermal hormonal contraceptive patch, ahead of its PDUFA date.

    • Returned approximately $550 million to shareholders through dividends and share repurchases, and repaid $900 million of debt.

    Concerns

    5

    • Nashik facility manufacturing disruptions and FDA inspection observations are expected to impact H2 revenues by $100 million to $150 million.

    • Greater China growth is expected to moderate in the second half due to a procurement policy change negatively impacting hospital channel volumes.

    • Net sales in Emerging Markets declined 2% year-over-year, falling below expectations due to supply constraints in the ARV generics portfolio.

    • The company agreed to sell the global rights to Tirva, signaling a strategic shift away from eye care as a therapeutic area of focus.

    • Additional competitive pressure is anticipated in developed markets for Brena and Wixela in North America.

    Guidance & targets

    19
    CategoryTargetConfidence
    Full-year 2026 Total Revenues Operational Growth
    approximately 2%
    high materiality
    High
    Full-year 2026 Adjusted EBITDA Operational Growth
    approximately 5%
    high materiality
    High
    Full-year 2026 Adjusted EPS Operational Growth
    approximately 7%
    high materiality
    High
    Full-year 2026 Total Revenues Growth - Greater China
    Low double-digit growth
    medium materiality
    High
    Full-year 2026 Total Revenues Growth - Developed Markets
    roughly flat
    medium materiality
    High
    Full-year 2026 Total Revenues Growth - North America
    declining slightly
    medium materiality
    High
    Full-year 2026 Total Revenues Growth - Emerging Markets
    low single-digit growth
    medium materiality
    High
    Full-year 2026 Total Revenues Growth - Jans
    low single-digit decline
    medium materiality
    High
    Nashik Facility Supply Disruptions Impact on H2 2026 Total Revenues
    $100 million and $150 million
    medium materiality
    High
    Full-year 2026 Total Revenues Weighting
    approximately 51%
    low materiality
    High
    Full-year 2026 Adjusted EBITDA Weighting
    slightly lower in the second half
    low materiality
    High
    Full-year 2026 Adjusted EPS Weighting
    slightly lower in the second half
    low materiality
    High
    Full-year 2026 Free Cash Flow Weighting
    more heavily weighted to the second half
    low materiality
    High
    Nefecon NDA Submission in Japan
    by the end of 2026
    medium materiality
    High
    Pitolisant Regulatory Decisions in Japan
    in the second half of this year
    medium materiality
    High
    Progestin-only Patch Top-line Results
    in the first half of 2027
    medium materiality
    High
    Cenerimod Phase III SLE Studies Results
    in the first half of 2027
    high materiality
    High
    Selatogrel Phase III SOS Study Data Readout
    in the first half of 2027
    high materiality
    High
    Generic Pipeline New Product Approvals
    more than 100 new product approvals this year
    medium materiality
    High

    Segment performance

    6
    SegmentRevenueYoYQoQMargin
    Developed Markets
    Net sales increased by 2% versus the prior year, exceeding expectations.
    		—2%——
    North America
    Net sales grew 1%, driven by increased demand across the diverse generics portfolio and strength from Brain. New product revenues benefited from complex injectables.
    Net sales growth: 1%Drivers: increased demand across diverse generics portfolio (including estradiol patches), continued strength from Brain, momentum in complex injectable portfolio (octreotide, iron sucrose)Branded product performance: YUPELRI solid growth offset by anticipated competitive pressure on established brands
    		—1%——
    Europe
    Net sales increased 2% versus the prior year, primarily driven by strength in the generics portfolio and new product revenues.
    Net sales growth: 2%Drivers: strength in generics portfolio across key countries (France, Italy), contributions from new product revenuesBranded product performance: solid growth from Creon and Brufen offset by anticipated competitive pressure on dimes stock
    		—2%——
    Emerging Markets
    Net sales declined 2% versus the prior year, coming in below expectations, primarily due to supply constraints in the ARV generics portfolio.
    Net sales decline: 2%Drivers: continued supply constraints affecting lower-margin ARV generics portfolioBranded product performance: net sales increased 6% year-over-year, supported by stable growth across established brands
    		—-2%——
    Jans
    Net sales were essentially flat versus the prior year, exceeding expectations, reflecting new product uptake and generics volume growth, offset by price regulations and competition.
    Net sales growth: essentially flatDrivers: uptake from launch of effector for generalized anxiety disorder, broad volume growth in genericsHeadwinds: anticipated impact of government-driven price regulations in Japan, increased competition for certain brands in Australia
    		—flat——
    Greater China
    Delivered another exceptional quarter with net sales increasing 16% year-over-year, ahead of expectations, benefiting from favorable market fundamentals and strategic investments.
    Net sales growth: 16%Drivers: favorable market fundamentals (aging population, demand for cardiovascular products), strategic investments in selling and marketing capabilities (e-commerce, retail platforms)E-commerce sales growth: 36%
    		—16%——

    Operational metrics

    19
    Adjusted Gross Margin
    57.5%nearly 1% improvement versus prior year
    Q2 FY26

    Represents nearly 1% improvement versus the prior year.

