Viatris

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☑
Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 2024
OR
☐
Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from              to             
Commission file number 001-39695
VIATRIS INC.
(Exact name of registrant as specified in its charter)
Delaware
 
83-4364296
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
1000 Mylan Boulevard, Canonsburg, Pennsylvania, 15317
(Address of principal executive offices)(Zip Code)
(724) 514-1800
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class:
Trading Symbol(s)
Name of Each Exchange on Which Registered:
Common Stock, par value $0.01 per share
VTRS
The NASDAQ Stock Market
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes   ☑      No   ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ☐      No  ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days.    Yes  ☑      No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-
T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☑      No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging
growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the
Exchange Act.
Large accelerated filer
☑
  
Accelerated filer
☐
Non-accelerated filer
☐
  
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect
the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of
the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ☐      No  ☑
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2024, the last business day of the
registrant’s most recently completed second fiscal quarter, was approximately $12,661,582,065.
The number of shares of common stock outstanding, par value $0.01 per share, of the registrant as of February 21, 2025 was 1,193,688,749.
INCORPORATED BY REFERENCE
Document
Part of Form 10-K into Which

Document is Incorporated
An amendment to this Form 10-K will be filed no later than 120 days after the close of registrant’s fiscal year.
III

Table of Contents
VIATRIS INC.
INDEX TO FORM 10-K
For the Year Ended December 31, 2024
 
 
 
