Viatris Q3 2026 Earnings Call Transcript

Viatris (NASDAQ:VTRS) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Viatris reported Q3 2026 revenues of $3.75 billion, adjusted EBITDA of $1.2 billion, and adjusted EPS of $0.71, indicating strong financial performance and continued growth momentum.

The company is advancing strategic initiatives, including the acquisition of Pacira BioSciences, which is expected to add high-margin products and strengthen Viatris’ position in non-opioid pain management.

Viatris has made significant progress in its innovative medicines pipeline with approvals and anticipated launches, such as Ryzumvi for presbyopia and the expected 2027 launch of fast-acting meloxicam.

North America and Greater China have shown meaningful growth, with North America benefiting from a shift to higher-margin products and complex generics and China experiencing a 10% growth despite regulatory changes.

The company raised its 2026 financial guidance, anticipating continued revenue growth and operational improvements, while also managing supply constraints in Europe and emerging markets.

Management highlighted strong cash flow generation and a solid leverage position, with plans to maintain disciplined capital allocation, including dividends, share repurchases, and strategic acquisitions.

Full Transcript

OPERATOR

Good morning and welcome to the Viatris Q3 2026 earnings call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on your touchtone phones. To withdraw your questions, you may press star and two. Please also note today’s event is being recorded.

At this time, I’d like to turn the floor over to Bill Ciblowski, Head of Capital Markets. Please go ahead.

Bill Ciblowski (Head of Capital Markets)

Good morning everyone. Welcome to our Q3 2026 earnings call. With us today is our CEO Scott Smith, interim CFO Paul Campbell, Chief R and D Officer Philippe Martin, and Chief Commercial Officer Corinne Lagoff. 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 risks 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 the 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 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.

Scott A. Smith (Chief Executive Officer)

Good morning everyone. We’re pleased with our strong third quarter performance which reflects continued momentum across our businesses. As we’ve been saying, we believe we’ve entered a new phase of sustained growth. For Viatris, the disciplined execution of the strategy we outlined earlier this year is translating into results. During the third quarter, we delivered total revenues of $3.75 billion, adjusted EBITDA of $1.2 billion and adjusted EPS of $0.71 per share.

Through the first nine months of the year, total revenues grew 2%, adjusted EBITDA grew 6% and adjusted EPS grew 8% operationally compared to the prior year, demonstrating continued progress towards our long-term financial targets. Given our performance and expectations for continued momentum in the fourth quarter, we are narrowing our financial guidance ranges and once again raising the midpoint for all key financial metrics. Paul will provide more details shortly.

Now let me walk through a few highlights for the quarter. Our base business continues to deliver solid results, reflecting the strength and durability of our portfolio. We’re pleased with our performance in North America and Greater China where we continue to see meaningful growth. In North America, growth is accelerating as our portfolio mix shifts towards more durable higher margin products and complex generics supported by strong demand for our estradiol patches and new product revenue from our recent injectable launches.

We are pleased to have launched Winlo, our low-dose contraceptive patch in the US in October. In Greater China, growth continues to be driven by strong demand for our cardiovascular portfolio and the strength of our established brands. Regarding our pipeline, we continue to make meaningful progress in advancing our innovative medicines portfolio and positioning the business for long-term growth. In Japan we received regulatory approval for Wacox, which we expect to be an important product launch and a key contributor to the country’s strategy to return to growth. In the US we received approval for Ryzumvi for the treatment of presbyopia and we continue to advance our preparations for the potential approval and launch of fast-acting meloxicam.

As a reminder, the PDUFA date for fast-acting meloxicam is December 27th and, if approved, we expect to launch early in 2027. In addition, we are approaching the Phase 3 readouts for ciladogrel and Samaramod, representing significant milestones for the innovative medicines portfolio. Both products have blockbuster potential and could become important growth drivers for us in the next decade. Philippe will provide additional details on these programs and the pipeline shortly.

Finally, I’d like to take a moment to discuss our recently announced agreement to acquire Pacira BioSciences and the strategic opportunities we believe this transaction will create for Viatris. I’m excited about the potential of the Pacira business. I believe this acquisition represents a significant step forward for Viatris and is a strong example of the business development strategy we are executing to support our long-term growth. More specifically, the transaction would add two established patent-protected medicines in the U.S., Exparel and Zilretta, further strengthening our U.S. promoted brands business with durable revenue and margins well above our company average. With the addition of Pacira’s products, we expect our U.S. Innovative Medicines business to generate more than a billion dollars in total revenue in 2027.

We’re also exploring potential opportunities to leverage our global infrastructure to develop and commercialize Pacira’s products in selected markets outside of the U.S. Additionally, Pacira would bring an experienced U.S. team and established capabilities across sales, marketing, market access, medical affairs and global R and D that complement our existing infrastructure. We believe these capabilities could help us maximize the potential of fast-acting meloxicam and position Viatris to become a leader in non-opioid pain management.

Before I turn it over to Philippe, I want to recognize a recent leadership transition. After more than 30 years with Viatris and our legacy company, Cormac retired as our Chief Supply Officer on November 1st. I want to personally thank Peter for his tremendous contribution and years of dedicated leadership. With Peter’s transition, I’m very pleased to welcome Paul Duffy as our new Chief Supply Officer. Paul brings 35 years of industry experience across global supply chain management, manufacturing strategy and business transformation.