    Capital Deployed
    $1.4 billion
    YTD early August

    Consistent with balanced capital allocation strategy.

    Capital Returned to Shareholders
    $550 million
    YTD early August

    Through dividends and share repurchases.

    Share Repurchases
    $270 million
    YTD early August

    Part of capital returned to shareholders.

    Debt Repaid
    $900 million
    Q2 FY26

    Debt that matured in June.

    Gross Leverage Ratio
    2.9xbelow midpoint of long-term target range
    Q2 FY26

    Ended the quarter with a gross leverage ratio of approximately 2.9x.

    E-commerce Sales Growth
    36%versus prior year
    Q2 FY26

    Sales increased 36% versus the prior year in Greater China e-commerce channel.

    New Product Approvals (Generics)
    70
    H1 FY26

    70 approvals already secured in the first half, remaining on track for over 100 this year.

    Complex Injectables Approvals in US
    11
    past 2 years

    Over the past 2 years, secured approval in the U.S. for 11 complex injectables.

    Estradiol Patch Order Fulfillment Rate
    70%
    current

    Currently able to fulfill about 70% of orders due to increased demand.

    Fast-acting Meloxicam Peak Sales
    $500 million
    peak

    Could reach up to $500 million in peak sales, contributing meaningfully to long-term guidance.

    Selatogrel Phase III Study Powering
    20%
    study design

    The study is powered for approximately a 20% risk reduction, with a minimal commercial bar of 10-15% benefit.

    Cenerimod Phase III Enrollment (Interferon-1 High Patients)
    >70%
    enrollment

    Exceeded the goal of approximately 70% interferon-1 high patients in both Phase III studies.

    Selatogrel Phase III Enrollment Rate
    approximately 1,200 patients per month
    current

    Maintaining an enrollment rate of approximately 1,200 patients per month for the SOS Phase III study.

    Selatogrel Phase III Total Enrollment
    up to 21,000 patients
    protocol

    The protocol always contemplated enrolling up to 21,000 patients, and the company may need a bit more.

    Selatogrel Platelet Inhibition Peak
    6-7 hours
    post-dosing

    Within 6 to 7 hours, peak platelet inhibition is achieved, with more than 80% inhibition after 15 minutes seen in Phase II.

    Selatogrel Platelet Inhibition Offset
    within 24 hours
    post-dosing

    The offset is within 24 hours, meaning selatogrel is no longer present.

    Acute Pain Market Size
    80 million patients
    annual

    Acute pain is a broad market with about 80 million patients suffering from pain every year, with half already dependent on opioids.

    Belimumab Patients in Cenerimod Trial
    approximately 5%
    trial population

    Belimumab is considered standard of care and is included in the medications, but not expected to be a significant number of patients, closer to 5%.

    Industry KPIs

    8
    MetricValueDetails
    Peak sales guidanceup to $500 millionUSD
    EPS revenue guidanceRaised midpoint of 2026 guidance
    Pricing policy impactChina procurement policy change
    Pipeline clinical milestonesMultiple Phase III readouts and regulatory submissions
    Regulatory approvals filingsWinland (US FDA approval)
    Geographic regional revenue growthVaried by region for FY26%
    Clinical trial efficacy safety dataPositive top-line Phase III results for Nefecon
    Business development capacity deal appetiteActive pursuit of in-market accretive assets

    Deals & partnerships

    1
    UndisclosedSale of global rights to Tirva

    Agreed to sell the global rights to Tirva, reflecting a strategic shift away from eye care as a therapeutic area of focus. Transaction expected to close in H2 2026, subject to customary closing conditions.