Page
PART I
ITEM 1.
Business
6
ITEM 1A.
Risk Factors
21
ITEM 1B.
Unresolved Staff Comments
49
ITEM 1C.
Cybersecurity
50
ITEM 2.
Properties
51
ITEM 3.
Legal Proceedings
51
ITEM 4.
Mine Safety Disclosures
51
PART II
ITEM 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
52
ITEM 6.
[Reserved]
53
ITEM 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
54
ITEM 7A.
Quantitative and Qualitative Disclosures about Market Risk
76
ITEM 8.
Financial Statements and Supplementary Data
77
ITEM 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
149
ITEM 9A.
Controls and Procedures
149
ITEM 9B.
Other Information
149
ITEM 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
149
PART III
ITEM 10.
Directors, Executive Officers and Corporate Governance
150
ITEM 11.
Executive Compensation
150
ITEM 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
150
ITEM 13.
Certain Relationships and Related Transactions, and Director Independence
150
ITEM 14.
Principal Accounting Fees and Services
151
PART IV
ITEM 15.
Exhibits and Consolidated Financial Statement Schedules
152
Signatures
160
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Table of Contents
Glossary of Defined Terms
Unless the context requires otherwise, references to “Viatris,” “the Company,” “we,” “us” or “our” in this 2024 Form 10-K (defined below) refer
to Viatris Inc. and its subsidiaries. We also have used several other terms in this 2024 Form 10-K, most of which are explained or defined below. Some
amounts in this Form 10-K may not add due to rounding.
2003 LTIP
Mylan N.V. Amended and Restated 2003 Long-Term Incentive Plan
2020 Incentive Plan
Viatris Inc. 2020 Stock Incentive Plan
2021 Revolving Facility
The $4.0 billion revolving facility dated as of July 1, 2021, by and among Viatris, certain lenders and
issuing banks from time to time party thereto and Bank of America, N.A., as administrative agent and
which was amended and restated in September 2024
2024 Revolving Facility
The $3.5 billion revolving facility dated as of September 27, 2024, by and among Viatris, certain lenders
and issuing banks from time to time party thereto and Bank of America, N.A., as administrative agent
505(b)(2)
A streamlined NDA process in which the applicant relies upon one or more investigations conducted by
someone other than the applicant and for which the applicant has not obtained right of reference.
ACA
Patient Protection and Affordable Care Act, as amended by the Health Care and Education and
Reconciliation Act
Adjusted EBITDA
Non-GAAP financial measure that the Company believes is appropriate to provide information to investors
- EBITDA (defined below) is further adjusted for share-based compensation expense, litigation
settlements, and other contingencies, net, gain (loss) on divestitures of businesses, impairment of long-
lived assets and goodwill, restructuring, acquisition and divestiture-related and other special items
Adjusted EPS
Adjusted net earnings per diluted share
AI
Artificial intelligence
ANDA
Abbreviated New Drug Application
AOCE
Accumulated other comprehensive earnings
API
Active pharmaceutical ingredients
ARV
Antiretroviral medicines
ASC
Accounting Standards Codification
ASU
Accounting Standards Update
Biocon
Biocon Limited
Biocon Biologics
Biocon Biologics Limited, a majority owned subsidiary of Biocon
Biocon Biologics Transaction
The transaction between Viatris and Biocon Biologics pursuant to which Viatris contributed its biosimilars
portfolio, composed of the Biocon collaboration programs, biosimilars to Humira®, Enbrel®, and Eylea®,
as well as related assets and liabilities to Biocon Biologics
Biocon Agreement
The transaction agreement between Viatris and Biocon Biologics, dated February 27, 2022, relating to the
Biocon Biologics Transaction, as amended from time to time
Business Combination Agreement
Business Combination Agreement, dated as of July 29, 2019, as amended from time to time, among Viatris,
Mylan, Pfizer and certain of their affiliates
CAMT
U.S. corporate alternative minimum tax
CCPS
Compulsory convertible preferred shares
cGMP
Current Good Manufacturing Practices
CIRP
Cybersecurity Incident Response Plan
CIRT
Cybersecurity Incident Response Team
Code
The U.S. Internal Revenue Code of 1986, as amended
CODM
Chief operating decision maker
Combination
Refers to Mylan combining with Pfizer's Upjohn Business in a Reverse Morris Trust transaction to form
Viatris on November 16, 2020
Commercial Paper Program
The $1.65 billion unsecured commercial paper program entered into as of November 16, 2020 by Viatris,
as issuer, Mylan Inc., Utah Acquisition Sub Inc. and Mylan II B.V., as guarantors, and certain dealers from
time to time
COPD
Chronic obstructive pulmonary disease
COSO
Committee of Sponsoring Organizations of the Treadway Commission
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DEA
U.S. Drug Enforcement Agency
Developed Markets segment
Viatris’ business segment that includes our operations primarily in the following markets: North America
and Europe
DGCL
Delaware General Corporation Law
Distribution
Pfizer's distribution to Pfizer stockholders of all the issued and outstanding shares of Upjohn Inc.
DOJ
U.S. Department of Justice
EBITDA
Non-GAAP financial measure that the Company believes is appropriate to provide information to investors
- U.S. GAAP net earnings (loss) adjusted for income tax provision (benefit), interest expense and
depreciation and amortization
EDPA
U.S. District Court for the Eastern District of Pennsylvania
EMA
European Medicines Agency
Emerging Markets segment
Viatris’ business segment that includes, but is not limited to, our operations primarily in the following
markets: Parts of Asia, the Middle East, South and Central America, Africa, and Eastern Europe
EPD Business
Abbott Laboratories’ non-U.S. developed markets specialty and branded generics business, prior to its
acquisition by Mylan in February 2015
EPS
Earnings per share
EU
European Union
Exchange Act
Securities Exchange Act of 1934, as amended
Famy Life Sciences
Famy Life Sciences Private Limited
FASB
Financial Accounting Standards Board
FDA
U.S. Food and Drug Administration
Form 10-K
This annual report on Form 10-K for the fiscal year ended December 31, 2024
GA Depot
Long-acting glatiramer acetate depot product
GDPR
The EU’s General Data Protection Regulation
Global Systemically Important Banks
Financial institutions that are considered systemically important by the Financial Stability Board
Greater China segment
Viatris’ business segment that includes our operations primarily in the following markets: mainland China,
Taiwan and Hong Kong
Hatch-Waxman Act
Drug Price Competition and Patent Term Restoration Act of 1984
HIPAA
Health Insurance Portability and Accountability Act of 1996 and the Health Information Technology for
Economic and Clinical Health Act
HIV/AIDS
Human immunodeficiency virus infection and acquired immune deficiency syndrome
Idorsia
Idorsia Pharmaceuticals Ltd.
Idorsia Transaction
The transaction between Viatris and Idorsia pursuant to which Viatris acquired the development programs
and certain personnel related to selatogrel and cenerimod from Idorsia in exchange for an upfront payment
to Idorsia of $350 million, potential development and regulatory milestone payments, certain contingent
payments of tiered sales milestones, as well as potential contingent tiered sales royalties
INN
International Nonproprietary Name
IPR&D
In-process research and development
IRS
U.S. Internal Revenue Service
IT
Information technology
JANZ segment
Viatris’ business segment that includes our operations in the following markets: Japan, Australia and New
Zealand
Lexicon Pharmaceuticals, Inc.
Lexicon
LIBOR
London Interbank Offered Rate
LOE
Loss of exclusivity
Mapi
Mapi Pharma Ltd.
Maximum Leverage Ratio
The maximum consolidated leverage ratio financial covenant requiring maintenance of a maximum ratio of
consolidated total indebtedness as of the end of any quarter to consolidated EBITDA for the trailing four
quarters as defined in the related credit agreements from time to time
MDL
Multidistrict litigation
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MPI
Mylan Pharmaceuticals Inc.
Mylan
Mylan N.V. and its subsidiaries
Mylan Inc. U.S. Dollar Notes
The 4.550% Senior Notes due 2028, 5.400% Senior Notes due 2043 and 5.200% Senior Notes due 2048
issued by Mylan Inc., which are fully and unconditionally guaranteed on a senior unsecured basis by
Mylan II B.V., Viatris Inc. and Utah Acquisition Sub Inc.
NASDAQ
The NASDAQ Stock Market
NCDs
Noncommunicable diseases
NDA
New drug application
OECD
The Organisation for Economic Co-operation and Development
OTC
Over-the-counter
OTC Business
Viatris’ OTC business that the Company divested to Cooper Consumer Health SAS in July 2024, including
two manufacturing sites located in Merignac, France, and Confienza, Italy, and an R&D site in Monza,
Italy. This excludes the Company’s rights for Viagra®, Dymista® (which, in certain limited markets, are
sold as OTC products), and select OTC products in certain markets.
OTC Transaction
On October 1, 2023, Viatris announced it had received an offer for the divestiture of its OTC Business. In
January 2024, we exercised our option to accept the offer and entered into a definitive transaction
agreement with respect to such OTC Transaction. The OTC Transaction closed in July 2024.
Oyster Point
Oyster Point Pharma, Inc.
PBMs
Pharmacy benefit managers
PCAOB
Public Company Accounting Oversight Board
Pfizer
Pfizer Inc.
Profit Sharing 401(k) Plan
401(k) retirement plan with a profit sharing component for non-union represented employees
PSUs
Performance awards
QCE
Quality consistency evaluation
R&D
Research and development
Receivables Facility
The $400 million accounts receivable facility entered into in August 2020 and expiring in April 2025
Registered Upjohn Notes
The 2.300% Senior Notes due 2027, 2.700% Senior Notes due 2030, 3.850% Senior Notes due 2040 and
4.000% Senior Notes due 2050 originally issued on October 29, 2021 registered with the SEC in exchange
for the corresponding Unregistered Upjohn U.S. Dollar Notes in a similar aggregate principal amount and
with terms substantially identical to the corresponding Unregistered Upjohn U.S. Dollar Notes and fully
and unconditionally guaranteed by Mylan Inc., Mylan II B.V. and Utah Acquisition Sub Inc.
Respiratory Delivery Platform
Pfizer’s proprietary dry powder inhaler delivery platform
Restricted Stock Awards
The Company’s nonvested restricted stock and restricted stock unit awards, including PSUs
Revance
Revance Therapeutics, Inc.
RICO
Racketeer Influenced and Corrupt Organizations Act
ROU asset
Right-of-use asset
SARs
Stock appreciation rights
SDNY
U.S. District Court for the Southern District of New York
SEC
U.S. Securities and Exchange Commission
Securities Act
Securities Act of 1933, as amended
Senior U.S. Dollar Notes
The Upjohn U.S. Dollar Notes, the Utah U.S. Dollar Notes and the Mylan Inc. U.S. Dollar Notes,
collectively
Separation
Pfizer's transfer to Upjohn of substantially all the assets and liabilities comprising the Upjohn Business
Separation and Distribution Agreement
Separation and Distribution Agreement between Viatris and Pfizer, dated as of July 29, 2019, as amended
from time to time
SG&A
Selling, general and administrative expenses
stock awards
Stock options and SARs
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Tax Matters Agreement
The agreement entered into by Pfizer and Viatris in connection with the Separation and the Distribution
that governs the parties’ respective rights, responsibilities and obligations with respect to taxes, including
taxes arising in the ordinary course of business and taxes, if any, incurred as a result of any failure of the
Distribution or certain related transactions to qualify as tax-free transactions
Teva
Teva Pharmaceutical Industries Ltd.
Theravance Biopharma
Theravance Biopharma, Inc.
TSA
Transition services agreements, including related distribution services
U.K.
United Kingdom
U.S.
United States
U.S. GAAP
Accounting principles generally accepted in the U.S.
Unregistered Upjohn U.S. Dollar Notes
The 2.300% Senior Notes due 2027, 2.700% Senior Notes due 2030, 3.850% Senior Notes due 2040 and
4.000% Senior Notes due 2050 originally issued on June 22, 2020 by Upjohn Inc. (now Viatris Inc.) in a
private offering exempt from the registration requirements of the Securities Act and fully and
unconditionally guaranteed by Mylan Inc., Mylan II B.V. and Utah Acquisition Sub Inc.
Upjohn
Upjohn Inc., a wholly owned subsidiary of Pfizer prior to the Distribution, that combined with Mylan and
was renamed Viatris Inc.
Upjohn Business
Pfizer’s off-patent branded and generic established medicines business that, in connection with the
Combination, was separated from Pfizer and combined with Mylan to form Viatris
Upjohn Distributor Markets
Select geographic markets that were part of the Combination that are smaller in nature and in which we had
no established infrastructure prior to or following the Combination and that the Company has divested or
intends to divest
Upjohn Euro Notes
Senior unsecured notes denominated in euros and issued by Upjohn Finance B.V. pursuant to an indenture
dated June 23, 2020
Upjohn U.S. Dollar Notes
Senior unsecured notes denominated in U.S. dollars and originally issued by Upjohn Inc. or Viatris Inc.
pursuant to an indenture dated June 22, 2020 and fully and unconditionally guaranteed by Mylan Inc.,
Mylan II B.V. and Utah Acquisition Sub Inc.
URP
Universal reimbursement pricing
Utah Acquisition Sub
Utah Acquisition Sub Inc., a Delaware corporation and an indirect wholly owned subsidiary of Viatris
Utah Euro Notes
The 3.125% Senior Notes due 2028 issued by Utah Acquisition Sub Inc., which are fully and
unconditionally guaranteed on a senior unsecured basis by Mylan Inc., Viatris Inc. and Mylan II B.V.
Utah U.S. Dollar Notes
The 3.950% Senior Notes due 2026 and 5.250% Senior Notes due 2046 issued by Utah Acquisition Sub
Inc., which are fully and unconditionally guaranteed on a senior unsecured basis by Mylan Inc., Viatris Inc.
and Mylan II B.V.
VA
Department of Veterans Affairs
VBP
Volume-based procurement
Viatris
Viatris Inc., formerly known as Upjohn Inc. prior to the completion of the Combination
Viatris Board
The board of directors of Viatris Inc.
Viatris Bylaws
The amended and restated bylaws of Viatris Inc.
Viatris Charter
Amended and restated certificate of incorporation of Viatris Inc., as amended
WHO
World Health Organization
YEN Term Loan Facility
The ¥40 billion term loan agreement dated as of July 1, 2021, among Viatris, the guarantors from time to
time party thereto, the lenders from time to time party thereto and Mizuho Bank, Ltd., as administrative
agent
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Table of Contents
PART I
ITEM 1.
Business
About Viatris
Viatris is a global healthcare company whose breadth and scale we believe make it uniquely positioned to address healthcare needs globally. With
a mission to empower people worldwide to live healthier at every stage of life, Viatris supplies high-quality medicines to approximately 1 billion patients
around the world each year. The Company has a global footprint, an extensive portfolio of medicines that is well-diversified across therapeutic areas, a one-
of-a-kind global supply chain designed to reach more people when and where they need them, and the scientific expertise to address some of the world's
most enduring health challenges.
Viatris’ executive management team is focused on ensuring that the Company is optimally structured and efficiently resourced to deliver
sustainable value to patients, shareholders, customers and other key stakeholders. The Company operates in more than 165 countries and territories with
approximately 32,000 employees. The Company has 26 manufacturing and packaging sites worldwide, more than 1,400 approved molecules, and industry
leading commercial, R&D, regulatory, manufacturing, legal and medical expertise. Viatris’ portfolio consists of generics (including complex products),
globally recognized iconic brands, and an expanding portfolio of innovative medicines. Viatris is headquartered in the U.S., with global centers in
Pittsburgh, Pennsylvania, Shanghai, China and Hyderabad, India.
Viatris has executed various strategic initiatives, transactions and business arrangements over the last few years to return its base business to
growth, deliver on its pipeline, reduce debt, maintain an investment grade credit rating and return capital to shareholders. The Company has also completed
certain transactions to simplify and streamline its business, accelerate paydown of debt and unlock value, including the Biocon Biologics Transaction and
the recently completed divestitures discussed below.
On November 29, 2022, Viatris completed a transaction to contribute its biosimilars portfolio to Biocon Biologics to create a vertically integrated
global biosimilars leader. A portion of the consideration received from Biocon at closing included approximately $1 billion of CCPS representing a stake of
approximately 12.9% (on a fully diluted basis) in Biocon Biologics.
In October 2023, the Company announced it had received an offer for the divestiture of its OTC Business and had entered into definitive
agreements to divest its women’s healthcare business primarily related to oral and injectable contraceptives, its API business in India, its rights to two
women’s healthcare products in certain countries, and commercialization rights in the Upjohn Distributor Markets. The Company has substantially
completed all of these divestitures:
•
In March 2024, the Company completed the divestiture of its women's healthcare business, primarily related to its oral and injectable
contraceptives, to Insud Pharma, S.L., a leading Spanish multinational pharmaceutical company. The transaction included two manufacturing
facilities in India: one in Ahmedabad and one in Sarigam.
•
In June 2024, the Company completed the divestiture of its API business in India to Matrix Pharma Private Limited, a privately held
pharmaceutical company based in India. The transaction included three manufacturing sites and an R&D lab in Hyderabad, three manufacturing
sites in Vizag and third-party API sales. Viatris retained some selective R&D capabilities in API.
•
In July 2024, the Company completed the divestiture of its OTC Business to Cooper Consumer Health, a leading European OTC drug
manufacturer and distributor. The transaction included two manufacturing sites located in Merignac, France, and Confienza, Italy, and an R&D
site in Monza, Italy. The Company retained the rights for Viagra®, Dymista® (which, in certain limited markets, are sold as OTC products) and
select OTC products in certain markets.
•
Viatris divested its rights to women’s healthcare products Duphaston® and Femoston® in certain countries to Theramex HQ UK Limited, a
leading global specialty pharmaceutical company dedicated to women's health. The transaction (other than in the U.K., which was sold to Insud
Pharma, S.L. in August 2024) closed in December 2023.
•
The divestitures of the commercialization rights in the majority of the Upjohn Distributor Markets closed during 2023 and 2024.
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Business Strategy
The Company has laid out three strategic pillars to accelerate growth and shareholder return:
•
Diversified & Growing Base Business: We believe the Company’s continued success in its base business comes from its large and diversified
portfolio of generics and off-patent brands that extends across markets and therapeutic areas. Here the Company has a clear legacy of deep product
knowledge and extensive commercialization and development expertise. We believe it is important that Viatris maintains a strong focus on growing its base
business over the long-term.
•
Financial Strength & Significant Cash Flow: We believe the Company’s strong balance sheet and sector-leading cash flow generation
differentiate it from sector peers. The Company expects to continue to deliver on its long-term financial strategy to return capital to shareholders through
dividends and share repurchases, while making investments in its business and maintaining its commitment to its investment grade debt rating.
•
Expanding Innovative Portfolio: This represents the Company’s continuous efforts to identify, vet and secure innovative, best-in-class, patent-
protected assets in areas of unmet medical need in which it can be successful. By expanding our innovative portfolio, we believe the Company has the
potential to drive accelerated and durable revenue growth over the long-term.
As part of expanding our innovative portfolio, on March 15, 2024, the Company acquired exclusive global development and commercialization
rights to two Phase 3 assets from Idorsia, as well as the potential to add additional innovative assets in the future.
The collaboration includes selatogrel, a potential life-saving self-administered medicine for patients with a history of acute myocardial infarction
(AMI), or heart attack, and builds on Viatris' existing global cardiovascular franchise and specialty infrastructure, as well as its knowledge, leadership, and
distribution capabilities for self-administered medication for acute life-threatening conditions.
The collaboration also includes cenerimod, a novel immunology asset that has the potential to be a first-in-class oral therapy for the treatment of
systemic lupus erythematosus (SLE), the most common form of lupus. Through lifecycle management, this asset also has the potential for broad
application across multiple autoimmune diseases in a specialist-driven category with attractive market dynamics for oral therapies and could be a
cornerstone asset in Viatris' immunology portfolio.
Under the terms of the original agreements, the development programs and certain personnel for selatogrel and cenerimod were transferred to
Viatris from Idorsia in exchange for an upfront payment to Idorsia of $350 million, potential contingent milestone payments (including $300 million
payable upon the achievement of certain development and regulatory milestones, and $2.1 billion payable upon the achievement of certain tiered sales
milestones), as well as potential contingent tiered sales royalties. Viatris and Idorsia are both contractually obligated to contribute to the development costs
for both programs. Viatris has worldwide commercialization rights for both selatogrel and cenerimod (excluding, for cenerimod only, Japan, South Korea
and certain countries in the Asia-Pacific region). A joint development committee was formed to oversee the development of the ongoing Phase 3 programs
through regulatory approval. The agreements also provide Viatris a right of first refusal and a right of first negotiation for certain other assets in Idorsia’s
pipeline.
On February 25, 2025, in order to preserve the ongoing continuity of the development programs for selatogrel and cenerimod considering certain
capital structuring steps announced by Idorsia to secure its ongoing operations, Viatris and Idorsia entered into a letter agreement to amend certain terms of
the original agreements described above. Under the terms of the letter agreement, Viatris will receive additional territory rights in Japan, South Korea and
certain other countries in the Asia-Pacific region for cenerimod, a $250 million reduction in contingent milestone payments, including $200 million of
development milestones, and additional personnel to expedite transitioning the development programs to Viatris in exchange for Viatris assuming $100
million of Idorsia’s obligation to contribute to development costs. In addition, the letter agreement provides for the replacement of the joint development
committee with a transition committee to oversee the transition of both development programs to Viatris. For additional information, see Part I, Item 1A
Risk Factors – “We may not realize the intended benefits of, or achieve the intended goals or outlooks with respect to, our strategic initiatives and
priorities, including divestitures, acquisitions or other potential transactions.”, “If we are unable to successfully introduce new products in a timely
manner, our future revenue and profitability may be adversely affected.” and “We expend a significant amount of resources on R&D efforts that may not
lead to successful product introductions.”
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Table of Contents
Unless otherwise indicated, industry data included in this Item 1 are sourced from IQVIA Holdings Inc. and are for the twelve months ended
November 2024 and Viatris product and other company data included in this Item 1 are from internal sources and are as of November 30, 2024.
Organization
Upjohn was incorporated in Delaware on February 14, 2019 as a wholly-owned subsidiary of Pfizer to operate the Upjohn Business. Effective as
of November 16, 2020, Upjohn, Mylan and Pfizer consummated the combination of Mylan with the Upjohn Business through a Reverse Morris Trust
transaction, Viatris became the parent entity of the combined Upjohn Business and Mylan business, and Upjohn changed its name to “Viatris Inc.” As a
result of the Combination, Mylan ceased to exist as a separate legal entity after merging with and into Mylan II B.V., an indirect wholly owned subsidiary
of Viatris.
The Upjohn Business was a global, primarily off-patent branded and generic established medicines business, which included 20 primarily off-
patent oral solid dose legacy brands, such as Lyrica®, Lipitor®, Celebrex® and Viagra®.
Mylan was founded in 1961 as a privately-owned company and grew over time into one of the largest manufacturers of generic medicines in the
U.S. Mylan became a publicly traded company in 1973. Mylan’s strategy then led to many acquisitions which played a significant role in the evolution of
that company, including Matrix Laboratories Limited (2007); Merck KGaA’s generic and specialty pharmaceutical business (2007); the EPD Business
(2015) and Meda AB (publ.) (2016). These acquisitions assisted in creating robust research, manufacturing, supply chain and commercial platforms on a
global scale; substantially expanding its portfolio of medicines; diversifying by geography, product type and channel; maintaining its commitment to
quality; and cultivating its global workforce.
Business Model and Operations
At Viatris, we have a relentless focus on delivering access at scale. Our strength is in our diversity. Our business and operating model is
deliberately designed and implemented to deliver on our strategy to provide and sustain access to medicine at scale. We seek to create value for and
together with our key stakeholders – the people who trust our medicines every day, the health systems who rely on us, the people who make up Viatris, our
partners and the investors who believe in our ability to execute on our ambitious mission.
We are convinced that patients and health systems around the world are best served by a healthcare company applying a well-rounded and long-
term approach, maintaining viability while working to manage inherent risks and opportunities and continuously striving to advance sustainable operations
and responsible practices in a focused way. We see healthcare not as it is, but as it should be. We act courageously and believe we are uniquely positioned
to be a source of stability in a world of evolving healthcare needs. Our mission is to empower people worldwide to live healthier at every stage of life. We
do so via Access, Leadership and Partnership.
ACCESS
Viatris provides high-quality, trusted medicines, regardless of geography or circumstance. As noted above access is fundamental to our
mission. It is not an initiative; it is our business model, and it is personal. It begins with our ability to sustainably deliver quality medicines to people,
regardless of geography or circumstance. We believe we are a company uniquely positioned to bridge the traditional divide between generics and brands,
combining the best of both to more holistically address healthcare needs globally. We are committed to improving access to high-quality medicines and
working to ensure a reliable supply so patients can get the treatments they need, when and where they need them. Our global portfolio, supported by our
science, medical and manufacturing expertise, delivers global iconic and key brands, and generics, including complex products.
We see access as fundamental to empowering people worldwide to live healthier at every stage of life—a powerful concept in challenging times.
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With what we believe is an extensive portfolio of medicines to meet nearly every health need, a one-of-a-kind global supply chain designed to
reach more people with health solutions when and where they need them, and the scientific expertise to address some of the world’s most enduring health
challenges, access takes on deeper meaning at Viatris.
From our unique vantage point, we touch all of life’s moments, from birth to the end of life, acute conditions to chronic diseases. We see across
multiple therapeutic areas to the person at the center of their own unique health journey. We are focused on meeting individual needs, whether with a
generic medicine, an improved version of an existing medicine, or a truly novel therapeutic solution.
Ultimately, we know we are stronger together. Both as a company and as a global community. Our pursuit of access is relentless. Because health
matters everywhere.
As a company, Viatris:
•
Covers a broad range of therapeutic areas. We produce medicines for patients across a broad range of major therapeutic areas. From
cardiovascular health to oncology, Viatris offers quality treatment options across more than 10 major therapeutic areas covering a wide variety of
noncommunicable and infectious diseases. We also offer support services such as diagnostic clinics, educational seminars and digital tools to help
patients better manage their health. We continue to seek opportunities in various therapeutic areas that move the Company forward and leverage
the strength of our internal capabilities and global platform.
•
Helps ease the burden of noncommunicable diseases. According to the WHO, NCDs, such as ischemic heart disease, stroke, diabetes, certain
cancers and chronic obstructive pulmonary disease, are among the leading causes of death globally. NCDs affect people of every age, gender and
socioeconomic status in every corner of the world, and pose a heavy burden on individuals, families and communities. To overcome this global
public health threat, patients worldwide need a partner they can trust – one that not only believes everyone deserves good health, but also has the
portfolio, experience and expertise to make this belief a reality.
•
Helps hearts stay healthier. According to the WHO, coronary heart disease is the number one cause of death globally. With our acquisition of
selatogrel and licensing agreement for sotagliflozin, we are continuing to build on our strong presence in cardiovascular disease. Viatris
collaborates with many organizations to help prevent, diagnose, and treat cardiovascular illnesses. Our deep experience in emerging and developed
markets affords a tried-and-true method of achieving high impact across the patient experience, from awareness to adherence. In close
collaboration with governments, healthcare providers, technology partners and patients, we at Viatris work to nurture healthcare systems that can
adapt and respond to patients’ ever-changing needs. We continue to collaborate with medical associations, patient advocacy groups and academia
to develop innovative, integrated solutions and programs to help strengthen both the delivery and quality of healthcare.
•
Fights infectious disease. We are also a global leader in treating infectious diseases such as HIV/AIDS, hepatitis, and tuberculosis, and offer an
extensive portfolio across these disease states. While many important strides have been made to treat these illnesses, there is still more to be done
in countries where lack of access to therapeutics, preventative treatment and diagnostics often result in patients not receiving proper care, and
those where HIV transmission continues decades into the epidemic. From manufacturing a pediatric-friendly antiretroviral used to treat HIV-
positive infants to providing HIV self-tests in some low- and middle-income countries, we are innovating to help patients.
An Increasingly Innovative and Differentiated Pipeline
Our confidence in the future delivery of our pipeline is rooted in our strong historic development programs and list of firsts, including the first
FDA approvals of the generic version of Allergan's Restasis® and the generic version of Symbicort®, Breyna™. In addition, we are working on many
other programs, including the potential to be first to market for our generics of Abilify Maintena®, Injectafer®, Invega Trinza®, Ozempic®, Venofer® and
Wegovy™. We are also working with our partners in developing patent-protected, innovative assets such as selatogrel and cenerimod, and on novel and
complex products such as our BOTOX® (onabotulinumtoxinA) biosimilar.
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While we continue to diligently pursue important generics opportunities, we have increasingly focused on limited-competition complex and novel
products targeting gaps in care, all with a first-to-market emphasis and serving our mission of patient access. Complex product categories are critical to
patient health and are growing at a rapid pace. Our goal is to enhance our proven scientific capabilities and current global platform, including our Global
Healthcare Gateway®, which allows partners to access our infrastructure and many established strengths to reach patients they may not have the resources
to reach on their own, to create a durable and higher-margin portfolio of products. And that means further expanding beyond our current scope into more
innovative products, including innovative, best-in-class, patent-protected assets that address areas of significant unmet medical need.
LEADERSHIP
Viatris is advancing sustainable operations and innovative solutions to improve patient health and support more resilient healthcare
systems. Viatris is committed to providing steady leadership in a world that is constantly evolving. We take that commitment seriously and know that
advancing sustainable operations and innovative solutions to improve patient health requires strong global leadership. We know what it takes to reach more
patients with more products, and believe that Viatris is uniquely positioned to make a difference through our:
•
Powerful global operating platform, which combines what we believe to be best-in-class manufacturing and supply chain capabilities. We have
designed our global operations and supply chain to be a reliable and flexible partner for access across the world, constantly adapting to an ever-
evolving landscape. Viatris operates approximately 26 manufacturing and packaging sites worldwide that produce oral solid doses, injectables, and
products with complex dosage forms on five different continents. Together with a global, flexible and diverse supply chain, our platform strives to
mitigate risks of disruption and ensure supply reliability. Our responsive global network has helped us maintain a reliable supply of much needed
medicines through times of significant volatility. We are committed to advancing responsible and sustainable operations and work diligently to
minimize our environmental footprint across the Viatris network while safeguarding access to medicine.
•
Robust global technical resources, including thousands of scientists, regulatory experts, clinical, medical and product safety professionals
working around the world on innovative therapies and solutions for patients everywhere.
•
Strong global commercial team, including sales team members and marketing professionals whose goal is to ensure that our products reach
customers around the globe.
•
Diverse and differentiated global portfolio includes products in more than 10 major therapeutic areas, including both infectious diseases and
NCDs, and medicines that help treat the top 10 leading causes of death globally, as determined by the WHO. We are a leading supplier of
medicines to the HIV/AIDS community around the world, with a legacy of providing access to high-quality and affordable ARVs in more than
100 countries.
We believe that Viatris’ global leadership in all of these areas uniquely positions us to efficiently and effectively serve patients regardless of
geography or circumstance. Together, with our commitment to provide access to a sustainable, affordable, and diverse portfolio of high-quality medicines
and our goal to be a Partner of Choice® for companies big and small, Viatris works to improve access and meet evolving healthcare needs around the
world.
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PARTNERSHIP
Leveraging our collective expertise to connect people to products and services. Partnerships and collaborations are critical, as are policies and
strong healthcare systems that allow for healthy competitive environments. We have a strong history of playing a leading role by partnering with other
pharmaceutical companies, nonprofit organizations, government agencies, policymakers, trade associations and alliances, industry researchers and patient
advocacy groups to promote sustainable access to treatment, build more resilient healthcare systems and drive these issues within our industry on global,
regional and local levels. Many of our collaborations focus on access to medicine; public awareness and disease screening; and healthcare professional
education and support.
Global Healthcare Gateway® Built to Fuel Growth and Partnerships
The Company’s Global Healthcare Gateway® offers partners ready access to more markets and patients worldwide through the Company’s unique
global infrastructure and expertise, connecting more people with even more products and services they may not have the resources to reach on their own.
The Company is actively engaging with potential business partners to help them accelerate possibilities of using their own healthcare assets to reach more
markets and patients by leveraging Viatris’ unique global platform – its R&D, supply chain, manufacturing, regulatory, commercial and legal expertise.
With the global platforms and infrastructure supporting its innovative Global Healthcare Gateway®, the Company is enhancing its capital allocation
approach to business development, and its organic and inorganic R&D investments through a focused governance structure to ensure the highest level of
strategic decision-making.
A recent example of how the Company is utilizing its Global Healthcare Gateway® is the October 2024 exclusive licensing agreement with
Lexicon for sotagliflozin in all markets outside of the U.S. and Europe. This licensing agreement leverages Viatris’ expertise in cardiovascular diseases and
is another example of how the Company is continuing to expand its innovative portfolio by identifying, vetting and securing highly innovative, patent-
protected assets that address significant unmet medical needs.
Licensing and Other Partner Agreements
Viatris periodically enters into commercial licensing and other partner agreements with other pharmaceutical companies for the development,
manufacture, marketing and/or sale of pharmaceutical products. Doing so helps the Company share risks and costs, leverage strengths and scale up
commercialization, but usually requires the Company to also share future profits. The result often is that medicines become available sooner and to a
significantly larger group of patients.
The Company’s significant licensing and other partner agreements are focused on the development, manufacturing, supply and commercialization
of multiple, high-value generic compounds, respiratory products, and other complex or innovative products. Refer to Note 18 Licensing and Other Partner
Agreements included in Part II, Item 8 of this Form 10-K for more information. As the Company continues to expand its portfolio of more innovative, best-
in-class, patent-protected assets, the Company may enter into more financial commitments in connection with agreements with its collaboration partners
that provide for certain services, as well as cross manufacturing, development and licensing arrangements. For additional information, see Part I, Item 1A
Risk Factors – “We may not realize the intended benefits of, or achieve the intended goals or outlooks with respect to, our strategic initiatives and
priorities, including divestitures, acquisitions or other potential transactions.”
Operations
Viatris has developed an end-to-end experience across the total product life cycle, which includes global regulatory licensing, launch, growth and
post-approval lifecycle management. Our research, development and medical platform seeks to maximize the impact of our existing portfolio by examining
whether there is an opportunity for new indications, label extensions, formulations, and market registrations for our products. We also use our platform to
determine whether there is an opportunity to integrate new products into our portfolio.
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The manufacturing of API and finished dosage forms is currently performed by a combination of internal and external manufacturing operations.
After completing the divestiture of our API business in India, we continue to maintain some selective R&D capabilities in API and believe we have access
to adequate API supplies through a manufacturing and supply agreement with the API business buyer and our arrangements with other manufacturers. For
additional information, see Part I, Item 1A Risk Factors - “We have a limited number of manufacturing facilities and certain third-party suppliers produce a
substantial portion of our API and products, some of which require a highly exacting and complex manufacturing process.” of this Form 10-K.
The Company’s significant manufacturing, warehousing and distribution activities are located primarily in the U.S., Puerto Rico, Singapore, India,
Australia, China, and certain EU countries, including Ireland. In addition, we maintain administrative facilities around the world. While many of these key
facilities are owned, Viatris also leases certain facilities from third parties.
The Company believes all its facilities are in good operating condition, the machinery and equipment are well-maintained, the facilities are
suitable for their intended purposes, and they have capacities adequate for the current operations.
Facilities and records related to our products are subject to periodic inspection by the FDA, the EMA and other regulatory authorities in
jurisdictions where the Company’s products are marketed. In addition, authorities often conduct pre-approval plant inspections to determine whether the
Company’s systems and processes comply with current GMP and other regulations, and clinical-trial reviews to evaluate regulatory compliance and data
integrity. Our suppliers, contract manufacturers, clinical trial partners and other business partners are subject to similar regulations and periodic inspections.
The Company remains committed to maintaining the highest quality manufacturing standards at its facilities around the world and to continuous
assessment and improvement in a time of evolving industry dynamics and regulatory expectations.
Following an inspection by the FDA at our oral finished dose manufacturing facility in Indore, India in 2024, the FDA has issued a warning letter,
and an import alert related to this facility. The import alert affects 11 actively distributed products that will no longer be accepted into the U.S. until the
warning letter is lifted. It makes exceptions, subject to certain conditions, for four products based on shortage concerns. Following recently concluded
discussions with the FDA, the Company does not expect additional product exceptions to be granted by the FDA.
Following the substance of FDA’s original inspection observations, the Company immediately implemented a comprehensive remediation plan at
the site. The necessary corrective and preventive actions are well underway, including but not limited to related personnel actions. Additionally, we have
engaged independent third-party subject matter experts to support the remediation plan.
We have been in regular communication with FDA during this process and will continue to work to ensure that the FDA is satisfied with the steps
we have taken to resolve all the points raised. Our responses to the warning letter and import alert were submitted within the required time periods.
While product continues to be shipped from the Indore facility to markets outside the U.S., some impact in other markets, including the ARV
business in Emerging Markets and select generic products in Europe, is anticipated. The Company currently estimates the negative impact to 2025 total
revenues to be approximately $500 million and to 2025 earnings from operations to be approximately $385 million.
We take very seriously our continued and comprehensive oversight of our entire manufacturing network. Patient safety remains our primary and
unwavering focus. We will work closely with our customers to mitigate any possible supply disruptions and meet the needs of the patients we serve.
For additional information, see Part I, Item 1A Risk Factors - “The pharmaceutical industry is heavily regulated, and we face significant costs and
uncertainties associated with our efforts to comply with applicable laws and regulations.” of this Form 10-K.
Customers and Marketing
Our customers include retail and pharmacy establishments, wholesalers and distributors, payers, insurers and governments, and institutions, such
as hospitals, among others. See “Channel Types” below for more information about our customers.
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The table below displays the percentage of consolidated net sales to our largest customers during the years ended December 31, 2024, 2023 and
2022:
Percentage of Consolidated Net Sales
2024
2023
2022
McKesson Corporation
*
10 %
11 %
Cencora, Inc. (formerly AmerisourceBergen Corporation)
12 %
10 %
10 %
Cardinal Health, Inc.
*
5 %
5 %
     Net sales represented less than 10% of consolidated net sales during the period.
We serve our customers through a team of highly-skilled sales and marketing professionals, all of whom are focused on establishing Viatris as our
customers’ partner of choice. To best meet customers’ needs, the Company manages its business on a geographic basis.
In addition to being dynamic, the pharmaceutical industry is complex. How it functions, how it is regulated and how it provides patients access
varies by location. Similarly, competition is affected by many factors. Examples of factors include innovation and development, timely approval of
prescription drugs by health authorities, manufacturing capabilities, product quality, marketing effectiveness, portfolio size, customer service, consumer
acceptance, product price, political stability and the availability of funding for healthcare.
Certain parts of our business also are affected by seasonality, e.g., due to the timing and severity of peak cough, cold and flu incidence, which can
cause variability in sales trends for some of our products. While seasonality may affect quarterly comparisons within a fiscal year, it generally is not
material to our annual consolidated results.
For these and other reasons, the Company’s sales and marketing efforts vary accordingly by product, market and channel type, each of which is
described below.
See the Application of Critical Accounting Policies section in Part II, Item 7 of this Form 10-K for more information related to customer
arrangements.
Products
From cardiovascular health to oncology, Viatris offers quality treatment options across more than 10 major therapeutic areas covering a wide
variety of noncommunicable and infectious diseases. We also offer support services such as diagnostic clinics, educational seminars and digital tools to
help patients better manage their health. We offer a broad and diverse range of treatment options across all our therapeutic areas, with many categories
containing several products in a range of dosage forms, formulations and delivery systems that allow physicians to tailor care for optimal treatment.
As the Company looks to the future, Viatris’ goal is to leverage its proven scientific capabilities to create a durable and higher-margin portfolio of
products. Viatris intends to continue building its pipeline and focusing on products with greater complexity while also investing in the lifecycle
management of certain key products in our current portfolio. The Company is also expanding further beyond its current scope into more innovative
products, including innovative, best-in-class, patent-protected assets that address areas of significant unmet medical need. The Company is further
enhancing its commercial and scientific capabilities as needed for this future portfolio and intends to increase its R&D investment as well as inorganically
grow via business development through its Global Healthcare Gateway®.
Viatris currently markets prescription branded and generic drugs, including complex drugs.
Branded drugs are typically prescription pharmaceuticals that are sufficiently novel as to be protected by patents or other forms of exclusivity. As
such, these drugs, which bear trade names, may be produced and sold only by those owning the rights, subject to certain challenges that other companies
may make. Developing new medicines can take years and significant investment. Only a few promising therapies ever enter clinical trials. Fewer still are
approved for sale by health authorities, at which point marketing to healthcare providers and consumers begins. Because patents and exclusivities last many
years, they serve as an incentive to developers. During the periods protected, developers often recoup their investments and earn a profit. In many high-
income countries, the brand business often is characterized by higher margins on lower volumes - especially as compared with generic manufacturers.
Viatris has numerous branded drugs, including iconic brands, as well as several global key brands to help patients manage their health. Brand drugs include
branded generics which are off-patent products that are
*
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sold under an approved proprietary name for marketing purposes. Brand products often become branded generics once patent protections or other forms of
exclusivity expire. Branded generic products are common in many countries outside the U.S., including emerging markets. Brand and branded generic
products are more sensitive to promotion than are unbranded generic products. They therefore represent the primary focus of most of our sales
representatives and product-level marketing activity. Our remaining OTC products, which are sold directly to consumers without a prescription and without
reimbursement, are generally sold under a brand name.
Generic drugs are therapeutically equivalent versions of brand drugs. Generics generally become available once the patents and other exclusivities
on their branded counterparts expire. The generics business is generally characterized by lower margins on higher volumes of a relatively large number of
products. Our generic medicines work in the same way and provide the same clinical benefits as their as their brand-name counterparts and may cost less,