I’m looking forward to working very closely with him. With that, I’ll turn it over to Philippe.

Philippe Martin (Chief R&D Officer)

Thank you, Scott. We continue to execute with discipline across our pipeline and remain on track to deliver against our R and D priorities, starting with our value-added medicines. The FDA review of our fast-acting meloxicam NDA is substantially complete, with FDA being very engaged with us throughout the review process. We are on track to start labeling negotiations this month ahead of an anticipated regulatory decision by our PDUFA goal date of December 27th.

We continue to view fast-acting meloxicam as a potentially meaningful addition to the acute pain treatment landscape given its rapid absorption profile, clinically meaningful pain relief and demonstrated reduction in opioid use. Over the past two years, we’ve been working on bringing additional benefits to patients through life cycle management opportunities including label expansions or additional indications. To this end, we recently secured on-time approval for the presbyopia indication for Ryzumvi in the US. We also submitted a Type 2 variation application in Europe for CREON to expand its approved dosing range for non-cystic fibrosis indications, which represents a significant opportunity to expand value of these important products for patients.

We anticipate a regulatory decision in the first half of 2027. Regarding our women’s health portfolio, we continue to leverage our transdermal capabilities to address important unmet needs. We received approval and launched Greenlo in the US. We continue to advance our next patch candidate, a norgestromin-only weekly patch, for which we have completed Phase 3 enrollment and anticipate a data readout in the first half of 2027. In Japan, our Neficon program for patients with IgA nephropathy continues to advance as planned following the positive Phase 3 results announced earlier this year.

We remain on track to submit our JNDA by the end of this year, with a regulatory decision anticipated in the second half of 2027. Turning to our innovative pipeline, Cineremod continues to progress well with both Phase 3 SLE studies OPUS 1 and OPUS 2 advancing as planned. We remain on track to report results in the first half of 2027. In addition, the Phase 3 LUMIOSE study in lupus nephritis is actively enrolling patients. For cilatogrel, enrollment in our SOSMI Phase 3 studies continues to track well. We continue to expect the data read around the first half of 2027, keeping in mind the event-driven design of the study.

Turning to our generic pipeline, where our execution remains strong, we are on track to secure over 100 new product approvals this year, reflecting the strength and breadth of our development and regulatory capabilities. Importantly, we are preparing to launch our once-monthly aripiprazole injection in the US, for which we were the first to secure final FDA approval. In addition, we secured first-to-file status for Wegovy, or semaglutide 25 milligram tablets, further strengthening our pipeline of generic GLP-1s.

Lastly, with the announced acquisition of Pacira, we see an opportunity to bolster our global R and D platform with new talent, capabilities and programs. There are several pipeline programs of interest for which there are upcoming readouts, including the Phase 2 Part A readout for the osteoarthritis gene therapy asset PCRX201. We will make sure to keep you updated on the status of this program following deal close. Overall, we expect a strong finish to the year and believe we are well positioned heading to 2027 with several important regulatory and clinical milestones across our innovative, value-added and generic pipeline. With that, I’ll turn the call over to Paul.

Paul

Thank you, Philippe, and good morning, everyone. As a quick summary, we delivered another strong quarter of performance driven primarily by continued growth in our higher-margin Greater China and North American businesses, which offset ongoing supply constraints affecting lower-margin generics performance in Europe and emerging markets. While the overall impact on total revenues was neutral, adjusted EBITDA benefited from the higher net margins. Today I will review the key drivers of our third quarter performance, discuss our updated financial outlook for the remainder of the year, and highlight some expected benefits associated with our proposed acquisition of Pacira Biosciences.

Beginning with our third quarter results, total revenues were $3.75 billion, in line with expectations. This performance reflects the continued strength of our global base business, the breadth of our diversified portfolio, and disciplined execution. More specifically, Greater China continues to benefit from favorable macroeconomic and demographic trends, strong demand from our leading portfolio of established brands, and continued execution from our commercial organization.

During the quarter, Greater China net sales grew approximately 10% versus the prior year, driven by growth across all channels, including continued uptake in the e-commerce channel. Also, as anticipated, the policy changes we discussed last quarter began to moderate our growth, particularly in the hospital channel. As such, net sales were in line with our expectations for the quarter. In North America, we are really encouraged by the growth of our U.S. business. Growing our business in the U.S. remains a strategic priority and is expected to be an important driver of our future growth and success. Throughout the year, we have continued to capitalize on favorable market dynamics across certain key products. In the third quarter, North American net sales exceeded our expectations and grew approximately 7% versus the prior year, driven primarily by growth of higher-margin complex generics, including estradiol patch products.

In fact, these drivers represented over 65% of our North American generics net sales for the quarter, reflecting our continued shift away from commodity generics. Specifically related to our estradiol patch products, net sales in the quarter for North America exceeded our expectations with volumes approximately double compared to the prior-year period. We have actively expanded capacity through operational enhancements and expect to continue to make additional capital investments across our manufacturing and packaging operations for future expansion.

