Viatris Inc. Common Stock 2026 Q2 Earnings Call

Welcome to our Q2 2026 earnings call. With us today is CEO Scott Smith, Interim CFO Paul Campbell, Chief R&D Officer Philippe Martin, and Chief Commercial Officer Karin Murgoff. 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 risk and uncertainties. We will 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 most directly comparable GAAP measures. When discussing 2026 actual or reported results, we will be making certain comparisons to 2025 actual or 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 off to an exceptional start in 2026. We delivered another strong quarter that reinforces our confidence in the strategy we outlined earlier this year. In the second quarter, we delivered $3.8 billion in total revenues, representing 3.5% operational revenue growth year-over-year. Adjusted EBITDA of $1.2 billion and adjusted EPS of $0.69 per share. These results exceeded our expectations and reflect the strong momentum across our businesses and continued improvement in operating leverage. Just as importantly, these results give us confidence to raise our outlook for the remainder of the year. Let me briefly highlight some of the progress we made across our businesses. Commercial execution was excellent across our global portfolio during the quarter, led once again by Greater China, where the commercial investments in our portfolio of established brands are generating meaningful growth.

In North America, execution across our complex generics and transdermal products also drove solid growth. Our pipeline is progressing as expected. As we announced last week, we received U.S. regulatory approval for Gwyn Lo and expect to launch the product later this year. At the same time, launch preparations continue for fast-acting meloxicam as it progresses through FDA review. We're confident in the differentiated clinical profiles of both medicines and also in our commercial readiness. In Japan, we recently reported phase III results for Nefecon, while pitolisant continues to progress through the final stages of regulatory review, underscoring the momentum we're building across our pipeline in this strategically important market. Beyond these opportunities, our phase III programs for Selatogrel and Cenerimod remain on track with important readouts expected in 2027, which, if successful, we believe will represent meaningful long-term blockbuster growth opportunities.

Taken together, these milestones provide a robust set of near-term catalysts with the potential to accelerate our long-term growth profile. As we prepare for our next phase of growth, we're prioritizing our capital, talent, and resources toward the opportunities we believe offer the greatest long-term growth potential. As part of that effort, we agreed to sell the global rights to Durbia, reflecting a strategic shift away from eye care as a therapeutic area of focus. Turning to our enterprise-wide strategic review, we're delivering the savings we committed to earlier this year while reinvesting a portion of those savings to support future growth. We're beginning to see those actions translate into the real operating leverage we expected. That's creating a stronger Viatris with greater flexibility to invest in growth and create long-term value. Turning to capital allocation, we continue to take a balanced and opportunistic approach.

Supported by strong cash generation and the additional financial flexibility created through the monetization of our Biocon equity stake, we're executing across all our capital allocation priorities. We continue to return significant capital to shareholders through our dividend and more recently through our continued share repurchases, together totaling approximately $550 million to date. At the same time, we're maintaining flexibility to pursue disciplined business development opportunities that we believe can play a significant role in accelerating our long-term growth. As we think about our performance so far this year and the outlook for the rest of the year, we're raising the midpoint of our 2026 financial guidance ranges across all key financial metrics. Our updated outlook incorporates all the business dynamics we expect in the second half, including certain intermittent manufacturing disruptions at our Nashik facility following the Q1 fire and the FDA's May 2026 inspection.

We are communicating with the FDA, working closely with external experts, and have initiated a comprehensive remediation plan to address the inspection observations. In summary, I'm very pleased with our execution through the first half of the year and the momentum we're carrying into the second half.

We're entering a catalyst-rich period with multiple upcoming launches, important phase III milestones, and the financial flexibility to pursue disciplined, accretive business development. Together, we believe these opportunities position Viatris to accelerate long-term growth and create meaningful value for shareholders. With that, I'll turn it over to Philippe.

Thank you, Scott. We have delivered a strong first half of the year in R&D as we continue to execute with discipline against our strategy. Starting with our value-added medicines, we were pleased to receive FDA approval for Gwyn Lo last week ahead of its PDUFA date. Gwyn Lo is a new, discrete, once-weekly transdermal hormonal contraceptive patch that offers women a non-invasive, reversible option with a low dose of estrogen. Importantly, the approved label reflects the strength of our clinical program, including demonstrated efficacy in women with a BMI of 25 to less than 30 kilograms per square meter, with no BMI-based limitation of use for this population. We are also working on addressing the unmet need for women with a BMI at or above 30 through our next contraceptive transdermal system, a progestin-only patch currently in development.

This program has completed phase III enrollment, and we expect top-line results in the first half of 2027. As patients continue to seek convenient and non-invasive treatment options, we believe our deep expertise in developing and manufacturing transdermal drug delivery systems position us well to advance additional opportunities across this platform. Regarding fast-acting meloxicam, we continue to have positive engagement with FDA as the NDA review progresses and as we approach the mid-cycle point of the review. We continue to believe that the investigational profile of fast-acting meloxicam, including its rapid absorption, clinically meaningful pain relief, and reductions in opioid use, positions the product as a meaningful addition to the evolving acute pain treatment landscape. Pending final labeling negotiations ahead of an anticipated FDA approval.

Regarding our pipeline in Japan, we recently announced positive top-line phase III results evaluating the efficacy and safety of Nefecon in Japanese adults with primary IgA nephropathy, a designated intractable disease in Japan. If approved, Nefecon has the potential to provide a meaningful disease-modifying treatment option for these patients. We are targeting submission of a new drug application in Japan by the end of 2026. Our applications for pitolisant for the treatment of excessive daytime sleepiness associated with obstructive sleep apnea and narcolepsy remain on track and have reached the final stages of review. We anticipate regulatory decisions for both indications in the second half of this year. Turning to our innovative global phase III programs. For cenerimod, we continue to expect results from both phase III SLE studies, OPUS-1 and OPUS-2, in the first half of 2027.

Most patients have elected to continue treatment in the open-label extension study with a study treatment duration extending up to five years. For Selatogrel, we remain on track to reach full enrollment in our SOS-AMI phase III study around year-end and are maintaining an enrollment rate of approximately 1,200 patients per month. We continue to expect a data readout in the first half of 2027. Finally, turning to our generic pipeline. We continue to execute well across our pipeline and remain on track to achieve more than 100 new product approvals this year, with 70 approvals already secured in the first half. The key area of focus remains our complex generics, including complex injectables, where we have established a meaningful expertise.

Over the past two years, we have secured approval in the U.S. for 11 complex injectables, including octreotide, and recently we are the first approved for all three strengths for both iron sucrose and ferric carboxymaltose injection. Overall, the substantial progress we've made in the first half of the year reflects both the disciplined execution of our teams and the breadth of capabilities we've built. With multiple regulatory, clinical, and scientific milestones ahead, we remain confident in our ability to execute our R&D strategy, advance meaningful medicines for patients, and continue strengthening our scientific leadership. With that, I'll turn it over to Paul.