providing patients and the healthcare system important savings and options which we believe are essential to making healthcare accessible. The
manufacturing of generic medicines is held to the same standards of GMP by health authorities as the manufacturing of branded medicines. National health
authorities inspect our facilities around the world to ensure that generic manufacturing, packaging and testing sites pass the same quality standards as those
of brand drugs. Generic products typically are sold under their INNs. INNs facilitate the identification of pharmaceutical substances or API. Each INN is
unique and globally recognized. A nonproprietary name also is known as a generic name.
Complex drugs are medicines that could have a complex active ingredient, complex formulation, complex route of delivery or complex drug
device combinations. Viatris offers a number of these important medicines to patients, including Breyna™ Inhalation Aerosol, the first FDA-approved
generic version of Symbicort®, Wixela Inhub®, the first generic of ADVAIR DISKUS® and glatiramer acetate injection, a generic version of Copaxone®.
Our current complex products are considered generics and are included within our generics revenue category.
While Viatris will continue to diligently pursue important generics opportunities, the Company will increasingly focus on limited-competition
complex and novel products targeting gaps in care, all with a first-to-market emphasis and serving our mission of patient access. The Company believes
innovative and complex products categories are critical to patient health and are growing at a rapid pace.
We also often incur substantial litigation expense as a result of defending or challenging brand patents or exclusivities, which is described further
in Note 19 Litigation included in Part II, Item 8 of this Form 10-K.
Market Types
Viatris focuses its sales and marketing efforts on the people who make key decisions around pharmaceutical prescribing, dispensing or buying.
Decision makers vary by country or region, reflecting law and custom, giving rise to different types of pharmaceutical markets. Many countries feature a
mix of or hybrids of various market types, though the Company may focus on just one type in a particular country.
In prescription markets, physicians decide which medicines patients will take. Pharmacies then dispense the products as directed. Drug companies
employ sales forces to educate doctors about the clinical benefits of their products. Representatives call on individual doctors or group practices; the
process is known as detailing. Examples of countries served by Viatris that are mainly prescription markets are the U.S. brand business, China, Turkey,
Poland and Mexico.
In substitution markets, pharmacists generally are authorized (and in some cases required) by law to dispense an unbranded or branded generic, if
available, in place of a brand-name medicine, or vice versa. Drug companies may use sales forces in these markets too, with representatives calling on and
educating pharmacy personnel about their organization and products. Examples of countries served by Viatris that are mainly substitution markets are
France, Italy, Spain, Portugal, Japan and Australia.
In tender markets, payers, such as governments or insurance companies, negotiate the lowest price for a drug (or group of drugs) on behalf of their
constituents or members. In exchange, the chosen supplier’s product is placed on the payer’s formulary, or list of covered prescriptions. Often, a supplier’s
drug is the only one available in an entire class of drugs. Large sales forces are not needed to reach these decision-makers. Examples of generic markets
served by Viatris that are mainly tender markets are New Zealand, Sweden, South Africa, as well as Germany.
In distribution markets, retailers and wholesalers make drug-purchasing decisions. Large sales forces are not needed to reach the decision-makers
representing these organizations. Note, however, that pharmacists operating in distribution markets
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also may be authorized to make substitution decisions when dispensing medicines. Examples of countries served by Viatris that are mainly distribution
markets are the U.S. generics business, the U.K. and Norway.
The allocation of our sales and marketing resources reflects the characteristics of these different market types.
For our remaining OTC products, consumers are the decision-makers. OTC products are commonly sold via retail channels, such as pharmacies,
drugstores and supermarkets. This makes their sale and marketing comparable to other retail businesses, with broad advertising and trade-channel
promotion. Consumers often are loyal to well-known OTC brands. For this reason, suppliers of OTC products, Viatris included, must invest the time and
resources needed to build strong OTC brand names.
Channel Types
Viatris’ products make their way to patients through a variety of intermediaries, or channels.
Pharmaceutical wholesalers/distributors purchase prescription medicines and other medical products directly from manufacturers for storage in
warehouses and distribution centers. The distributors then fill orders placed by healthcare providers and other authorized buyers.
Pharmaceutical retailers purchase products directly from manufacturers or wholesalers/distributors. They then sell them to consumers in
relatively small quantities for personal use.
Institutional pharmacies address the unique needs of hospitals, nursing homes and other such venues. Among the services provided are specialized
packaging, including for injectables and unit-dose products, for controlled administration.
Mail-order and e-commerce pharmacies receive prescriptions by mail, fax, phone or the internet at a central location; process them in large,
mostly automated centers; and mail the drugs to the consumer.
Specialty pharmacies focus on managing the handling and service requirements associated with high-cost and more-complex drug therapies, such
as those used to treat patients with rare or serious diseases.
Business Segments
Viatris has four reportable segments: Developed Markets, Greater China, JANZ, and Emerging Markets. The Company reports segment
information on the basis of markets and geography, which reflects its focus on bringing its large and diversified portfolio of branded and generic products,
including complex products, to people in markets everywhere.
Developed Markets
The Developed Markets segment comprises our operations primarily in North America and Europe. The Company’s business in North America is
driven mainly by operations in the U.S., where the Company is one of the largest providers of prescription medicines. The U.S. pharmaceutical industry is
very competitive, and the primary means of competition are innovation and development, timely FDA approval, manufacturing and supply chain
capabilities, product quality, marketing, portfolio size, customer service, reputation and price. Viatris relies on a flexible and cost-effective supply chain to
meet the rapidly changing needs of its customers around a reliable, high-quality supply of pharmaceutical products. Europe, where many governments
provide healthcare at a low direct cost to consumers and regulate pharmaceutical prices or patient reimbursement levels, continues to be a highly
competitive market, especially in terms of pricing, quality standards, service levels and product portfolio. Viatris’ leadership position in a number of
countries provides the Company a platform to fulfill the needs of patients, physicians, pharmacies, customers and payors.
Significant products sold by the Developed Markets segment include Lyrica®, Lipitor®, Creon®, Influvac®, Wixela Inhub®, EpiPen® Auto-
Injector, Fraxiparine®, and Yupelri®.
New product launches are an important growth driver. Important recent launches include Breyna™ and lisdexamfetamine in the U.S., and
Rivaroxaban in certain European markets.
While Viatris’ U.S. customer base is extensive, it comprises a small number of very large firms as the pharmaceutical industry has undergone
tremendous change and consolidation. Viatris believes it is well positioned to serve such customers in the Developed Markets due to the scale it has built in
terms of R&D, supply chain, and portfolio breadth.
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Greater China
The Greater China segment includes our operations in mainland China, Taiwan, and Hong Kong. The Viatris Greater China portfolio
predominantly consists of branded LOE products.
In China, the recent healthcare reform measures are aimed at controlling the overall healthcare costs, while providing better and broader care to
the population. Healthcare spending is expected to increase in-line with GDP growth. The VBP policy for LOE molecules is now in its sixth year and
includes approximately 400 molecules. All major Viatris brands are included in the VBP molecule lists. The Company has re-balanced its business to
expand its focus on the retail pharmacy and e-commerce channels while maintaining its presence in the hospital channel. Healthcare consumerism,
increased spending power, and demand for premium medical products have generated strong growth in these new channels and partially absorbed the
reductions seen in the hospital channel due to VBP. Additional pricing and volume pressure for pharmaceutical products sold in the hospital channel is
expected to continue during 2025 and could negatively impact the Company’s results of operations. For additional information, see Part I, Item 1A Risk
Factors - “We have and may continue to experience pressure on the pricing of and reimbursements for certain of our products due to pricing controls,
social or government pressure to lower the cost of drugs, and consolidation across the supply chain.” of this Form 10-K.
Significant products within the Greater China segment include Lipitor®, Norvasc®, and Viagra®.
JANZ
The JANZ segment consists of our operations in Japan, Australia and New Zealand. In Japan, the National Health Insurance regulates the pricing
of pharmaceutical products to healthcare providers. The Company sells products in Japan primarily through a network of wholesalers who then sell the
products to doctors, hospitals and pharmacies. In Australia, the healthcare system is a mix of public and private healthcare sectors, with Medicare,
Australia’s public healthcare system, covering most of the country’s medical costs. The Department of Health oversees healthcare governance, law, and
policy while the various state and territory governments administer the system. Most prescription pharmaceutical products are subsidized under the
pharmaceutical benefits scheme by the federal government. Pricing of reimbursed pharmaceutical products is regulated by the government and funded via
the Medicare levy and through company and patient contributions. The Company sells products primarily through the wholesale system, while promoting
its products to both physicians and pharmacists.
Significant products within the JANZ segment include AMITIZA®, Effexor®, Lipacreon®, Lyrica®, and EpiPen® Auto-Injector.
Emerging Markets
The Emerging Markets segment encompasses our presence in more than 125 countries with developing markets and emerging economies
including in Asia, Africa, Eastern Europe, Latin America and the Middle East as well as the Company’s ARV franchise. With healthcare at various stages
of development across these markets, we believe we are positioned to not only leverage our large geographical footprint to maximize the similarities
between these markets, but also tailor solutions to meet local need. There is demand in this segment for better healthcare to serve a growing population and
economic expansion. Many countries in this segment are brand-conscious with generic penetration rates lower than developed markets.
Among Viatris products sold in the segment are Lipitor®, Lyrica®, Norvasc®, Celebrex®, and ARVs.
Refer to Note 15 Segment Information included in Part II, Item 8 of this Form 10-K for more information about the Company’s segments.
Government Regulation
Regulation by governmental authorities is a significant factor in the R&D, production, marketing, sales and distribution of pharmaceuticals.
Viatris’ products are subject to robust developmental studies which include analytical determinations of strength, quality, purity as well as rigorous safety
and efficacy determinations using preclinical, pharmacokinetic studies and clinical evaluations to gather data to support regulatory review and approval.
This body of work results in extensive data and scientific information that is incorporated into a given product’s regulatory dossier. Manufacturing is
conducted under exacting conditions governed by extensive regulation including strict in-process and finished pharmaceutical products specifications and
controls. Post-approval activities, such as advertising and promotion, pharmacovigilance, post-marketing regulatory commitments, and pharmacopeial
monographs, are also subject to extensive regulation and controls.
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The lengthy process of developing products and obtaining required approvals and the continuing need for post-approval compliance with
applicable statutes and regulations require the expenditure of substantial resources. Regulatory approval, if and when obtained, may be limited in scope.
Further, approved drugs, as well as their manufacturers, are subject to ongoing post-marketing review and inspection, which can lead to the discovery of
previously unknown attributes of the products or the manufacturing or quality control procedures used in their production, which may impact the marketing
of the products or result in restrictions on their manufacture, sale or use or in their withdrawal from the market.
Any failure or delay by Viatris, its suppliers of manufactured drug product, collaborators or licensees, in obtaining and maintaining regulatory
approvals could adversely affect the marketing of our products and our ability to receive product revenue, license revenue or profit-sharing payments.
Other Regulatory Requirements
Viatris’ business is subject to a wide range of various other federal, state, national, regional, provincial, non-governmental, and local agency rules
and regulations. They focus on fraud and corruption, pricing and reimbursement, data privacy, and the environment, among many other considerations. For
more information about certain of these regulations and the associated risks the Company faces, see Part I, Item 1A Risk Factors of this Form 10-K.
Research and Development
Viatris’ R&D organization, which includes developers and regulatory and clinical experts, works collaboratively across the Company’s different
R&D centers around the world, which include technology-focused development sites and global R&D centers.
Viatris’ research, development and clinical platform, which includes regulatory activities, seeks to deliver new product opportunities across all of
the Company’s categories and markets and to evaluate opportunities to expand the scope of our existing product portfolio with a focus on development
activities. The Company’s product pipeline includes a variety of dosage forms, including oral solid dosage forms, transdermals, injectables, inhalation, and
other delivery systems. While committed to generics and specialty products, over the last several years, a greater portion of the Company’s investments has
been focused on complex or difficult-to-formulate products, such as modified release or complex injectables such as glucagon, rather than on commodity
products, such as conventional oral solid dosage forms. For example, the Company is working on a number of programs including the potential to be first-
to-market for our generics of Abilify Maintena®, Injectafer®, Invega Trinza®, Ozempic®, Venofer® and Wegovy™. The Company is also working with
its partners on novel and/or complex products such as our biosimilar to BOTOX® (onabotulinumtoxinA).
As previously mentioned, one of the Company’s strategic pillars is our focus on expanding our innovative portfolio to identify, vet and secure
best-in-class, patented-protected assets that address areas of significant unmet medical need. Viatris invests a significant amount of capital and resources in
R&D, and this amount is likely to increase as we focus on more complex and innovative products to drive accelerated and durable growth, and build a more
durable higher margin portfolio with exclusivity opportunities. In addition to increasing its R&D and IPR&D investment, the Company also expects to
inorganically grow via business development through strategic alliances with partners, including through our Global Healthcare Gateway® and agreements
with collaboration partners. For additional information, see Part I, Item 1A Risk Factors - “We expend a significant amount of resources on R&D efforts
that may not lead to successful product introductions.” of this Form 10-K.
Intellectual Property
Viatris considers the protection of its intellectual property rights to be extremely valuable, and the Company acts to protect them from
infringement by third parties.
Viatris has an extensive trademark portfolio totaling more than 28,700 trademarks filed globally and routinely apply to register key brand names,
generic names, branded generic names, and trade names in numerous countries around the world. The Company’s registered trademarks are renewable
indefinitely, and are maintained in accordance with the laws of the countries in which they are registered.
The Company also has an extensive patent portfolio and actively files for patent protection in various countries to protect its brand-name, generic,
branded generic, and remaining OTC products, including processes for making and using them. The Company has more than 2,400 patents filed globally.
For additional information, see Part I, Item 1A Risk Factors - “We
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rely on the effectiveness of our patents, trademarks, confidentiality agreements and other measures to protect our intellectual property rights.” of this Form
10-K.
Further, Viatris has well-established safeguards in place to protect our proprietary know-how and trade secrets, both of which the Company
considers extremely valuable to its intellectual property portfolio.
The Company looks for intellectual property licensing opportunities to or from third parties, related not only to our existing products, but as a
means for expanding our product portfolio.
Viatris relies on the aforementioned types of intellectual property, as well as our copyrights, trade dress, regulatory exclusivities and contractual
protections, to establish a broad scope of intellectual property rights for our product portfolio.
Sustainability
To learn about Viatris’ sustainability work, the Company encourages you to read Viatris’ 2023 Sustainability Report: Building Sustainable Access
at Scale , published in May 2024. The report highlights Viatris’ actions and initiatives across multiple areas of focus in support of the Company’s efforts to
continue to be a model for sustainable access to medicine and to make an impact in the communities it serves. It also reports on how the Company
progressed in 2023 on its companywide sustainability goals in the areas of: access and global health; workplace culture; and environment (climate, water,
and waste). This includes the Company’s scope 1 & 2, as well as its scope 3 emission reduction targets validated and approved by the Science Based
Targets initiative (SBTi).
Viatris’ recent accolades include inclusion on TIME’s inaugural list of World’s Most Sustainable Companies, USA Today’s list of America’s
Climate Leaders, Forbes’ World’s Best Employers, and TIME’s World’s Top Companies for Women.
The following highlights Viatris’ systematic efforts and progress across key areas:
Access and Global Health
Access is fundamental to Viatris’ mission. It begins with the Company’s ability to sustainably deliver quality medicines to people, regardless of
geography or circumstance.
The Company is focused on striving to meet individual needs, whether with a generic medicine, a trusted brand, an improved version of an
existing medicine, or a truly novel therapeutic solution.
Viatris goes beyond developing, manufacturing, and distributing quality medicines. With the needs of people at the center, Viatris often works to
help find solutions that support resilient healthcare systems. The Company has designed its global operations and supply chain to be a reliable and flexible
partner for access across the world, constantly adapting to an ever-evolving landscape.
Viatris pursues holistic approaches to prevention, diagnosis, treatment, and disease management. The Company works to build public health
awareness, to support and implement research, to deliver access to health education, and to advocate for public policies that advance sustainable access at
scale, globally.
Viatris is keenly aware that no one can meet this high aspiration alone. Partnerships and collaborations are critical, as are policies and strong
healthcare systems that allow for healthy competitive environments. The need is universal, and Viatris works with an array of both public and private
organizations, globally, regionally, and locally, to support sustainable access to quality medicines at consistent quality standards.
Environmental Stewardship
We are committed to minimizing our impact on the environment while working to safeguard a reliable supply of medicine. Our commitment
entails systematic and continuous work, and a global integrated approach to managing our impact on and from climate change, energy efficiency and
renewable energy, water and waste reduction, and air emissions.
 Please note that our website, Sustainability Report and their respective contents are not incorporated by reference into this Form 10-K.
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As part of having our scope 1 & 2, and scope 3 emission reduction targets validated and approved by SBTi, SBTi classified Viatris’ scope 1 & 2
targets as being aligned with the 1.5°C trajectory. Further, we have updated our initial climate scenario analysis, a key recommendation of the Task Force
on Climate-Related Financial Disclosures, to reflect recent divestiture activity. The analysis is global in scope and helps us to continue to understand the
risk and uncertainties in different hypothetical scenarios and confirm areas of focus. Key actions and strategies for making progress toward our SBTi
climate targets include increasing renewable energy usage, implementing energy-efficiency projects, preventing refrigerant leaks and transitioning to
greener refrigerants, using alternative fuels and technologies, and leveraging infrastructure upgrades and utility replacement projects. While it is very hard
to predict accurately the future costs associated with compliance with environmental laws, this is not expected to require significant capital expenditures
and has not had, and is not expected to have, a material adverse effect on our operations or competitive position.
Viatris remains engaged in promoting environmentally responsible supply chains, including through the Company’s compliance with the AMR
Industry Alliance’s Common Antibiotic Manufacturing Standard in its operations and its commitment to the standard’s implementation across Viatris’
external supply chain. Viatris’ manufacturing for all dosages of the antibiotic Ciprofloxacin at the Company’s facility in Aurangabad, India, became the
first at Viatris to receive British Standards Institute (BSI) Certification under the Antibiotic Manufacturing Standard. Furthermore, Viatris is leveraging its
membership in the Pharmaceutical Supply Chains Initiative in external supplier sustainability engagement.
Community Engagement
Viatris seeks to foster healthy communities around the world by supporting education, health and disease awareness efforts that, in particular,
promote empowering patients and creating access to care. The Company works via in-kind and monetary donations, volunteering time and talents and
engaging with partners to find solutions. The Company’s work addresses common global themes and leverages Viatris colleagues’ collective capabilities,
while addressing unique local needs.
Viatris has continued its humanitarian support for emergency response to assist victims of armed conflicts, disasters and extreme weather.
Together with long-term partners including but not limited to, Direct Relief, Save the Children, SBP, World Central Kitchen, and the American Red Cross,
the Company has supported medical relief shipments, access to food and long-term rebuilding efforts. Furthermore, Viatris colleagues across the globe
have done beach cleanups, community fundraisers, and participated in volunteer opportunities to raise money and awareness for patients living with
diseases as a part of a larger global initiative called Building Healthier Communities.
Business partnerships, collaboration within and across sectors, memberships, and philanthropic collaborations help us serve patients, healthcare
systems and communities worldwide.
Human Capital
Our people
Our approximately 32,000 colleagues are passionate about our mission, and together we are building a performance-driven, highly engaging and
inclusive culture where diverse perspectives drive access, innovation and our ability to make an impact in the world.
In 2024, the Company received several recognitions, such as inclusion on Forbes’ World’s Top Companies for Women list, Forbes’ World’s Best
Employers list, TIME’s World’s Most Sustainable Companies list, USA Today’s America’s Climate Leaders list, National Association for Business
Resources’ Nation’s Best & Brightest in Wellness list and Newsweek’s America’s Greenest Companies list.
In previous years, Viatris has also been included on Forbes’ World’s Best Employers list, USA Today’s America’s Climate Leaders list, 3BL 100
Best Corporate Citizens list, TIME’s World’s Best Companies list, Fast Company’s Most Innovative Companies list, Fortune’s Change the World list, and
Newsweek’s America’s Most Responsible Companies list. Viatris has also received several local accolades in 2024 and previous years, such as Great Place
to Work® and Top Employers certifications in multiple countries, among many others.
Our colleagues are dedicated to our mission and we continue to build our culture with a focus on colleague experience and engagement; learning
and development; career progression; workplace culture; talent attraction and our deep commitment to the health, safety and wellbeing of our colleagues,
their families and the communities we serve.
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We remain committed to building upon our foundations, harmonizing our processes and programs and initiating many firsts for Viatris. Our
commitment to wellbeing has grown with the launch of our Elevate program focused on the health, purpose and growth of our colleagues. This program is
fully supported by an active and engaged employee-led group of ambassadors through the Viatris Elevate Champions network. We are living the Viatris
mission internally by providing 100% of all colleagues globally access to Elevate tools and resources including many local programs to further support
health and wellbeing, with a focus on mental health through employee assistance programs and our new partnership with Unmind.
We have expanded our professional development opportunities, including a focus on executive and management development, and we have
continued to build core programming to support colleagues at all stages of life and career. Viatris has successfully introduced new and differentiated core
capabilities to enhance our performance and growth aligned with the Company’s strategy moving forward. We believe we have a deep talent bench of core
generics and expanding innovative capabilities to help drive our future forward. Through regular annual objective setting and talent assessment practices,
the Company believes it provides tools and resources that enable high performance.
At Viatris, diverse perspectives drive innovation and our ability to make an impact in the world. The workplace culture we foster can be one of our
greatest strengths in achieving breakthroughs that help empower people to live healthier at every stage of life.
Our Employee Resource Groups have expanded to include EmpoWer advocating for an ecosystem that empowers women to reach their full
potential; VIVID supporting LGBTQ+ employees and allies; RISE supporting our colleagues of African descent; and Care, advocating for caregivers. The
insights from our employee listening strategy guide our efforts as we continually strive to create a work environment where people can learn, grow, feel
appreciated and make an impact in the world.
Health and Safety
Protecting the health and safety of our colleagues is essential at Viatris. We have a global Environmental, Health and Safety Management System,
technical requirements, processes and systems that establish the foundation of our health and safety program. This focus, along with our deep commitment
to wellbeing, applies to all locations and guides us in cultivating a culture of health and safety throughout our global workforce.
Exchange Act Reports
Viatris maintains a website at Viatris.com where you can find certain reports and associated amendments that the Company files with the SEC in
accordance with the Exchange Act. These filings will include our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-
K and any amendments to those reports.
We make this information available on our website free of charge, as soon as reasonably practicable after we electronically file such material with,
or furnish it to, the SEC. The contents of our website are not incorporated by reference in this Annual Report on Form 10-K and shall not be deemed
“filed” under the Exchange Act.
The SEC also maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers
that file electronically with the SEC.
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ITEM 1A.
Risk Factors
We operate in a complex and rapidly changing environment that involves risks, many of which are beyond our control. Our business, financial
condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price could be materially affected by any of these
risks, if they occur, or by other factors not currently known to us, or not currently considered to be material. These risk factors should be read in
conjunction with the other information in this Form 10-K, as well as our other filings with the SEC.
Our risk factors are organized into five categories: Strategic, Operational, Compliance, Finance and General.
Summary
Below is a summary of some of the more significant risks and uncertainties we face. This summary is not exhaustive and is qualified by reference
to the full set of risk factors set forth in this Part I, Item 1A.
•
Strategic Risks
◦
We may not realize the intended benefits of, or achieve the intended goals or outlooks with respect to, our strategic initiatives and
priorities, including divestitures, acquisitions or other potential transactions.
◦
There are ongoing risks and uncertainties associated with our recent divestitures, one or more of which could have a material adverse
effect on our business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock
price.
◦
The integration of acquired businesses as well as restructuring programs have presented and may in the future present significant
challenges.
◦
We have and may continue to experience pressure on the pricing of and reimbursements for certain of our products due to pricing
controls, social or government pressure to lower the cost of drugs, and consolidation across the supply chain.
◦
We have significant operations globally, which exposes us to the risks inherent in conducting our business internationally.
◦
Charges to earnings resulting from acquisitions could have a material adverse effect on our business, financial condition, results of
operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
•
Operational Risks
◦
Current and changing economic conditions, including inflation, may adversely affect our industry, business, partners and suppliers.
◦
The pharmaceutical industry is heavily regulated, and we face significant costs and uncertainties associated with our efforts to comply
with applicable laws and regulations.
◦
The use of legal, regulatory, and legislative strategies by both brand and generic competitors, including but not limited to “authorized
generics” and regulatory petitions, may increase costs associated with the introduction or marketing of our generic products, could delay
or prevent such introduction, and could significantly reduce our revenue and profit.
◦
If we are unable to successfully introduce new products in a timely manner, our future revenue and profitability may be adversely
affected.
◦
We expend a significant amount of resources on R&D efforts that may not lead to successful product introductions.
◦
Even if our products in development receive regulatory approval, such products may not achieve expected levels of market acceptance.
◦
Our business is highly dependent upon market perceptions of us, our products and brands, and the safety and quality of our products and
brands, as well as the effectiveness of our sales and marketing activities, and we may be adversely impacted by negative publicity or
findings.
◦
We have a limited number of manufacturing facilities and certain third-party suppliers produce a substantial portion of our API and
products, some of which require a highly exacting and complex manufacturing process.
◦
Our future success is highly dependent on our ability to attract, motivate and retain key personnel.
•
Compliance Risks
◦
We are subject to the U.S. Foreign Corrupt Practices Act, U.S. Foreign Extortion Prevention Act, the U.K. Bribery Act, Chinese anti-
corruption laws and similar worldwide anti-corruption laws, which impose restrictions on certain conduct and may carry substantial fines
and penalties.
◦
Our competitors, including branded pharmaceutical companies, and/or other third parties, may allege that we or our suppliers are
infringing upon their intellectual property, including in an “at risk launch” situation,
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which could result in substantial monetary damages, impact our ability to launch a product and/or our ability to continue marketing a
product, and/or force us to expend substantial resources in resulting litigation, the outcome of which is uncertain.
◦
We are involved in various legal proceedings and certain government inquiries and may experience unfavorable outcomes of such
proceedings or inquiries.
◦
We are increasingly dependent on IT and information systems and our systems and infrastructure face certain risks, including
cybersecurity and data leakage risks.
•
Finance Risks
◦
There can be no guarantee that we will continue to pay dividends or repurchase shares under our share repurchase program.
◦
We may not be able to maintain competitive financial flexibility and our corporate tax rate which could adversely affect us and our
shareholders.
◦
Currency fluctuations and changes in exchange rates have impacted and could continue to adversely affect our business, financial
condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
◦
We have significant indebtedness, which could lead to adverse consequences or adversely affect our financial position and prevent us
from fulfilling our obligations under such indebtedness, and any refinancing of this debt could be at significantly higher interest rates.
◦
There are inherent uncertainties involved in estimates, judgments and assumptions used in the preparation of financial statements in
accordance with U.S. GAAP. Any future changes in estimates, judgments and assumptions used or necessary revisions to prior estimates,
judgments or assumptions or changes in accounting standards could lead to a restatement or revision to previously issued financial
statements.
◦
Viatris has suffered and in the future could suffer additional losses due to impairment charges.
Strategic Risks
We may not realize the intended benefits of, or achieve the intended goals or outlooks with respect to, our strategic initiatives and priorities, including
divestitures, acquisitions or other potential transactions.
Viatris has announced various strategic initiatives and priorities, transactions and business arrangements. As the Company moves forward, it will
look to accelerate its growth by building on the strength of its base business with an expanding portfolio of innovative, best-in-class, patent-protected assets
and will focus on three strategic pillars: 1) diversified and growing base business, 2) financial strength and significant cash flow and 3) expanding
innovative portfolio.
Implementing these and other strategic initiatives and priorities has included and may in the future include divestitures, acquisitions, asset
purchases, partnerships, collaborations, joint ventures, product rationalization and other investments. Certain of these transactions and arrangements have
been and may in the future be material both from a strategic and financial perspective. These strategic initiatives and priorities have been, and may continue
to be, complex, time-consuming or expensive, may divert management’s and employees’ attention, and expose us to operational ineffectiveness. We may
miscalculate the risks associated with our strategic initiatives and priorities at the time they are made or not have the resources or ability to access all the
relevant information to evaluate them properly, including with regard to the potential of R&D pipelines, manufacturing issues, compliance issues, or the
outcome of ongoing legal and other proceedings. Innovative assets are more difficult, costly and time-consuming to develop, receive regulatory approval
for and bring to market. There can be no assurance that we will be able to achieve all of our intended goals or outlooks with respect to such strategies and
priorities within the anticipated timeframes or at all, fully realize the expected benefits of any such transactions or arrangements, or successfully manage
base business erosion or grow in future periods.
Divestitures, product rationalizations or asset sales have resulted and could in the future result in asset impairments, or reductions to the size or
scope of our business, our market share in particular markets or our opportunities and ability to compete with respect to certain markets, therapeutic areas
or products. We may not be successful in separating divested businesses or assets, which could negatively impact our ongoing operations, future earnings
and future goals and outlooks. Please also refer to “There are ongoing risks and uncertainties associated with our recent divestitures, one or more of which
could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares,
and/or stock price.”
We have also entered into strategic alliances with partners, including through our Global Healthcare Gateway®, to develop, manufacture, market
and/or distribute certain products, and/or certain components of our products, in various markets. We have entered into and may in the future enter into
agreements with our collaboration partners that provide for certain services, as well as cross manufacturing, development and licensing arrangements. We
commit substantial efforts and other resources to these various alliances and collaborations. In addition, as the Company looks to accelerate its growth by
building on the strength of its base business with an expanding portfolio of innovative, best-in-class, patent-protected assets, it expects to
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use more capital resources and has entered into, and may in the future enter into, financial commitments in connection with these alliances and
collaborations. For example, our acquisition of the development programs for selatogrel and cenerimod, which are currently in Phase 3 development. There
is a risk that the investments made by us in these and other alliances and collaborative arrangements will not generate financial returns. While we believe
our relationships with our collaboration partners generally are successful, our collaboration partners’ financial situation, or disputes or conflicting priorities
and regulatory or legal intervention has been or could in the future be a source of delay or uncertainty as to the expected benefits of our strategic alliances
and collaborations. For example, on February [25], 2025, in order to preserve the ongoing continuity of the development programs for selatogrel and
cenerimod considering certain capital structuring steps announced by Idorsia to secure its ongoing operations, Viatris and Idorsia entered into a letter
agreement to amend certain terms of the original agreements described in Part I, Item 1 Business - About Viatris - Business Strategy of this Form 10-K.
The overall execution of our strategic initiatives and priorities may result in material unanticipated problems, expenses, liabilities, competitive
responses, operational inefficiencies, adverse tax consequences, impairment or restructuring charges, loss of customer relationships, difficulty attracting
and retaining qualified employees, and diversion of management’s and/or employee’s attention, among other potential adverse consequences. In addition,
we may have to terminate a strategic alliance, agreement or arrangement, or our partners may be unable to fulfill their operational or other obligations due
to their financial condition or otherwise.
Any of the risks described above could have a material adverse effect on our reputation, business, financial condition, results of operations, cash
flows, ability to pay dividends or repurchase shares, and/or stock price.
There are ongoing risks and uncertainties associated with our recent divestitures, one or more of which could have a material adverse effect on our
business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
In recent years, the Company has completed several divestitures, including the Biocon Biologics Transaction, the OTC Transaction and other
divestitures. These divestitures have resulted and may in the future result in continued financial and operational exposure to the divested assets or
businesses, such as through guarantees or other financial arrangements, indemnification, continued supply and transition services obligations to the
divested businesses, stranded costs, or potential litigation.
For instance, in connection with our recently completed divestitures, we have entered into transition services and manufacturing and supply
agreements pursuant to which we have agreed to provide certain specified services to the respective purchasers, including manufacturing, quality, supply
chain, pricing and procurement, regulatory, product safety and risk management, medical affairs, IT, finance, human resources, real estate, commercial
development and local commercial operations services. In addition, in connection with the OTC Transaction and the divestitures of our women’s healthcare
business, we entered into distribution agreements. Our obligations under these agreements have resulted and may in the future result in additional expenses
that are borne by us and have diverted and may continue to divert our focus and resources that would otherwise be invested into maintaining or growing
our retained business. In connection with our API business divestiture, we entered into a manufacturing and supply agreement pursuant to which we are
purchasing a significant amount of API from the purchaser in that transaction. Our obligations under the manufacturing and supply agreement may make us
more vulnerable to API supply shortages and price volatility. Please also refer to “We have a limited number of manufacturing facilities and certain third-
party suppliers produce a substantial portion of our API and products, some of which require a highly exacting and complex manufacturing process.”
With respect to the Biocon Biologics Transaction, a significant portion of the consideration that we received, valued at approximately $1.3 billion
on our balance sheet at December 31, 2024, is in the form of equity in Biocon Biologics, which is currently a privately held Indian company. Although we
have negotiated certain “downside” protection regarding the value of that equity in the Biocon Agreement and related documents, such protection does not
guarantee any particular liquidity event or our ability to monetize our equity and, even if we are able to successfully liquidate our equity, the downside
protection may be inadequate to guarantee a minimum return that we or investors expect. In addition, we believe the success of the Biocon Biologics
business will be highly dependent upon the successful transition of the business to, and ongoing operation of the business by, Biocon Biologics. If the
ongoing operation of the business is not successful, it could have a significant impact on the value of the equity we will own in Biocon Biologics and could
negatively impact our business or financial condition.
We have also agreed to indemnify Biocon Biologics and certain of its representatives against certain losses suffered as a result of certain breaches
of our representations, warranties, covenants and agreements in the Biocon Agreement and related documents. Any event that results in a right for Biocon
Biologics to seek indemnity from us could result in substantial liability to us and could adversely affect our financial position and results of operations.
We may not be able to realize the anticipated benefits from our divestitures, such as realizing the anticipated proceeds or utilizing the net proceeds
for our strategic initiatives and priorities. We may also face other challenges as a result of
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divestitures, including maintaining employee morale and retaining key management and other employees to provide the transition services and to operate
our retained business, and managing stranded costs.
As a result of the Biocon Biologics Transaction and our recently completed divestitures, our results of operations, including but not limited to total
revenues and cash flows, have been reduced. Because the businesses or assets we have divested were commingled with Viatris’ other businesses, their
financial information must be carved-out of Viatris’ financial and other systems, and this process has increased or will continue to increase the risk of errors
in the presentation of our financial results in conformity with U.S. GAAP.
Any of the risks described above could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability
to pay dividends or repurchase shares, and/or stock price. Refer to Note 5 Divestitures included in Part II, Item 8 of this Form 10-K for more information
about our recently completed divestitures.
The integration of acquired businesses as well as restructuring programs have presented and may in the future present significant challenges.
The combination of two or more independent businesses is a complex, costly and time-consuming process and there is a significant degree of
difficulty inherent in the integration process. These difficulties may include:
•
diversion of management’s and employees’ attention from the ongoing operations of Viatris to integration and restructuring matters;
•
the challenge of integrating the employees and business cultures;
•
retaining existing customers and suppliers, or obtaining new customers and suppliers;
•
risks associated with managing a larger and more complex company;
•
loss of institutional knowledge or lack of access to IT systems and historical data, including clinical or trial data;
•
the challenge and cost of integrating manufacturing, logistics, IT, communications and other systems;
•
the potential difficulty transitioning acquired assets to the Company and retaining key personnel and other employees;
•
challenges in reducing reliance on transition services, including difficulties in hiring employees or finding suitable replacements, prior to the
expiration of any period in which such services are provided; and
•
reducing costs associated with transition services, including managing the amount for replacement costs.
Viatris has also in the past undertaken and may in the future undertake restructuring programs in order to achieve synergies and ensure the
Company is optimally structured and efficiently resourced. The process of integrating operations and implementing restructuring initiatives could cause an
interruption of, or loss of momentum in, the activities of one or more of Viatris’ businesses. These integration and restructuring processes have in the past
and may in the future require Viatris’ senior management to devote considerable amounts of time to these processes, which has in the past and could in the
future decrease the time they have to manage and service Viatris’ businesses, and develop new products or strategies. Even if integration activities and
restructuring programs are successful, we may not achieve anticipated synergies, growth opportunities and other financial and operating benefits within the
timeline we anticipate, or at all.
If integration activities or restructuring programs are unsuccessful, if the estimated costs are higher than anticipated, or if we are unable to realize
the anticipated synergies and other benefits, there could be a material adverse effect on Viatris’ business, financial condition, results of operations, cash
flows, ability to pay dividends or repurchase shares, and/or stock price.
We have and may continue to experience pressure on the pricing of and reimbursements for certain of our products due to pricing controls, social or
government pressure to lower the cost of drugs, and consolidation across the supply chain.
We operate in a challenging environment, with significant pressures on the pricing of our products and on our ability to obtain and maintain
satisfactory rates of reimbursement for our products by governments, insurers and other payors. We face numerous cost-containment measures by
governments and other payors, including certain government-imposed industry-wide price reductions, caps on price increases, mandatory rebates or
pricing, international reference pricing (i.e., the practice of a country linking its regulated medicine prices to those of other countries), VBP, tender systems,
shifting of the payment burden to patients through higher co-payments, and requirements for increased transparency on pricing, all of which may have an
adverse impact on the pricing of our products. In addition, rates of inflation have increased and may continue to increase pressure on governments, insurers
and other payors to implement additional cost containment measures. There is no guarantee that these cost containment measures will be rolled back in the
event that inflation rates decrease in the future.
Many markets in which we operate have implemented or may implement tender systems for generic pharmaceuticals in an effort to lower prices.
Under such tender systems, manufacturers submit bids which establish prices for generic pharmaceutical products. Upon winning the tender, the winning
company will receive a preferential reimbursement for a period
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of time. If our bids do not win, we may not be able to participate in the given market or may lose out on market share. While criteria other than price can be