These actions will position us to better serve increasing patient demand. Within Europe and emerging markets, performance was impacted by continued supply constraints primarily related to remediation activities at our Nashik facility. The total revenue impact of those supply constraints was approximately $100 million in the third quarter. Specific to an update on Nashik, in September, the company received notice from the FDA that the plant was being classified as Official Action Indicated, or OAI, following the issuance of 43 observations in May.

In October, out of an abundance of caution, we suspended manufacturing at the facility while remediation activities are ongoing. It is important to note that underlying demand trends across both regions generally remain healthy. This is demonstrated by growth in key European markets such as Italy and Spain, as well as continued strength in our established brands portfolio. In Japan, net sales exceeded our expectations but declined versus the prior year, reflecting the impact from government price regulations, which more than offset the positive contribution from the launch of Effexor for generalized anxiety disorder. We are encouraged by the early uptake of Effexor and continue to believe this launch, combined with the continued uptake of Spidia and the expected launch of wacox, positions Japan for a return to growth in the future.

Turning to the remainder of the P&L, adjusted gross margins came in above our expectations at 58%, driven by the growth in Greater China and North America. Operating expenses were in line with expectations and declined slightly as a percentage of total revenues compared with the prior year, reflecting continued spending discipline and the benefits from our enterprise-wide strategic review. We remain on track to achieve $120 million of net savings from the strategic review this year.

Collectively, these factors contributed to improved operating leverage across our businesses. Turning to cash flow, free cash flow was $814 million during the quarter, inclusive of transaction- and restructuring-related costs and taxes, exceeding our expectations. Excluding these items, free cash flow would have been $895 million. Through the first three quarters, we returned approximately $717 million to shareholders through $300 million of share repurchases and the remainder coming from the quarterly dividends. And lastly, we exited the quarter in a strong gross leverage position at approximately 2.9 times, which is below the midpoint of our long-term target of 2.8 to 3.2 times.

Now let me provide a full-year financial guidance update. Based on strong performance year to date and our confidence in the continued momentum of the business, we are raising our 2026 financial guidance across all key metrics. It is important to note that this updated guidance excludes any contributions from the proposed acquisition of Pacira. At the midpoint of our revised guidance ranges, we now expect operational growth of approximately 2% for total revenues, 6% for adjusted EBITDA, and 8% for adjusted EPS versus the prior year.

Our outlook reflects a balanced view of fourth quarter dynamics as we currently see them, including continuing strength in the U.S., including new product revenue led by octreotide and increasing supply for our estradiol patch products, partially offset by additional competition of certain key products; continuing growth in Greater China but moderated by the implementation of the hospital-focused procurement policy; continuing supply disruptions expected to impact Europe and emerging markets total revenues by approximately $100 million in the fourth quarter; and increasing investments to support future growth. As we approach year end, we remain confident in our expectation to continue growing our globally diversified business into 2027.

Lastly, I want to spend a few minutes discussing Pacira. The tender offer was launched on October 30, and we expect the transaction to close before the end of November. We expect the impact of the transaction to be immediately accretive to all financial guidance metrics in 2027 versus our expected 2026 results. Also, the transaction is expected to be funded from excess cash and short-term borrowings from existing credit facilities. As such, we expect the transaction to have a minimal impact on our gross leverage ratio.

In addition, we are enthusiastic about Pacira’s ability to accelerate our innovative medicine strategy, and we see the following additional potential benefits of the transaction: expected growth across total revenues and adjusted EBITDA meaningfully contributes towards achievement of our stated long-term growth targets; by combining both businesses, we currently expect to realize more than $50 million in annual cost synergies by the end of 2028 with the potential for additional savings as we fully integrate the business; ability to leverage Pacira’s commercial capabilities, expertise in acute non-opioid pain management, and maximize the potential of fast-acting meloxicam; ability to leverage our proven expertise across intellectual property and extend product life cycles to maximize the long-term value of the Pacira portfolio; and strengthening our cash flow generation, credit profile, and preserving financial flexibility.

In closing, we remain focused on executing on our strategy to accelerate growth, generate strong cash flow, maintain a balanced and disciplined approach to capital allocation, and deliver long-term value for patients, customers, and shareholders. With that, I’ll hand it back to the operator to begin Q&A.

OPERATOR

At this time we’ll begin the question-and-answer session. To ask a question, you may press star and then one on your touchtone phones. If you are using a speakerphone, we do ask that you please pick up the handset before pressing the keys to ensure the best sound quality. To withdraw your questions, you may press star and two. Again, that is star and then one to join the question queue. We’ll pause momentarily to assemble the roster. Our first question today comes from Les Slewski from Oppenheimer.

Please go ahead with your question.

Les Slewski (Analyst at Oppenheimer)

Good morning. Thank you for taking my questions and congrats on the progress. So first, you previously noted hospital procurement changes would moderate China growth. But with 10% in 3Q, is the policy impact smaller or is it being offset by stronger demand? And as a follow up, how much of the updated guidance comes from puts and takes around the performance, specifically in China versus the rest of the portfolio? And how’s your outlook for ex-China changed?