    Risks & headwinds

    4
    Nashik facility manufacturing disruptions and FDA inspection observationssecond half of 2026

    $100 million and $150 million impact to total revenues

    Mitigation: communicating with FDA, working closely with external experts, initiated comprehensive remediation plan; impact expected to be short-term and intermittent, larger in Q3 and moderating in Q4

    Moderation in Greater China growth due to procurement policy changesecond half of 2026

    expected to negatively impact volumes in hospital channel

    Mitigation: built into forecast; overall growth expected to continue but muted; active discussions with government to understand policy execution; will have better view by November

    Additional competitive pressure in developed marketssecond half of 2026

    impact on Brena and Wixela in North America

    Mitigation: fully considered in updated 2026 financial guidance

    Supply constraints affecting ARV generics portfolioQ2 FY26 and ongoing

    Emerging Markets net sales declined 2% year-over-year

    Mitigation: not explicitly stated, but company is working to ramp up production for other high-demand products like estradiol patches

    What to watch in Q3 FY26

    5

    Fast-acting meloxicam FDA label negotiations

    October/November 2026
    CurrentFDA review progressing, mid-cycle point reached
    TargetClarity on opioid-sparing language in label

    Why it matters

    The specific language around opioid sparing will be crucial for the commercial positioning and market potential of this asset.

    labeling negotiations won't start until October, November time frame. So this is when really we'll start talking about the exact language around opioid sparing.

    Q&A highlights

    5

    Can you provide a breakdown of China revenue by channel (e-commerce, retail, hospital) and explain why the EBITDA guidance raise is double the revenue raise at the midpoint?

    E-commerce accounts for 10-15% of China's business, with growth across all channels. The higher EBITDA raise is due to strong cost containment measures being ahead of schedule, offsetting challenges from high-margin product competition and lower-margin Nashik disruptions in H2.

    “e-commerce is about 10 -- between 10% and 15% of the overall business. [...] Adjusted EBITDA was approximately twice the growth or the increasing expectation over revenue, right? And a lot of that is because of the cost containment measures are on track and even ahead of schedule in certain instances.”

    asked by Ashwani Verma · answered by Paul Campbell

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Q2 Performance and Raised Outlook

    Viatris delivered an exceptional Q2 FY26, with total revenues of $3.8 billion, marking 3.5% operational growth year-over-year. Adjusted EBITDA reached $1.2 billion and adjusted EPS was $0.69 per share, both exceeding expectations. This strong performance, driven by momentum across businesses and improved operating leverage, led the company to raise the midpoint of its 2026 financial guidance across all key metrics, including 2% operational growth for total revenues, 5% for adjusted EBITDA, and 7% for adjusted EPS.

    02

    Pipeline Progress and Key Milestones

    The company's pipeline is progressing as expected, with several significant milestones achieved or anticipated. U.S. regulatory approval was received for Winland, a new transdermal hormonal contraceptive patch, with launch expected later this year. Fast-acting meloxicam is progressing through FDA review with anticipated approval towards year-end, and Nefecon showed positive Phase III results in Japan, targeting NDA submission by end of 2026. Additionally, regulatory decisions for pitolisant in Japan are expected in H2 2026, and Phase III readouts for cenerimod and selatogrel are on track for H1 2027, representing potential blockbuster opportunities.

    03

    Strategic Review and Operating Leverage

    Viatris's enterprise-wide strategic review is yielding committed savings, which are being reinvested to support future growth. This has translated into real operating leverage, contributing to the strong financial performance. The company noted that cost containment measures are on track and even ahead of schedule in certain instances, driving adjusted EBITDA growth that outpaced revenue growth in the first half of the year.

    04

    Capital Allocation and Balance Sheet Strength

    The company continues its balanced and opportunistic capital allocation strategy, supported by strong cash generation and financial flexibility from the Biocon equity stake monetization. Through early August, Viatris deployed approximately $1.4 billion of capital, including returning $550 million to shareholders via dividends and share repurchases, and repaying $900 million of debt. This resulted in a gross leverage ratio of approximately 2.9x, below the midpoint of its long-term target range of 2.8x to 3.2x.

    05

    Greater China Momentum and Policy Headwinds

    Greater China delivered another exceptional quarter with net sales increasing 16% year-over-year, exceeding expectations. This growth was driven by favorable market fundamentals, strategic investments in selling and marketing capabilities, and strong e-commerce performance, which saw sales increase 36% YoY. However, the company anticipates moderation in Greater China growth in the second half due to the implementation of a procurement policy change expected to negatively impact volumes in the hospital channel, though overall growth is still expected.

    06

    Nashik Facility Disruptions and Remediation

    The company experienced intermittent manufacturing disruptions at its Nashik facility following a fire and FDA inspection observations in May 2026. These issues are expected to impact total revenues by $100 million to $150 million in the second half of 2026, primarily affecting low-margin oral solid dose generics. Viatris is communicating with the FDA, working with external experts, and has initiated a comprehensive remediation plan, expecting the impact to be short-term and largely contained to 2026.

    AI-generated summary of the company’s earnings call. Not investment advice.