included in tenders, tender systems often select the lowest bid, which often results in companies underbidding one another by proposing low pricing in
order to win the tender. Other markets may also consider the implementation of a tender system, and even if a tender system or other price controls are
ultimately not implemented, the anticipation of such could result in price reductions.
In the EU, U.K. and some other international markets, the government provides healthcare at low cost to consumers and regulates pharmaceutical
prices, patient eligibility and/or reimbursement levels to control costs for the government-sponsored healthcare system. These systems of price regulations
may lead to inconsistent and lower prices. The availability of our products in some markets at lower prices undermines our sales in other markets with
higher prices. Additionally, certain countries set prices by reference to the prices in other countries where our products are marketed. Thus, our inability to
secure adequate prices in a particular country may also impair our ability to obtain acceptable prices in existing and potential new markets and may create
the opportunity for third party cross-border trade. In addition to the impacts of these government-sponsored healthcare systems, in the EU, U.K. and other
international markets, certain governmental agencies have enacted, or are considering enacting, further measures to decrease the costs of providing
healthcare, including government mandated price reductions and/or other forms of price controls, including retrospective “clawback” price reductions.
In China, pricing pressures have increased in recent years, and the Chinese government has also increased its focus on patient access and
reimbursement for pharmaceutical medicines. For example, in 2013, China began to implement a QCE process for post-LOE products to improve the
quality of domestically manufactured generic drugs, primarily by requiring such drugs to pass a test to assess their bioequivalence to a qualified reference
drug (typically the originator drug). Effective January 1, 2024, China implemented measures that aim to further improve quality management of drugs,
including, among other things, stipulating additional responsibilities of marketing authorization holders and medical institutions to have a robust quality
management system with respect to drug purchase, storage and use. In addition, since 2018, China's National Healthcare Security Administration, in
conjunction with relevant departments, has been promoting a centralized VBP policy for drugs, which has become standard practice and subjects many
drugs to a competitive bidding process. Molecules subject to the VBP bidding process have seen significant price cuts, with some bidders reducing the
price of their products by as much as 96% as they attempt to secure volumes on the Chinese pharmaceutical market. We expect pricing pressures on our
products included in the VBP bidding process to continue to increase as a result of this policy. We have failed, and may continue to fail, to win bids due to
various factors, including uncompetitive bidding prices. In addition, the URP policy will cap reimbursement of molecules at their VBP tender winning
price. URP will create additional pricing and volume pressure for pharmaceutical products that are subject to the program and is expected to negatively
impact our results of operations.
Demand for our products also depends in part on the extent to which reimbursements are available. In the U.S., third-party payors increasingly
challenge the pricing of pharmaceutical products. These trends and other trends toward managed healthcare, the vertical consolidation among insurers,
PBMs and pharmacies, and legislative healthcare reform create significant uncertainties regarding the future levels of payment, price or reimbursement for
pharmaceutical products. Further, any payment, price or reimbursement may be reduced in the future to the point that market demand for our products
and/or our profitability declines. Changes to Medicare and/or state Medicaid programs, or changes required in the way in which Medicare payment rates
are set, the design of the Medicare Part D and Part B benefits, and/or the way Medicare or Medicaid rebates are calculated, could adversely affect the
payment we receive for our products. In order to control expenditures on pharmaceuticals, most member states in the EU regulate the pricing of products
and, in some cases, limit the range of different forms of pharmaceuticals available for prescription by national health services. These controls can result in
considerable price differences between member states.
There has also been increasing U.S. federal and state legislative and enforcement interest with respect to drug pricing, as well as from international
organizations like the United Nations, WHO and OECD, in addition to intense publicity and scrutiny regarding such matters, including publicity and
pressure resulting from prices charged by competitors and peer companies for new products as well as price increases by competitors and peer companies
on older products that some have deemed excessive.
In addition, there have been executive orders, legislation, and legislative and regulatory proposals, including in connection with government
programs such as Medicare, concerning drug prices and related issues, including the perceived need to bring more transparency to drug pricing, reviewing
the relationship between pricing and manufacturer patient programs, and reforming government program reimbursement methodologies for drugs. Some
states have also signed into law programs that compel manufacturers to provide certain medicines at free or reduced costs to certain patients, and additional
states are exploring such programs. Although we continue to expect to see focus on regulating pricing, we cannot predict what, if any, additional changes in
legislative or regulatory priorities and personnel may transpire at the state or federal level, particularly given that there is a new presidential administration
and change in control of Congress, or what the ultimate impact may be.
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In the U.S., certain of these pressures are further compounded by increasing consolidation among wholesalers, retailer drug chains, PBMs, private
insurers, managed care organizations and other private payors, which can increase their negotiating power. Please also refer to “A significant portion of our
revenues is derived from sales to a limited number of customers.”
The numerous cost-containment measures by governments and other payors, failing to win tenders, the implementation of price control systems,
adverse legislation and regulation, the consolidation of our customers, or continued social or government pressure to lower the cost of pharmaceutical
products could have a material adverse impact on our business, reputation, financial condition, results of operations, cash flows, ability to pay dividends or
repurchase shares, and/or stock price.
Healthcare reform legislation could have a material adverse effect on our business.
In recent years, there have been numerous initiatives on the federal and state levels for comprehensive reforms affecting the payment for, the
availability of and reimbursement for, healthcare services in the U.S., and it is likely that Congress and state legislatures and health agencies will continue
to focus on healthcare reform in the future.
In 2022, then-President Biden signed into law the Inflation Reduction Act, which includes numerous Medicare reforms that will affect
reimbursement for certain pharmaceuticals covered by Medicare and modify the Part D and Part B program structure, including shifting the liability for
certain prescription drug costs shared between Medicare, pharmaceutical manufacturers, and Part D plans. These reforms include government price
negotiation for certain high-spend, single-source Medicare drugs, out-of-pocket caps for Medicare beneficiaries using insulin products, and the application
of inflation-based rebates for certain Medicare drugs. The implementation of the Inflation Reduction Act, including the drug price negotiation provision,
inflation penalties, and Part D redesign is currently underway and could negatively affect certain Viatris portfolio products based on future pricing
decisions, changes in the Consumer Price Index for All Urban Consumers (CPI-U), and the potential for shifting payor preferences based on the Part D
redesign and requirements to cover drugs selected for negotiation.
We are unable to predict the future course of federal or state healthcare legislation in the U.S. or reform or the outcome of challenges to such laws
or reforms once passed, particularly given that there is a new presidential administration and change in control of Congress. Significant additional reforms
to the U.S. healthcare system, including changes to the ACA, Medicare and Medicaid, modifications to the Inflation Reduction Act, or changes to other
laws or regulatory frameworks in other markets in which we operate, that reduce our revenues or increase our costs could have a material adverse effect on
our business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
We have significant operations globally, which exposes us to the risks inherent in conducting our business internationally.
Our operations extend to numerous countries globally and therefore are subject to the risks inherent in this geographic scope. These risks include,
but are not limited to:
•
compliance with the national and local laws, regulations and customs of countries in which we do business, including, but not limited to, data
privacy and protection, environmental and social regulations, import/export and enforcement of intellectual property rights;
•
less established legal and regulatory regimes in certain jurisdictions, including China, where the interpretation and enforcement of laws, rules and
regulations may involve uncertainties and can be inconsistent;
•
litigation, administrative and court proceedings may be protracted, expensive and unpredictable;
•
governments in certain jurisdictions may favor local businesses and make it more difficult for foreign businesses to operate on an equal footing,
including but not limited to by promoting or requiring the local manufacture of pharmaceutical products and API or the establishment of local sites
and offices;
•
increased uncertainties related to the enforcement of contracts with certain parties;
•
compliance with a variety of U.S. laws including, but not limited to, trade controls or sanctions, regulations put forth by the U.S. Treasury’s Office
of Foreign Assets Control, the Iran Threat Reduction and Syria Human Rights Act of 2012 and rules relating to the use of certain “conflict
minerals” under Section 1502 of the Dodd-Frank Wall Street Reform and the Consumer Protection Act;
•
sanctions and our interpretation of those sanctions, trade controls, supply chain and staffing challenges as a result of the ongoing conflict between
Russia and Ukraine that have impacted and may continue to impact our ability to market or sell pharmaceuticals in either country or subject us to
increased government scrutiny, and a significant escalation or expansion of the conflict’s current scope may have a negative impact on our
operations and financial results in future periods;
•
instability in the Middle East, especially the ongoing conflict in Israel and Gaza, has impacted and may continue to impact our and our partners’
ability to develop and manufacture products in the region and to transport those products to other markets, and has impacted and may continue to
impact the ability of regulators to conduct required inspections at our or our partners’ manufacturing facilities in the region. The conflict has also
impacted our and our partners’
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ability to market or sell pharmaceutical products in the area, and has caused and may continue to cause other disruptions to the supply chain. A
significant escalation or expansion of the conflict’s current scope may have a negative impact on our operations and financial results in future
periods;
•
changes in laws, regulations, and practices that impact the pharmaceutical industry and/or healthcare systems, including but not limited to imports,
exports, manufacturing, quality, cost, pricing, reimbursement, approval, inspection, and delivery of healthcare;
•
changes in policies designed to promote foreign investment, including significant tax incentives, liberalized import and export duties, and
preferential rules on foreign investment and repatriation;
•
differing local product preferences and product requirements;
•
adverse changes in the economies in which we or our partners and suppliers operate as a result of a slowdown in overall growth;
•
changes in government or economic policies, elections, or financial, political, or social change or instability that affects the markets or countries in
which we or our partners operate;
•
reductions in funding by U.S. governmental agencies for certain products in our Emerging Markets region;
•
changes in employment or labor laws, or wage increases in the countries in which we or our partners and suppliers operate;
•
local, regional and global restrictions on banking and commercial activities in certain markets, especially emerging markets;
•
longer payment cycles and increased exposure to counterparty risk;
•
volatility in international financial markets and increased foreign currency risk;
•
inflation or hyperinflation in certain markets, including Turkey and Egypt;
•
supply disruptions and increases in energy and transportation costs;
•
increased tariffs on the import or export of our products, ingredients or inputs into our products, or API, including potentially significant reciprocal
tariffs on products sold between the U.S. and other countries as a result of recent trade policy shifts in the U.S.;
•
changes in U.S. government procurement laws for pharmaceutical products related to compliance with the Trade Agreements Act or country of
origin policies, or changes in U.S. agency procurement policies for pharmaceutical products manufactured in India or China;
•
burdens to comply with multiple, changing and potentially conflicting laws, regulations and disclosure requirements, including those relating to
environmental, social and governance matters, carbon emissions, health and safety, labor and human rights;
•
natural or man-made disasters, including droughts, floods, earthquakes, hurricanes, wildfires and the impact of climate change in the countries in
which we or our partners and suppliers operate; and
•
local disturbances, the outbreak of highly contagious diseases or other health epidemics or pandemics, terrorist attacks, riots, social disruption,
wars, or regional hostilities in the countries in which we or our partners and suppliers operate and that could affect the economy, our operations
and employees by disrupting operations and communications, making travel and the conduct of our business more difficult, and/or causing our
customers to be concerned about our ability to meet their needs.
We also face the risk that some of our competitors have more experience with operations in such countries or with international operations
generally and may be able to manage unexpected crises more easily. Moreover, the internal political stability of, or the relationship between, any country or
countries where we conduct business operations may deteriorate. Changes in a country’s political stability or the state of relations between any such
countries are difficult to predict and the political or social stability in and/or diplomatic relations between any countries in which we or our partners and
suppliers do business could meaningfully deteriorate.
The occurrence of any one or more of the above risks could have a material adverse effect on our business, financial condition, results of
operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
Charges to earnings resulting from acquisitions could have a material adverse effect on our business, financial condition, results of operations, cash
flows, ability to pay dividends or repurchase shares, and/or stock price.
Under U.S. GAAP provisions relating to business acquisition accounting standards, we recognize the identifiable assets acquired, the liabilities
assumed, and any noncontrolling interests in acquired companies generally at their acquisition date fair values and, in each case, separately from goodwill.
Goodwill as of the acquisition date is measured as the excess amount of consideration transferred, which is also generally measured at fair value, and the
net of the acquisition date amounts of the identifiable assets acquired and the liabilities assumed. Our estimates of fair value are based upon assumptions
believed to be reasonable, but which are inherently uncertain. After we complete an acquisition, the following factors could result in material charges and
adversely affect our operating results and may adversely affect our cash flows:
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•
costs incurred to combine the operations of companies we acquire, such as transitional employee expenses and employee retention, redeployment
or relocation expenses;
•
liabilities assumed in purchase accounting;
•
impairment of goodwill or intangible assets, including acquired IPR&D;
•
amortization of intangible assets acquired;
•
a reduction in the useful lives of intangible assets acquired;
•
identification of or changes to assumed contingent liabilities, including, but not limited to, litigation reserves, contingent purchase price
consideration including fair value adjustments, income tax contingencies and other non-income tax contingencies, after our final determination of
the amounts for these contingencies or the conclusion of the measurement period (generally up to one year from the acquisition date), whichever
comes first;
•
significant costs to restructure our operations and to reduce our cost structure, including cost related to severance payments, plant shutdowns and
costs to achieve anticipated synergies; and
•
charges to our operating results resulting from expenses incurred to effect the acquisition.
A significant portion of these adjustments could be accounted for as expenses that will decrease our net income and earnings per share for the
periods in which those costs are incurred.
In particular, the amount of goodwill and identifiable intangible assets in our consolidated balance sheets is significant as a result of our
acquisitions and other transactions, and may increase further following future potential acquisitions, and we have in the past and may in the future decide to
sell assets that we determine are not critical to our strategy or execution. These and other future events or decisions have in the past and may in the future
lead to asset impairments and/or related charges. Certain impairments may also result from a change in our strategic goals, business direction or other
factors relating to the overall business environment. Any such charges could cause a material adverse effect on our business, financial condition, results of
operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
The illegal distribution and sale by third parties of counterfeit or IP-infringing versions of our products or of diverted or stolen products could have a
negative impact on our reputation and our business.
The pharmaceutical drug supply is vulnerable to illegal counterfeiting and the presence of counterfeit or IP-infringing products in a growing
number of markets, including widespread sales over the internet.
Third parties may illegally distribute and sell counterfeit or IP-infringing versions of our products that do not meet our rigorous manufacturing and
testing standards. Counterfeit products are frequently unsafe or ineffective and can be potentially life-threatening. Counterfeit medicines may contain
harmful substances, the wrong API, an incorrect dose of API or no API at all, depriving patients of the therapeutic benefit of such medicines. However, to
distributors and users, counterfeit products may be visually indistinguishable from the authentic version.
Reports of adverse reactions to counterfeit or IP-infringing drugs or increased levels of counterfeiting could materially affect patient confidence in
the authentic product. It is possible that adverse events caused by unsafe counterfeit products will mistakenly be attributed to the authentic product. In
addition, unauthorized diversions of products or thefts of inventory at warehouses, plants, or while in-transit could result in improper storage or
compromise product integrity and therefore adversely impact patient safety, our reputation, and our business.
Loss of sales or revenues, as well as public loss of confidence in the integrity of pharmaceutical products as a result of counterfeiting, diversion, or
theft could have a material adverse effect on our business, reputation, financial condition, results of operations, cash flows, ability to pay dividends or
repurchase shares, and/or stock price.
We face vigorous competition that threatens the commercial acceptance and pricing of our products.
The pharmaceutical industry is highly competitive. We face competition from other pharmaceutical manufacturers globally, some of whom are
significantly larger than us and have stronger, more well-established reputations than us. Our competitors may be able to develop products and processes
competitive with or superior to our own for many reasons, including but not limited to the possibility that they may have:
•
proprietary processes or delivery systems;
•
larger or more productive R&D and marketing staff;
•
larger or more efficient production capabilities in a particular therapeutic area;
•
more experience in preclinical testing and human clinical trials;
•
more products;
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•
more experience in developing new drugs; or
•
greater financial resources.
Many of our products are not protected by patent rights or have limited patent life and will soon lose patent protection. Loss of patent protection
for a product typically is followed promptly with the launch of generic products. As a result, sales of many of these products decline or stop growing over
time, and decline faster than projected once patent protection is lost. In addition, certain products have experienced or may experience generic competition
prior to the expiration of patent terms or associated extensions. We may not be successful in managing competition from non-branded generics or other
alternatives, or in generally managing revenues after loss of exclusivity, and our business may be materially adversely affected.
We also face increasing competition from lower-cost generic products and other branded products. As we focus on developing or acquiring
innovative, best-in-class, patent-protected assets, competition from manufacturers of generic or biosimilar drugs, including from generic versions of
competitors’ branded products that lose their market exclusivity, has been and will continue to be a major challenge for our patent-protected and branded
products. Generic competitors are also becoming more aggressive in terms of pricing in many of the regions in which Viatris operates. In China, for
example, we face strong competition from certain generic manufacturers, which have resulted and may in the future result in price cuts and volume loss on
some of Viatris’ branded products. In many emerging markets, we face increased competition and contracting markets for certain of our ARV products,
primarily related to competing therapies. We also face competition in the U.S., the EU and other mature markets that have a robust generics market and
favorable regulatory conditions for generics. In addition, legislative proposals emerge from time to time in various jurisdictions to further encourage the
early and rapid approval of generic drugs. Any such proposal that is enacted into law could increase competition and worsen this negative effect on our
branded sales.
In addition, certain of our products also face potential competition from products that may be developed in the future that could render our
products uncompetitive or obsolete. For example, Viatris or other companies may develop medicines that treat the same indications targeted by our current
products, and these medicines could be more effective than our current products or patients and physicians could prefer these medicines over our current
medicines. The introduction of these new competing products could also have a negative impact on product sales.
Other related factors that could affect our business include:
•
Competitors’ products may be safer, more effective, more effectively marketed or sold, or have lower prices or better performance features than
ours;
•
PBMs and other pharmaceutical manufacturers may utilize contracting strategies that could decrease utilization of or otherwise negatively impact
our products;
•
Vertical integration of pharmacies and large purchasing organizations or consolidation among distribution outlets; and
•
Our sales have suffered and may suffer in the future as a result of changes in consumer demand for our products, including those related to
fluctuations in consumer buying patterns tied to seasonality or other factors, willingness of customers to switch among products of different
pharmaceutical manufacturers, importation by consumers or the introduction of new products by competitors.
The occurrence of any of the above risks could have an adverse effect on our business, financial condition, results of operations, cash flows, ability
to pay dividends or repurchase shares, and/or stock price.
A relatively small group of products may represent a significant portion of our revenues, net sales, gross profit, or net earnings from time to time.
Sales of a limited number of our products from time to time represent a significant portion of our revenues, net sales, gross profit, and net
earnings. For each of the years ended December 31, 2024 and 2023, Viatris’ top ten products in terms of sales, in the aggregate, represented approximately
33% of the Company’s net sales. If the volume or pricing of our largest selling products declines in the future, our business, financial condition, results of
operations, cash flows, and/or share price could be materially adversely affected.
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Operational Risks
Current and changing economic conditions, including inflation, may adversely affect our industry, business, partners and suppliers.
The global economy continues to experience significant volatility, and the economic environment may become less favorable. For example, if the
U.S. government defaults on its debt, or the U.S. Treasury takes measures to avoid such a default, or if there is an assumption that such an event may occur,
this could have a negative impact on general economic conditions, including the liquidity of and access to the capital markets. A sovereign debt default,
economic volatility, governmental financial restructuring efforts and evolving deficit and spending reduction programs could negatively impact the global
economy and the pharmaceutical industry. This has led, or could lead, to reduced consumer and customer spending, reduced or eliminated governmental or
third-party payor coverage or reimbursement or reduced spending on healthcare, including but not limited to pharmaceutical products. While generic drugs
present an alternative to higher-priced branded products, our sales could be negatively impacted if patients forego obtaining healthcare, patients and
customers reduce spending or purchases, or if governments or third-party payors reduce or eliminate coverage or reimbursement amounts for
pharmaceuticals or impose price or other controls adversely impacting the price or availability of pharmaceuticals (whether for generics, branded products
or both). Reduced consumer and customer spending, reduced government or third-party payor coverage or reimbursement, or new government controls,
may drive us and our competitors to decrease prices, may reduce the ability of customers to pay, or may result in reduced demand for our products.
In addition, higher rates of inflation over the past few years have resulted, and may continue to result, in increased costs of labor, raw materials,
other supplies and freight and distribution costs, among others. While inflationary and other macroeconomic pressures have somewhat eased more recently,
we do not expect to see a corresponding reduction in these higher costs and expect such higher costs to negatively impact our results of operations. For the
pharmaceutical industry and the healthcare systems in the markets in which we participate, regulatory restrictions and the pricing dynamics of our products
generally make it difficult to pass on such costs to customers. Inflation has also resulted and may continue to result in higher interest rates and increased
costs of capital. In particular, the global economy has recently been impacted by high levels of inflation and rising energy costs, which has resulted in
significant economic volatility and central banks tightening their monetary policies and increasing interest rates. These macroeconomic pressures combined
with the volatility in foreign exchange rates, including the strengthening of the U.S. dollar versus the other currencies in which we operate, has in the past
and may in the future, negatively impact our results of operations.
The occurrence of any of the above risks could have a material adverse effect on our industry, business, financial condition, results of operations,
cash flows, ability to pay dividends or repurchase shares, and/or stock price.
Failure to comply with applicable environmental and occupational health and safety laws and regulations worldwide could adversely impact our
business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
We are subject globally to various laws and regulations concerning, among other things, the environment, climate change, water, waste, chemicals
and employee health and safety. These requirements include regulation of the handling, manufacture, transportation, storage, use and disposal of materials
and wastes, including the discharge of regulated materials and emissions into the environment. We are also subject to related permitting, record-keeping,
reporting and registration requirements. In the normal course of our business, we are exposed to risks relating to possible releases of hazardous substances
into the environment, which could cause environmental or property damage or personal injuries, and which could result in (i) our noncompliance with such
environmental and occupational health and safety laws, regulations and permits and (ii) regulatory enforcement actions or claims for personal injury and
property damage against us. If environmental discharge occurs, or to the extent we discover contamination caused by third parties, including by prior
owners and operators of properties we acquire or lease, or by neighboring properties or other offsite sources, we could be liable for cleanup or remediation
obligations, damages and fines or have relevant permits, authorizations or registrations modified or revoked, regardless of our responsibility for such
contamination. In addition, any non-compliance with environmental and occupational health and safety laws and regulations and permits, or emissions into
the environment, whether actual or perceived, may result in significant reputational damage. The substantial unexpected costs we may incur could have a
material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock
price. Environmental and occupational health and safety laws and regulations are also complex and subject to change, and our related capital expenditures
and costs for compliance may increase substantially in the future as a result of such changes, the development and manufacturing of a new product or
increased development or manufacturing activities at any of our facilities. We may be required to expend significant funds and our manufacturing activities
could be delayed or suspended or we may lose the ability to purchase or use certain materials, or face restrictions on the amounts of materials we may use
or purchase, which could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends or
repurchase shares, and/or stock price.
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The pharmaceutical industry is heavily regulated, and we face significant costs and uncertainties associated with our efforts to comply with applicable
laws and regulations.
The pharmaceutical industry is subject to regulation by various governmental authorities in the jurisdictions in which we operate, including the
U.S., EU, China and India. For instance, we must comply with applicable laws and requirements of the FDA and other regulatory agencies, including
foreign authorities, with respect to the research, development, manufacture, quality, safety, effectiveness, approval, labeling, tracking, tracing,
authentication, storage, record-keeping, reporting, pharmacovigilance, sale, distribution, import, export, marketing, advertising, and promotion of
pharmaceutical products. We are committed to conducting our business, including the sale and marketing of our products, in compliance with all applicable
laws and regulations. These laws and regulations, however, are numerous, complex and continue to evolve, and it is possible that a governmental authority
may challenge our activities, or that an employee or agent could violate these laws and regulations without our knowledge. Failure to comply with these
laws, regulations or expectations could result in a range of consequences, including, but not limited to, fines, penalties, disgorgement, exclusion from U.S.
federal healthcare reimbursement programs, unanticipated compliance expenditures, suspension of review of applications or other submissions, rejection or
delay in approval of applications, recall or seizure of products, total or partial suspension of production and/or distribution, our inability to sell products, the
return by customers of our products, injunctions, and/or criminal prosecution. Under certain circumstances, a regulator may also have the authority to
revoke or vary previously granted drug approvals.
The safety profile of any product will continue to be closely monitored by the FDA and comparable foreign regulatory authorities after approval.
If such regulatory authorities become aware of new safety information about any of our marketed or investigational products, those authorities may require
further inspections, enhancements to manufacturing controls, labeling changes, establishment of a risk evaluation and mitigation strategy or similar
strategy, restrictions on a product’s indicated uses or marketing, or post-approval studies or post-market surveillance. In addition, we are subject to
regulations in various jurisdictions, including the Federal Drug Supply Chain Security Act in the U.S., the Falsified Medicines Directive in the EU and
several other such regulations in other countries that require us to develop electronic systems to serialize, track, trace and authenticate units of our products
through the supply chain and distribution system. Compliance with these regulations has in the past and may in the future result in increased expenses for
us or impose greater administrative burdens on our organization, and failure to meet these requirements could result in fines or other penalties.
In recent years, the regulatory framework in China regarding the pharmaceutical industry has undergone significant changes and Chinese
authorities have become increasingly vigilant in enforcing laws in the pharmaceutical industry. We believe that Viatris’ strategies regarding pharmaceutical
research, development, manufacturing and commercialization in China are currently aligned with the Chinese government’s policies, but they may in the
future diverge, requiring a change in such strategies. For example, in order to comply with foreign ownership restrictions and meet regulatory, licensing,
and cybersecurity requirements, we conduct some of our business in China through variable interest entities. Although we believe these structures and
activities related to our VIEs comply with existing laws and regulations in China, they involve unique risks and uncertainties, including that China may
from time to time consider and implement additional changes in their legislative, regulatory, licensing, or other requirements that could subject us to
penalties and impact these structures and activities. Any such change may result in increased compliance costs to us or cause delays in or prevent the
successful research, development, manufacturing or commercialization of our products in China, result in the loss of required licenses and permits or the
suspension or termination of Viatris’ activities in China.
The FDA and comparable foreign regulatory authorities also regulate the facilities and operational procedures that we use to manufacture our
products. We must register our facilities with the FDA and similar regulators in other countries. Products must be manufactured in our facilities in
accordance with cGMP or similar standards in each territory in which we manufacture. Compliance with such regulations and with our own quality
standards requires substantial expenditures of time, money, and effort in multiple areas, including training of personnel, record-keeping, production, and
quality control and quality assurance. The FDA and other comparable regulatory authorities, including foreign authorities, periodically inspect our
manufacturing facilities for compliance with cGMP or similar standards in the applicable territory. Regulatory approval to manufacture a drug is granted on
a site-specific basis. Failure to comply with cGMP and other regulatory standards at one of our or our partners’ or suppliers’ manufacturing facilities could
result in an adverse action brought by the FDA or other regulatory authorities, which has resulted and could in the future result in the receipt of an untitled
or warning letter, fines, penalties, disgorgement, unanticipated compliance expenditures, rejection or delay in approval of applications, suspension of
review of applications or other submissions, suspension of ongoing clinical trials, recall or seizure of products, total or partial suspension of production
and/or distribution, our inability to sell products, the return by customers of our products, orders to suspend, vary, or withdraw marketing authorizations,
injunctions, consent decrees, requirements to modify promotional materials or issue corrective information to healthcare practitioners, refusal to permit
import or export, criminal prosecution and/or other adverse actions.
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Although we have established internal quality and regulatory compliance programs and policies, there is no guarantee that these programs and
policies, as currently designed, will meet regulatory agency standards in the future or will prevent instances of non-compliance with applicable laws and
regulations. Additionally, despite our compliance efforts, we or our partners have in the past and may in the future receive notices of manufacturing and
quality-related observations following inspections by regulatory authorities around the world, as well as official agency correspondence regarding
compliance. For example, in December 2024 the FDA issued a warning letter and import alert related to our oral finished dose manufacturing facility in
Indore, India. The warning letter and import alert restrict our ability to distribute certain products into the U.S. and have also negatively impacted our
ability to sell products made at this facility to customers in other regions. We currently expect a negative impact from the Indore actions on our financial
condition, results of operations and cash flows in fiscal year 2025, and, if we are unable to resolve any such observations and address regulatory concerns
in a timely fashion, our business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price
could be materially adversely affected in 2025 as well as future periods.
Our business could be adversely affected if any regulatory body were to delay, withhold, or withdraw approval of an application; require a recall
or other adverse product action; require one of our manufacturing facilities to cease or limit production; or suspend, vary, or withdraw related marketing
authorization. Reductions in personnel at the FDA or other health agencies as a result of changing legislative or regulatory priorities could result in slower
response times or reduced resources and, as a result, review of regulatory submissions, inspections, resolution of warning letters or import alerts, approval
of new products and other timelines important to our business may be materially impacted, which could have a material adverse effect on our business.
Regulators and policymakers globally are also increasingly focused on addressing drug shortages and expanding transparency across supply
chains. In the U.S., Congress has recently considered measures to enhance supply chain resiliency and ensure the quality of pharmaceutical products,
including expansion of reporting requirements to include API and finished dose manufacturing locations and expanded communication with regulators
regarding demand spikes for pharmaceutical products. Compliance with any such requirements may be burdensome or costly.
We utilize controlled substances in certain of our current products and products in development, and therefore must meet the requirements of the
Controlled Substances Act of 1970 and the related regulations administered by the DEA in the U.S., as well as those of similar laws in other countries
where we operate. These laws relate to the manufacture, shipment, storage, sale, and use of controlled substances. The DEA and other regulatory agencies
limit the availability of the controlled substances used in certain of our current products and products in development and, as a result, our procurement
quota of these active ingredients may not be sufficient to meet commercial demand or complete clinical trials. We must apply to the DEA and similar
regulatory agencies for procurement quotas in order to obtain these substances. Any delay or refusal by the DEA or such similar agencies in establishing
our procurement quota for controlled substances could delay or stop our clinical trials or product launches, or could cause trade inventory disruptions for
those products that have already been launched. In addition, some states have passed laws and regulations imposing assessments on the sale or distribution
of certain controlled substances, and other states are considering and may implement similar laws and regulations in the future.
The occurrence of any of the above risks could have a material adverse effect on our business, financial condition, results of operations, cash
flows, ability to pay dividends or repurchase shares, and/or stock price.
The use of legal, regulatory, and legislative strategies by both brand and generic competitors, including but not limited to “authorized generics” and
regulatory petitions, may increase costs associated with the introduction or marketing of our generic products, could delay or prevent such
introduction, and could significantly reduce our revenue and profit.
Our competitors, both branded and generic, often pursue strategies that could prevent or delay generic alternatives to branded products. These
strategies include, but are not limited to:
•
entering into agreements whereby other generic companies will begin to market an authorized generic, which is the approved brand-name drug
without the brand-name on its label, at the same time or after generic competition initially enters the market;
•
launching their own authorized generic product prior to or at the same time or after generic competition initially enters the market;
•
pricing a branded product at a discount equivalent to generic pricing;
•
filing frivolous petitions with the FDA or other regulatory bodies seeking to prevent or delay approvals, including timing the frivolous filings so as
to thwart generic competition by causing delays of our product approvals;
•
contracting strategies among pharmaceutical manufacturers and PBMs that could decrease generic or biosimilar utilization and negatively impact
our products;
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•
seeking to establish regulatory and legal obstacles that would make it more difficult to demonstrate bioequivalence or to meet other requirements
for approval, and/or to prevent regulatory agency review of applications;
•
initiating legislative or other efforts to limit the substitution of generic versions of brand pharmaceuticals;
•
filing suits for patent infringement and other claims that may delay or prevent regulatory approval, manufacture, and/or sale of generic products;
•
introducing “next-generation” products prior to the expiration of market exclusivity for the reference product, which often materially reduces the
demand for the generic or the reference product for which we seek regulatory approval;
•
persuading regulatory bodies to withdraw the approval of brand-name drugs for which the patents are about to expire and converting the market to
another product of the brand company on which longer patent protection exists;
•
obtaining extensions of market exclusivity by conducting clinical trials of brand drugs in pediatric populations or by other methods; and
•
seeking to obtain new patents on drugs for which patent protection is about to expire.
In the U.S., some companies have lobbied Congress for amendments to Hatch-Waxman Act that would give them additional advantages over
generic competitors. For example, although the term of a company’s drug patent can be extended to reflect a portion of the time an NDA (which is filed in
the U.S. with the FDA when approval is sought to market a newly developed branded product and, in certain instances, for a new dosage form, a new
delivery system or a new indication for a previously approved drug) is under regulatory review, some companies have proposed extending the patent term
by a full year for each year spent in clinical trials rather than the one-half year that is currently permitted. Additionally, some companies have lobbied
Congress to amend legislation related to patent eligible subject matter that would limit generic drug patent challenges to a single forum (inter partes review
or district court). These lobbying efforts, if successful, could discourage the use of inter partes review and limit the ability of generic drug companies to
efficiently invalidate improperly granted brand drug patents.
If proposals like these in the U.S., EU, or in other countries where we or our partners and suppliers operate were to become effective, or if any
other actions by our competitors and other third parties to prevent or delay activities necessary to the approval, manufacture, or distribution of our products
are successful, our entry into the market and our ability to generate revenues associated with new products may be delayed, reduced, or eliminated, which
could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares,
and/or stock price.
If we are unable to successfully introduce new products in a timely manner, our future revenue and profitability may be adversely affected.
Our future revenues and profitability will depend, in part, upon our ability to successfully and timely develop, license, or otherwise acquire and
commercialize new products. Product development is inherently risky, especially for new drugs for which safety and efficacy have not been established
and/or the market is not yet fully developed as well as for complex generic drugs and biosimilars. Likewise, product licensing involves inherent risks,
including, among others, uncertainties due to matters that may affect the achievement of milestones, as well as the possibility of contractual disagreements
with regard to whether the supply of product meets certain specifications or terms such as license scope or termination rights. As we look to accelerate our
growth by building on the strength of our base business with an expanding portfolio of innovative, best-in-class, patent-protected assets, the development
and commercialization process of such products requires substantial time, effort and financial resources. We, or a collaboration partner, may not have
sufficient capital or finances to develop or commercialize a potential product, may not be successful in developing or commercializing such products on a
timely basis, or at all, and such products may be less likely or take longer to receive regulatory approval, which could adversely affect our business,
financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
Before any prescription drug product, including generic drug products, can be marketed, marketing authorization approval is required by the
relevant regulatory authorities and/or national regulatory agencies (for example, the FDA in the U.S., the EMA in the EU and other regulatory authorities).
The process of obtaining regulatory approval to manufacture and market new branded and generic pharmaceutical products is rigorous, time consuming,
costly, and inherently unpredictable. In addition, these regulatory agencies may be delayed in reviewing and approving products as a result of lapsed or
insufficient funding, insufficient staffing, travel or work restrictions, or other factors beyond our control. Any delay in regulatory approval could impact the
commercial or financial success of a product.
Outside the U.S., the approval process may be more or less rigorous, depending on the country, and the time required for approval may be longer
or shorter than that required in the U.S. Bioequivalence, clinical, or other studies conducted in one country may not be accepted in other countries, the
requirements for approval may differ among countries, and the approval of a pharmaceutical product in one country does not necessarily mean that the
product will be approved in another country. We, or a partner or supplier, may be unable to obtain requisite approvals on a timely basis, or at all, for new
products that we may develop, license or otherwise acquire. Moreover, if we obtain regulatory approval for a drug, it may be limited, for example, with
respect to the indicated uses and delivery methods for which the drug may be marketed, or may include warnings,
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precautions or contraindications in the labeling, which could restrict our potential market for the drug. A regulatory approval may also include post-
approval study or risk management requirements that may substantially increase the resources required to market the drug. Also, for products pending
approval, we may obtain raw materials or produce batches of inventory to be used in efficacy and bioequivalence testing, as well as in anticipation of the
product’s launch. If regulatory approval is denied or delayed, we could be exposed to the risk of this inventory becoming obsolete.
The approval process for generic pharmaceutical products often results in the relevant regulatory agency granting final approval to a number of
generic pharmaceutical products at the time a patent claim for a corresponding branded product or other market exclusivity expires. This often forces us to