Scott A. Smith (Chief Executive Officer)

Yeah. So first of all, good morning, Les. Thank you for the questions. China-specific, we’re very, very pleased with the progress that we’re making and with the investments that we’ve made. You know, we see some policy implementation in China, but we still see very, very good momentum as we go through the year. We expect that to continue as we get into 27 and beyond. I think we’re kind of uniquely well positioned given the brands that we have, the investments that we’ve made in certain channels in China, and the overall dynamics of the quality of the affiliate that we have in China.

I think we’re very well positioned to finish the year strong and move into 27 with some good momentum. I’ll turn it over to Paul to get more specific on some of the questions he answered.

Paul

Okay, thanks, Scott. Hey, Les. So just to add to what Scott said, you know, the impact for the quarter was in line with our expectations. I think back in the second quarter we had talked about the moderating growth. You know, first half of the year our growth was 16%, 17%. In the third quarter it was 10% year over year. So it did moderate, you know, to a level that we expected. We currently are seeing some variability in the level of readiness and enforcement of the policy across provinces, which is really preventing us from being precise on what we think the impact is.

But as we look into Q4, you know, consistent with what we said last quarter, we expect Q4 to be a higher impact than Q3 as other provinces come online. So, you know, the way I’m thinking about it is the growth rate continuing, you know, to come down, I believe below the 10% that we had in Q3, but still very, very healthy in Q4. And then more importantly, as we exit the year and go into 27, we still see growth coming from China next year, albeit closer to the historical averages we’ve had, you know, more in the low- to mid-single-digit range, but very excited about that business.

Scott A. Smith (Chief Executive Officer)

No, I think, Les, you asked a little bit about ex-China. And just one thing I’d like to point out is the mix evolution that we’re seeing in the United States moving towards more complex, higher-margin products. By the time we get to the end of the year, we will have eight complex injectables approved, two respiratory medicines, three HRT transdermals. And so we’re really working hard to evolve the portfolio in the U.S. towards higher-margin, higher-growth, stickier-revenue, complex generics.

So we’re also very pleased with how we’re tracking there.

OPERATOR

Our next question comes from Glenn Santangelo from Barclays. Please go ahead with your question.

Glenn Santangelo (Analyst at TD Cowen)

Yeah, good morning. Thanks for taking my question. Hey Scott, maybe I’ll just follow up on Les’s question a little bit. I wanted to zoom out and just sort of look at the growth so far year to date. I think now with the guidance raise, you’re sort of calling for, you know, 2% revenue growth. And if you go back to your analyst day back in March, I think you were sort of comfortable at the time with that 2% to 3% sort of base business growth. And when you look at the year, certainly some things played out maybe better than you would have expected like China, maybe some of the value-added launches, clearly on the women’s health side, but you also had the facility fire. Maybe on the negative side, could you just give us a little bit of a post-mortem on this year and some of those bigger highlights and what went better and, maybe more importantly, what didn’t play out like you thought?

As we think about the exit rate here in ’26 heading into 2027, I know you don’t want to give guidance, but I’m just kind of curious if you feel better about your base business today heading into the new year. And then my second question was for Philippe, and I apologize if I missed this in your prepared remarks, but I just wanted to make sure I’m clear on the timing of the readouts for selatogrel and cenerimod in 2027 and any high-level expectations you might have. Thanks, and I’ll stop there.

Scott A. Smith (Chief Executive Officer)

Thanks, Glenn. I’ll take up comments, kick it over to Paul, and then to Philippe to answer your questions. You know, we’re very, very pleased with the momentum that we have so far this year. You take a look at the first nine months of the year, 2% revenue growth, a little bit above that, as we talked about, 6% EBITDA growth, 8% EPS growth relative to prior year. So we’re very, very pleased with the progress that we’re making towards the goals that we put out earlier this year.

Also, when you add Pacira—and hopefully we’ll get that acquisition closed—and you take a look at ’27, our U.S. Innovative Medicines business will be over a billion dollars in ’27, likely. And so we’re very, very pleased with the progress we’re making on the base business overall, adding some interesting innovative components in the U.S., seeing good progress in China, a lot of launches in Japan. I think overall we’re very pleased with the momentum we’ve got in ’26 and where we’re heading company-wide and with the portfolio in particular as we move into ’27.

Paul

Yeah, thanks, Scott, and thanks for the question, Glenn. So if I go back to the beginning of the year, you know, you look at our original guidance, we had guided to about a 3% increase on an operational basis, and first half of the year we outperformed that. Right. But we had guided in the second quarter that we were going to have the headwinds specifically related to the supply issues we were having, primarily in Nashik. So if I think about where we were just from a regional or a country-specific place at the beginning of the year, we thought North America would be flat, Europe would be up 4%, emerging markets up 6%, and Japan down 7%, and Greater China up 3%. That was the guidance we provided. With the midpoints of our updated guidance, we’re now seeing—because of some of the strengths that Scott’s really focused on—North America we expect to be more in the high single-digit range.

We see Europe coming in flattish, primarily related to the supply, but there are some other dynamics in the business, competition we had talked about on some of our products, that are also putting pressure there. Emerging markets and Japan are going to be low single-digit declines—now again, emerging markets would be supply-related—and Greater China we’re looking at coming in closer to, you know, kind of the low double-digit range as the moderation hits Q4 but with the strength of the first half we see.

So as we look forward to ’27—and I want to really emphasize what Scott’s been saying—you know, we are very encouraged and very confident in the business as we look into ’27. You know, we’re hoping to continue the growth in North America. We haven’t talked a lot about the estradiol patch products, but we do see continuing demand there where, as that grows into ’27, there’s a positive mix impact to adjusted EBITDA. China, as I mentioned before, we expect some growth to continue there, although back to historical levels.

And then obviously the Pacira business will come online. We also have, you know, exciting product launches for next year. You know, Gwentlo—we’ve launched, and it just launched in October, just started—and we’re hoping to get, you know, our approval for fast-acting meloxicam and have that on the market next year. So a lot of great momentum as we go into ’27. The one item I would just point out to keep in mind, that we’re keeping an eye on, is we do have some loss of exclusivities next year. Particularly Amitiza—we expect, or there’s a potential to lose that mid-year in Japan—and then isosulfan blue is another good product in the U.S. that lost LOE this year; we’re going to have a full-year impact next year. So there are a few, you know, kind of headwinds there, but I think the tailwinds certainly are in our favor overall.

Scott A. Smith (Chief Executive Officer)

Thank you. And Philippe — selatogrel and cenerimod.

Philippe Martin (Chief R&D Officer)

Cenerimod and selatogrel are continuing to perform as planned, as expected. We’re going to get the results for cenerimod first; it will be in the first half of ’27, followed by selatogrel, also expected in the first half of 2027. It’s an event-driven study, so the precision there is less than for cenerimod, but based on what we’re seeing today, that’s our expectation to get that data around the first half of 2027. So the studies are performing as expected.

Nothing to point out that is not going in the right direction at this point, and so we look forward to seeing those results early next year.

OPERATOR

Our next question comes from Ash Verma from UBS. Please go ahead with your question.

Ash Verma (Analyst at UBS)

Hey, great. Thanks for taking our question, and congrats to see a deal that you are going to close soon. Maybe just on the Exparel generic entry in 2030. So wanted to get your thoughts on the potential entry of Fresenius Kabi. There was a settlement for this for limited volume in 2025. Since then the patent estate has expanded. Pacira talked about this Markman hearing and trial coming up. So just help us understand if this product can have a durable growth beyond 2030.

And then secondly I wanted to ask about women’s patches. It seems like pretty significant growth year over year and we are seeing roughly $700 to $800 million in gross sales annualized run rate in IQVIA. How much of net sales are you generating? It seems like a pretty big category and you are the leader in this space. Just how big can it get from here for you? Thank you.

Scott A. Smith (Chief Executive Officer)

Yeah, so thank you very much. I’ll kick it over to Paul to talk a little bit about the cadence of genericization and exclusivity that we’re thinking around Exparel, and I can come back to you and talk a little bit about the transdermal market and the evolution that we’ve seen there.

Paul

Sure, thanks. So as far as Pacira goes, obviously we did our diligence with the company, and I would say, number one, from now till 2030 we do expect continued growth in Exparel until the volume-limited generic entry in 2030. We also believe that one of the benefits of the transaction was bringing our proven ability to extend product life cycles and sustain meaningful sales after generic entry. So we’re hoping to maximize the long-term value of Exparel post-2030.

And I also think it’s important—I think that Pacira’s talked about this since the original settlement that they entered into—there has been a lot of work done around the IP for that product and additional patents that are out there, et cetera. And so we’re very encouraged by that, and we’ll obviously work, once we take over the company, to defend that position.

Scott A. Smith (Chief Executive Officer)

Yeah. And relative to the HRT market, the transdermal market, we’ve seen over the last 12 to 18 months an unexpected increase in demand for those products based on a removal of the black box warning on HRT. Also, the utilization of GLP-1 products increasing overall, the delayed gastric emptying, making transdermal products much more favorable in the marketplace. And, you know, I think one of the things we’ve done is work really hard to try and meet that demand.

You know, I’ve been to the plant personally. Everybody here in this room has been to the plant—some multiple times. We’re trying to look for solutions. We’ve moved from 24/5 to 24/7 utilization of that plant. We’re adding a packaging line. We’re looking for geographic expansion outside of Vermont to other sites to be able to meet the demand. So we see an incredible demand. We have market-leading products in this area, and we’re doing everything we can to increase our supply to help meet that demand. Overall, I don’t know. Corinne, did you want to make a note?

Corinne Le Goff (Chief Commercial Officer (CCO))

I was also at the plant last week, and it’s extraordinary to see the technical sophistication of this plant. We’ve been producing patches for decades, and we are really one of the leaders in this area. But what I want to add on the market itself: we see that the demand for estradiol patches will continue to increase into the foreseeable future. Just to give you an idea of how this market is developing, we have in the U.S. an estimated number of 45 million women that are symptomatic with menopausal symptoms, but less than 30% of them are actually treated with HRT therapy. So there is a very large, untapped market. And as part of our market research that we conducted with clinicians, we are seeing a very strong willingness to continue to treat these patients, as the FDA, as Scott mentioned, has eliminated the black box warning for these products.