face immediate competition when we introduce a generic product into the market. Additionally, further generic approvals often continue to be granted for a
given product subsequent to the initial launch of the generic product. These circumstances generally result in significantly lower prices, as well as reduced
margins, for generic products compared to branded products. New generic market entrants generally cause continued price, margin, and sales erosion over
the generic product life cycle.
In the U.S., the Hatch-Waxman Act provides for a period of 180 days of generic marketing exclusivity for a “first applicant,” that is the first
submitted ANDA (which is filed in the U.S. with the FDA when approval is sought to market a generic equivalent of a drug product previously approved
under an NDA and listed in the FDA publication entitled Approved Drug Products with Therapeutic Equivalence Evaluations, popularly known as the
“Orange Book” or for a new dosage strength for a drug previously approved under an ANDA) containing a certification of invalidity, non-infringement or
unenforceability related to a patent listed with the ANDA’s reference drug product, commonly referred to as a Paragraph IV certification. During this
exclusivity period, which under certain circumstances may be shared with other ANDAs filed on the same day, the FDA cannot grant final approval to
later-submitted ANDAs for the same generic equivalent. If an ANDA is awarded 180-day exclusivity, the applicant generally enjoys higher market share,
net revenues, and gross margin for that generic product. However, our ability to obtain 180 days of generic marketing exclusivity may be dependent upon
our ability to obtain FDA approval or tentative approval within an applicable time period of the FDA’s acceptance of our ANDA. If we are unable to obtain
approval or tentative approval within that time period, we may risk forfeiture of such marketing exclusivity. By contrast, if we are not a “first applicant” to
challenge a listed patent for such a product, we may lose significant advantages to a competitor with 180-day exclusivity, even if we obtain FDA approval
for our generic drug product. The same would be true in situations where we are required to share our exclusivity period with other ANDA sponsors with
Paragraph IV certifications.
In the EU and other countries and regions, there is no exclusivity period for the first generic product. The European Commission or national
regulatory agencies may grant marketing authorizations to any number of generics.
If we are unable to navigate our products through the approval process in a timely manner, there could be an adverse effect on our product
introduction plans, business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
We expend a significant amount of resources on R&D efforts that may not lead to successful product introductions.
Much of our development effort is focused on technically difficult-to-formulate products and/or products that require advanced manufacturing
technology. We conduct R&D primarily to enable us to gain approval for, manufacture, and market pharmaceuticals in accordance with applicable laws and
regulations. We also partner with third parties to develop products, including, for instance, our acquisition of the development programs for selatogrel and
cenerimod, which are currently in Phase 3 development. In such cases, successful product introductions have in the past and may in the future significantly
rely on such partners, including with respect to their financial condition. Typically, expenses related to the development of innovative or complex
compounds and the filing of marketing authorization applications for innovative and complex compounds (such as NDAs in the U.S.) are significantly
greater than those expenses associated with the development of and filing of marketing authorization applications for most generic products (such as
ANDAs in the U.S. and abridged applications in Europe). As we look to accelerate our growth by building on the strength of our base business with an
expanding portfolio of innovative, best-in-class, patent-protected assets, our related expenses have increased and will likely continue to increase. Because
of the inherent risk associated with R&D efforts in our industry, including the high cost and uncertainty of conducting clinical trials (where required)
particularly with respect to new and/or complex or innovative drugs, our, or a partner’s, R&D and Acquired IPR&D expenditures may not result in the
successful introduction of new pharmaceutical products approved by the relevant regulatory bodies. In addition, we have incurred and may in the future
incur asset impairment charges related to such programs if they are not successful. Also, after we submit a marketing authorization application for a new
compound or generic product, the relevant regulatory authority may change standards and/or request that we conduct additional studies or evaluations and,
as a result, we may incur approval delays as well as R&D costs in excess of what we anticipated. For example, we are currently working with Mapi to
determine appropriate next steps with respect to a Complete Response letter from the FDA regarding the NDA for GA Depot 40mg.
Clinical testing, particularly with respect to new and/or complex or innovative drugs, is expensive and can take many years to complete, and its
outcome is inherently uncertain. Failure can occur at any time during the clinical trial process. We or
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our collaboration partners may experience delays in our ongoing or future clinical trials, and we do not know whether planned clinical trials will begin or
enroll subjects on time, need additional financing, need to be redesigned, or be completed on schedule, if at all.
Clinical trials are complex to administer and outcomes are often unpredictable, particularly with respect to new and/or complex or innovative
products. Clinical trials may be delayed, suspended or prematurely terminated for a variety of reasons. If we experience delays in the completion of, or the
termination of, any clinical trial of our product candidates, the commercial prospects of our product candidates will be harmed, and our ability to generate
product revenues from any of these product candidates will be delayed. In addition, any delays in completing our clinical trials will increase our costs, slow
down our product candidate development and approval process, and jeopardize our ability to commence product sales and generate revenues. Any of these
occurrences may harm our business, financial condition and prospects significantly. In addition, many of the factors that cause, or lead to, a delay in the
commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates.
Finally, we cannot be certain that any investment made in developing products will be recovered, even if we are successful in commercialization.
To the extent that we expend significant resources on R&D efforts and are not able, ultimately, to introduce successful new and/or complex or innovative
products as a result of those efforts, there could be a material adverse effect on our business, financial condition, results of operations, cash flows, ability to
pay dividends or repurchase shares, and/or stock price.
Even if our products in development receive regulatory approval, such products may not achieve expected levels of market acceptance.
Even if we are able to obtain regulatory approvals for our new products, the success of those products is dependent upon market acceptance.
Levels of market acceptance for our products could be impacted by several factors, including but not limited to:
•
the availability, perceived advantages, and relative safety and efficacy of alternative products from our competitors;
•
the degree to which the approved labeling supports promotional initiatives for commercial success;
•
the prices of our products relative to those of our competitors;
•
the timing of our market entry;
•
the effectiveness of our marketing, sales, and distribution strategy and operations; and
•
other competitor actions, including legal actions.
Additionally, studies of the proper utilization, safety, and efficacy of pharmaceutical products are being conducted by the industry, government
agencies, and others. Such studies, which increasingly employ sophisticated methods and techniques, can call into question the utilization, safety, and
efficacy of previously marketed as well as future products. In some cases, such studies have resulted, and may in the future result, in the discontinuation or
variation of product marketing authorizations or requirements for risk management programs, such as a patient registry. Any of these events could
adversely affect our profitability, business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock
price.
Our business is highly dependent upon market perceptions of us, our products and brands, and the safety and quality of our products and brands, as
well as the effectiveness of our sales and marketing activities, and we may be adversely impacted by negative publicity or findings.
Market perceptions of us are very important to our business, especially market perceptions of our company, products, brands and the safety and
quality of our products and brands. Viatris believes that maintaining and enhancing certain of its brands is important and often provides certain competitive
advantages. If we, our partners and suppliers, or our products or brands suffer from negative publicity, are subject to market withdrawal or recall or are
proven to be, or are claimed to be, ineffective or harmful to consumers, then this could have a material adverse effect on our reputation and business.
Negative publicity related to the receipt of a warning letter, import alert, or similar restrictions from the FDA or other regulatory authorities, such as the
recent restrictions at our Indore facility, have damaged and could continue to damage our reputation among customers, lead customers to seek other
suppliers of our products, or lead to additional inquiries from other regulatory authorities. In addition, if customers, patients or regulatory authorities
mistake us, our partners and suppliers, or our products and brands for other companies, products or brands, this could lead to brand confusion,
unanticipated regulatory inquiries or proceedings and have a negative impact on our reputation and business.
Viatris’ sales and marketing efforts are anchored by promoting its products to physicians, pharmacists, eye care and other healthcare professionals,
clinics and hospitals. Therefore, Viatris’ sales and marketing force, whether in-house sales representatives or third-party commercial partners, must possess
a relatively high level of technical knowledge, up-to-date understanding of industry trends and expertise in the relevant therapeutic areas and products, as
well as promotion and
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communication skills. Marketing, advertising and promotions may be expensive and may not achieve their intended benefits. If Viatris is unable to
effectively train its in-house sales representatives and third-party commercial partners or monitor and evaluate their marketing performances, our sales and
marketing may be less successful than desired. In addition, fewer in-person sales and marketing efforts, or other similar limitations, may result in less
successful sales and marketing activities.
Given our dependence on market perception and sales and marketing efforts, negative publicity associated with product or brand quality, patient
illness, or other adverse effects resulting from, or perceived to be resulting from, our products or brands, or our partners’ and suppliers’ manufacturing
facilities, or an inability to increase or maintain the effectiveness and efficiency of our sales and marketing activities could have a material adverse effect on
our reputation, business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
A significant portion of our revenues is derived from sales to a limited number of customers.
A significant portion of our revenues is derived from sales to a limited number of customers. For the years ended December 31, 2024 and 2023,
Viatris’ top three customers in terms of net sales, in the aggregate, represented approximately 26% and 25%, respectively, of the Company’s consolidated
total net sales. If we were to experience a significant reduction in or loss of business with one or more such customers, or if one or more such customers
were to experience difficulty in paying us on a timely basis, our business, financial condition, results of operations, cash flows, ability to pay dividends or
repurchase shares, and/or stock price could be materially adversely affected.
In addition, a significant amount of our sales are to a relatively small number of drug wholesalers and retail drug chains. These customers
represent an essential part of the distribution chain of pharmaceutical products. Drug wholesalers and retail drug chains have undergone, and are continuing
to undergo, significant consolidation. This consolidation has resulted in these groups gaining additional purchasing leverage and, consequently, increasing
the product pricing pressures facing our business. We expect this trend of increased pricing pressures to continue. Additionally, the emergence of large
buying groups representing retail and wholesale pharmacies and the prevalence and influence of managed care organizations and similar institutions
increases the negotiating power of these groups, enabling them to attempt to extract price discounts, rebates, and other restrictive pricing terms on our
products. These factors could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends
or repurchase shares, and/or stock price.
We have a limited number of manufacturing facilities and certain third-party suppliers produce a substantial portion of our API and products, some of
which require a highly exacting and complex manufacturing process.
A substantial portion of our manufacturing capacity, as well as our current production, is attributable to a limited number of manufacturing
facilities and certain third-party suppliers. In recent years, we have closed, downsized and divested a number of our manufacturing facilities globally, which
further limits our internal manufacturing capacity and increases our dependence on third-party suppliers. A significant disruption at any facilities within our
internal or third-party supply chain, even on a short-term basis, whether due to the failure of a third-party supplier to fulfill the terms of their agreement
with us, labor disruption, adverse quality or compliance observation, other regulatory action, infringement of brand or other third-party intellectual property
rights, natural disaster, civil or political unrest, export or import restrictions, or other events could impair our ability to produce and ship products to the
market on a timely basis and could, among other consequences, subject us to exposure to claims from customers. Any of these events could also result in a
loss of confidence from our customers, loss of existing or potential business, and have a material adverse effect on our reputation, business, financial
condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price. If we or our third-party suppliers face
significant manufacturing issues, this could lead to shutdowns, delays or product shortages, or to our being entirely unable to supply certain products to
customers for an extended period of time. In addition, our facilities or the facilities of our third-party suppliers may be required to close for periods of time,
be required to staff at reduced capacity, or suffer other manufacturing delays as the result of an outbreak of disease, epidemic or pandemic, in or near any of
our facilities. Such shortages, delays or shutdowns have led and could continue to lead to significant losses of sales revenue, third-party litigation, or
negative publicity. See also “The pharmaceutical industry is heavily regulated, and we face significant costs and uncertainties associated with our efforts to
comply with applicable laws and regulations.”
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We purchase certain API and other materials and supplies that we use in our manufacturing operations, as well as certain finished products, from
many different foreign and domestic suppliers. The price of API and other materials and supplies is subject to volatility, including as a result of global
supply chain disruptions and rates of inflation. In certain cases, we have listed only one supplier in our applications with regulatory agencies. There is no
guarantee that we will always have timely, sufficient or affordable access to critical raw materials or finished product supplied by third parties, even when
we have more than one supplier, which could lead to our or our partners’ and suppliers’ inability to supply sufficient quantities of our products to meet
market demand. In connection with our API business divestiture, we entered into a manufacturing and supply agreement pursuant to which we purchase a
significant amount of API from the purchaser in that transaction. Our obligations under this manufacturing and supply agreement have made us more
dependent on the purchaser of our API business and the success of their business, and made us more vulnerable to API supply shortages and price
volatility. In addition, actual or alleged quality deficiencies in the products which we or our suppliers provide, or at our or their manufacturing facilities,
including with respect to the recent warning letter and import alert at our Indore facility, have in the past and could in the future adversely impact our
manufacturing and supply capabilities, cause supply interruptions, or lead to voluntary market withdrawals or product recalls. The EU has implemented
particularly stringent regulations with respect to manufacturing standards for API imported into Europe that place the certification requirement on the
regulatory bodies of the exporting countries. An increase in the price, or an interruption in the supply, of a single-sourced or any other raw material,
including the relevant API, or in the supply of finished product, could have a material adverse effect on our business, financial condition, results of
operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
In addition, the manufacture of some of our products is a highly exacting and complex process, due in part to strict regulatory requirements.
Problems may arise during manufacturing at our or our third-party suppliers’ facilities for a variety of reasons, including, among others, equipment
malfunction, failure to follow specific protocols and procedures, problems with raw materials, natural disasters, power outages, labor disputes or other civil
unrest, cybersecurity or compliance issues, and environmental, health and safety issues, laws, regulations and permits. If problems arise during the
production of a batch of product, that batch of product may have to be discarded. This could, among other things, lead to increased costs, contractual
penalties, lost revenue, damage to customer relations, time and expense spent investigating the cause, and, depending on the cause, similar losses with
respect to other batches or products. If problems are not discovered before the product is released to the market, recall and product liability costs may also
be incurred.
If we or one of our suppliers experience any of the problems described above, such problems could have a material adverse effect on our
reputation, business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
Our future success is highly dependent on our ability to attract, motivate and retain key personnel.
Given the size, complexity and global reach of our business, it is important that we attract, motivate and retain qualified management and other
key employees in order to develop and commercialize new products, manage our business, and compete effectively. Our ability to do so also depends in
part on how well we maintain a strong, diverse and inclusive workplace culture that is attractive to employees. Competition for qualified personnel in the
pharmaceutical industry is intense. Current or prospective Viatris employees may have changing expectations around workplace flexibility, and a failure to
meet these evolving expectations may result in reduced ability to attract and retain talent. In addition, current or prospective Viatris employees may
experience uncertainty about their future roles at the Company as a result of our strategic initiatives, acquisitions, divestitures, integration activities or
restructuring programs. As a result, we may lose key personnel or may be unable to attract, retain and motivate qualified individuals, or the associated costs
may increase. If we fail to attract, develop, incentivize and retain key scientific, technical, commercial, regulatory, information security/privacy, or
management personnel, this could lead to loss of customers, business disruption, and a decline in revenues, adversely affect the progress of pipeline
products, or otherwise adversely affect our operations.
In addition, while we work to ensure that we have effective plans in place for management succession throughout the organization, any anticipated
or unanticipated management transition could create uncertainty, which could disrupt or result in changes to our strategy and have a negative impact on our
business. If we are unsuccessful in retaining our key employees or enforcing certain post-employment contractual provisions such as confidentiality
provisions, it may have a material adverse impact on our business, financial condition, results of operations, cash flows, ability to pay dividends or
repurchase shares, and/or stock price.
Compliance Risks
We are subject to the U.S. Foreign Corrupt Practices Act, U.S. Foreign Extortion Prevention Act, the U.K. Bribery Act, Chinese anti-corruption laws
and similar worldwide anti-corruption laws, which impose restrictions on certain conduct and may carry substantial fines and penalties.
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We are subject to the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, Chinese anti-corruption laws and similar anti-corruption laws in
other jurisdictions. These laws generally prohibit companies and their intermediaries from engaging in bribery or making other prohibited payments to
government officials or others for the purpose of obtaining or retaining business, and some have record keeping requirements. The failure to comply with
these laws could result in substantial criminal and/or monetary penalties, or subject us to costly and time consuming government investigations and
oversight. Likewise, we are impacted by the U.S. Foreign Extortion Prevention Act that criminalizes a foreign government official’s solicitation of
improper payments from U.S. companies or individuals in exchange for conferring an improper advantage. While this law targets improper demands by
foreign officials, in many countries in which we operate hospitals are owned and operated by the government, and doctors and other hospital employees
with which we do business would be considered foreign officials under these regulations. In addition, the U.S. Foreign Extortion Prevention Act may
increase enforcement of the U.S. Foreign Corrupt Practices Act and other applicable anti-corruption laws and amplify exposure for U.S. companies.
We operate in jurisdictions that have experienced corruption, bribery, pay-offs and other similar practices from time-to-time and, in certain
circumstances, such practices may be local custom. We have implemented and trained relevant employees and third-party agents regarding internal control
policies and procedures that mandate compliance with these anti-corruption laws. However, we cannot be certain that these policies and procedures will
protect us against liability. There can be no assurance that our employees or other agents will not engage in such conduct for which we might be held
responsible. If our employees or agents are found to have engaged in such practices, we could suffer severe criminal or civil penalties, reputational harm
and other consequences that could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay
dividends or repurchase shares, and/or stock price.
Our competitors, including branded pharmaceutical companies, and/or other third parties, may allege that we or our suppliers are infringing upon
their intellectual property, including in an “at risk launch” situation, which could result in substantial monetary damages, impact our ability to launch
a product and/or our ability to continue marketing a product, and/or force us to expend substantial resources in resulting litigation, the outcome of
which is uncertain.
Companies that produce branded pharmaceutical products and other patent holders routinely bring litigation against entities selling or seeking
regulatory approval to manufacture and market generic forms of their branded products, as well as other entities involved in the manufacture, supply, and
other aspects relating to API and finished pharmaceutical products. These companies and other patent holders may allege patent infringement or other
violations of intellectual property rights as the basis for filing suit against an applicant for a generic product as well as others who may be involved in some
aspect of research, supply, production, distribution, testing, packaging or other processes. Litigation often involves significant expense and can delay or
prevent introduction or sale of our generic products. If patents are held valid and infringed by our products in a particular jurisdiction, we and/or our
supplier(s) or partner(s) may need to cease manufacturing and other activities, including but not limited to selling in that jurisdiction. We may also need to
pay damages, surrender or withdraw the product, or destroy existing stock in that jurisdiction.
There also may be situations where we use our business judgment and decide to market and sell products directly or through third parties,
notwithstanding the fact that allegations of patent infringement(s) and other third-party rights have not been finally resolved by the courts (i.e., an “at-risk
launch”). The risk involved in doing so can be substantial because the remedies available to the owner of a patent for infringement may include, among
other things, a reasonable royalty on sales, damages measured by the profits lost by the patent holder, or by profits earned by the infringer. If there is a
finding by a court of willful infringement, the definition of which is subjective, such damages may be increased by up to three times. An adverse decision
in a case such as this, or a judicial order preventing us or our suppliers and partners from manufacturing, marketing, selling, and/or other activities
necessary to the manufacture and distribution of our products, could result in substantial penalties, and/or have a material adverse effect on our business,
financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
We rely on the effectiveness of our patents, trademarks, confidentiality agreements and other measures to protect our intellectual property rights.
Our ability to commercialize any branded product successfully will largely depend upon our or any partner’s or supplier’s ability to obtain,
maintain and enforce intellectual property rights of sufficient scope to lawfully prevent third parties from developing and/or marketing infringing products.
This will be of particular importance as we will look to accelerate our growth by building on the strength of our base business with an expanding portfolio
of innovative, best-in-class, intellectual property-protected assets. In the absence of adequate intellectual property or other protections, competitors may
adversely affect our branded products business by independently developing and/or marketing substantially equivalent products. It is also possible that we
could incur substantial costs if we initiate litigation against others to protect or enforce our intellectual property rights.
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We may submit patent applications covering the API, formulation, methods of making, and/or methods of use for our branded products and
branded product candidates. We may not be issued patents based on patent applications already filed or that we file in the future. Further, due to other
factors that affect patentability, and if patents are issued, they may be insufficient in scope to protect our branded products from generic competition, as
generics may be able to design around our patents. Patents are national in scope and therefore the issuance of a patent in one country does not ensure the
issuance of a patent in any other country. Furthermore, the patent position of companies in the pharmaceutical industry generally involves complex legal
and factual questions and has been and remains the subject of significant litigation. Legal standards relating to scope and validity of patent claims are
evolving and may differ in various countries. Any patents we have obtained, or obtain in the future, may be challenged, invalidated or circumvented.
Moreover, the U.S. Patent and Trademark Office or any other governmental agency may commence or institute post-grant review, inter partes review,
interference proceedings, or other challenges to our patents or patent applications. Although many of our products do not have patent protection, we
continue to take steps to defend our patents for certain of our products.
In addition, branded products often have market viability based upon the goodwill of the product name, which typically is the subject of a
trademark registration or filing. Our branded products may therefore also be subject to risks related to the loss of a trademark or patent or to competition
from generic or other branded products. Challenges can come from other businesses, individuals or governments, and governments could require
compulsory licensing of our intellectual property. Any challenge to, or invalidation, opposition or circumvention of, our intellectual property (including
patents or patent applications, trademarks or trademark applications, trade dress and copyrights) would be costly, would require significant time and
attention of our management, and could cause a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay
dividends or repurchase shares, and/or stock price.
We also rely on trade secrets, unpatented proprietary know-how, proprietary designs, trade dress, regulatory exclusivity and continuing
technological innovation that we seek to protect, in part by confidentiality agreements with licensees, suppliers, employees and consultants. These
measures may not provide adequate protection for our unpatented technology. If these agreements are breached, it is possible that we will not have
adequate remedies. Disputes may arise concerning the ownership of intellectual property or the applicability of confidentiality agreements. Furthermore,
our trade secrets and proprietary technology may otherwise become known or be independently developed by our competitors or we may not be able to
maintain the confidentiality of information relating to such products.
Our ability to enforce intellectual property rights also depends on the laws of individual countries, each country’s practices with respect to
enforcement of intellectual property rights, and the extent to which certain countries may seek to engage in policies or practices that may weaken its
intellectual property framework (e.g., a policy of routine compulsory licensing, or threat of compulsory licensing, of pharmaceutical intellectual property).
If we are unable to adequately protect our technology, trade secrets or proprietary know-how, or enforce our intellectual property rights, this could cause a
material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock
price.
Our reporting and payment obligations related to our participation in U.S. federal healthcare programs, including Medicare, Medicaid and the VA, are
complex and often involve subjective decisions that could change as a result of new business circumstances, new laws, regulations or agency guidance,
or advice of legal counsel. Any failure to comply with those obligations could subject us to investigation, penalties, and sanctions.
U.S. federal laws regarding reporting and payment obligations with respect to a pharmaceutical company’s participation in federal healthcare
programs, including Medicare, Medicaid and the VA, are complex. Because our processes for calculating applicable government prices and the judgments
involved in making these calculations involve subjective decisions and complex methodologies, these calculations are subject to risk of errors and differing
interpretations. In addition, they are subject to review and challenge by the applicable governmental agencies, and it is possible that such reviews could
result in changes that may have material adverse legal, regulatory, or economic consequences.
Any governmental agencies or authorities that have commenced, or may commence, an investigation of us relating to the sales, marketing, pricing,
quality, or manufacturing of pharmaceutical products could seek to impose, based on a claim of violation of anti-fraud and false claims laws or otherwise,
civil and/or criminal sanctions, including fines, penalties, and possible exclusion from federal healthcare programs, including Medicare, Medicaid and/or
the VA. Some of the applicable laws may impose liability even in the absence of specific intent to defraud. Furthermore, should there be ambiguity with
regard to how to properly calculate and report payments—and even in the absence of any such ambiguity—a governmental authority may take a position
contrary to a position we have taken, and may impose or pursue civil and/or criminal sanctions. Governmental agencies may also make changes in program
interpretations, requirements or conditions of participation, some of which may have implications for amounts previously estimated or paid. There can be
no assurance that our submissions will not be found by Centers for Medicare & Medicaid Services or the VA to be incomplete or incorrect. Any failure to
comply with the above
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laws and regulations, and any such penalties or sanctions could have a material adverse effect on our business, financial condition, results of operations,
cash flows, ability to pay dividends or repurchase shares, and/or stock price.
We are involved in various legal proceedings and certain government inquiries and may experience unfavorable outcomes of such proceedings or
inquiries.
We are or may be involved in various legal proceedings and certain government inquiries or investigations, including, but not limited to, patent
infringement, product liability, personal injury, securities fraud, claims with respect to the manufacture, sale, marketing and distribution of opioid products,
antitrust matters, breach of contract, consumer protection matters, and claims involving Medicare, Medicaid and/or VA reimbursements, or laws relating to
sales, marketing, and pricing practices. These proceedings may involve claims for, or the possibility of, fines, penalties, or damages involving substantial
amounts of money or other relief, including but not limited to civil or criminal fines and penalties and exclusion from participation in various government
healthcare-related programs.
Viatris is subject to investigations and extensive regulation by government agencies in the U.S., China and other developed and emerging markets
in which we operate. Criminal charges, substantial fines and/or civil penalties, limitations on Viatris’ ability to conduct business in applicable jurisdictions,
as well as reputational harm and increased public interest in the matter could result from government investigations. With respect to government
enforcement of state and federal laws, including antitrust laws, as well as private plaintiff litigation of antitrust claims, including so-called “pay for delay”
patent settlements, large verdicts, settlements or government fines are possible, especially in the U.S. and EU. Additionally, some state legislatures have
enacted, and the U.S. federal government or additional state legislatures could enact, legislation to limit patent settlements between pharmaceutical
companies and deem such patent agreements as anticompetitive. These changes could impact our ability to launch generic products prior to the originator’s
patent expiry.
In connection with the Combination, the Company has generally assumed liability for, and control of, pending and threatened legal matters
relating to the Upjohn Business and has agreed to indemnify Pfizer for liabilities arising out of such assumed legal matters. Pfizer, however, has agreed to
retain various matters – including certain specified competition law matters – to the extent they arise from conduct during the pre-Distribution period and
has agreed to indemnify the Company for liabilities arising out of such matters. If Pfizer were to successfully dispute its retention of these matters, or if
there is an adverse outcome in the matters that Pfizer has agreed to retain, this could have an adverse impact on Viatris. In addition, Viatris has agreed to
pay Pfizer an amount equal to 57% of any losses actually incurred or suffered by Viatris, its predecessors or subsidiaries, since July 29, 2019, arising out of
third-party actions relating to the manufacture, distribution, marketing, promotion or sale of opioids by or on behalf of Viatris, its predecessors or
subsidiaries. If any of these legal proceedings or inquiries were to result in an adverse outcome, the impact could have a material adverse effect on our
business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
Emerging developments in the U.S. legal landscape relative to the liability of pharmaceutical manufacturers for certain product liabilities claims
could increase our exposure to litigation costs and damages, including in connection with third party defense and indemnification demands. Moreover,
although we maintain a combination of self-insurance and commercial insurance, no reasonable amount of insurance can fully protect against all risks
because of the potential liability inherent in the business of producing pharmaceuticals for human consumption. To the extent that a loss occurs, depending
on the nature of the loss and the level of insurance coverage maintained, it could have a material adverse effect on our business, financial condition, results
of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
In addition, in limited circumstances, entities that we have acquired are party to litigation in matters under which we are, or may be, entitled to
indemnification by the previous owners. Even in the case of indemnification, there are risks inherent in such indemnities and, accordingly, there can be no
assurance that we will receive the full benefits of such indemnification, or that we will not experience an adverse result in a matter that is not indemnified,
which could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase
shares, and/or stock price.
Refer to Note 19 Litigation included in Part II, Item 8 in this Form 10-K for further discussion of certain proceedings and litigation matters.
We are increasingly dependent on IT and information systems and our systems and infrastructure face certain risks, including cybersecurity and data
leakage risks.
Significant disruptions to our IT and information systems or breaches of information security could adversely affect our business. We are
increasingly dependent on sophisticated IT and information systems and infrastructure to operate our business. The number of new vulnerabilities
identified to these systems combined with the increased number of systems that reach end of life each year creates an opportunity for successful malicious
attacks. Such attacks are increasingly sophisticated
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and are made by groups and individuals with a wide range of motives and expertise, including state and quasi-state actors, criminal groups, “hackers” and
others. Evolving work conditions, including work from home protocols, may be less secure and have introduced operational risk, including increased
cybersecurity risk. For example, groups and individuals have sought to exploit remote working environments to initiate hacking, phishing, and social
engineering attempts and malware attacks.
We and our suppliers, partners, customers and vendors have in the past experienced and will in the future likely continue to experience
cybersecurity threats and incidents, including attacks on and compromises of our systems. Although we do not believe such cybersecurity threats or
incidents have had a significant impact on us to date, there is no guarantee that a future cybersecurity threat or incident will be detected and remediated to
not have a material adverse impact on our business, reputation, financial conditions, cash flows or results of operations. Any security breach or other
disruption to our or our vendors’ IT or information systems infrastructure could also interfere with or disrupt our business operations, including our
manufacturing, distribution, R&D, sales and/or marketing activities. While we continue to invest in the monitoring, protection and resilience of our
information and data security systems, there can be no assurances that our efforts will detect, prevent, or fully recover systems or data from all breakdowns,
service interruptions, cybersecurity threats and incidents, attacks and/or breaches.
We outsource significant elements of our operations to third parties and provide IT, information and security services to some partners under
transition services agreements. Some of these third parties are outside the U.S., including significant elements of our IT and information systems
infrastructure, and as a result we are managing many independent vendor relationships with third parties who may or could have access to our confidential
information. The overall increase in supply chain attacks on companies generally, and our interdependency on third party suppliers increases the potential
for supply disruptions and service IT and information system outages. In addition to our reliance upon third parties to provide IT and information system
and security services, the market for such services continues to contract and converge, increasing both the challenges in identifying competent providers
and the impact of a breach incident with any single vendor. In the ordinary course of business, we and our vendors collect, store and transmit large amounts
of confidential information (including trade secrets or other intellectual property, proprietary business information and personal information), and it is
critical that we do so in a secure manner to maintain the confidentiality and integrity of such confidential information. The size and complexity of our and
our vendors’ systems and the large amounts of confidential information that is present on them also makes them vulnerable to security breaches from
inadvertent or intentional actions by our employees, partners or vendors, or from attacks by malicious third parties. Maintaining our access to and the
security, confidentiality and integrity of this confidential information (including trade secrets or other intellectual property, proprietary business information
and personal information) is important to our competitive business position. However, such information can be difficult and costly to protect. While we
have taken steps to identify and protect such information, and to ensure that the third-party vendors’ on which we rely have taken adequate steps to protect
such information, there can be no assurance that our or our vendors’ efforts will prevent service interruptions or security breaches in our systems or the
unauthorized or inadvertent wrongful use or disclosure of confidential or material non-public information that could adversely affect our business
operations or result in the loss, misappropriation, and/or unauthorized access, use or disclosure of, or the prevention of access to, confidential information.
A breach of our or our vendors’ security measures or the accidental loss, inadvertent disclosure, unapproved dissemination, misappropriation or
misuse of trade secrets, proprietary information, or other confidential information, whether as a result of a cybersecurity threat or incident, theft, hacking,
fraud, trickery, phishing or other forms of deception, or for any other cause, could enable others to produce competing products, use our proprietary
technology or information, and/or adversely affect our business position. Further, any such interruption, security breach, or loss, misappropriation, and/or
unauthorized access, use or disclosure of confidential information, including personal information regarding our patients and employees, could result in
financial, legal, business, and reputational harm to us and could have a material adverse effect on our business, financial condition, results of operations,
cash flows, ability to pay dividends or repurchase shares, and/or stock price.
Insurance may be insufficient or may not cover the financial, legal, business or reputational losses that may result from a breakdown, breach,
cybersecurity threat or incident or other compromise of or interruption to our IT and information systems or confidential and other sensitive information.
We also cannot ensure that any limitation of liability or indemnity provisions in our contracts, including with vendors and service providers, for a
cybersecurity threat or incident, security lapse or breach or other security incident would be enforceable or adequate or would otherwise protect us from
any liabilities or damages with respect to any particular claim. Refer to Part I, Item 1C “Cybersecurity” of this Form 10-K for additional information about
the Company’s risk management and strategy and governance with respect to cybersecurity threats and incidents.
We are subject to data privacy and security laws and regulations in many different jurisdictions and countries where we do business, and our or our
vendors’ inability to comply could result in fines, penalties, or reputational damage, and could impact the way we operate our business.
We are subject to federal, state and international data privacy and security laws and regulations governing the collection, use, disclosure,
transmission and protection of personal information, including health-related information. As the legislative and regulatory landscape for data privacy and
security continues to evolve around the world, there has been an increasing focus on data privacy and security matters that may affect our business.
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In the U.S., federal laws include HIPAA, which governs the use, disclosure, and security of protected health information by HIPAA covered
entities and business associates. Several U.S. states have enacted or proposed broad data privacy laws and regulations governing the confidentiality,
security, use and disclosure of personal information, which may impose greater restrictions than federal data privacy and security laws and regulations and
provide transparency and privacy rights for their citizens. We may also be subject to other state data privacy and security breach notification laws, state
health information privacy laws, and federal and state consumer protection laws such as the federal Controlling the Assault of Non-Solicited Pornography
and Marketing (CAN-SPAM) Act, which impose requirements for the collection, use, disclosure, transmission and protection of personal information. Each
of these laws are subject to varying interpretations by courts and regulatory or government agencies, creating complex compliance issues for us. If we, or
the third-party vendors on which we rely, fail to comply with applicable laws and regulations we could be subject to fines, penalties or sanctions, including
criminal penalties.
The EU’s and U.K.’s GDPR and local implementing regulations also impose significant compliance obligations on our organization. The GDPR
contains data protection requirements in the EU and U.K. and imposes a framework of obligations and restrictions governing the collection, processing, and
the transmission of personal information to jurisdictions outside of the EU and U.K. The GDPR affords individuals with a series of privacy rights related to
the collection, processing, and transmission of their personal information. The GDPR imposes significant compliance obligations, including required
processes and policies governing our collection, transmission, processing and use of individuals personal information. In addition, the GDPR includes
significant penalties for non-compliance, with fines up to the higher of €20 million or 4% of total annual worldwide revenue. In general, GDPR, and other
data protection laws and regulations, could require adaptation of our technologies or practices to satisfy local country data protection requirements and
standards.
In China, the laws and regulations relating to cybersecurity, data privacy and personal information continue to evolve. In 2021 and 2022, China
amended and, in some cases, adopted new laws and regulations governing the collection, transmission, processing and use of individual personal
information, including the Data Security Law, the Cybersecurity Review Measures, the Personal Information Protection Law and the Data Export Security
Review Measures. These laws and regulations restrict our ability to collect, transfer and use certain personal data, absent an application to and, in some
cases, approval from relevant governmental authorities in China. Additional regulations, guidelines, and measures relating to data privacy and data
protection are expected to be adopted, including more guidance from industry sector regulators on the catalogues of important data and publication of
implementation rules for certifications for cross-border transfers of personal information out of China, which may contain additional requirements for
transferring personal information out of mainland China.
Other countries in which we operate have, or are developing, laws and regulations governing the collection, use, securing and transmission of
personal information as well that may affect our business or require us to adapt our technologies or practices. If we, or the third-party vendors on which we
rely, fail to comply with applicable laws and regulations we could be subject to fines, penalties or sanctions, including criminal penalties.
Similar initiatives could increase the cost of developing, implementing or maintaining our IT systems, require us to allocate more resources to
compliance initiatives or increase our costs.
In addition, AI-based solutions, including generative AI, are increasingly being used in the pharmaceutical industry, including by us, and we
expect to use other systems and tools that incorporate AI-based technologies in the future. The use of AI solutions by our employees or third parties on
which we rely could lead to the public disclosure of confidential information (including personal data or proprietary information) in contravention of our
internal policies, data protection or other applicable laws, or contractual requirements. The misuse of AI solutions could also result in unauthorized access