So we are very optimistic on the outlook for that, and we’ll continue to invest. We see this as being an important growth driver for the company between now and 2030 at least. And so, you know, we’re going to take advantage of this increasing demand, make the right investments, and continue to be a leader in the space.

OPERATOR

And our next question comes from Umer Raffat from Evercore. Please go ahead with your question.

Umer Raffat (Analyst at Evercore ISI)

Hi guys, thank you. Thank you for taking my question. I just wanted to touch up on two topics, if I may. First, there’s obviously a lot of momentum in the base business off of several markets that are accelerating in the U.S. as well as the broader business. When I add that ongoing momentum into ’27 and layer onto it some of the EBITDA synergies off of Pacira as well, is there a possibility that a $5 billion EBITDA is within reach for as early as 2027, not 2030, which is sort of where estimates currently stand?

Secondly, as I think about the upcoming readout for cenerimod in the lupus setting, I just wanted to check two things. One, the potential for pooled analysis in the interferon-high signature group. Is that pre-specified, or is that something you’re going to have to discuss with FDA? I only ask because once it’s been unblinded, it may not be as easy to do. And also, what constitutes interferon-high? Because I remember the phase 2 post hoc used, I think, four or five genes in the signature, whereas a lot of the other companies have used a three-gene panel.

So have you specified what that interferon-high gene signature definition comprises? Thank you.

Scott A. Smith (Chief Executive Officer)

So, Umer, thank you very much for the questions. Good morning. First of all, from an EBITDA perspective, you know, if you take a look at the momentum in the business and Pacira and other things, we’re not going to guide ’27 here at all. But you know what you’re talking about, the numbers you’re talking about are certainly in the ballpark of where we, where we may be going. I think we’re making tremendous progress relative to those 2030 targets and hopefully we’ll be able to hit them well ahead of time.

So again, you know, your thinking is in the ballpark. I think here, you know, we don’t want to guide ’27 until we get through the year, obviously, and look at all the puts and takes of going through the year. But you know, given the momentum and given Pacira and given some of those things going on, I think you’re in the relative neighborhood. Khalif?

Khalif

Yeah, so two questions on scenario mode. So, yes, the pooled analysis is prespecified as part of the SAP. Again, there’s a number of endpoints that are of particular relevance for this pooling strategy, in particular around steroid sparing, where pooling the two studies together may give us enough of a sample size to be fully powered for the analysis. But all endpoints will be looked at as each individual study, but also as pooled study. As you pointed out, these two studies are identical and can be pooled together.

In terms of the interferon 1 high, I think there are different techniques to look at and classify interferon 1. They all lead to the same results, however. And so whether you pool two, three, four different types of genes together, when we look at retrospectively, when we look at the data, it leads to the same results of who’s interferon 1 high versus who’s not. So those techniques do not make a difference. At the end of the day, we used the Phase 2b CARE data to determine the cutoff.

It is clear there’s a separation between interferon 1 high and interferon 1 low patients based on that cutoff. So we do not anticipate to miss many patients that would be interferon 1 low but potentially responders. So the short answer is that no matter which technique you use to determine interferon 1 high, it leads to similar results.

OPERATOR

Our next question comes from Matt Delator from Goldman Sachs. Please go ahead with your question.

Tommy (Analyst at Goldman Sachs)

Thanks for taking our question. This is Tommy on for Matt. Just a couple on the upcoming pain launch. Maybe could you speak to how hospital purchasing dynamics and ambulatory surgical centers are evolving under the NO PAIN Act? Are there any clear volume shifts towards non-opioid protocols and how would this impact your pricing and launch strategy? Thank you.

Scott A. Smith (Chief Executive Officer)

Good. So thank you for the question. I’ll turn it over to Corinne for a more detailed response.

Corinne Le Goff (Chief Commercial Officer (CCO))

Right. So thank you very much for your question. So for fast-acting meloxicam, of course we fight for NO PAIN. I think what’s important to note here is that NO PAIN has an impact and is very beneficial for inpatient hospital patients. But our strategy with fast-acting meloxicam is to really focus on the outpatient setting, more of the retail settings. Of course we’re going to focus on post-operative pain, but mostly in the outpatient setting and as well as non-operative pain.

So that’s—now, NO PAIN is important and we are focused on this as well.

Scott A. Smith (Chief Executive Officer)

And relative to your question on pricing, you know, we’re obviously exploring a bunch of different pricing models, looking at a number of different pricing points, matching them up with strategy to early penetration to the marketplace. But, you know, we don’t make any final pricing decisions until we understand the fullness of the label and all the specifics around the label. So we’re working on that. We’re not in a position to get too specific until we see final label and make some final decisions on that would be enough at launch.

OPERATOR

Our next question comes from Jason Gerberry from Bank of America. Please go ahead with your question.

Jason Gerberry (Analyst at Bank of America)

Hey guys, thanks for taking my questions. Follow-up on Ash’s question, slightly different variant of it. Pacira in the past had talked about the manufacturing barriers to Exparel and wondering if that’s part of the thought process here that there could be an upside that the generic suppliers may struggle to be able to make this. I assume that this is something that you guys looked at on the ANDA side of your business for a while. So just curious if you could comment on that.

And then my second question on selatogrel is a commercial one, which is as we think about how you model the EpiPen business, right, and how patients stockpile a rescue option there, how are you modeling the rescue carry rates for something like AMI? I know in the past you’ve talked about, I think 20% of heart attack survivors have another event, but that could vary, right, a year to five years later. And so I’m just wondering how you model that and thinking about the importance of high-risk subgroups when we ultimately get detailed data, how that could play into the commercial use case.

Scott A. Smith (Chief Executive Officer)

Paul, comment on the—manufacture and the barriers that presents.

Paul

Yeah, yeah, thanks, Jason. Yes, absolutely. That product is very difficult to manufacture and we did, you know, did look at it as we were working through due diligence. I will say, you know, as of now we’re not counting on, you know, any issues that generics may have. However, we are, you know, very aware that the product is tough to make and, you know, is something that could potentially be upside in the future. But certainly we’re not going to rely on that.

We’re going to assume if somebody has approval that they’ll be able to manufacture and deliver the volumes that are expected.

Scott A. Smith (Chief Executive Officer)

I think these are difficult to make and difficult to get approval as well because showing sameness is difficult for these products. So not every generic company will be able to get it approved and make a product like this. On the selatogrel question, I think the way we’re looking at the pen is that we’ll get about a shelf life that will be anywhere around between close to two years. But that will require basically a new pen close to once a year for patients. So patients will have to renew their pen or pens every year. I think if you look at the dynamics we see for other emergency treatment, patients typically need more than one pen. They need two to three pens at one time.

So I think that’s part of the expectation we’re going to need for selatogrel. Anything else on that topic you want to bring?

Corinne Le Goff (Chief Commercial Officer (CCO))

Maybe I’m going to add a point on the value of selatogrel. You know, your reference point of EpiPen might not apply here because the clinical context and the value drivers are vastly different for selatogrel given the cardiovascular outcome benefit that we expect and that we would consider as part of the value proposition of the product. So we will establish an episode-based value framework that will be linked to the reduction of the severity of the outcome, and we will be able to measure, as part of our value dossier, the measurable healthcare system efficiencies that will be driven by the early administration of—

Scott A. Smith (Chief Executive Officer)

You make an interesting point on the number of devices that an individual will accumulate over a lifetime. And I had just a personal story. I had a near-fatal anaphylactic reaction in my mid-30s and I probably own 50 EpiPens to this point. So modeling that gets very difficult, and the average patient certainly won’t own 50. But just, you know, particularly with something as serious as anaphylaxis, or in this case acute MI patients—and there’s some quality of life data that we’re going to be talking about coming out—patients feel much better to be able to have a device that they can take positive action if they have another event.

You know, when we’re working on all these models, a lot of patients will have more than one device in the car, other things, and then you need to renew the device over time. And again, I’ve never even had a second anaphylactic reaction myself, but I still have owned, you know, 40 to 50 EpiPens during the course of the last 30 years.

Corinne Le Goff (Chief Commercial Officer (CCO))

I think the other point to highlight is the fact that the risk of recurring MI is much higher within the first six months of the first MI. But it doesn’t go away, right? So it stays then over time, so the need to carry the pen doesn’t go away five, six, 10 years post the first MI. Right. So that’s also data that we’ll be emphasizing as we get closer to launch.

OPERATOR

Once again, if you would like to ask a question, please press star and then one. To withdraw your questions you may press star and two. Our next question comes from David Amsalom from Piper Sandler. Please go ahead with your question.

David Amsalom (Analyst at Piper Sandler)

Hey, thanks. So got a couple of Exparel-related questions and just Pacira questions in general. So on Exparel, I mean it’s had a more mature growth trajectory in recent years and obviously the hospital environment can be challenging. So I guess what gives you confidence that you can grow the product significantly in the next few years before you start to see the volume-limited generic competition? So that’s number one. And then secondly on the pipeline from Pacira, PCRX-2002, the ropivacaine product, I know that’s Phase 2 ready. I’m just wondering how you’re thinking about that asset as a potential next-generation post-surgical pain product that, you know, potentially could be a replacement for Exparel or even a better version that has longer lasting effects. And, you know, what’s the extent to which you’re ascribing value to that asset and your level of excitement over it?

Scott A. Smith (Chief Executive Officer)

So Dave, thank you very much for the questions. We don’t own, at this point in time, nor do we own Exparel, so I’m not going to get into specific strategies which we want to employ to change the trajectory of that growth line. I don’t think that would be appropriate at this point in time. However, we have looked very, very deeply at the product. We think there are things that we can do to, you know, continue the growth rate, see less—not as much of a mature growth rate—but continue to expand that growth rate and do some things to really sort of accelerate the expansion growth over the next few years.

We feel very confident in that. I don’t want to get into specifics at all. I think one of the other things which is underestimated is the positive synergy of this transaction on fast-acting meloxicam. Non-opioid pain group, very experienced group, doing very well with the products, with both products, Zilretta and Exparel, and I think they have some capabilities. For me, the acquisition was not just about two important assets in Exparel and Zilretta that are in market, accretive, growing, high margin, but also the capabilities that we’re acquiring when we bring the group into our group.