and use of personal data of our employees, clinical trial participants, collaborators, or other third parties. In addition, the legal and regulatory landscape
surrounding AI technologies is rapidly evolving and uncertain, including in the areas of intellectual property, cybersecurity, and privacy and data
protection. Compliance with new or changing laws, regulations or industry standards relating to AI may impose significant operational costs and may limit
our ability to develop, deploy or use AI technologies. Failure to appropriately respond to this evolving landscape may result in legal liability, regulatory
action, loss of trade secrets or other intellectual property, brand and reputational harm, or lead to outcomes with unintended biases or other consequences.
A failure by us, or our third-party vendors, to comply with applicable data privacy and security laws may lead to government enforcement actions
and private litigation, which could result in financial, legal, business, and reputational harm to us and could have a material adverse effect on the way we
operate our business, our financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
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Increasing scrutiny and evolving expectations from customers, regulators, governments, investors, lenders, employees, and other stakeholders with
respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.
Companies are facing increasing expectations and scrutiny from customers, regulators, governments, investors, lenders, employees and other
stakeholders related to their environmental, social and governance practices and disclosures. Investor advocacy groups, investment funds and influential
investors are also focused on these practices, including those related to the environment, climate change, health and safety, supply chain management,
diversity, labor conditions and human rights, both in our own operations and in our supply chain. New or evolving government regulations, including in the
EU, have resulted and could continue to result in new or more stringent forms of environmental, social and governance oversight and related costs,
including increased greenhouse gas limitations, and the expansion of mandatory and voluntary reporting, due diligence, and disclosure regarding
environmental, social and governance matters, which could materially negatively impact our business and operations. In parallel, environmental, social and
governance initiatives have become increasingly controversial, and we may also face scrutiny, reputational risk, lawsuits or market access restrictions as a
result of our initiatives and disclosures. Complying with new and changing regulations will likely require us to modify or update certain of our practices,
processes, and manufacturing systems, which could require additional investment of time and resources or result in significant costs. Failure to adapt to or
comply with government regulations, regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation,
ability to do business with certain partners, access to investors and capital, and our stock price, and could lead to novel forms of litigation, including
shareholder litigation and governmental investigations or enforcement actions, sanctions or fines related to environmental, social and governance matters.
In the EU, evolving “extended producer responsibility” regulations now require companies that manufacture pharmaceutical products to pay a
significant portion of the cost of treating urban wastewater to eliminate micropollutants. These regulations may significantly increase the cost of producing
our pharmaceutical products, limit our ability to supply certain products in certain markets, or may limit our competitiveness, which may adversely impact
our market share, business and operations.
In addition, a growing number of our customers, including certain government purchasers, have adopted, or may adopt, procurement policies that
include social and environmental requirements, including, for example, requirements to monitor and conduct third party audits, or these customers may
seek to include such provisions in their procurement contract terms and conditions. These social and environmental responsibility provisions and initiatives
are subject to change, vary from jurisdiction to jurisdiction, and certain elements may be difficult and/or cost prohibitive for us to comply with given the
inherent complexity of our external supply chain and the global scope of our operations. In certain circumstances, in order to meet the requirements or
standards of our customers, we may be obligated to implement additional processes, modify our sourcing practices or make other operational choices which
may require additional investments of time and resources, increase our costs or result in inefficiencies. Alternatively, we may be ineligible to participate in
bids or tenders in certain markets, which may result in lost sales and revenues or decrease patient access to medicine.
Viatris has company wide sustainability goals in the areas of access; workplace culture; and the environment: climate change, water and waste.
Achievement of these goals depends on our development and execution of various operational strategies. The development and execution of these
strategies and achievement of our goals, including our near-term science based emissions reductions targets for scope 1, 2 and 3, are subject to risk and
uncertainties, many of which are outside of our control. There are no assurances that we will be able to successfully develop or execute our strategies and
achieve our environmental, social and governance goals.
Any of the factors mentioned above, or the perception that we or our suppliers or contract manufacturers have not responded appropriately to the
growing concern for such issues, regardless of whether we are legally required to do so, may damage our reputation and have a material adverse effect on
our business, employee relations, access to investors and capital, financial condition, results of operations, cash flows, ability to pay dividends or
repurchase shares, and/or stock price.
Our business and operations are subject to risks related to climate change.
The effects of global climate change present risks to our business. Extreme weather, natural disasters, power outages, or other conditions caused
by climate change could adversely impact our supply chain and the availability and cost of raw materials, water supply, and other components required for
the operation of our business, or result in the delay and/or disruption of our ability to deliver products. Such conditions could also result in physical damage
to our or our partners’ products, plants and distribution centers, our ability to operate in certain areas, as well as the infrastructure and facilities of hospitals,
medical care facilities and other customers. Our programs to plan for and mitigate risk and build resilience to the impacts of climate change may not be
successful, and the cost of implementing such programs may be significant. Current or future insurance arrangements may not provide protection for costs
that may arise from such events, particularly if such events are catastrophic in nature or occur in combination. In addition, regulations intended to limit
greenhouse gas emissions or water usage, such as greenhouse gas emission reduction obligations, carbon pricing, and taxes on emissions, fuel and energy,
or to mitigate the
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impacts of climate change may become more prevalent, which could increase our operating costs and the costs charged by suppliers. These events could
have a material adverse effect on the way we operate our business, including the resiliency of our supply chain, our financial condition, results of
operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
Finance Risks
There can be no guarantee that we will continue to pay dividends or repurchase shares under our share repurchase program.
Although Viatris currently intends to continue to pay quarterly dividends to its shareholders, there is no assurance that Viatris will declare and pay,
or have the ability to declare and pay, any dividends on its common stock in the future. Whether dividends will be paid, and the amount and frequency of
any such dividend payments, will depend upon a number of factors, including Viatris’ results of operations, cash flows, financial position, competitive or
commercial developments, contractual or statutory restrictions and any other factors considered relevant by the Viatris Board. Such payments, and the
amount and frequency thereof, are also subject to the other risks set forth in these risk factors. In addition, while the Board of Directors has authorized a $2
billion share repurchase program, of which $1.5 billion remains available as of February 27, 2025, there is no guarantee with respect to the timing or
amount of any future share repurchases, or that we will repurchase the full amount authorized under our current share repurchase program. Other factors,
including changes in tax or securities laws, such as the U.S. Inflation Reduction Act of 2022 which imposes a corporate excise tax of 1% on net stock
repurchases, could also impact our share repurchases. A share repurchase program could affect our stock price and increase volatility, and any
announcement of a pause in, or termination of, a share repurchase program may result in a decrease in our stock price. Payment of a cash dividend or share
repurchases will reduce the amount of cash available to the Company for other activities, including repayment of debt, investment in the business, R&D,
business development activities, or other capital expenditures. If we are unable to, or choose not to, pay a quarterly dividend or repurchase shares under our
share repurchase program, this may have a negative impact on the perception of the Company as an investment opportunity by shareholders or investment
analysts, which may in turn negatively impact our stock price.
If the intercompany terms of cross border arrangements that we have among our subsidiaries are determined to be inappropriate or ineffective, our tax
liability may increase.
We have potential tax exposures resulting from the varying application of statutes, regulations, and interpretations which include exposures on
intercompany terms of cross-border arrangements among our subsidiaries (including intercompany loans, licenses, sales, and services agreements) in
relation to various aspects of our business, including manufacturing, marketing, sales, and delivery functions. Although we believe our cross-border
arrangements among our subsidiaries are based upon internationally accepted standards and applicable law, tax authorities in various jurisdictions may
disagree with and subsequently challenge the amount of profits taxed in their country, which may result in increased tax liability, including accrued interest
and penalties, which would cause our tax expense to increase and could have a material adverse effect on our business, financial condition, results of
operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
We may not be able to maintain competitive financial flexibility and our corporate tax rate which could adversely affect us and our shareholders.
We believe that our structure and operations give us the ability to achieve competitive financial flexibility and a competitive worldwide effective
corporate tax rate. We must make material assumptions underlying our expected tax rates, including regarding the effect of certain internal reorganization
transactions, intercompany transactions, and divestitures. We cannot give any assurance as to what our effective tax rate will be, however, because of,
among other reasons, uncertainty regarding the tax policies of the jurisdictions where we operate, potential changes of laws and interpretations thereof, and
the potential for tax audits or challenges. Our actual effective tax rate may vary from our expectation and that variance may be material. For example, in
2022 the U.S. Inflation Reduction Act was signed into law which, among other things, provides for a corporate alternative minimum tax of 15% on
adjusted financial statement income and an excise tax of 1% on corporate share repurchases. Moreover, the rate of tax we pay in other jurisdictions may
increase significantly upon the adoption and implementation of the OECD Pillar Two Global Anti-Base Erosion rule, which provides for a minimum 15%
tax rate in jurisdictions where adopted. We are continuing to evaluate the impact of these laws, and other proposed changes in corporate tax laws, which
may significantly increase our global tax liabilities. In addition, the tax laws of other jurisdictions could change in the future, and such changes could cause
a material change in our effective tax rate.
Any of the factors discussed above could materially increase our overall effective income tax rate, income tax expense and cash taxes paid and
could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares,
and/or stock price.
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Unanticipated changes in our tax provisions or exposure to additional income tax liabilities and changes in income tax laws and tax rulings may have
a significant adverse impact on our effective tax rate and income tax expense.
We are subject to income taxes in many jurisdictions. Significant analysis and judgment are required in determining our worldwide provision for
income taxes. In the ordinary course of business, there are many transactions and calculations where the ultimate tax determination is uncertain. We are
currently subject to tax audits, investigations and litigations in several jurisdictions, and may be subject to other audits, investigations or litigations in the
future. The final determination of any tax audits or related litigation could be materially different from our income tax provisions and accruals.
Additionally, changes in the effective tax rate as a result of a change in the mix of earnings in countries with differing statutory tax rates, changes
in our overall profitability, changes in the valuation of deferred tax assets and liabilities, changes in tax laws or in their application, the results of audits and
the examination of previously filed tax returns and related challenges and assessments by taxing authorities, and continuing assessments of our tax
exposures could impact our tax liabilities, income tax expense and cash taxes paid, which could have a material adverse effect on our business, financial
condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
Viatris may be subject to significant U.S. tax liabilities or be obligated to indemnify Pfizer for any such tax liability imposed on Pfizer in connection
with the Combination.
In connection with the Combination, Pfizer received a private letter ruling and opinion of counsel, each to the effect that, for U.S. federal income
tax purposes, the Distribution, together with certain related transactions, would qualify as a tax-free “reorganization” and the Distribution would qualify as
a tax-free distribution. If the Distribution were determined not to have qualified for tax-free treatment, Pfizer would generally be subject to tax as if it sold
the Viatris common stock in a transaction taxable to Pfizer, which could result in a material tax liability that, under certain circumstances, Viatris may be
required to indemnify Pfizer against pursuant to the Tax Matters Agreement. If Viatris was required to indemnify Pfizer for taxes resulting from the
Distribution or certain aspects of the Separation, that indemnification obligation could be substantial and could have a material adverse effect on Viatris,
including with respect to our business, financial condition and results of operations.
Currency fluctuations and changes in exchange rates have impacted and could continue to adversely affect our business, financial condition, results of
operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
Although we report our financial results in U.S. Dollars, a significant portion of our revenues, indebtedness and other liabilities and our costs are
denominated in non-U.S. currencies, including among others the Chinese Renminbi, Euro, Swedish Krona, Indian Rupee, Korean Won, Japanese Yen,
Australian Dollar, Canadian Dollar, and British Pound Sterling. Our financial condition, results of operations and cash flows, have in the past been and may
in the future be adversely affected by certain movements in currency exchange rates. Defaults or restructurings in other countries could have a similar
adverse impact on our financial condition, results of operations and cash flows. In addition, there remains significant international pressure on the Chinese
government to adopt a more flexible currency policy, including from the U.S. government, which designated China as a “currency manipulator” in August
2019 and subsequently removed such designation in January 2020, which could result in greater fluctuation of the Renminbi against the U.S. dollar. From
time to time, we may implement currency hedges intended to reduce our exposure to changes in foreign currency exchange rates. However, our hedging
strategies may not be successful, and any of our unhedged foreign exchange exposures will continue to be subject to market fluctuations.
In addition, Viatris also faces risks arising from currency devaluations and the imposition of cash repatriation restrictions and exchange controls.
Currency devaluations result in a diminished value of funds denominated in the currency of the country instituting the devaluation. Cash repatriation
restrictions and exchange controls may limit our ability to convert foreign currencies into U.S. dollars or to remit dividends and other payments by our
foreign subsidiaries or businesses located in or conducted within a country imposing restrictions or controls. For example, in China the conversion of
currency in the “capital account” (e.g., capital items such as direct investments or loans) requires the approval of, or registration or filing with, relevant
governmental authorities in China, which could materially and adversely affect the ability of our Chinese operating subsidiaries and affiliated companies to
obtain foreign currencies through equity or debt financing or for capital expenditures, therefore impeding our overall business operations in China. Should
we determine the need to repatriate or convert cash held in countries that have significant restrictions or controls in place, including in China, we may be
unable to repatriate or convert such cash, or be unable to do so without incurring substantial costs.
The occurrence of any of the above risks could cause a material adverse effect on our business, financial condition, results of operations, cash
flows, ability to pay dividends or repurchase shares, and/or stock price.
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We have significant indebtedness, which could lead to adverse consequences or adversely affect our financial position and prevent us from fulfilling
our obligations under such indebtedness, and any refinancing of this debt could be at significantly higher interest rates.
Our level of indebtedness could have important consequences, including but not limited to:
•
increasing our vulnerability to general adverse economic and industry conditions;
•
requiring us to dedicate a substantial portion of our cash flow from operations to make debt service payments, or repay debt, thereby reducing the
availability of cash flow to fund working capital, capital expenditures, acquisitions and investments, dividend payments or share repurchases, and
other general corporate purposes;
•
limiting our flexibility in planning for, or reacting to, challenges and opportunities, and changes in our businesses and the markets in which we
operate;
•
limiting our ability to obtain additional financing to fund our working capital, capital expenditures, acquisitions and debt service requirements and
other financing needs;
•
increasing our vulnerability to increases in interest rates in general related to any of our indebtedness that bears interest at floating rates or when
refinancing maturing debt at higher rates;
•
increasing our exposure to currency fluctuations, since a significant portion of our indebtedness is denominated in currencies other than the U.S.
dollar, such as our Euro and Japanese yen denominated debt; and
•
placing us at a competitive disadvantage to our competitors that have less debt.
Our ability to service our indebtedness will depend on our future operating performance and financial results, which will be subject, in part, to
factors beyond our control, including interest rates and general economic, financial and business conditions. If we do not have sufficient cash flow to
service our indebtedness, including the repayment of significant near-term indebtedness, we may need to refinance all or part of our existing indebtedness,
borrow more money or sell securities or assets, some or all of which may not be available to us at acceptable terms or at all. In addition, we may need to
incur additional indebtedness in the future in the ordinary course of business. Although the terms of our credit agreements and our bond indentures allow us
to incur additional debt, this is subject to certain limitations which may preclude us from incurring the amount of indebtedness we otherwise desire.
A downgrade in the credit rating of Viatris or any indebtedness of Viatris or its subsidiaries could increase the cost of further borrowings or
refinancings of such indebtedness, limit access to sources of financing in the future or lead to other adverse consequences. We have in the past been and
may in the future be subject to ratings downgrades or negative outlooks by ratings agencies, which could negatively impact our ability to raise debt or
borrow funds in amounts or on terms that are favorable to us, if at all.
Our credit facilities, senior unsecured notes, commercial paper program, other outstanding indebtedness and any additional indebtedness we incur
in the future impose, or may impose, significant operating and financial restrictions on us. These restrictions limit our ability to, among other things, incur
additional indebtedness, make investments, pay certain dividends, prepay other indebtedness, sell assets, incur certain liens, enter into agreements with our
affiliates, or restrict our subsidiaries’ ability to pay dividends, merge or consolidate. In addition, our credit facilities require us to maintain specified
financial ratios. A breach of any of these covenants or our inability to maintain the required financial ratios could result in a default under the related
indebtedness. If a default occurs, the relevant lenders could elect to declare our indebtedness, together with accrued interest and other fees, to be
immediately due and payable. These factors could have a material adverse effect on our business, financial condition, results of operations, cash flows,
ability to pay dividends or repurchase shares, and/or stock price.
If we incur additional debt, the risks described above could intensify. If global credit markets contract, future debt financing may not be available
to us when required or may not be available on acceptable terms or at all, and as a result we may be unable to grow our business, take advantage of
business opportunities, respond to competitive pressures or satisfy our obligations under our indebtedness. Any of the foregoing could have a material
adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
There are inherent uncertainties involved in estimates, judgments and assumptions used in the preparation of financial statements in accordance with
U.S. GAAP. Any future changes in estimates, judgments and assumptions used or necessary revisions to prior estimates, judgments or assumptions or
changes in accounting standards could lead to a restatement or revision to previously issued financial statements.
The consolidated and condensed consolidated financial statements included in the periodic reports we file with the SEC are prepared in
accordance with U.S. GAAP. The preparation of financial statements in accordance with U.S. GAAP involves making estimates, judgments and
assumptions that affect reported amounts of assets, liabilities, revenues, expenses
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and income. Estimates, judgments and assumptions are inherently subject to change in the future and any necessary revisions to prior estimates, judgments
or assumptions could lead to a restatement. Furthermore, although we have recorded reserves for certain critical accounting estimates, including litigation
related contingencies based on estimates of probable future costs, actual costs in the future could be substantially in excess of those reserves. Also, any new
or revised accounting standards may require adjustments to previously issued financial statements. Any such changes could result in corresponding changes
to the amounts of liabilities, revenues, expenses and income and could have a material adverse effect on our business, financial condition, results of
operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
We must maintain adequate internal controls and be able to provide an assertion as to the effectiveness of such controls on an annual basis.
Effective internal controls are necessary for us to provide reasonable assurance with respect to our financial reports. We spend a substantial
amount of management and other employee time and resources to comply with laws, regulations and standards relating to corporate governance and public
disclosure. In the U.S., such regulations include the Sarbanes-Oxley Act of 2002, SEC regulations and the NASDAQ listing standards. In particular,
Section 404 of the Sarbanes-Oxley Act of 2002 requires management’s annual review and evaluation of our internal control over financial reporting and
attestation as to the effectiveness of these controls by our independent registered public accounting firm. Additionally, internal control over financial
reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the circumvention or
overriding of controls, or fraud. Therefore, even effective internal controls can provide only reasonable assurance with respect to the preparation and fair
presentation of financial statements. In addition, projections of any evaluation of effectiveness of internal control over financial reporting to future periods
are subject to the risk that the control may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate. If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved
controls, this could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends or
repurchase shares, and/or stock price.
Viatris has suffered and in the future could suffer additional losses due to impairment charges.
Viatris has significant amounts of goodwill, IPR&D and intangible assets on its balance sheet. Viatris tests goodwill for impairment during the
second quarter of every fiscal year, and on an interim date should events or changes in circumstances indicate the carrying value of goodwill may not be
recoverable in accordance with ASC 350, Goodwill and Other Intangible Assets. If the fair value of a reporting unit is revised downward due to declines in
business performance or other factors, an impairment under ASC 350 could result and a non-cash charge could be required. Viatris tests intangible assets
with indefinite lives for impairment on an annual basis and intangible assets and IPR&D with finite lives for impairment whenever events or changes in
circumstances indicate the carrying amount of an asset may not be recoverable. This assessment of the recoverability of intangible assets could result in an
impairment and a non-cash charge could be required. In addition, we have incurred and may in the future incur significant impairment charges or losses.
For instance, during the year ended December 31, 2024, the Company recorded significant goodwill and other long-lived asset impairment charges. Such
impairments or losses have in the past and could in the future materially affect Viatris’ reported net earnings, business, financial condition, results of
operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
Viatris may be adversely affected by disruptions in the credit markets, including disruptions that reduce customers’ access to credit and increase the
costs to customers of obtaining credit.
The credit markets have historically been volatile and therefore it is not possible to predict the ability of Viatris’ customers to access short-term
financing and other forms of capital. If a disruption in the credit markets were to occur, Viatris could be unable to refinance its outstanding indebtedness on
reasonable terms or at all. Such a disruption could also pose a risk to Viatris’ business if customers or suppliers are unable to obtain financing to meet their
payment or delivery obligations. In addition, customers may decide to downsize, defer or cancel contracts which could negatively affect our revenue.
Recently, interest rates have increased above historical rates paid by Viatris. As such, any debt we refinance in the future may increase, even
substantially, our interest expense in future periods. Further, Viatris had approximately $257 million of floating rate debt as of December 31, 2024. A one
percentage point increase in the average interest rate of this debt would increase the combined interest expense by approximately $2.6 million per year.
Accordingly, a spike in interest rates could adversely affect our results of operations and cash flows.
Viatris has certain material obligations relating to defined benefit pension and termination benefit programs.
Viatris has certain material pension and post-employment benefit obligations associated with acquired businesses in both the U.S. and foreign
countries. Our obligations under these plans are significant and future funding obligations are subject to increased interest rates on asset and liability
calculations. Each of these liabilities and the related future payment obligations could restrict cash available for Viatris’ operations, capital expenditures,
acquisitions, dividend payments, share repurchases, and other requirements, and may materially affect Viatris’ financial condition and liquidity.
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General Risks
The market price of our common stock has been and may continue to be volatile, and the value of your investment could materially decline.
Investors who hold shares of Viatris common stock may not be able to sell their shares at or above the price at which they acquired them. The
price of Viatris’ common stock has in the past and may continue to fluctuate materially from time to time, including as a result of the other risks described
herein, and we cannot predict the price of our common stock at any given time. In addition, the stock market in general, including the market for
pharmaceutical companies, has experienced significant price and volume fluctuations which may materially harm the market price of our common stock,
regardless of our operating performance. In addition, the price of our common stock may be affected by the valuations and recommendations of the
analysts who cover us, and if our results do not meet the analysts’ forecasts and expectations, the price of our common stock could decline as a result of
analysts lowering their valuations and recommendations or otherwise. Following periods of volatility in the market and/or in the price of a company’s
stock, securities class-action litigation actions have been instituted against companies (including Viatris) and may be instituted against us in the future.
Such litigation has in the past and may in the future result in substantial costs and diversion of management’s attention and resources, which could have a
material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock
price. In addition, if we or our stockholders offer or sell shares of our common stock or securities convertible into or exchangeable or exercisable for shares
of our common stock, this or the possibility thereof, may depress the future trading price of our common stock and the voting power of our then existing
stockholders may be diluted if such a transaction were to occur.
The expansion of social media platforms presents new risks and challenges.
To the extent that we seek to use social media tools as a means to communicate about our products and/or business, there are uncertainties as to
the rules that apply to such communications, or as to the interpretations that authorities will apply to the rules that exist. As a result, despite our efforts to
monitor evolving social media communication guidelines and comply with applicable rules, there is risk that our use of social media for such purposes may
cause us to be found in violation of them. Our employees may knowingly or inadvertently make use of social media tools in ways that may not be aligned
with our social media strategy, may give rise to liability, or could lead to the loss of material non-public information, trade secrets or other intellectual
property, or public exposure of personal information (including sensitive personal information) of our employees, clinical trial patients, customers, and
others. In addition, negative posts or comments about us on any social media website could damage our reputation. Any of the above risks could have a
material adverse effect on our business, reputation, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares,
and/or stock price.
Provisions in the Viatris Charter and Viatris Bylaws and of applicable law may prevent or delay an acquisition of Viatris, which could decrease the
trading price of Viatris common stock.
The Viatris Charter, Viatris Bylaws and Delaware law contain provisions that may have the effect of deterring takeovers by making such takeovers
more expensive to the acquiror and by encouraging prospective acquirors to negotiate with the Viatris Board rather than to attempt a hostile takeover. These
provisions include rules regarding how stockholders may present proposals or nominate directors for election at shareholder meetings and the right of the
Viatris Board to issue preferred stock without shareholder approval. Delaware law also imposes some restrictions on mergers and other business
combinations between Viatris and any holder of 15% or more of Viatris’ outstanding common stock.
These provisions are intended to protect Viatris’ stockholders from coercive or otherwise unfair takeover tactics by requiring potential acquirors to
negotiate with the Viatris Board and by providing the Viatris Board with more time to assess any acquisition proposal. These provisions are not intended to
make Viatris immune from takeovers. However, these provisions apply even if the offer may be considered beneficial by some stockholders and could
delay or prevent an acquisition that the Viatris Board determines is not in the best interests of Viatris and its stockholders. Accordingly, if the Viatris Board
determines that a potential business combination transaction is not in the best interests of Viatris and its stockholders, but certain stockholders believe that
such a transaction would be beneficial to Viatris and its stockholders, such stockholders may elect to sell their shares in Viatris and the trading price of
Viatris common stock could decrease. These and other provisions of the Viatris Charter, the Viatris Bylaws and the DGCL could have the effect of
delaying, deferring or preventing a proxy contest, tender offer, merger or other change in control, which may have a material adverse effect on Viatris’
business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
The exclusive forum provisions in the Viatris Charter could discourage lawsuits against Viatris and its directors and officers.
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The Viatris Charter provides that unless Viatris, through approval of the Viatris Board, otherwise consents in writing, the Court of Chancery of the
State of Delaware or, if and only if the Court of Chancery of the State of Delaware dismisses such action for lack of subject matter jurisdiction, another
state court sitting in the State of Delaware (or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District
of Delaware), will be the sole and exclusive forum for any derivative action or proceeding brought on behalf of Viatris, any action or proceeding asserting a
claim of breach of a fiduciary duty owed by any director or officer or other employees of Viatris to Viatris or its stockholders, creditors or other
constituents, any action asserting a claim against Viatris or any of its directors, officers or other employees arising pursuant to, or seeking to enforce any
right, obligation or remedy under, any provision of the DGCL or the Viatris Charter or the Viatris Bylaws, as each may be amended from time to time, any
action or proceeding asserting a claim against Viatris or any of its directors, officers or other employees governed by the internal affairs doctrine or any
action or proceeding as to which the DGCL (as it may be amended from time to time) confers jurisdiction on the Court of Chancery of the State of
Delaware. The Viatris Charter also provides that unless Viatris (through approval of the Viatris Board) consents in writing to the selection of an alternative
forum, the federal district courts of the United States of America, to the fullest extent permitted by law, shall be the sole and exclusive forum for the
resolution of any action asserting a cause of action arising under the Securities Act. The enforceability of similar choice of forum provisions in other
companies’ charters and bylaws has been challenged in legal proceedings, and it is possible that, in connection with claims arising under federal securities
laws or otherwise, a court could find the exclusive forum provisions contained in the Viatris Charter to be inapplicable or unenforceable.
These exclusive forum provisions may limit the ability of Viatris’ stockholders to bring a claim in a judicial forum that such stockholders find
favorable for disputes with Viatris or its directors or officers, which may discourage such lawsuits against Viatris or its directors or officers. Alternatively, if
a court were to find these exclusive forum provisions inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or
proceedings described above, Viatris may incur additional costs associated with resolving such matters in other jurisdictions or forums, which could
materially and adversely affect Viatris’ business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or
stock price.
Our business and operations could be negatively affected by pressures from outside of the control of the company, including, but not limited to,
shareholder actions, government regulations and disclosure requirements, and other market dynamics, which could cause us to incur significant
expenses, hinder execution of our business strategy and negatively impact our share price.
Shareholder actions, government regulations and disclosure requirements, and other market dynamics involving corporate governance,
environmental and social matters, human capital, strategic direction and operations have become increasingly prevalent. Shareholder challenges, extensive
government regulation, and the potential for additional intervention in these areas, may create a significant distraction or burden for our management and
employees, increase our costs, negatively impact our ability to execute our business plans, require our management to expend significant time and
resources, create uncertainties with respect to our financial position and operations, adversely affect our ability to attract and retain key employees or result
in loss of potential business opportunities with our current and potential customers and business partners. In addition, such actions, regulation and
intervention may cause significant fluctuations in our share price based on temporary or speculative market perceptions, uncertainties or other factors that
do not necessarily reflect the underlying fundamentals and prospects of our business, which could cause the market value of our common stock to decline.
ITEM 1B.
Unresolved Staff Comments
None.
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ITEM 1C.
Cybersecurity
Viatris operates in a complex and rapidly changing environment that involves many potential risks, including IT and cybersecurity risks. Risk
management is an enterprise-wide objective and is subject to oversight by the Viatris Board and its committees. It is the responsibility of Viatris’
management and employees to identify material risks to our business and to implement and administer risk management and mitigation processes and
programs, while also maintaining reasonable flexibility in how we operate. Our internal audit function coordinates cross functionally to maintain the
Company’s enterprise risk assessment, including the identification of key and emerging risks, and reviews and refreshes this analysis quarterly with
executive management. For each key or emerging risk identified, the Company establishes risk monitoring ownership, from which quarterly updates are
collected for executive management and the Viatris Board’s Compliance and Risk Oversight Committee.
With respect to IT and cybersecurity risks, Viatris maintains an information security program that is aligned with the National Institute of
Standards and Technology Cybersecurity Framework, and which is designed to govern, identify, protect, detect, respond to and recover from cybersecurity
threats. Viatris’ information security program includes policies, procedures, cybersecurity awareness communications, testing, and training for employees
(including mandatory training programs for system users), system monitoring, risk reduction, vulnerability and patch management and monitoring of
external developments. The information security team is responsible for defining and overseeing the execution of the Company’s information security
program and strategy. The Viatris IT team, led by the Chief Information Officer, is responsible for ongoing security operations such as maintaining
firewalls and patch management. In addition, the delivery of many information security programs relies on IT resources to execute the selection, delivery
and implementation of security solutions, such as end-point protection and end-of-life protocols.
The Company’s Chief Information Security Officer & Head of Global Security, under the direction of the Company’s Chief Compliance Officer,
reports quarterly to an internal risk committee of senior management, which includes the CEO, CFO, Chief Legal Officer, Chief People Officer, Chief
Corporate Affairs Officer, Chief Information Officer, Chief Compliance Officer, Chief Quality Officer, Chief Supply Officer, Chief R&D Officer and
Regional Presidents, as well as the Viatris Board on the progress of the information security program and overall security status. Viatris’ current Chief
Information Security Officer & Head of Global Security has over 25 years of experience in information security within the pharmaceutical industry.
As part of its information security program, Viatris has adopted a Cybersecurity Incident Response Plan (CIRP) to establish a guide for Viatris’
leadership and incident response stakeholders through an “incident” – a single event or a set of anomalous and adverse “events” or, for purposes of the
CIRP, a change in a system, technology device or environment that could impact the confidentiality, integrity, availability or safety of Viatris’ data,
employees or assets, caused by malicious intent or accident and impacting Viatris’ network, computing systems, digital information, employees or assets.
The CIRP is managed by the Viatris global information security team and is reviewed at least annually. Viatris tests the CIRP through technical exercises
semi-annually, reviews the CIRP with executive management annually, and periodically conducts executive tabletop exercises/scenarios. The CIRP
provides an overview of critical actions to take through the incident response lifecycle and contains a severity matrix used to guide the Company’s incident
response stakeholders on communication and escalation protocols. The severity of the incident guides the determination of the parties to whom the incident
will be escalated, and the Company may decide to seek assistance from a third-party incident response vendor.
Viatris’ Cybersecurity Incident Response Team (CIRT) reports to the Chief Information Security Officer & Head of Global Security and has the
role of investigating and executing incident protocols. The CIRT is responsible for determining the potential impacts to the Company, including severity,
notifying appropriate parties pursuant to the CIRP and determining whether to engage a third-party incident response vendor, among other responsibilities.
Critical incidents require implementation of the global crisis plan and high severity incidents require notification to the executive leadership team once such
an incident is confirmed. The Company’s Disclosure Controls and Procedures also require (i) the Company’s Information Security function to monitor and
escalate, as appropriate, cybersecurity incidents or series of related incidents (including with respect to any third party provider to the Company of IT
services) and (ii) the Disclosure Committee to determine, without unreasonable delay, the materiality of any such escalated cybersecurity incidents or series
of related incidents with input from Global Compliance, Information Security, Legal, Finance and other groups, as appropriate.
The Company participates in several industry and third-party threat monitoring and information-sharing services, and these engagements provide
insight into vulnerabilities and threats which are incorporated into the security operations and IT remediation. Key aspects of the information security
program are also provided by third-party managed security providers, including first- and second-line support for incident response and the Company’s
vulnerability assessment process. Our suppliers, subcontractors and third-party service providers, including third-party managed security providers, are
subject to cybersecurity obligations and controls. We conduct initial risk assessments of third-party suppliers and service providers based
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on various factors and then review and monitor these third-party suppliers and service providers based on their relative assessed level of risk. We also
require our suppliers, subcontractors and third-party service providers to agree to cybersecurity-related contractual terms and conditions of purchase.
The Compliance and Risk Oversight Committee of the Viatris Board is responsible for reviewing management’s exercise of its responsibility to
identify, assess, and manage material risks not allocated to the Viatris Board or another Committee of the Viatris Board, including data security programs
and cybersecurity and IT. In the event of a severe cybersecurity incident, such as a ransomware attack or other incident that has a severe adverse effect on
Viatris’ operations, critical systems or sensitive data, or which may cause severe reputational damage, executive management may determine that it is
necessary to notify the Viatris Board or the Compliance and Risk Oversight Committee about such a cybersecurity incident immediately. Otherwise, the
Compliance and Risk Oversight Committee receives reports from executive management on data security, cybersecurity and information security-related
matters on at least a quarterly basis, including with respect to related risks, risk management, risk reduction programs, and relevant legislative, regulatory,
and technical developments. On a biannual basis, the Compliance and Risk Oversight Committee and chairs of each other Committee of the Viatris Board
receive an information security update from the Company’s Chief Information Security Officer & Head of Global Security, the Chief Compliance Officer
and the Chief Information Officer. The full Viatris Board receives a report on the respective quarterly discussions from the Chair of the Compliance and
Risk Oversight Committee each quarter.
We and our suppliers, partners, customers and vendors have in the past experienced and will in the future likely continue to experience
cybersecurity threats and incidents, including attacks on and compromises of our systems. Although we do not believe such cybersecurity threats or
incidents have had a significant impact on us to date, there is no guarantee that a future cybersecurity threat or incident will be detected and remediated to
not have a material adverse impact on our business, reputation, financial conditions, cash flows or results of operations. For additional information
regarding how cybersecurity threats are reasonably likely to materially affect our business, financial condition, results of operations, cash flows, ability to
pay dividends, repurchase shares, and/or stock price, see Part I, Item 1A Risk Factors – “We are increasingly dependent on IT and information systems and
our systems and infrastructure face certain risks, including cybersecurity and data leakage risks.” of this Form 10-K.
ITEM 2.
Properties
For information regarding properties, refer to Item 1 “Business” in Part I of this Form 10-K.
ITEM 3.
Legal Proceedings
For information regarding legal proceedings, refer to Note 19 Litigation included in Part II, Item 8 of this 10-K.
ITEM 4.
Mine Safety Disclosures
Not applicable.
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PART II
ITEM 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Our common stock is traded on the NASDAQ Stock Market under the symbol “VTRS”.
As of February 21, 2025, there were approximately 95,287 holders of record of shares of Viatris common stock.
The Company paid quarterly cash dividends of $0.12 per share on the Company’s issued and outstanding common stock on March 18, 2024, June
14, 2024, September 13, 2024 and December 13, 2024. On February 24, 2025, the Company’s Board of Directors declared a quarterly cash dividend of
$0.12 per share on the Company’s issued and outstanding common stock, which will be payable on March 18, 2025 to shareholders of record as of the
close of business on March 10, 2025. The declaration and payment of future dividends to holders of the Company’s common stock will be at the discretion
of the Board of Directors, and will depend upon factors, including but not limited to, the Company’s financial condition, earnings, capital requirements of
its businesses, legal requirements, regulatory constraints, industry practice, and other factors that the Board of Directors deems relevant. The Company also
paid quarterly cash dividends of $0.12 per share on the Company’s issued and outstanding common stock in each of the four quarters of 2023 and 2022.
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STOCK PERFORMANCE GRAPH
Viatris common stock has been listed on the NASDAQ under the symbol “VTRS” since November 17, 2020. Prior to that time, there was no
public market for our common stock. The graph below compares Viatris Inc.’s cumulative total shareholder return on common stock with the cumulative
total returns of the S&P 500 index and the Dow Jones US Pharmaceuticals index. The graph tracks the performance of a $100 investment in our common
stock and in each index (with the reinvestment of all dividends) from November 16, 2020 to December 31, 2024.
November 16,

2020
December 31,

2020
December 31,

2021
December 31,

2022
December 31,

2023
December 31,

2024
Viatris Inc.
100.00 
119.67 
88.40 
75.78 
77.34 
92.55 
S&P 500
100.00 
115.21 
148.28 
121.43 
153.35 
191.72 
Dow Jones U.S. Pharmaceuticals
100.00 
104.70 
130.85 
141.10 
141.08 
152.31 
ITEM 6.
[Reserved]
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ITEM 7.
Management’s Discussion and Analysis of Financial Condition And Results of Operations
The following discussion and analysis addresses material changes in the financial condition and results of operations of Viatris Inc. and
subsidiaries for the periods presented. Unless context requires otherwise, the “Company,” “Viatris,” “our” or “we” refer to Viatris Inc. and its subsidiaries.
This discussion and analysis should be read in conjunction with the consolidated financial statements and the related notes to consolidated
financial statements included in Part II, Item 8 in this Form 10-K, and our other SEC filings and public disclosures.
This Form 10-K contains “forward-looking statements”. These statements are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements may include, without limitation, statements about the goals or outlooks with respect to the
Company’s strategic initiatives and priorities, including but not limited to divestitures, acquisitions, strategic alliances, collaborations, or other potential
transactions; the benefits and synergies of such divestitures, acquisitions, strategic alliances, collaborations, or other transactions, or restructuring programs;
future opportunities for the Company and its products; and any other statements regarding the Company’s future operations, financial or operating results,
capital allocation, dividend policy and payments, share repurchases, debt ratio and covenants, anticipated business levels, future earnings, planned
activities, anticipated growth, market opportunities, strategies, competitions, commitments, confidence in future results, efforts to create, enhance or
otherwise unlock value, and other expectations and targets for future periods. Forward-looking statements may often be identified by the use of words such
as “will”, “may”, “could”, “should”, “would”, “project”, “believe”, “anticipate”, “expect”, “plan”, “estimate”, “forecast”, “potential”, “pipeline”, “intend”,
“continue”, “target”, “seek” and variations of these words or comparable words. Because forward-looking statements inherently involve risks and
uncertainties, actual future results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or
contribute to such differences include, but are not limited to:
•
the possibility that the Company may not realize the intended benefits of, or achieve the intended goals or outlooks with respect to, its strategic
initiatives and priorities (including divestitures, acquisitions, strategic alliances, collaborations, or other potential transactions) or accelerate its
growth by building on the strength of its base business with an expanding portfolio of innovative, best-in-class, patent-protected assets;
•
the possibility that the Company may be unable to achieve intended or expected benefits, goals, outlooks, synergies, growth opportunities and
operating efficiencies in connection with divestitures, acquisitions, strategic alliances, collaborations, or other transactions, or restructuring
programs, within the expected timeframes or at all;
•
the ongoing risks and uncertainties associated with our recent divestitures;
•
goodwill or impairment charges or other losses;
•
the Company’s failure to achieve expected or targeted future financial and operating performance and results;
•
the potential impact of natural or man-made disasters, public health outbreaks, epidemics, pandemics, or social disruption in regions where we or
our partners or suppliers operate;
•
actions and decisions of healthcare and pharmaceutical regulators;
•
changes in relevant laws, regulations and policies and/or the application or implementation thereof, including but not limited to tax, healthcare and
pharmaceutical laws, regulations and policies globally;
•
the ability to attract, motivate and retain key personnel;
•
the Company’s liquidity, capital resources and ability to obtain financing;
•
any regulatory, legal or other impediments to the Company’s ability to bring new products to market, including but not limited to “at-risk
launches”;
•
success of clinical trials and the Company’s or its partners’ ability to execute on new product opportunities and develop, manufacture and
commercialize products;
•
any changes in or difficulties with the Company’s manufacturing facilities, including with respect to inspections, remediation and restructuring
activities, supply chain or inventory or the ability to meet anticipated demand;
•
the scope, timing and outcome of any ongoing legal proceedings, including government inquiries or investigations, and the impact of any such
proceedings on the Company;
•
any significant breach of data security or data privacy or disruptions to our IT systems;
•
risks associated with having significant operations globally;
•
the ability to protect intellectual property and preserve intellectual property rights;
•
changes in third-party relationships;
•
the effect of any changes in the Company’s or its partners’ customer and supplier relationships and customer purchasing patterns, including
customer loss and business disruption being greater than expected following an adverse regulatory action, acquisition or divestiture;
•
the impacts of competition, including decreases in sales or revenues as a result of the loss of market exclusivity for certain products;
•
changes in the economic and financial conditions of the Company or its partners;
•
uncertainties regarding future demand, pricing and reimbursement for the Company’s products;
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•
uncertainties and matters beyond the control of management, including but not limited to general political and economic conditions, tariffs and
trade policies, inflation rates and global exchange rates; and
•
inherent uncertainties involved in the estimates and judgments used in the preparation of financial statements, and the providing of estimates of
financial measures, in accordance with U.S. GAAP and related standards or on an adjusted basis.
For more detailed information on the risks and uncertainties associated with Viatris, see the risks described in Part I, Item 1A in this Form 10-K,
and our other filings with the SEC. You can access Viatris’ filings with the SEC through the SEC website at www.sec.gov or through our website, and
Viatris strongly encourages you to do so. Viatris routinely posts information that may be important to investors on our website at investor.viatris.com, and
we use this website address as a means of disclosing material information to the public in a broad, non-exclusionary manner for purposes of the SEC’s
Regulation Fair Disclosure (Reg FD). The contents of our website are not incorporated by reference in this Form 10-K and shall not be deemed “filed”
under the Securities Exchange Act of 1934, as amended. Viatris undertakes no obligation to update any statements herein for revisions or changes after the
filing date of this Form 10-K other than as required by law.
Company Overview
Viatris is a global healthcare company whose breadth and scale we believe make it uniquely positioned to address healthcare needs globally. With
a mission to empower people worldwide to live healthier at every stage of life, Viatris supplies high-quality medicines to approximately 1 billion patients
around the world each year. The Company has a global footprint, an extensive portfolio of medicines that is well-diversified across therapeutic areas, a one-
of-a-kind global supply chain designed to reach more people when and where they need them, and the scientific expertise to address some of the world's
most enduring health challenges.
Viatris’ executive management team is focused on ensuring that the Company is optimally structured and efficiently resourced to deliver
sustainable value to patients, shareholders, customers and other key stakeholders. The Company operates in more than 165 countries and territories with
approximately 32,000 employees. The Company has 26 manufacturing and packaging sites worldwide, more than 1,400 approved molecules, and industry
leading commercial, R&D, regulatory, manufacturing, legal and medical expertise. Viatris’ portfolio consists of generics (including complex products),
globally recognized iconic brands, and an expanding portfolio of innovative medicines. Viatris is headquartered in the U.S., with global centers in
Pittsburgh, Pennsylvania, Shanghai, China and Hyderabad, India.
Viatris has four reportable segments: Developed Markets, Greater China, JANZ, and Emerging Markets. The Company reports segment
information on the basis of markets and geography, which reflects its focus on bringing its large and diversified portfolio of branded and generic products,
including complex products, to people in markets everywhere. Our Developed Markets segment comprises our operations primarily in North America and
Europe. Our Greater China segment includes our operations in mainland China, Taiwan and Hong Kong. Our JANZ segment consists of our operations in
Japan, Australia and New Zealand. Our Emerging Markets segment encompasses our presence in more than 125 countries with developing markets and
emerging economies including in Asia, Africa, Eastern Europe, Latin America and the Middle East as well as the Company’s ARV franchise.
Certain Market and Industry Factors
The global pharmaceutical industry is a highly competitive and highly regulated industry. As a result, we face a number of industry-specific
factors and challenges, which can significantly impact our results. The following discussion highlights some of these key factors and market conditions.
The process of obtaining regulatory approval to manufacture and market new branded and generic pharmaceutical products is rigorous, time
consuming, costly, and inherently unpredictable. Complex products are more difficult, costly and time-consuming to receive regulatory approval for and
bring to market. Any delay in regulatory approval could impact the commercial or financial success of a product. Regulatory approval, if and when
obtained, may be limited in scope. Even if regulatory approvals for new products are obtained, the success of those products is dependent upon market
acceptance.
Generic products, particularly in the U.S., generally contribute most significantly to revenues and gross margins at the time of their launch, and
even more so in periods of market exclusivity, or in periods of limited generic competition. As such, the timing of new product introductions can have a
significant impact on the Company’s financial results. The entrance into the market of additional competition generally has a negative impact on the
volume and pricing of the affected products. Additionally, pricing is often affected by factors outside of the Company’s control. Conversely, generic
products generally experience less volatility over a longer period of time in Europe as compared to the U.S., primarily due to the role of
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government oversight of healthcare systems in the region. In addition, U.S. governmental agencies provide funding for certain products in our Emerging
Markets region. We expect that any reduction in that funding will have a negative impact on our financial condition, results of operations or cash flows.
For branded products, the majority of the product’s commercial value is usually realized during the period in which the product has market
exclusivity. In the U.S. and some other countries, when market exclusivity expires and generic versions of a product are approved and marketed, there can
often be very substantial and rapid declines in the branded product’s sales. For example, generic entry may occur for Amitiza® 24 μg in Japan in December
2025 upon expiration of patent exclusivity.
Certain markets in which we do business outside of the U.S. have undergone government-imposed price reductions, and further government-
imposed price reductions are expected in the future. Such measures, along with the tender systems discussed below, are likely to have a negative impact on
sales and gross profit in these markets. However, government initiatives in certain markets that appear to favor generic products could help to mitigate this
unfavorable effect by increasing rates of generic substitution and penetration.
Additionally, a number of markets in which we operate outside of the U.S. have implemented, or may implement, tender systems for generic
pharmaceuticals in an effort to lower prices. Generally speaking, tender systems can have an unfavorable impact on sales and profitability. Under such
tender systems, manufacturers submit bids that establish prices for generic pharmaceutical products. Upon winning the tender, the winning company will
receive priority placement for a period of time. The tender system often results in companies underbidding one another by proposing low pricing in order to
win the tender. Sales continue to be negatively affected by the impact of tender systems in certain countries.
In addition to the impact of competition, government pricing actions and other measures designed to reduce healthcare costs, our results of
operations, cash flows and financial condition could also be affected by other risks of doing business internationally, including the impact of inflation,
elections, geopolitical events, including the ongoing conflicts in the Middle East and between Russia and Ukraine and related trade controls, sanctions,
supply chain and staffing challenges and other economic considerations, supply chain disruptions, foreign currency exchange fluctuations, public health
epidemics, changes in intellectual property legal protections and other regulatory changes.
Recent Developments
Lexicon Licensing Agreement
In October 2024, the Company entered into an exclusive licensing agreement with Lexicon for sotagliflozin in all markets outside of the U.S. and
Europe in exchange for an upfront payment of $25.0 million, and additional potential contingent payments, including regulatory milestones, sales
milestones and tiered royalties ranging from low-double-digit to upper-teens on annual net sales. Viatris will be responsible for all regulatory and
commercialization activities for sotagliflozin in the licensed territories. Lexicon will be responsible for providing clinical and commercial supply of
sotagliflozin to Viatris. The Company accounted for the transaction as an asset acquisition, with the upfront payment expensed as Acquired IPR&D in the
fourth quarter of 2024.
Indore Manufacturing Facility
Following an inspection by the FDA at our oral finished dose manufacturing facility in Indore, India in 2024, the FDA has issued a warning letter,
and an import alert related to this facility. The import alert affects 11 actively distributed products that will no longer be accepted into the U.S. until the
warning letter is lifted. It makes exceptions, subject to certain conditions, for four products based on shortage concerns. Following recently concluded
discussions with the FDA, the Company does not expect additional product exceptions to be granted by the FDA.
Following the substance of FDA’s original inspection observations, the Company immediately implemented a comprehensive remediation plan at
the site. The necessary corrective and preventive actions are well underway, including but not limited to related personnel actions. Additionally, we have
engaged independent third-party subject matter experts to support the remediation plan.
We have been in regular communication with FDA during this process and will continue to work to ensure that the FDA is satisfied with the steps
we have taken to resolve all the points raised. Our responses to the warning letter and import alert were submitted within the required time periods.
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While product continues to be shipped from the Indore facility to markets outside the U.S., some impact in other markets, including the ARV
business in Emerging Markets and select generic products in Europe, is anticipated. The Company currently estimates the negative impact to 2025 total
revenues to be approximately $500 million and to 2025 earnings from operations to be approximately $385 million.
We take very seriously our continued and comprehensive oversight of our entire manufacturing network. Patient safety remains our primary and
unwavering focus. We will work closely with our customers to mitigate any possible supply disruptions and meet the needs of the patients we serve.
Acquisition of Idorsia Products
On March 15, 2024, the Company acquired exclusive global development and commercialization rights to two Phase 3 assets from Idorsia, as well
as the potential to add additional innovative assets in the future. Under the terms of the original agreements, the development programs and certain
personnel for selatogrel and cenerimod were transferred to Viatris from Idorsia in exchange for an upfront payment to Idorsia of $350 million, potential
contingent milestone payments (including $300 million payable upon the achievement of certain development and regulatory milestones, and $2.1 billion
payable upon the achievement of certain tiered sales milestones), as well as potential contingent tiered sales royalties. Viatris has worldwide
commercialization rights for both selatogrel and cenerimod (excluding, for cenerimod only, Japan, South Korea and certain countries in the Asia-Pacific
region). A joint development committee was formed to oversee the development of the ongoing Phase 3 programs through regulatory approval. The
agreements also provide Viatris a right of first refusal and a right of first negotiation for certain other assets in Idorsia’s pipeline. Viatris and Idorsia are
both contractually obligated to contribute to the development costs for both programs, which are expected to be incurred through 2026. There are risks and
uncertainties associated with the timely and successful completion of these programs, including but not limited to the high cost and uncertainty of
conducting clinical trials (particularly with respect to new and/or complex or innovative drugs), obtaining approval by relevant regulatory bodies and our
partner’s financial condition. Refer to Note 4 Acquisitions and Other Transactions included in Part II, Item 8 of this Form 10-K for more information.
On February 25, 2025, in order to preserve the ongoing continuity of the development programs for selatogrel and cenerimod considering certain
capital structuring steps announced by Idorsia to secure its ongoing operations, Viatris and Idorsia entered into a letter agreement to amend certain terms of
the original agreements described above. Under the terms of the letter agreement, Viatris will receive additional territory rights in Japan, South Korea and
certain other countries in the Asia-Pacific region for cenerimod, a $250 million reduction in contingent milestone payments, including $200 million of
development milestones, and additional personnel to expedite transitioning the development programs to Viatris in exchange for Viatris assuming $100
million of Idorsia’s obligation to contribute to development costs. In addition, the letter agreement provides for the replacement of the joint development
committee with a transition committee to oversee the transition of both development programs to Viatris.
Divestitures
In October 2023, the Company announced it had received an offer for the divestiture of its OTC Business and had entered into definitive
agreements to divest its women’s healthcare business, its API business in India, its rights to two women’s healthcare products in certain countries, and
commercialization rights in the Upjohn Distributor Markets. The divestiture of the women’s healthcare business was primarily related to our oral and
injectable contraceptives and did not include all of our women’s healthcare related products. The transaction to divest the Company’s rights to two
women’s healthcare products in certain countries closed in December 2023 (other than in the U.K.), and the divestiture of the women’s healthcare business
closed in March 2024. In the third quarter of 2024, the Company closed the divestiture of the product rights in the U.K. The divestitures of the
commercialization rights in the majority of the Upjohn Distributor Markets closed during 2023 and 2024, the divestiture of our API business in India
closed in June 2024, and the OTC Transaction closed in July 2024. Refer to Note 5 Divestitures included in Part II, Item 8 of this Form 10-K for more
information.
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Financial Summary
The table below is a summary of the Company’s financial results for the year ended December 31, 2024 compared to the prior year period:
Year Ended December 31,
(In millions, except per share amounts)
2024
2023
Change
Total revenues
$
14,739.3 
$
15,426.9 
$
(687.6)
Gross profit
5,623.6 
6,438.6 
(815.0)
Earnings from operations
10.1 
766.2 
(756.1)
Net (loss) earnings
(634.2)
54.7 
(688.9)
Diluted (loss) earnings per share
$
(0.53)
$
0.05 
$
(0.58)
A detailed discussion of the Company’s financial results can be found below in the section titled “Results of Operations.” As part of this
discussion, we also report sales performance using the non-GAAP financial measures of “constant currency” net sales and total revenues. These measures
provide information on the change in net sales and total revenues assuming that foreign currency exchange rates had not changed between the prior and
current period. The comparisons presented at constant currency rates reflect comparative local currency sales at the prior year’s foreign exchange rates. We
routinely evaluate our net sales and total revenues performance at constant currency so that sales results can be viewed without the impact of foreign
currency exchange rates, thereby facilitating a period-to-period comparison of our operational activities, and believe that this presentation also provides
useful information to investors for the same reason.
More information about non-GAAP measures used by the Company as part of this discussion, including adjusted cost of sales, adjusted gross
margins, adjusted EBITDA, adjusted net earnings, and adjusted EPS (all of which are defined below) can be found in Part II, Item 7 under Results of
Operations and Results of Operations — Use of Non-GAAP Financial Measures.
Results of Operations
2024 Compared to 2023
Year Ended December 31,
(In millions, except %s)
2024
2023
% Change
2024 Currency
Impact 
2024 Constant
Currency
Revenues
Constant Currency
% Change 
Net sales
Developed Markets 
$
8,929.4 
$
9,251.9 
(3)% $
(5.3)
$
8,924.1 
(4)%
Greater China
2,166.5 
2,160.4 
— %
47.2 
2,213.7 
2 %
JANZ
1,346.2 
1,424.5 
(5)%
81.4 
1,427.6 
— %
Emerging Markets 
2,250.7 
2,551.6 
(12)%
116.2 
2,366.9 
(7)%
Total net sales
14,692.8 
15,388.4 
(5)%
239.5 
14,932.3 
(3)%
Other revenues 
46.5 
38.5 
NM
0.1 
46.6 
NM
Consolidated total revenues 
$
14,739.3 
$
15,426.9 
(4)% $
239.6 
$
14,978.9 
(3)%
____________
Currency impact is shown as unfavorable (favorable).
The constant currency percentage change is derived by translating net sales or revenues for the current period at prior year comparative period
exchange rates, and in doing so shows the percentage change from 2024 constant currency net sales or revenues to the corresponding amount in
the prior year.
Reductions were driven primarily by the inclusion of net sales in the prior year period related to divestitures that have closed during 2023 and
2024.
For the year ended December 31, 2024, other revenues in Developed Markets, Greater China, JANZ, and Emerging Markets were approximately
$32.0 million, $1.3 million, $3.5 million, and $9.7 million, respectively.
Amounts exclude intersegment revenue which eliminates on a consolidated basis.
(1)
(2)
(3)
(3)
(4)
(3)(5)
(1)
(2)
(3)
(4)
(5)
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Total Revenues
For the year ended December 31, 2024, the Company reported total revenues of $14.74 billion, compared to $15.43 billion for the comparable
prior year period, representing a decrease of $687.6 million, or 4%. Total revenues include both net sales and other revenues from third parties. Net sales
for the year ended December 31, 2024 were $14.69 billion, compared to $15.39 billion for the comparable prior year period, representing a decrease of
$695.6 million, or 5%. Other revenues for the year ended December 31, 2024 were $46.5 million, compared to $38.5 million for the comparable prior year
period.
Net sales decreased by approximately $732.2 million, or 5%, due to the inclusion of net sales in the prior year period related to divestitures that
have closed during 2023 and 2024. The decrease in net sales was also partially driven by the unfavorable impact of foreign currency translation of
approximately $239.5 million, or 2%, primarily reflecting changes in the U.S. Dollar as compared to the currencies of subsidiaries in Japan, China, and
countries in Emerging Markets. On a constant currency basis, net sales from the remaining business increased by approximately $276.1 million, or 2%, for
the year ended December 31, 2024 compared to the prior year period, driven by new product sales, primarily in Developed Markets, of approximately
$582.4 million. New product sales include new products launched in 2024 and the carryover impact of new products, including business development,
launched within the last twelve months. The increase was partially offset by base business erosion of approximately $306.3 million.
From time to time, a limited number of our products may represent a significant portion of our net sales, gross profit and net earnings. Generally,
this is due to the timing of new product introductions, seasonality, and the amount, if any, of additional competition in the market. Our top ten products in
terms of net sales, in the aggregate, represented approximately 33% for each of the years ended December 31, 2024 and 2023.
Net sales are derived from our four reporting segments: Developed Markets, Greater China, JANZ and Emerging Markets.
Developed Markets Segment
Net sales from Developed Markets decreased by $322.5 million, or 3%, for the year ended December 31, 2024 when compared to the prior year.
Net sales decreased by approximately $421.1 million, or 5%, due to the inclusion of net sales in the prior year period related to divestitures that have closed
during 2023 and 2024. The favorable impact of foreign currency translation was approximately $5.3 million, or less than 1%. Constant currency net sales
from the remaining business increased by approximately $93.3 million, or 1%, driven primarily by new product sales throughout Developed Markets,
including Breyna™ and lisdexamfetamine in the U.S. This increase was partially offset by anticipated lower net sales of certain existing products within
the U.S., including EpiPen® Auto-Injector and Perforomist®, as a result of lower pricing and volumes due to additional competition and increased
utilization within government channels. Net sales within North America totaled approximately $3.78 billion and net sales within Europe totaled
approximately $5.15 billion.
Greater China Segment
Net sales from Greater China were essentially flat for the year ended December 31, 2024 when compared to the prior year. The unfavorable
impact of foreign currency translation was approximately $47.2 million, or 2%. Constant currency net sales increased by approximately $53.4 million, or
2%, when compared to the prior year, driven primarily by increased volumes of existing products. Divestitures did not have a significant impact on the net
sales during the years ended December 31, 2024 and 2023.
JANZ Segment
Net sales from JANZ decreased by $78.3 million, or 5%, for the year ended December 31, 2024 when compared to the prior year. This decrease
was the result of the unfavorable impact of foreign currency translation of approximately $81.4 million, or 6%. Net sales also decreased by approximately
$16.4 million, or 1%, due to the inclusion of net sales in the prior year period related to divestitures that have closed during 2023 and 2024. Constant
currency net sales from the remaining business increased by approximately $19.5 million, or 1%, when compared to the prior year, driven primarily by new
product sales in Australia. This increase was partially offset by lower net sales of existing products mainly driven by lower pricing in Japan as a result of
government price reductions and additional competition.
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Emerging Markets Segment
Net sales from Emerging Markets decreased by $300.9 million or 12% for the year ended December 31, 2024 when compared to the prior year.
Net sales decreased by approximately $294.6 million, or 12%, due to the inclusion of net sales in the prior year period related to divestitures that have
closed during 2023 and 2024. The decrease in net sales was also partially driven by the unfavorable impact of foreign currency translation of approximately
$116.2 million, or 5%. Constant currency net sales from the remaining business increased by approximately $109.9 million, or 4%, when compared to the
prior year, primarily driven by new products and higher net sales of existing products in certain Latin American, Middle Eastern and Asian countries.
Cost of Sales and Gross Profit
Cost of sales increased from $8.99 billion for the year ended December 31, 2023 to $9.12 billion for the year ended December 31, 2024. The
increase in cost of sales was largely driven by IPR&D intangible asset impairment charges of $177.1 million. Refer to Note 8 Goodwill and Intangible
Assets included in Part II, Item 8 of this Form 10-K for more information. This increase was partially offset by the impact of the decrease in net sales,
including as a result of the divestitures that have closed in 2023 and 2024.
Gross profit for the year ended December 31, 2024 was $5.62 billion and gross margins were 38%. For the year ended December 31, 2023, gross
profit was $6.44 billion and gross margins were 42%. The changes in gross profit and gross margins are primarily related to the impact of the divestitures
and the IPR&D intangible asset impairment charges. Adjusted gross margins were approximately 58% for the year ended December 31, 2024, essentially
flat when compared to the year ended December 31, 2023.
A reconciliation between cost of sales, as reported under U.S. GAAP, and adjusted cost of sales and adjusted gross margin for the year ended
December 31, 2024 compared to the year ended December 31, 2023 is as follows:
Year Ended December 31,
(In millions, except %s)
2024
2023
U.S. GAAP cost of sales
$
9,115.7 
$
8,988.3 
Deduct:
Purchase accounting amortization and other related items
(2,581.1)
(2,421.6)
Acquisition and divestiture-related costs
(71.5)
(40.7)
Restructuring-related costs
(115.7)
(101.8)
Share-based compensation expense
(3.7)
(2.9)
Other special items
(143.0)
(119.2)
Adjusted cost of sales
$
6,200.7 
$
6,302.1 
Adjusted gross profit 
$
8,538.6 
$
9,124.8 
Adjusted gross margin 
58 %
59 %
____________
Adjusted gross profit is calculated as total revenues less adjusted cost of sales. Adjusted gross margin is calculated as adjusted gross profit divided by
total revenues.
Operating Expenses
Research and Development Expense
R&D expense for the year ended December 31, 2024 was $808.7 million, essentially flat compared to R&D expense of $805.2 million for the
prior year. An increase in spend on the selatogrel and cenerimod programs was partially offset by lower spending on base business programs. We expect
R&D expense to increase in excess of $100 million in 2025 as compared to 2024 primarily as a result of increased expenses for the selatogrel and
cenerimod development programs.
(a)
(a)
(a)
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Acquired IPR&D
Acquired IPR&D expense for the year ended December 31, 2024 was $28.3 million, compared to $105.5 million for the prior year, a decrease of
$77.2 million. The decrease was primarily due to upfront licensing payments to Mapi of $75.0 million related to additional products under development
recorded during the prior year. This was partially offset by an upfront licensing payment of $25.0 million to Lexicon related to sotagliflozin recorded
during the fourth quarter of 2024.
Selling, General and Administrative Expense
SG&A expense for the year ended December 31, 2024 was $4.43 billion, compared to $4.65 billion for the prior year, a decrease of $224.5
million. The decrease was primarily due to lower goodwill impairment charges of approximately $259.1 million (refer to Note 8 Goodwill and Intangible
Assets included in Part II, Item 8 of this Form 10-K for more information on the goodwill impairment charges recorded in 2023 and 2024), and the impact
of the divestitures. Partially offsetting these decreases was a gain recorded in 2023 of approximately $156.2 million on the transaction to divest the
Company’s rights to two women’s healthcare products in certain countries.
Litigation Settlements and Other Contingencies, Net
The following table includes the losses recognized in litigation settlements and other contingencies, net during the years ended December 31, 2024
and 2023, respectively:
Year Ended December 31,
(In millions)
2024
2023
Contingent consideration adjustment
$
54.8 
$
80.4 
Litigation settlements, net
296.1 
31.2 
Total litigation settlements and other contingencies, net
$
350.9 
$
111.6 
The contingent consideration adjustment for the year ended December 31, 2024 was primarily due to fair value adjustments related to the
Respiratory Delivery Platform and the Idorsia contingent consideration liabilities. Refer to Note 9 Financial Instruments and Risk Management included in
Part II, Item 8 of this Form 10-K for more information.
Also refer to Note 19 Litigation included in Part II, Item 8 of this Form 10-K for more information.
Interest Expense
Interest expense for the year ended December 31, 2024 totaled $550.0 million, compared to $573.1 million for the year ended December 31, 2023,
a decrease of $23.1 million. The decrease was primarily due to the impact of debt repayments, partially offset by the non-cash accretion of the contingent
consideration liability related to the Idorsia Transaction.
Other Expense (Income), Net
Other expense (income), net includes gains and losses from divestitures of businesses, changes in the fair value of equity securities,
extinguishment of debt, foreign exchange, expense (income) related to post-employment benefit plans, TSA income, and interest and dividend income.
Other expense (income), net for the year ended December 31, 2024 totaled $83.3 million of expense, compared to $(9.8) million of income for the year
ended December 31, 2023, a decrease of $93.1 million.
The decrease in other income, net was driven by: (1) higher net loss on divestitures of approximately $156.4 million, (2) charges of $184.6 million
related to the impairment of our equity investment in Mapi and advances for GA Depot inventory (refer to Note 18 Licensing and Other Partner
Agreements included in Part II, Item 8 of this Form 10-K for more information), (3) net gains recorded in the prior year of approximately $43.4 million as a
result of remeasuring our equity interests in Mapi and Famy Life Sciences and the CCPS in Biocon Biologics to fair value, and (4) lower TSA income of
approximately $98.1 million as the prior year included TSA income related to the reimbursement for transition services provided to Biocon Biologics.
Biocon Biologics had substantially exited all transition services with Viatris as of December 31, 2023. The costs related to the transition services are
included in SG&A and R&D.
This was partially offset by: (1) current year gains of $373.5 million as a result of remeasuring the CCPS in Biocon Biologics to fair value, (2)
higher interest income of approximately $32.1 million, and (3) gain on debt extinguishments of $16.5 million.
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Income Tax Provision
For the year ended December 31, 2024, the Company recognized an income tax provision of $11.0 million, compared to an income tax provision
of $148.2 million for the prior year, a change in the provision of $137.2 million. The income tax provision for the year ended December 31, 2024 includes a
tax benefit related to certain gains on the sale of subsidiaries in connection with the divestiture of the OTC Business which were partially exempt from tax.
This benefit was partially offset by the goodwill impairment charge recorded in the second quarter of 2024, for which no tax benefit was realized. The
income tax provision for the year ended December 31, 2023 was negatively impacted by the goodwill impairment related to the divestiture of the OTC
Business, partially offset by the deferred tax impact of the Company’s internal tax restructuring. The current year and prior year provisions were also
impacted by the levels of income and the changing mix at which it is earned in jurisdictions with differing tax rates.
2023 Compared to 2022
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 are not included in this Form 10-K, and can be found in
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form
10-K for the year ended December 31, 2023.
Use of Non-GAAP Financial Measures
Whenever the Company uses non-GAAP financial measures, we provide a reconciliation of the non-GAAP financial measures to their most
directly comparable U.S. GAAP financial measure. Investors and other readers are encouraged to review the related U.S. GAAP financial measures and the
reconciliation of non-GAAP measures to their most directly comparable U.S. GAAP measure and should consider non-GAAP measures only as a
supplement to, not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with U.S. GAAP. Additionally,
since these are not measures determined in accordance with U.S. GAAP, non-GAAP financial measures have no standardized meaning across companies,
or as prescribed by U.S. GAAP and, therefore, may not be comparable to the calculation of similar measures or measures with the same title used by other
companies.
Management uses these measures internally for forecasting, budgeting, measuring its operating performance, and incentive-based awards.
Primarily due to acquisitions, divestitures and other significant events which may impact comparability of our periodic operating results, we believe that an
evaluation of our ongoing operations (and comparisons of our current operations with historical and future operations) would be difficult if the disclosure
of our financial results was limited to financial measures prepared only in accordance with U.S. GAAP. We believe that non-GAAP financial measures are
useful supplemental information for our investors and when considered together with our U.S. GAAP financial measures and the reconciliation to the most
directly comparable U.S. GAAP financial measure, provide a more complete understanding of the factors and trends affecting our operations. The financial
performance of the Company is measured by senior management, in part, using adjusted metrics as described below, along with other performance metrics.
The Company’s use of such non-GAAP measures is governed by an adjusted reporting policy maintained by the Company and such non-GAAP measures
are reviewed in detail with the Audit Committee of the Board of Directors.
Adjusted Cost of Sales and Adjusted Gross Margin
We use the non-GAAP financial measure “adjusted cost of sales” and the corresponding non-GAAP financial measure “adjusted gross margin.”
The principal items excluded from adjusted cost of sales include restructuring, acquisition and divestiture-related costs, and other special items, purchase
accounting amortization and other related items, and share-based compensation expense, which are described in greater detail below.
Adjusted Net Earnings and Adjusted EPS
Adjusted net earnings and adjusted net earnings per diluted share (“adjusted EPS”) are non-GAAP financial measures and provide an alternative
view of performance used by management. Management believes that, primarily due to acquisitions, divestitures and other significant events, an evaluation
of the Company’s ongoing operations (and comparisons of its current operations with historical and future operations) would be difficult if the disclosure of
its financial results were limited to financial measures prepared only in accordance with U.S. GAAP. Management believes that adjusted net earnings and
adjusted EPS are important internal financial metrics related to the ongoing operating performance of the Company, and are therefore useful to investors
and that their understanding of our performance is enhanced by these measures. Actual internal and forecasted operating results and annual budgets used by
management include adjusted net earnings and adjusted EPS.
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EBITDA and Adjusted EBITDA
EBITDA and adjusted EBITDA are non-GAAP financial measures that the Company believes are appropriate to provide additional information to
investors to demonstrate the Company’s ability to comply with financial debt covenants and assess the Company’s ability to incur additional indebtedness.
The Company also believes that adjusted EBITDA better focuses management on the Company’s underlying operational results and true business
performance and is used, in part, for management’s incentive compensation. We calculate EBITDA as U.S. GAAP net earnings (loss) adjusted for income
tax provision (benefit), interest expense and depreciation and amortization. EBITDA is further adjusted for share-based compensation expense, litigation
settlements and other contingencies, net, gain (loss) on divestitures of businesses, impairment of long-lived assets and goodwill, restructuring, acquisition
and divestiture-related and other special items to determine adjusted EBITDA. These adjustments are generally permitted under our credit agreement in
calculating adjusted EBITDA for determining compliance with our debt covenants.
The significant items excluded from adjusted cost of sales, adjusted EBITDA, adjusted net earnings, and adjusted EPS include:
Purchase Accounting Amortization and Other Related Items
The ongoing impact of certain amounts recorded in connection with acquisitions of both businesses and assets is excluded from adjusted cost of
sales, adjusted EBITDA, adjusted net earnings, and adjusted EPS. These amounts include the amortization of intangible assets, inventory step-up, property,
plant and equipment step-up, intangible asset impairment charges, including for IPR&D, and impairment of goodwill. For the acquisition of businesses
accounted for under the provisions of ASC 805, Business Combinations, these purchase accounting impacts are excluded regardless of the financing
method used for the acquisitions, including the use of cash, long-term debt, the issuance of common stock, contingent consideration or any combination
thereof.
Fair Value Adjustments, Including Contingent Consideration
The impact of changes to the fair value of assets and liabilities, including contingent and deferred consideration and non-marketable equity
investments, and the related accretion income or expense are excluded from adjusted EBITDA, adjusted net earnings, and adjusted EPS because they are
not indicative of the Company’s ongoing operations due to the variability of the amounts and the lack of predictability as to the occurrence and/or timing
and management believes their exclusion is helpful to understanding the underlying, ongoing operational performance of the business.
Share-based Compensation Expense
Share-based compensation expense is excluded from adjusted cost of sales, adjusted EBITDA, adjusted net earnings, and adjusted EPS. Our share-
based compensation programs have become increasingly weighted toward performance-based compensation, which leads to variability and to a lack of
predictability as to the occurrence and/or timing of amounts incurred. As such, management believes the exclusion of such amounts on an ongoing basis is
helpful to understanding the underlying operational performance of the business.
Restructuring, Acquisition and Divestiture-Related Costs and Other Special Items
Costs related to restructuring, acquisition and divestiture-related activities and other actions are excluded from adjusted cost of sales, adjusted
EBITDA, adjusted net earnings, and adjusted EPS, as applicable. These amounts include items such as:
•
Costs related to formal restructuring programs and actions, including costs associated with facilities to be closed or divested, employee
separation costs, impairment charges, accelerated depreciation, incremental manufacturing variances, equipment relocation costs,
decommissioning and other restructuring related costs;
•
Certain acquisition and divestiture costs, including costs relating to integration and planning, advisory and legal fees, certain financing related
costs, certain reimbursements related to the Company’s obligation to reimburse Pfizer for certain financing and transaction related costs under
the Business Combination Agreement and Separation and Distribution Agreement, certain other TSA related set-up and exit costs, and other
business transformation and/or optimization initiatives, which are not part of a formal restructuring program, including employee separation
and post-employment costs;
•
Other costs, incurred from time to time, related to certain special events or activities that lead to gains or losses, including, but not limited to,
incremental manufacturing variances, asset write-downs, including other-than-temporary impairments of investments in equity or debt
instruments, or liability adjustments;
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•
Certain costs to further develop and optimize our global enterprise resource planning systems, operations and supply chain;
•
Gains or losses from divestitures, including impairments of held for sale assets; and
•
The impact of changes related to uncertain tax positions are excluded from adjusted net earnings and adjusted EPS. In addition, tax
adjustments to adjusted earnings are recorded to present items on an after-tax basis consistent with the presentation of adjusted net earnings
and adjusted EPS.
The Company has undertaken restructurings and other optimization initiatives of differing types, scope and amount during the covered periods
and, therefore, these charges should not be considered non-recurring; however, management excludes these amounts from adjusted cost of sales, adjusted
EBITDA, adjusted net earnings, and adjusted EPS because it believes it is helpful to understanding the underlying, ongoing operational performance of the
business.
Litigation Settlements, Net
Charges and gains related to legal matters, such as those discussed in Note 19 Litigation included in Part II, Item 8 of this Form 10-K are generally
excluded from adjusted EBITDA, adjusted net earnings, and adjusted EPS. Normal, ongoing defense costs of the Company made in the normal course of
our business are not excluded.
Reconciliation of U.S. GAAP Net (Loss) Earnings to Adjusted Net Earnings and U.S. GAAP (Loss) Earnings Per Share to Adjusted EPS
A reconciliation between net (loss) earnings and diluted earnings (loss) per share as reported under U.S. GAAP, and adjusted net earnings and
adjusted EPS for the periods shown follows:
Year Ended December 31,
(In millions, except per share amounts)
2024
2023
2022
U.S. GAAP net (loss) earnings and U.S. GAAP diluted (loss) earnings per
share
$
(634.2)
$
(0.53) $
54.7 
$
0.05 
$
2,078.6 
$
1.71 
Purchase accounting amortization (primarily included in cost of sales) 
2,581.1 
2,421.5 
2,721.3 
Impairment of goodwill (included in SG&A) 
321.0 
580.1 
117.0 
Litigation settlements and other contingencies, net
350.9 
111.6 
4.4 
Interest expense (primarily amortization of premiums and discounts on
long term debt)
(23.0)
(42.4)
(48.7)
Acquisition and divestiture-related costs (primarily included in SG&A) 
361.0 
377.9 
475.7 
Loss (gain) on divestitures of businesses (included in other expense
(income), net) 
399.4 
239.9 
(1,754.1)
Restructuring-related costs 
211.1 
125.2 
86.9 
Share-based compensation expense
146.1 
180.7 
116.5 
Other special items included in:
Cost of sales 
143.0 
119.2 
255.2 
Research and development expense
2.8 
2.8 
1.0 
Selling, general and administrative expense
90.5 
(83.5)
68.8 
Other expense (income), net 
(160.2)
(24.4)
(3.8)
Tax effect of the above items and other income tax related items
(597.1)
(525.6)
(41.7)
Adjusted net earnings and adjusted EPS
$
3,192.4 
$
2.65  $
3,537.7 
$
2.93 
$
4,077.1 
$
3.35 
Weighted average diluted shares outstanding
1,202.7 
1,206.9 
1,217.4 
Significant items for the year ended December 31, 2024 include the following:
Includes IPR&D intangible asset impairment charges of $177.1 million as the Company concluded that certain of its IPR&D assets were fully
impaired due to unfavorable clinical results and/or changes in market conditions which led to the termination of the development programs.
Includes a goodwill impairment charge of $321.0 million related to the JANZ reporting unit.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
 (h)
(a)    
(b)    
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Acquisition and divestiture-related costs consist primarily of transaction costs including legal and consulting fees and integration activities.
Consists primarily of pre-tax charges / (gains) related to the divestitures of the OTC, biosimilars, API, and women’s healthcare businesses of
approximately $369.0 million, $60.0 million, $47.8 million, and $(77.8) million, respectively.
Includes approximately $115.7 million in cost of sales, approximately $3.0 million in R&D, and approximately $92.3 million in SG&A.
Includes incremental manufacturing variances at plants slated for sale or closure of approximately $109.4 million.
Includes: (1) a gain of approximately $373.5 million as a result of remeasuring the CCPS in Biocon Biologics to fair value; (2) a gain on the
extinguishment of debt of $16.5 million; and (3) charges of $184.6 million related to the impairment of our equity investment in Mapi and
advances for GA Depot inventory (refer to Note 18 Licensing and Other Partner Agreements included in Part II, Item 8 of this Form 10-K for
more information).
Adjusted for changes for uncertain tax positions.
Reconciliation of U.S. GAAP Net (Loss) Earnings to EBITDA and Adjusted EBITDA
Below is a reconciliation of U.S. GAAP net (loss) earnings to EBITDA and adjusted EBITDA for the year ended December 31, 2024 compared to
the prior year periods:
Year Ended December 31,
(In millions)
2024
2023
2022
U.S. GAAP net (loss) earnings
$
(634.2) $
54.7  $
2,078.6 
Add adjustments:
Income tax provision
11.0 
148.2 
734.6 
Interest expense 
550.0 
573.1 
592.4 
Depreciation and amortization 
2,893.2 
2,740.5 
3,027.6 
EBITDA
$
2,820.0  $
3,516.5  $
6,433.2 
Add / (deduct) adjustments:
Share-based compensation expense
146.1 
180.7 
116.4 
Litigation settlements and other contingencies, net
350.9 
111.6 
4.4 
Loss (gain) on divestitures of businesses
399.4 
239.9 
(1,754.1)
Impairment of goodwill
321.0 
580.1 
117.0 
Restructuring, acquisition and divestiture-related and other special items 
632.0 
495.3 
859.9 
Adjusted EBITDA
$
4,669.4  $
5,124.1  $
5,776.8 
____________
Includes amortization of premiums and discounts on long-term debt.
Includes purchase accounting related amortization.
See items detailed in the Reconciliation of U.S. GAAP Net (Loss) Earnings to Adjusted Net Earnings.
Liquidity and Capital Resources
Our primary source of liquidity is net cash provided by operating activities, which was $2.30 billion for the year ended December 31, 2024. We
believe that net cash provided by operating activities and available liquidity will continue to allow us to meet our needs for working capital, capital
expenditures, interest and principal payments on debt obligations, dividend payments, and share repurchases. Nevertheless, our ability to satisfy our
working capital requirements and debt service obligations, and fund planned capital expenditures, share repurchases, or dividend payments, will
substantially depend upon our future operating performance (which will be affected by prevailing economic conditions), and financial, business and other
factors, some of which are beyond our control.
Beginning in 2024, upfront and milestone payments related to externally developed IPR&D projects acquired directly in a transaction other than a
business combination, which were previously included in cash flows from operating activities in the consolidated statements of cash flows, are now
classified as cash flows from investing activities. Certain reclassifications were made to conform the prior period consolidated financial statements to the
current period presentation. The adjustments resulted in an increase to net cash provided by operating activities and an increase to net cash used in
investing activities of $100.4 million for the year ended December 31, 2023.
(c)     
(d)    
(e)    
(f)    
(g)    
(h)    
(a)
(b)
(c)
(a)    
(b)    
(c)    
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Operating Activities
Net cash provided by operating activities decreased by $597.1 million to $2.30 billion for the year ended December 31, 2024, as compared to net
cash provided by operating activities of $2.90 billion for the year ended December 31, 2023. Net cash provided by operating activities is derived from net
(loss) earnings adjusted for non-cash operating items, gains and losses attributed to investing and financing activities and changes in operating assets and
liabilities resulting from timing differences between the receipts and payments of cash, including changes in cash primarily reflecting the timing of cash
collections from customers, payments to vendors and employees and tax payments in the ordinary course of business.
The decrease in net cash provided by operating activities was principally due to lower operating earnings, including as a result of divestitures in
2023 and 2024, higher transaction costs associated with divestitures, and the timing of cash payments and collections.
Investing Activities
Net cash from investing activities was $1.80 billion for the year ended December 31, 2024, as compared to net cash used in investing activities of
$864.5 million for the year ended December 31, 2023, an increase of $2.67 billion.
In 2024, significant items in investing activities included the following:
•
proceeds from the sale of assets and businesses of $2.51 billion, primarily related to the divestitures of the OTC Business, the API business in
India and the women’s healthcare business;
•
cash paid for acquisitions, net of cash acquired, of $350.0 million related to the Idorsia Transaction; and
•
capital expenditures, primarily for equipment and facilities, totaling approximately $326.0 million. While there can be no assurance that
current expectations will be realized, capital expenditures for the 2025 calendar year are expected to be approximately $300 million to $400
million.
In 2023, significant items in investing activities included the following:
•
cash paid for acquisitions, net of cash acquired, of $667.7 million;
•
payments for product rights and other, net totaling approximately $97.5 million, related to various products;
•
capital expenditures, primarily for equipment and facilities, totaling approximately $377.0 million; and
•
proceeds from the sale of assets and businesses of $364.1 million, primarily related to divestitures of the Company’s rights to two women’s
healthcare products in certain countries and commercialization rights in certain Upjohn Distributor Markets.
Financing Activities
Net cash used in financing activities was $4.33 billion for the year ended December 31, 2024, as compared to net cash used in financing activities
of $2.30 billion for the year ended December 31, 2023, an increase of $2.03 billion.
In 2024, significant items in financing activities included the following:
•
repayment of Senior Notes through tender offers for and satisfaction and discharge of approximately $1.86 billion of Senior Notes;
•
repayment of Senior Notes at maturity of approximately $1.86 billion, consisting of the 1.023% Euro Senior Notes and the 2.250% Euro
Senior Notes;
•
share repurchases of $250.0 million;
•
cash dividends paid of $574.8 million; and
•
receipt of $245.0 million in deferred consideration from the Biocon Biologics Transaction, and net cash of $52.7 million collected on behalf
of various partners, including Biocon Biologics, which are included in Other items, net.
In 2023, significant items in financing activities included the following:
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•
repayments of Senior Notes at maturity of approximately $1.25 billion, consisting of the 3.125% Senior Notes and the 4.200% Senior Notes;
•
share repurchases of $250.0 million;
•
cash dividends paid of $575.6 million; and
•
payment of $220.0 million to Biocon Biologics related to the closing working capital target, partially offset by net cash of $47.6 million
collected on behalf of various partners, including Biocon Biologics, which are included in Other items, net.
Refer to the consolidated statements of cash flows in Part II, Item 8 of this Form 10-K for additional details on other significant sources and uses
of cash during the years ended December 31, 2024 and 2023.
Capital Resources
Our cash and cash equivalents totaled $734.8 million at December 31, 2024. The majority of our cash is invested in U.S. government money
market funds and in bank deposits. In order to support our global operations, we maintain significant cash and cash equivalents within the banking system
with the majority of this at Global Systemically Important Banks. We monitor the third-party depository institutions that hold our cash and cash equivalents
on a regular basis. Our primary emphasis is on the safety of the principal. Where possible, we diversify our cash and cash equivalents among counterparties
to minimize exposure to any one counterparty. The Company anticipates having sufficient liquidity, including existing borrowing capacity under the 2024
Revolving Facility, Commercial Paper Program, and Receivables Facility combined with cash to be generated from operations, to fund foreseeable cash
needs without requiring the repatriation of non-U.S. cash. Should we determine the need to repatriate or convert cash held in countries that have significant
restrictions or controls in place, including in China, we may be unable to repatriate or convert such cash, or be unable to do so without incurring substantial
costs.
The Company has access to $3.5 billion under the 2024 Revolving Facility which matures in September 2029. Up to $1.65 billion of the 2024
Revolving Facility may be used to support borrowings under our Commercial Paper Program. As of December 31, 2024, the Company did not have any
borrowings outstanding under the Commercial Paper Program or the 2024 Revolving Facility.
The Company has a $400 million Receivables Facility which expires in April 2025. As of December 31, 2024, the Company did not have any
borrowings outstanding under the Receivables Facility.
Under the terms of the Receivables Facility, certain of our accounts receivable secure the amounts borrowed and cannot be used to pay our other
debts or liabilities. The amount that we may borrow at a given point in time is determined based on the amount of qualifying accounts receivable that are
present at such point in time. Borrowings outstanding under the Receivables Facility bear interest at the applicable base rate plus 0.775% and are included
as a component of short-term borrowings, while the accounts receivable securing these obligations remain as a component of accounts receivable, net, in
our consolidated balance sheets. In addition, the agreement governing the Receivables Facility contains various customary affirmative and negative
covenants, and customary default and termination provisions.
We have entered into accounts receivable factoring agreements with financial institutions to sell certain of our non-U.S. accounts receivable.
These transactions are accounted for as sales and result in a reduction in accounts receivable because the agreements transfer effective control over and risk
related to the receivables to the buyers. Our factoring agreements do not allow for recourse in the event of uncollectibility, and we do not retain any interest
in the underlying accounts receivable once sold. We derecognized $68.5 million and $30.8 million of accounts receivable as of December 31, 2024 and
2023, respectively, under these factoring arrangements. Additionally, in 2023, we entered into a similar arrangement for certain European countries. As of
December 31, 2024 and 2023, we assigned and derecognized approximately $29.9 million and $415.7 million, respectively, of Trade Receivables, Net,
which were included in Other Receivables.
The Company has certain voluntary supply chain finance programs with financial intermediaries which provide participating suppliers the option
to be paid by the intermediary earlier than the original invoice due date. The Company’s responsibility is limited to making payments on the terms
originally negotiated with the suppliers, regardless of whether the intermediary pays the supplier in advance of the original due date. The range of payment
terms the Company negotiates with suppliers are consistent, regardless of whether a supplier participates in a supply chain finance program. The total
amounts due to financial intermediaries to settle supplier invoices under supply chain finance programs as of December 31, 2024 and 2023 were
$41.9 million and $65.1 million, respectively. These amounts are included within Accounts payable in the consolidated balance sheets.
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We are continuously evaluating the potential acquisition of products, as well as companies, as a strategic part of our future growth. Consequently,
we may utilize current cash reserves or incur additional indebtedness to finance any such acquisitions, which could impact future liquidity. Also, on an
ongoing basis, we review our operations, including the evaluation of potential divestitures of products and businesses, as part of our future strategy. Any
divestitures could impact future liquidity. In addition, we plan to continue to explore various other ways to unlock the value of the Company’s unique
global platform in order to create shareholder value.
For information regarding our dividends paid and declared and share repurchase program, refer to Note 2 Summary of Significant Accounting
Policies included in Part II, Item 8 of this Form 10-K.
Long-term Debt Maturity
For information regarding our debt agreements and mandatory minimum repayments remaining on the outstanding notional amount of long-term
debt at December 31, 2024, refer to Note 10 Debt included in Part II, Item 8 of this Form 10-K.
The YEN Term Loan Facility and the 2024 Revolving Facility contain customary affirmative covenants for facilities of this type, including among
others, covenants pertaining to the delivery of financial statements, notices of default and certain material events, maintenance of corporate existence and
rights, property, and insurance and compliance with laws, as well as customary negative covenants for facilities of this type, including a financial covenant,
which set the Maximum Leverage Ratio as of the end of any quarter at 3.75 to 1.00, except in circumstances as defined in the related credit agreement, and
other limitations on the incurrence of subsidiary indebtedness, liens, mergers and certain other fundamental changes, investments and loans, acquisitions,
transactions with affiliates, payments of dividends and other restricted payments and changes in our lines of business.
The Company is in compliance with its covenants at December 31, 2024 and expects to remain in compliance for the next twelve months.
We and our subsidiaries and affiliates may from time to time, in our sole discretion, purchase, repay, redeem or retire any of our outstanding debt
securities (including any publicly-issued debt securities) in privately negotiated or open market transactions, by tender offer or otherwise, or extend or
refinance any of our outstanding indebtedness. Refer to Note 10 Debt included in Part II, Item 8 of this Form 10-K for more information.
Supplemental Guarantor Financial Information
Viatris Inc. is the issuer of the Registered Upjohn Notes, which are fully and unconditionally guaranteed on a senior unsecured basis by Mylan
Inc., Mylan II B.V. and Utah Acquisition Sub Inc.
Following the Combination, Utah Acquisition Sub Inc. is the issuer of the Utah U.S. Dollar Notes, which are fully and unconditionally guaranteed
on a senior unsecured basis by Mylan Inc., Viatris Inc. and Mylan II B.V.
Mylan Inc. is the issuer of the Mylan Inc. U.S. Dollar Notes, which are fully and unconditionally guaranteed on a senior unsecured basis by Mylan
II B.V., Viatris Inc. and Utah Acquisition Sub Inc.
The respective obligations of Viatris Inc., Mylan Inc., Utah Acquisition Sub Inc., and Mylan II B.V. as guarantors of the applicable series of Senior
U.S. Dollar Notes are senior unsecured obligations of the applicable guarantor and rank pari passu in right of payment with all of such guarantor’s existing
and future senior unsecured obligations that are not expressly subordinated to such guarantor’s guarantee of the applicable series of Senior U.S. Dollar
Notes, rank senior in right of payment to any future obligations of such guarantor that are expressly subordinated to such guarantor’s guarantee of the
applicable series of Senior U.S. Dollar Notes, and are effectively subordinated to such guarantor’s existing and future secured obligations to the extent of
the value of the collateral securing such obligations. Such obligations are structurally subordinated to all of the existing and future liabilities, including
trade payables, of the existing and future subsidiaries of such guarantor that do not guarantee the applicable series of Senior U.S. Dollar Notes.
The guarantees by Mylan Inc., Mylan II B.V. and Utah Acquisition Sub Inc. under the applicable series of Senior U.S. Dollar Notes will terminate
under certain customary circumstances, each as described in the applicable indenture, including: (1) a sale or disposition of the applicable guarantor in a
transaction that complies with the applicable indenture such that such guarantor ceases to be a subsidiary of the issuer of the applicable series of Senior
U.S. Dollar Notes; (2) legal defeasance or covenant defeasance or if the issuer’s obligations under the applicable indenture are discharged; (3) with respect
to the Utah U.S. Dollar Notes, the earlier to occur of (i) with respect to the guarantee provided by Mylan Inc., (x) the release of Utah
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Acquisition Sub Inc.’s guarantee under all applicable Mylan Inc. Debt (as defined in the applicable indenture) and (y) Mylan Inc. no longer having any
obligations in respect of any Mylan Inc. Debt and (ii) with respect to the guarantee provided by Mylan II B.V., (x) the release of Mylan II B.V.’s guarantee
under all applicable Triggering Indebtedness (as defined in the applicable indenture) and (y) the issuer and/or borrower of the applicable Triggering
Indebtedness no longer having any obligations with respect to such Triggering Indebtedness; (4) with respect to the guarantees provided by Utah
Acquisition Sub Inc. and Mylan II B.V. of the Mylan Inc. U.S. Dollar Notes, subject to certain exceptions set forth in the applicable indenture, such
guarantor ceasing to be a guarantor or obligor in respect of any Triggering Indebtedness; and (5) with respect to the Registered Upjohn Notes, (a) upon the
applicable guarantor no longer being an issuer or guarantor in respect of (i) Mylan Notes (as defined in the indenture governing the Registered Upjohn
Notes) that have an aggregate principal amount in excess of $500.0 million or (ii) any Triggering Indebtedness; in each case, other than in respect of
indebtedness or guarantees, as applicable, that are being concurrently released; or (b) upon receipt of the consent of holders of a majority of the aggregate
principal amount of the outstanding notes of such series in accordance with the indenture governing the Registered Upjohn Notes.
The guarantee obligations of Viatris Inc., Mylan Inc., Utah Acquisition Sub Inc., and Mylan II B.V. under the Senior U.S. Dollar Notes are subject
to certain limitations and terms similar to those applicable to other guarantees of similar instruments, including that (i) the guarantees are subject to
fraudulent transfer and conveyance laws and (ii) each guarantee is limited to an amount not to exceed the maximum amount that can be guaranteed by the
applicable guarantor without rendering the guarantee, as it relates to such guarantor, voidable under applicable fraudulent transfer and conveyance laws or
similar laws affecting the rights of creditors generally.
The following table presents unaudited summarized financial information of Viatris Inc., Mylan Inc., Utah Acquisition Sub Inc., and Mylan II B.V.
on a combined basis as of and for the years ended December 31, 2024 and 2023. All intercompany balances have been eliminated in consolidation. This
unaudited combined summarized financial information is presented utilizing the equity method of accounting.
Combined Summarized Balance Sheet Information of
Viatris Inc., Mylan Inc., Utah Acquisition Sub Inc. and
Mylan II B.V.
(In millions)
December 31, 2024
December 31, 2023
ASSETS
Current assets
$
786.7 
$
1,013.1 
Non-current assets
61,424.7 
63,212.6 
LIABILITIES AND EQUITY
Current liabilities
30,796.9 
29,824.8 
Non-current liabilities
12,779.0 
13,933.6 
Combined Summarized Income Statement Information
of Viatris Inc., Mylan Inc., Utah Acquisition Sub Inc. and
Mylan II B.V.
(In millions)
Year Ended December 31,
2024
Year Ended December 31,
2023
Revenues
$
— 
$
— 
Gross profit
— 
— 
Loss from operations
(1,206.6)
(1,243.8)
Net (loss) earnings
(634.2)
54.7 
Other Commitments
The Company is involved in various disputes, governmental and/or regulatory inquiries, investigations and proceedings, tax proceedings and
litigation matters, both in the U.S. and abroad, that arise from time to time, some of which could result in losses, including damages, fines and/or civil
penalties, and/or criminal charges against the Company. These matters are often complex and have outcomes that are difficult to predict. We have
approximately $384 million accrued for legal contingencies at December 31, 2024.
While the Company believes that it has meritorious defenses with respect to the claims asserted against it and the assumed legal matters referenced
above, and intends to vigorously defend its position, the process of resolving these matters is
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inherently uncertain and may develop over a long period of time, and so it is not possible to predict the ultimate resolution of any such matter. It is possible
that an unfavorable resolution of any of the ongoing matters could have a material effect on the Company’s business, financial condition, results of
operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
In connection with the divestitures, Viatris and the respective buyers entered into transition services and/or manufacturing and supply agreements
pursuant to which the Company is providing services to the respective purchasers, substantially the same as we previously provided to the related
businesses, generally for a period of up to 12 months for transition services and for periods between one to 10 years for manufacturing and supply
agreements, depending on the geographic market and the products subject to such agreement, subject to potential extensions in certain circumstances. In
addition, in connection with the OTC Transaction and the divestiture of our women’s healthcare business, we entered into distribution agreements for
certain markets for a limited period of time. In connection with the API business divestiture, we entered into a manufacturing and supply agreement
pursuant to which we are purchasing a significant amount of API from the purchaser in that transaction.
At December 31, 2024, our material cash requirements from known contractual and other obligations primarily relate to repayment of outstanding
borrowings and interest, open purchase orders, post-employment benefit plans, unrecognized tax benefits, capital expenditures, dividends and leases. For
additional information, refer to Notes 2, 7, 10, 12, 14, and 16 included in Part II, Item 8 of this Form 10-K. We anticipate our cash requirements related to
ordinary course purchases of goods and services will be consistent with our past levels.
In the normal course of business, Viatris periodically enters into acquisition, divestiture, collaboration, employment, legal settlement and other
agreements which incorporate indemnification provisions. The maximum amount to which Viatris may be exposed under such agreements cannot be
reasonably estimated due to the conditional nature of the Company’s obligations and the unique facts and circumstances involved in each particular
agreement. Historically, we have not paid material amounts under these indemnification provisions. Further, for certain agreements, the Company
maintains insurance coverage, which management believes will effectively mitigate the Company’s obligations under these indemnification provisions. No
amounts have been recorded in the consolidated financial statements with respect to the Company’s obligations under such agreements.
We have entered into employment and other agreements with certain executives and other employees that provide for compensation and certain
other benefits. These agreements provide for severance payments under certain circumstances.
Licensing and Other Partner Agreements
Under our licensing and other partner agreements, our potential maximum development milestones not accrued for at December 31, 2024 totaled
approximately $419.4 million. We estimate that the amounts that may be paid during the next twelve months to be approximately $33 million. These
agreements may also include potential sales-based milestones and call for us to pay a percentage of amounts earned from the sale of the product as a royalty
or a profit share. Refer to Note 18 Licensing and Other Partner Agreements included in Part II, Item 8 of this Form 10-K for additional information.
Application of Critical Accounting Policies
Our significant accounting policies are described in Note 2 Summary of Significant Accounting Policies included in Part II, Item 8 of this Form 10-
K and are in accordance with U.S. GAAP.
Included within these policies are certain policies which contain critical accounting estimates and, therefore, have been deemed to be “critical
accounting policies.” Critical accounting estimates are those which require management to make assumptions about matters that were uncertain at the time
the estimate was made and for which the use of different estimates, which reasonably could have been used, or changes in the accounting estimates that are
reasonably likely to occur from period to period could have a material impact on our financial condition or results of operations. We have identified the
following to be our critical accounting policies: the determination of net revenue provisions; accounting for acquisitions, including intangible assets,
goodwill and contingent consideration; income taxes; and the impact of existing legal matters.
Revenue Recognition
We recognize revenues in accordance with ASC 606, Revenue from Contracts with Customers. Under ASC 606, the Company recognizes net
revenue for product sales when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we
expect to be entitled to in exchange for those goods or services.
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Revenues are recorded net of provisions for variable consideration, including discounts, rebates, governmental rebate programs, price adjustments, returns,
chargebacks, promotional programs and other sales allowances. Accruals for these provisions are presented in the consolidated financial statements as
reductions in determining net sales and as a contra asset in accounts receivable, net (if settled via credit) and other current liabilities (if paid in cash).
Amounts recorded for revenue deductions can result from a complex series of judgements about future events and uncertainties and can rely heavily on
estimates and assumptions. As such, they have been identified as critical accounting estimates. The following section briefly describes the nature of our
provisions for variable consideration and how such provisions are estimated:
•
Chargebacks: the Company has agreements with certain indirect customers, such as independent pharmacies, retail pharmacy chains, managed
care organizations, hospitals, nursing homes, governmental agencies and pharmacy benefit managers, which establish contract prices for certain
products. The indirect customers then independently select a wholesaler from which to purchase the products at these contracted prices.
Alternatively, certain wholesalers may enter into agreements with indirect customers that establish contract pricing for certain products, which the
wholesalers provide. Under either arrangement, Viatris will provide credit to the wholesaler for any difference between the contracted price with
the indirect party and the wholesaler’s invoice price. Such credits are called chargebacks. The provision for chargebacks is based on expected sell-
through levels by our wholesaler customers to indirect customers, as well as estimated wholesaler inventory levels. We continually monitor our
provision for chargebacks and evaluate our reserve and estimates as additional information becomes available. A change of 5% would have an
effect on our reserve balance of approximately $24.7 million.
•
Rebates, promotional programs and other sales allowances: this category includes rebate and other programs to assist in product sales. These
programs generally provide that the customer receives credit directly related to the amount of purchases or credits upon the attainment of pre-
established volumes. Also included in this category are prompt pay discounts, administrative fees and price adjustments to reflect decreases in the
selling prices of products. A change of 5% would have an effect on our reserve balance of approximately $63.3 million.
•
Returns: consistent with industry practice, Viatris maintains a return policy that allows customers to return a product, which varies country by
country in accordance with local practices, generally within a specified period prior (six months) and subsequent (twelve months) to the expiration
date. The Company’s estimate of the provision for returns is generally based upon historical experience with actual returns. Generally, returned
products are destroyed and customers are refunded the sales price in the form of a credit. A change of 5% would have an effect on our reserve
balance of approximately $20.0 million.
•
Governmental rebate programs: government reimbursement programs in the U.S. include Medicare, Medicaid, and State Pharmacy Assistance
Programs established according to statute, regulations and policy. Manufacturers of pharmaceutical products that are covered by the Medicaid
program are required to pay rebates to each state based on a statutory formula set forth in the Social Security Act. Medicare beneficiaries are
eligible to obtain discounted prescription drug coverage from private sector providers. In addition, certain states have also implemented
supplemental rebate programs that obligate manufacturers to pay rebates in excess of those required under federal law. Our estimate of these
rebates is based on the historical trends of rebates paid as well as on changes in wholesaler inventory levels and increases or decreases in the level
of sales. We estimate discounts on branded prescription drug sales to Medicare Part D participants in the Medicare “coverage gap” based on
historical experience of prescriptions and utilization expected to result in the discount of the “coverage gap”.
Outside the U.S., the majority of our pharmaceutical sales are contractually or legislatively governed. In certain European countries, certain
rebates are calculated on the governments total pharmaceutical spending or on specific product sale thresholds. We utilize historical data and
obtain third party information to determine the adequacy of these accruals. Also, this provision includes price reductions that are mandated by law
outside of the U.S.
A change of 5% would have an effect on our reserve balance of approximately $18.7 million.
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The following is a rollforward of the categories of variable consideration during 2024:
(In millions)
Balance at
December 31,
2023
Current Provision
Related to Sales Made
in the Current Period
Checks/ Credits
Issued to Third
Parties
Effects of Foreign
Exchange
Balance at
December 31, 2024
Chargebacks
$
530.3 
$
5,008.7 
$
(5,043.6)
$
(1.5)
$
493.9 
Rebates, promotional programs and other sales allowances
1,102.9 
4,193.1 
(3,986.8)
(42.3)
1,266.9 
Returns
425.4 
292.5 
(312.5)
(4.5)
400.9 
Governmental rebate programs
421.3 
718.1 
(751.6)
(13.1)
374.7 
Total
$
2,479.9 
$
10,212.4 
$
(10,094.5)
$
(61.4)
$
2,536.4 
Accruals for these provisions are presented in the consolidated financial statements as reductions in determining net revenues and as a contra asset
in accounts receivable, net (if settled via credit) and other current liabilities (if paid in cash). Accounts receivable are presented net of allowances relating to
these provisions, which were comprised of the following at December 31, 2024 and 2023, respectively:
(In millions)
December 31,