We’re very, very excited about Pacira, the capabilities that they bring and the ability of them to help us really launch fast-acting meloxicam in a better way. Yeah. And really help us reach our potential with fast-acting meloxicam. I think we are very impressed with the infrastructure that they have in place, the ability to reach hospitals, ASCs and ambulatory surgical centers, but also, you know, having salesforce in retail as well. So it’s a very strong addition for us and it will accelerate our capabilities as we prepare for the launch of fast-acting meloxicam with arms. Again, there was a pipeline question.

Philippe Martin (Chief R&D Officer)

Yes, on 2002, your question. I think, again, we don’t own these assets yet, but we certainly did due diligence around them. The pipeline was not the main driver for this acquisition. That being said, I think there are a number of assets within that pipeline that are very interesting and have significant potential. You asked specifically about 2002. I think we see it as interesting because of the hydrogel technology and the long release time — potentially a much longer effect than existing drugs on the market — and also the ease of administration, which I think is particularly important for this product.

Now, it’s early. Phase two is just starting. So once we get the data, we’ll revisit everything, but make decisions based on data going forward for this pipeline. And so once that data comes in, we’ll get a better sense of the potential for this asset specifically.

OPERATOR

Our next question comes from Chris Schott from JP Morgan. Please go ahead with your question.

Ethan (Analyst at JP Morgan)

Hi, this is Ethan on for Chris. Thanks for taking our question following the recent Pacira deal. Just curious on how you’re thinking about capital deployment and BD priorities from here. And then the second question would be, I think you noted that you secured first-to-file status for Wegovy in the call. Just curious how you’re thinking about maybe the magnitude of capacity that you can get there. Thank you.

Scott A. Smith (Chief Executive Officer)

Thanks for the question. I think from a capital allocation perspective, we don’t see any changes in our capital allocation priorities. We’re going to continue to pay dividend, buy back shares, and continue to do business development over the next three to five years. We bought back shares already this year. We may even do some more this year as we go forward. We’ll be opportunistic in how we do that. But we don’t see any changes in our capital allocation strategy at all.

In terms of BD, we’ll continue to do BD. We’re continuing to look for things that are accretive, in-market. We can be good owners of that and are going to add to our growth profile going forward. So we’re going to do all those things, and we’re going to have sufficient cash to be able to do that over the next 3 to 5 years between now and 2030 — buy back shares, pay the dividend, and do BD that makes sense for us. And then the Wegovy tablet, 25 milligram — yes, we said that we secured first-to-file; again, that’s for the tablet. But as you know, we have a significant offering for GLP-1s in the future, where we basically developed every presentation for semaglutide but also for tirzepatide.

Our focus, as we’ve said in the past, will be primarily in the US where we can significantly differentiate and use our technology to further differentiate versus competition. That said, we will also be selectively launching in other regions for the GLP-1. So we are very well placed. We have many first-to-files on all these presentations and are getting ready for the US market.

OPERATOR

And our next question comes from Daniel Clark from Leerink. Please go ahead with your question.

Daniel Clark (Analyst at Leerink Partners)

Great, thanks so much. Just wanted to drill down on the HRT kind of market and how you’re thinking about growth opportunities here. Appreciate the color that less than 30% of women with menopausal symptoms are being treated with HRT. Where do you think that can kind of go given this is an unprecedented situation? I think we’re still trying to figure out where real demand is here at this point.

Scott A. Smith (Chief Executive Officer)

Thanks for the question, Dan. I’ll kick it over to Corinne for her response.

Corinne Le Goff (Chief Commercial Officer (CCO))

Thank you for your question. I think that, as I said, it’s a very large untapped market. There is now much more ease in prescribing hormonal replacement therapies coming from clinicians, and women are being made aware that they can now have access to patches and also other formulations of estradiol and progesterone for relieving their menopausal symptoms. So potentially this market is large. Can we say exactly where it’s going to go? I can only say that for the foreseeable future it is going to grow.

Just to give you some data on our products, our patches — we expect that they are going to reach 1.5 million women this year in 26, and we’re going to add in 27 another million women using our patches. So we are very encouraged by — I think it’s wonderful to see that this market is opening up again, right, because it’s been now 10 years without the possibility of treating women with menopausal symptoms, and we are going back to levels of prescriptions that we experienced back in 2002.

Twenty years, 2002.

OPERATOR

And with that, ladies and gentlemen, we’ll be concluding today’s question and answer session. I’d like to turn the floor over to Scott Smith, CEO, for closing remarks.

Scott A. Smith (Chief Executive Officer)

As we approach the end of 2026, I’m very encouraged by the continued progress we’re making in executing our strategy and advancing toward our long-term financial targets and the momentum we are building for the years ahead. With a strong and evolving base business, important innovative medicines opportunities ahead of us, and the planned acquisition of Pacira, I believe we’re well positioned for long-term sustained growth. We’ve already accomplished a lot this year, and I’m excited about what’s ahead in 27 and beyond for Viatris.

Thank you all for your attention.

OPERATOR

The conference has now concluded. We do thank you for attending today’s presentation. You may now disconnect your lines.

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