2024
December 31,

2023
Accounts receivable, net
$
1,547.0 
$
1,483.6 
Other current liabilities
989.4 
996.3 
Total
$
2,536.4 
$
2,479.9 
We have not made and do not anticipate making any significant changes to the methodologies that we use to measure provisions for variable
consideration; however, the balances within these reserves can fluctuate significantly through the consistent application of our methodologies. Historically,
we have not recorded in any current period any material amounts related to adjustments made to prior period reserves.
Acquisitions, including Intangible Assets, Goodwill and Contingent Consideration
The Company accounts for acquired businesses using the acquisition method of accounting in accordance with the provisions of ASC 805,
Business Combinations, which requires that the assets acquired and liabilities assumed be recorded at the date of acquisition at their respective estimated
fair values. The cost to acquire businesses is allocated to the underlying net assets of the acquired business based on estimates of their respective fair
values. Amounts allocated to acquired IPR&D are capitalized at the date of acquisition and, at that time, such IPR&D assets have indefinite lives. As
products in development are approved for sale, amounts are allocated to product rights and licenses and will be amortized over their estimated useful lives.
Finite-lived intangible assets are amortized over the expected life of the asset. Any excess of the purchase price over the estimated fair values of the net
assets acquired is recorded as goodwill. Refer to Note 4 Acquisitions and Other Transactions and Note 8 Goodwill and Intangible Assets included in Part
II, Item 8 of this Form 10-K for additional information.
Purchases of developed products and licenses that are accounted for as asset acquisitions, including milestone payments related to development
compounds due upon receipt of regulatory approvals, are capitalized as intangible assets and amortized over an estimated useful life. IPR&D assets
acquired as part of an asset acquisition are expensed immediately if they have no alternative future uses.
The judgments made in determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives,
can materially impact our results of operations. Fair values and useful lives are determined based on, among other factors, the expected future period of
benefit of the asset, the various characteristics of the asset and projected cash flows. Because this process involves management making estimates with
respect to future sales volumes, pricing, new product launches, government reform actions, anticipated cost environment and overall market conditions, and
because these estimates form the basis for the determination of whether or not an impairment charge should be recorded, these estimates are considered to
be critical accounting estimates.
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The Company records contingent consideration liabilities resulting from business acquisitions or divestitures at its estimated fair value on the
acquisition or divestiture date. Each reporting period thereafter, the Company revalues these obligations and records increases or decreases in their fair
value as adjustments to litigation settlements and other contingencies, net within the consolidated statements of operations. Changes in the fair value of the
contingent consideration obligations can result from adjustments to the discount rates, payment periods and adjustments in the probability of achieving
future development steps, regulatory approvals, market launches, operating results, sales targets and profitability. These fair value measurements represent
Level 3 measurements as they are based on significant inputs not observable in the market.
Significant judgment is employed in determining the assumptions utilized as of the acquisition or divestiture date and for each subsequent
measurement period. Accordingly, changes in the assumptions described above could have a material impact on the Company’s consolidated financial
condition and results of operations.
The Company reviews goodwill for impairment at least annually or more frequently if events or changes in circumstances indicate that the
carrying value of goodwill may not be recoverable based on management’s assessment of the fair value of the Company’s reporting units as compared to
their related carrying value. Under the authoritative guidance issued by the FASB, we have the option to first assess the qualitative factors to determine
whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to
perform a quantitative goodwill impairment test. If we choose to use qualitative factors and determine that it is more likely than not that the fair value of a
reporting unit is less than its carrying amount, then the goodwill impairment test would be required. The goodwill impairment test requires the Company to
estimate the fair value of the reporting unit and to compare the fair value of the reporting unit with its carrying amount. If the carrying amount is less than
its fair value, then no impairment is recognized. If the carrying amount recorded exceeds the fair value calculated, an impairment charge is recorded for the
difference. The judgments made in determining the projected cash flows used to estimate the fair value can materially impact the Company’s financial
condition and results of operations.
The Company performed its annual goodwill impairment test on a quantitative basis for its five reporting units, North America, Europe, Emerging
Markets, JANZ, and Greater China. In estimating each reporting unit’s fair value, the Company performed an extensive valuation analysis, utilizing a
discounted cash flow approach. The determination of the fair value of the reporting units requires the Company to make significant estimates and
assumptions that affect the reporting unit’s expected future cash flows. These estimates and assumptions, utilizing Level 3 inputs, primarily include, but are
not limited to, the discount rate, terminal growth rates, operating income before depreciation and amortization, capital expenditures forecasts and control
premiums.
The Company reviews goodwill for impairment annually on April 1st or more frequently if events or changes in circumstances indicate that the
carrying value of goodwill may not be recoverable. The Company performed the annual goodwill impairment test as of April 1, 2024.
When compared to the prior year’s annual goodwill impairment test completed on April 1, 2023, due to certain macroeconomic conditions, the
Company has experienced fluctuations in foreign exchange rates in certain international markets, combined with an increase in market interest rates. These
conditions impacted all reporting units, with the most significant impact in JANZ and Emerging Markets. The impact in the other reporting units was offset
by changes in other discount rate assumptions.
As of April 1, 2024, the allocation of the Company’s total goodwill was as follows: North America $3.12 billion, Europe $3.86 billion, Emerging
Markets $1.17 billion, JANZ $0.62 billion and Greater China $0.93 billion.
In conjunction with its annual goodwill impairment test, the Company recorded a goodwill impairment charge of $321.0 million during the second
quarter of 2024 related to its JANZ reporting unit, which was recorded within SG&A in the consolidated statement of operations. The impairment charge
was primarily the result of a 1.0% increase in the discount rate and a 0.5% reduction in the terminal growth rate assumption for the reporting unit.
For the JANZ reporting unit at April 1, 2024, the Company forecasted cash flows for the next 10 years. During the forecast period, the revenue
compound annual growth rate was approximately negative 0.3%. A terminal year value was calculated with a 1.0% revenue growth rate applied. The
discount rate utilized was 8.0% and the estimated tax rate was 30.3%.
Following the goodwill impairment charge recorded in the JANZ reporting unit, the carrying value of the reporting unit was equal to its estimated
fair value as of April 1, 2024. If market conditions or the projected results were to change materially, it may be necessary to record further impairment
charges to the JANZ reporting unit in future periods.
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As of April 1, 2024, the Company determined that the fair values of the North America, Greater China, and Emerging Markets reporting units
were substantially in excess of the respective unit’s carrying value.
For the Europe reporting unit, the estimated fair value exceeded its carrying value by approximately $882 million or 7.9% for the annual goodwill
impairment test. As it relates to the discounted cash flow approach for the Europe reporting unit at April 1, 2024, the Company forecasted cash flows for
the next 10 years. During the forecast period, the revenue compound annual growth rate was approximately 2.5%. A terminal year value was calculated
with a 2.0% revenue growth rate applied. The discount rate utilized was 10.0% and the estimated tax rate was 15.7%. If all other assumptions are held
constant, a reduction in the terminal value growth rate by 1.5% or an increase in discount rate by 1.0% would result in an impairment charge for the Europe
reporting unit.
Due to the inherent uncertainty involved in making these estimates, actual results could differ from those estimates. In addition, changes in
underlying assumptions, especially as they relate to the key assumptions detailed, could have a significant impact on the fair value of the reporting units.
The carrying values of long-lived assets, which include property, plant and equipment and intangible assets with finite lives, are evaluated
periodically in relation to the expected future undiscounted cash flows of the underlying assets and monitored for other potential triggering events. We
assess the recoverability of certain long-lived assets, principally finite-lived intangible assets, contained within the reporting units whenever certain
impairment indicators are present. Any impairment of these assets must be considered prior to our impairment review of goodwill. The assessment for
impairment is based on our ability to recover the carrying value of the long-lived assets or asset grouping by analyzing the expected future undiscounted
pre-tax cash flows specific to the asset or asset grouping. If the carrying amount is greater than the undiscounted cash flows, the Company recognizes an
impairment loss for the excess of the carrying amount over the estimated fair value based on discounted cash flows.
Significant management judgment is involved in estimating the recoverability of these assets and is dependent upon the accuracy of the
assumptions used in making these estimates, as well as how the estimates compare to the eventual future operating performance of the specific asset or
asset grouping. The fair value of finite-lived intangible assets was calculated as the present value of the estimated future net cash flows using a market rate
of return. At December 31, 2024 and 2023, the Company’s finite-lived intangible assets totaled $16.26 billion and $18.86 billion, respectively. Changes to
any of the Company’s assumptions related to the estimated fair value based on the discounted cash flows, including discount rates or the competitive
environment related to the assets, could lead to future material impairment charges. Any future long-lived assets impairment charges could have a material
impact on the Company’s consolidated financial condition and results of operations.
The Company’s indefinite-lived intangible assets, principally IPR&D acquired as part of business combinations, are tested at least annually for
impairment or upon the occurrence of a triggering event. The impairment test for IPR&D consists of a comparison of the asset’s fair value with its carrying
value. Impairment is determined to exist when the fair value of IPR&D assets, which is based upon updated forecasts and commercial development plans,
is less than the carrying value of the assets being tested. For the years ended December 31, 2024 and 2022, the Company recorded $177.1 million and $0.6
million, respectively, of impairment charges, which were recorded as a component of amortization expense. There were no IPR&D impairment charges in
2023. At December 31, 2024 and 2023, the Company’s IPR&D assets totaled $814.2 million and $319.4 million, respectively.
The fair value of both IPR&D and finite-lived intangible assets was determined based upon detailed valuations employing the income approach
which utilized Level 3 inputs, as defined in Note 9 Financial Instruments and Risk Management included in Part II, Item 8 of this Form 10-K. Changes to
any of the Company’s assumptions including changes to or abandonment of development programs, regulatory timelines, discount rates or the competitive
environment related to the assets could lead to future material impairment charges.
Income Taxes
We compute our income taxes based on the statutory tax rates and tax reliefs available to Viatris in the various jurisdictions in which we generate
income. Significant judgment is required in determining our income taxes and in evaluating our tax positions. We establish reserves in accordance with
Viatris’ policy regarding accounting for uncertainty in income taxes. Our policy provides that the tax effects from an uncertain tax position be recognized in
Viatris’ financial statements, only if the position is more likely than not of being sustained upon audit, based on the technical merits of the position. We
adjust these reserves in light of changing facts and circumstances, such as the settlement of a tax audit. Our provision for income taxes includes the impact
of reserve provisions and changes to reserves. Favorable resolution would be recognized as a reduction to our provision for income taxes in the period of
resolution or expiration of the underlying statutes of limitation. Based on this
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evaluation, as of December 31, 2024, our reserve for unrecognized tax benefits totaled $255.7 million, of which $182.2 million was recorded in connection
with the Combination and is subject to Pfizer’s indemnification obligations to Viatris under the Tax Matters Agreement.
Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the
existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred in certain taxing jurisdictions
over the three-year period ended December 31, 2024. Such objective evidence limits the ability to consider other subjective evidence such as our
projections for future growth.
Based on this evaluation and other factors, as of December 31, 2024, a valuation allowance of $1.23 billion has been recorded in order to measure
only the portion of the deferred tax asset that more likely than not will be realized. The amount of the deferred tax asset considered realizable, however,
could be adjusted if estimates of future taxable income during the carryforward period are reduced or if objective negative evidence in the form of
cumulative losses is no longer present and additional weight may be given to subjective evidence such as projections for growth. When assessing the
realizability of deferred tax assets, management considers all available evidence, including historical information, long-term forecasts of future taxable
income and possible tax planning strategies. Amounts recorded for valuation allowances can result from a complex series of estimates, assumptions and
judgments about future events. Due to the inherent uncertainty involved in making these estimates, assumptions and judgments, actual results could differ
materially. Any future increases to the Company’s valuation allowances could materially impact the Company’s consolidated financial condition and results
of operations. At December 31, 2024 and 2023, the Company’s net deferred tax assets totaled $753.0 million and $692.9 million, respectively.
A variance of 5% between estimated reserves and valuation allowances and actual resolution and realization of these tax items would have an
effect on our reserve balance and valuation allowance of approximately $74.5 million.
Legal Matters
Viatris is involved in various legal proceedings, some of which involve claims for substantial amounts. An estimate is made to accrue for a loss
contingency relating to any of these legal proceedings if it is probable that a liability was incurred as of the date of the financial statements and the amount
of loss can be reasonably estimated. Because of the subjective nature inherent in assessing the outcome of litigation and because of the potential that an
adverse outcome in a legal proceeding could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to
pay dividends or repurchase shares, and/or stock price, such estimates are considered to be critical accounting estimates.
A variance of 5% between estimated and recorded litigation reserves and actual resolution of certain legal matters would have an effect on our
litigation reserve balance of approximately $19.2 million. Refer to Note 19 Litigation included in Part II, Item 8 of this Form 10-K for further discussion of
litigation matters.
Impact of Currency Fluctuations and Inflation
Because our results are reported in U.S. Dollars, changes in the rate of exchange between the U.S. Dollar and the local currencies in the markets in
which we operate, mainly the Euro, Indian Rupee, Chinese Renminbi, Japanese Yen, Australian Dollar, Canadian Dollar, Pound Sterling and South Korean
Won affect our results as previously noted. In recent years, the global economy has been impacted by high levels of inflation and rising energy costs, which
has resulted in significant economic volatility. As a result, central banks have tightened their monetary policies and increased interest rates. While
inflationary and other macroeconomic pressures may ease and interest rates may decline, we do not expect to see a corresponding reduction in these higher
costs. These macroeconomic pressures combined with the volatility in foreign exchange rates, including the strengthening of the U.S. dollar versus certain
of the other currencies in which we operate, have impacted and may continue to negatively impact our results of operations. We proactively look to manage
such macroeconomic pressures by implementing strategies to mitigate and partially offset the impact of these factors.
Recent Accounting Pronouncements
Refer to Note 2 Summary of Significant Accounting Policies included in Part II, Item 8 of this Form 10-K for recently adopted accounting
pronouncements and recently issued accounting pronouncements not yet adopted.
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ITEM 7A.
Quantitative and Qualitative Disclosures About Market Risk
Foreign Currency Exchange Risk
A significant portion of our revenues and earnings are exposed to changes in foreign currency exchange rates. We seek to manage this foreign
exchange risk in part through operational means, including managing same currency revenues in relation to same currency costs and same currency assets
in relation to same currency liabilities.
From time to time, foreign exchange risk is managed through the use of foreign currency forward-exchange contracts. These contracts are used to
offset the potential earnings effects from mostly intercompany foreign currency assets and liabilities that arise from operations and from intercompany
loans. Any unhedged foreign exchange exposures continue to be subject to market fluctuations.
Our financial instrument holdings at year end were analyzed to determine their sensitivity to foreign exchange rate changes. The fair values of
these instruments were determined as follows:
•
foreign currency forward-exchange contracts — net present values
•
foreign currency denominated receivables, payables, debt and loans — changes in exchange rates.
In this sensitivity analysis, we assumed that the change in one currency’s rate relative to the U.S. Dollar would not have an effect on other
currencies’ rates relative to the U.S. Dollar. All other factors were held constant.
If there were an adverse change in foreign currency exchange rates of 10%, the expected net effect on net income related to Viatris’ foreign
currency denominated financial instruments would not be material.
The Company is also exposed to translation risk on non-U.S. dollar-denominated net assets. Non-U.S. dollar borrowings, principally our Euro and
Yen denominated long-term debt, are used to hedge the foreign currency exposures of our net investment in certain foreign affiliates and are designated as
hedges of net investments. The foreign exchange gains or losses on these hedges is included in the foreign currency translation component of accumulated
other comprehensive income (loss). If our net investment decreases below the equivalent value of the non-U.S. debt borrowings, the change in the
remeasurement basis of the debt would be subject to recognition in net income as changes occur.
Interest Rate and Long-Term Debt Risk
Viatris’ exposure to interest rate risk arises primarily from our U.S. Dollar and Euro borrowings and U.S. Dollar investments. We invest primarily
on a variable-rate basis and we borrow on both a fixed and variable basis. In order to maintain a certain ratio of fixed to variable rate debt, from time to
time, depending on market conditions, Viatris will use derivative financial instruments such as interest rate swaps to fix interest rates on variable-rate
borrowings or to convert fixed-rate borrowings to variable interest rates.
As of December 31, 2024, Viatris’ outstanding fixed rate borrowings consist principally of $13.33 billion notional amount of senior U.S. dollar
and Euro notes. Generally, the fair value of fixed interest rate debt will decrease as interest rates rise and increase as interest rates fall. As of December 31,
2024, the fair value of our outstanding fixed rate senior U.S. dollar and Euro notes was approximately $11.53 billion. As of December 31, 2024, Viatris’
outstanding variable rate borrowings consist principally of borrowings under the Yen Term Loan Facility of $254.4 million. A 100 basis point change in
interest rates on Viatris’ variable rate debt would result in a change in interest expense of approximately $2.6 million per year.
Fair Value Risk
The Company’s fair value risk exposure relates primarily to our equity investments that do not have readily determinable fair values, principally
the CCPS received as part of the Biocon Biologics Transaction. As of December 31, 2024 and 2023, the carrying value of these investments were
approximately $1.35 billion and $1.14 billion, respectively. A hypothetical 20 percent decline in the fair value of these investments would have decreased
the carrying value and increased other expense (income), net by approximately $270.0 million at December 31, 2024.
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ITEM 8.
Financial Statements And Supplementary Data
Index to Consolidated Financial Statements and
Supplementary Financial Information
 
Page
Management’s Report on Internal Control over Financial Reporting
78
Reports of Independent Registered Public Accounting Firm (PCAOB ID No. 34)
79
Consolidated Balance Sheets as of December 31, 2024 and 2023
83
Consolidated Statements of Operations for the Years Ended December 31, 2024, 2023 and 2022
84
Consolidated Statements of Comprehensive (Loss) Earnings for the Years Ended December 31, 2024, 2023 and 2022
85
Consolidated Statements of Equity for the Years Ended December 31, 2024, 2023 and 2022
86
Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022
87
Notes to Consolidated Financial Statements
88
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Management’s Report on Internal Control over Financial Reporting
Management of Viatris Inc. is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over
financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with accounting principles generally accepted in the United States of America. In order to evaluate the
effectiveness of internal control over financial reporting, management has conducted an assessment, including testing, using the criteria in Internal Control
- Integrated Framework (2013), issued by COSO. Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
As a result of this assessment, management has concluded that the Company maintained effective internal control over financial reporting as of
December 31, 2024 based on the criteria in Internal Control - Integrated Framework (2013) issued by COSO.
Our independent registered public accounting firm, Deloitte & Touche LLP (PCAOB ID No. 34), has audited the effectiveness of the Company’s
internal control over financial reporting. Deloitte & Touche LLP’s opinion on the Company’s internal control over financial reporting appears on page 82 of
this Annual Report on Form 10-K.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Viatris Inc.:
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Viatris Inc. and subsidiaries (the "Company") as of December 31, 2024 and 2023, the
related consolidated statements of operations, comprehensive (loss) earnings, equity, and cash flows, for each of the three years in the period ended
December 31, 2024, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our
opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the
results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles
generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's
internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued
by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2025, expressed an unqualified opinion on
the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial
statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to
those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the
financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or
required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2)
involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion
on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical
audit matters or on the accounts or disclosures to which they relate.
Goodwill – Viatris Inc. Europe and JANZ Reporting Units – Refer to Note 8 to the financial statements.
Critical Audit Matter Description
The Company performed an annual goodwill impairment test as of April 1, 2024. As of April 1, 2024, the Company had approximately $9.7 billion of
consolidated goodwill, $3.86 billion and $0.62 billion of which was allocated to its Europe and JANZ reporting units, respectively. The Company’s
evaluation of goodwill for impairment involves the comparison of the estimated fair value of each reporting unit to its carrying value. The Company
performed its valuation analysis, using an income-based approach, to determine the fair value of its Europe and JANZ reporting units. The determination of
the fair value requires management to make significant estimates and assumptions that affect the reporting unit’s expected future cash flows. These
estimates and assumptions, utilizing Level 3 valuation inputs, primarily include, but are not limited to, discount rates, terminal growth rates, operating
income before depreciation and amortization, and capital expenditures forecasts. The fair value of the Europe reporting unit exceeded its carrying value by
approximately $0.88 billion, or 7.9% as of April 1, 2024. The Company recorded a goodwill impairment charge of $321.0 million during the second
quarter related to the JANZ reporting
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unit. The impairment charge was primarily the result of a 1.0% increase in the discount rate and a 0.5% reduction in the terminal growth rate assumption
for the reporting unit.
Given that the Europe and JANZ reporting unit’s revenues are sensitive to changes in consumer demand, the approval of new product launches, the
expansion of existing products into new jurisdictions (which have differentiated distribution and commercialization models throughout the regions), and the
impact of business development activity, auditing management’s judgments regarding forecasts of future revenues, and the selection of the discount rates
and terminal growth rates required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value
specialists.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the forecasts of future revenues (“forecasts”), and the selection of the discount rates and terminal growth rates for the
Europe and the JANZ reporting units included the following procedures, among others:
•
We tested the effectiveness of controls over the review of the goodwill impairment tests, including those over the development of the business
forecasts of future revenues and the selection of the discount rates and terminal growth rates.
•
We evaluated management’s ability to accurately forecast future revenues of the Europe and JANZ reporting units by comparing actual results to
management’s historical forecasts.
•
We evaluated the reasonableness of management’s revenue forecasts by comparing the projections to (1) historical results, (2) internal
communications to management and the Board of Directors, and (3) forecasted information included in Company press releases. We also
considered third party reports related to macroeconomic and industry trends and made inquiries of management, including various regional
commercial and operations leaders to assess key inputs in the forecast assumptions.
•
With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology, discount rates, and terminal
growth rates, including (1) testing the source information underlying the determination of the discount rates and terminal growth rates and the
mathematical accuracy of the calculations, (2) developing a range of independent estimates and comparing those to the discount rates selected by
management, and (3) considering third party macroeconomic reports.
Net Revenue Provisions – Sales Returns Accrual at MPI – Refer to Note 3 to the financial statements.
Critical Audit Matter Description
The Company provides customers with the ability to return product, which varies country by country in accordance with local practices, generally within a
specified period prior (six months) and subsequent (twelve months) to the expiration date. The Company’s estimate of the provision for returns is generally
based upon historical experience with actual returns. The returns reserve at Mylan Pharmaceuticals Inc. (MPI) represents a significant component of the
global sales returns reserve as of December 31, 2024.
Estimating the amounts to be accrued for returns requires significant estimation as management’s model utilizes historical experience with actual returns
and considers levels of inventory in the distribution channel, product dating and expiration period, size and maturity of the market prior to a product launch,
entrance into the market of additional competitors, and changes in the regulatory environment. Given the volume of sales returns and the level of estimation
uncertainty involved, auditing management’s judgments required a high degree of auditor judgment and an increased extent of effort.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the Net Revenue Provisions – Sales Returns Accrual at MPI included the following, among others:
•
We evaluated the Company’s methodology and assumptions in developing their sales returns accrual model, including assessing the completeness
and accuracy of the underlying data used by management in their estimates.
•
We tested the effectiveness of controls over the calculation of the sales returns reserve at MPI.
•
We compared prior period sales returns accruals to sales returns credits subsequently issued to evaluate management’s ability to accurately
forecast sales returns activity.
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•
We developed independent expectations of product-level sales returns accruals and sales returns accruals in the aggregate using the following: 1)
historical sales and returns activity, 2) remaining shelf life information, 3) finished goods inventory on-hand at the end of the period, and 4)
adjustments for known or anticipated sales return activity based on market dynamics (market prior to Viatris launch, impact of competition, and
overall regulatory environment) and compared those to the recorded amounts.


/s/ DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
February 27, 2025
We have served as the Company's auditor since 1976.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Viatris Inc.:
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Viatris, Inc. and subsidiaries (the “Company”) as of December 31, 2024, based on criteria
established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024,
based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated
financial statements as of and for the year ended December 31, 2024, of the Company and our report dated February 27, 2025, expressed an unqualified
opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of
internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our
responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control
over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
/s/ DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
February 27, 2025
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VIATRIS INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In millions, except share and per share amounts)
December 31,

2024
December 31,

2023
ASSETS
Assets
Current assets:
Cash and cash equivalents
$
734.8 
$
991.9 
Accounts receivable, net
3,221.3 
3,700.4 
Inventories
3,854.1 
3,469.7 
Prepaid expenses and other current assets
1,710.5 
2,028.1 
Assets held for sale
— 
2,786.0 
Total current assets
9,520.7 
12,976.1 
Property, plant and equipment, net
2,666.1 
2,759.6 
Intangible assets, net
17,070.9 
19,181.1 
Goodwill
9,133.3 
9,867.1 
Deferred income tax benefit
753.0 
692.9 
Other assets
2,356.9 
2,208.7 
Total assets
$
41,500.9 
$
47,685.5 
LIABILITIES AND EQUITY
Liabilities
Current liabilities:
Accounts payable
$
1,853.7 
$
1,938.2 
Income taxes payable
192.7 
226.8 
Current portion of long-term debt and other long-term obligations
8.3 
1,943.4 
Liabilities held for sale
— 
275.1 
Other current liabilities
3,724.7 
3,393.9 
Total current liabilities
5,779.4 
7,777.4 
Long-term debt
14,038.9 
16,188.1 
Deferred income tax liability
1,107.9 
1,735.7 
Other long-term obligations
1,939.2 
1,516.9 
Total liabilities
22,865.4 
27,218.1 
Equity
Viatris Inc. shareholders’ equity
Common stock: $0.01 par value, 3,000,000,000 shares authorized; shares issued: 1,234,131,491 as of December 31,
2024 and 1,221,994,491 as of December 31, 2023
12.3 
12.2 
Additional paid-in capital
18,921.6 
18,814.7 
Retained earnings
3,418.8 
4,639.7 
Accumulated other comprehensive loss
(3,212.9)
(2,747.4)
19,139.8 
20,719.2 
Less: Treasury stock — at cost
Common stock shares: 40,483,663 as of December 31, 2024 and 21,239,521 as of December 31, 2023
504.3 
251.8 
Total equity
18,635.5 
20,467.4 
Total liabilities and equity
$
41,500.9 
$
47,685.5 
See Notes to Consolidated Financial Statements
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VIATRIS INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(In millions, except per share amounts)
 
Year Ended December 31,
 
2024
2023
2022
Revenues:
Net sales
$
14,692.8 
$
15,388.4 
$
16,218.1 
Other revenues
46.5 
38.5 
44.6 
Total revenues
14,739.3 
15,426.9 
16,262.7 
Cost of sales
9,115.7 
8,988.3 
9,765.7 
Gross profit
5,623.6 
6,438.6 
6,497.0 
Operating expenses:
Research and development
808.7 
805.2 
662.2 
Acquired IPR&D
28.3 
105.5 
36.4 
Selling, general and administrative
4,425.6 
4,650.1 
4,179.1 
Litigation settlements and other contingencies, net
350.9 
111.6 
4.4 
Total operating expenses
5,613.5 
5,672.4 
4,882.1 
Earnings from operations
10.1 
766.2 
1,614.9 
Interest expense
550.0 
573.1 
592.4 
Other expense (income), net
83.3 
(9.8)
(1,790.7)
(Loss) earnings before income taxes
(623.2)
202.9 
2,813.2 
Income tax provision
11.0 
148.2 
734.6 
Net (loss) earnings
$
(634.2)
$
54.7 
$
2,078.6 
(Loss) earnings per share attributable to Viatris Inc. shareholders
Basic
$
(0.53)
$
0.05 
$
1.71 
Diluted
$
(0.53)
$
0.05 
$
1.71 
Weighted average shares outstanding:
Basic
1,193.3 
1,200.3 
1,212.1 
Diluted
1,193.3 
1,206.9 
1,217.4 
See Notes to Consolidated Financial Statements
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VIATRIS INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive (Loss) Earnings
(In millions)
Year Ended December 31,
2024
2023
2022
Net (loss) earnings
$
(634.2)
$
54.7 
$
2,078.6 
Other comprehensive (loss) earnings, before tax:
Foreign currency translation adjustment
(744.1)
139.2 
(1,583.5)
Change in unrecognized (loss) gain and prior service cost related to defined benefit plans
(20.6)
(18.7)
279.1 
Net unrecognized gain (loss) on derivatives in cash flow hedging relationships
53.4 
13.9 
(36.9)
Net unrecognized gain (loss) on derivatives in net investment hedging relationships
325.4 
(178.5)
460.1 
Net unrealized (loss) gain on available-for-sale fixed income securities
(0.1)
1.5 
(2.8)
Other comprehensive loss, before tax
(386.0)
(42.6)
(884.0)
Income tax provision (benefit)
79.5 
(56.4)
132.9 
Other comprehensive (loss) earnings, net of tax
(465.5)
13.8 
(1,016.9)
Comprehensive (loss) earnings
$
(1,099.7)
$
68.5 
$
1,061.7 
See Notes to Consolidated Financial Statements
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VIATRIS INC. AND SUBSIDIARIES
Consolidated Statements of Equity
(In millions, except share amounts)
Additional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Equity
 
Common Stock
Treasury Stock
 
Shares
Cost
Shares
Cost
Balance at December 31, 2021
1,209,507,463  $12.1  $18,536.1  $3,688.8 
—  $
—  $
(1,744.3) $ 20,492.7 
Net earnings
— 
— 
— 
2,078.6 
— 
— 
— 
2,078.6 
Other comprehensive loss, net of tax
— 
— 
— 
— 
— 
— 
(1,016.9)
(1,016.9)
Share-based compensation expense
— 
— 
116.4 
— 
— 
— 
— 
116.4 
Issuance of restricted stock, net
3,972,427 
— 
1.6 
— 
— 
— 
— 
1.6 
Taxes related to the net share settlement of equity
awards
— 
— 
(11.6)
— 
— 
— 
— 
(11.6)
Issuance of common stock
313,341 
— 
3.3 
— 
— 
— 
— 
3.3 
Cash dividends declared, $0.48 per common
share
— 
— 
— 
(591.8)
— 
— 
— 
(591.8)
Balance at December 31, 2022
1,213,793,231  $12.1  $18,645.8  $5,175.6 
—  $
—  $
(2,761.2) $ 21,072.3 
Net earnings
—  $
—  $
—  $
54.7 
—  $
—  $
—  $
54.7 
Other comprehensive earnings, net of tax
— 
— 
— 
— 
— 
— 
13.8 
13.8 
Share-based compensation expense
— 
— 
180.7 
— 
— 
— 
— 
180.7 
Issuance of restricted stock and stock options
exercised, net
7,892,041 
0.1 
5.1 
— 
— 
— 
— 
5.2 
Common stock repurchase
— 
— 
— 
—  21,239,521 
(251.8)
— 
(251.8)
Taxes related to the net share settlement of equity
awards
— 
— 
(26.1)
— 
— 
— 
— 
(26.1)
Issuance of common stock
309,219 
— 
3.1 
— 
— 
— 
— 
3.1 
Cash dividends declared, $0.48 per common
share
— 
— 
— 
(590.6)
— 
— 
— 
(590.6)
Other
— 
— 
6.1 
— 
— 
— 
— 
6.1 
Balance at December 31, 2023
1,221,994,491  $12.2  $18,814.7  $4,639.7  21,239,521  $(251.8) $
(2,747.4) $ 20,467.4 
Net loss
—  $
—  $
—  $ (634.2)
—  $
—  $
—  $
(634.2)
Other comprehensive loss, net of tax
— 
— 
— 
— 
— 
— 
(465.5)
(465.5)
Share-based compensation expense
— 
146.1 
— 
— 
— 
— 
146.1 
Issuance of restricted stock and stock options
exercised, net
11,918,687 
0.1 
10.6 
— 
— 
— 
— 
10.7 
Common stock repurchase
— 
— 
— 
—  19,244,142 
(252.5)
— 
(252.5)
Taxes related to the net share settlement of equity
awards
— 
— 
(52.3)
— 
— 
— 
— 
(52.3)
Issuance of common stock
218,313 
— 
2.5 
— 
— 
— 
— 
2.5 
Cash dividends declared, $0.48 per common
share
— 
— 
— 
(586.7)
— 
— 
— 
(586.7)
Balance at December 31, 2024
1,234,131,491  $12.3  $18,921.6  $3,418.8  40,483,663  $(504.3) $
(3,212.9) $ 18,635.5 
See Notes to Consolidated Financial Statements
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VIATRIS INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In millions)
 
Year Ended December 31,
 
2024
2023
2022
Cash flows from operating activities:
Net (loss) earnings
$
(634.2)
$
54.7 
$
2,078.6 
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
2,893.2 
2,740.5 
3,027.6 
Deferred income tax benefit
(767.6)
(387.1)
(25.9)
Litigation settlements and other contingencies, net
274.5 
86.8 
(1.7)
Loss (gain) on disposal of business
399.5 
239.9 
(1,754.1)
Share-based compensation expense
146.1 
180.7 
116.4 
Acquired IPR&D
12.3 
100.4 
46.4 
Other non-cash items
297.7 
595.4 
434.3 
Changes in operating assets and liabilities:
Accounts receivable
300.1 
78.6 
(240.3)
Inventories
(723.4)
(613.3)
(259.5)
Trade accounts payable
36.0 
314.7 
170.2 
Income taxes
219.3 
(76.7)
25.3 
Other operating assets and liabilities, net
(150.6)
(414.6)
(618.3)
Net cash provided by operating activities
2,302.9 
2,900.0 
2,999.0 
Cash flows from investing activities:
Cash paid for acquisitions, net of cash acquired
(350.0)
(667.7)
— 
Capital expenditures
(326.0)
(377.0)
(406.0)
Payments for product rights and other, net
(20.8)
(97.5)
(37.0)
Proceeds from sale of property, plant and equipment
2.7 
14.0 
13.8 
Purchases of IPR&D
(12.3)
(100.4)
(46.4)
Proceeds from sale of assets and subsidiaries
2,507.1 
364.1 
1,950.0 
Purchase of marketable securities
(26.0)
(26.3)
(30.2)
Proceeds from the sale of marketable securities
26.0 
26.3 
29.9 
Net cash provided by (used in) investing activities
1,800.7 
(864.5)
1,474.1 
Cash flows from financing activities:
Proceeds from issuance of long-term debt
— 
0.3 
1,875.6 
Payments of long-term debt
(3,713.7)
(1,250.2)
(3,662.5)
Payments of financing fees
(4.8)
(0.5)
(1.9)
Change in short-term borrowings, net
— 
0.3 
(1,493.2)
Purchase of common stock
(250.0)
(250.0)
— 
Taxes paid related to net share settlement of equity awards
(53.3)
(38.2)
(17.3)
Contingent consideration payments
(31.5)
(8.4)
(18.9)
Cash dividends paid
(574.8)
(575.6)
(581.6)
Non-contingent payments for product rights
— 
(9.7)
— 
Issuance of common stock
2.5 
3.1 
3.3 
Other items, net
295.2 
(173.0)
18.6 
Net cash used in financing activities
(4,330.4)
(2,301.9)
(3,877.9)
Effect on cash of changes in exchange rates
(30.7)
(2.5)
(38.9)
Net (decrease) increase in cash, cash equivalents and restricted cash
(257.5)
(268.9)
556.3 
Cash, cash equivalents and restricted cash — beginning of period
993.6 
1,262.5 
706.2 
Cash, cash equivalents and restricted cash — end of period
$
736.1 
$
993.6 
$
1,262.5 
Supplemental disclosures of cash flow information —
Cash paid during the period for:
Income taxes
$
514.0 
$
570.9 
$
735.2 
Interest
$
561.1 
$
611.6 
$
642.5 
See Notes to Consolidated Financial Statements
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Viatris Inc. and Subsidiaries
Notes to Consolidated Financial Statements
1.
 Nature of Operations
Viatris is a global healthcare company whose breadth and scale we believe make it uniquely positioned to address healthcare needs globally. With
a mission to empower people worldwide to live healthier at every stage of life, Viatris supplies high-quality medicines to patients around the world. The
Company has a global footprint, an extensive portfolio of medicines that is well-diversified across therapeutic areas, a one-of-a-kind global supply chain
designed to reach more people when and where they need them, and the scientific expertise to address some of the world's most enduring health challenges.
The Company operates in more than 165 countries and territories with approximately 32,000 employees. The Company has 26 manufacturing and
packaging sites worldwide, more than 1,400 approved molecules, and industry leading commercial, R&D, regulatory, manufacturing, legal and medical
expertise. Viatris’ portfolio consists of generics (including complex products), globally recognized iconic brands, and an expanding portfolio of innovative
medicines. We conduct our business through four segments: Developed Markets, Greater China, JANZ, and Emerging Markets. Viatris is headquartered in
the U.S., with global centers in Pittsburgh, Pennsylvania, Shanghai, China and Hyderabad, India.
Beginning in 2024, upfront and milestone payments related to externally developed IPR&D projects acquired directly in a transaction other than a
business combination, which were previously included in cash flows from operating activities in the consolidated statements of cash flows, are now
classified as cash flows from investing activities. Certain reclassifications were made to conform the prior period consolidated financial statements to the
current period presentation. The adjustments resulted in an increase to net cash provided by operating activities and an increase to net cash used in
investing activities of $100.4 million for the year ended December 31, 2023, and in an increase to net cash provided by operating activities and a decrease
to net cash provided by investing activities of $46.4 million for the year ended December 31, 2022.
2.
Summary of Significant Accounting Policies
Principles of Consolidation. The consolidated financial statements include the accounts of Viatris and those of its wholly owned and majority-
owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates in the Preparation of Financial Statements. The preparation of financial statements, in conformity with U.S. GAAP, requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Because of the uncertainty inherent in such estimates, actual results could differ
from those estimates.
Foreign Currencies. The consolidated financial statements are presented in U.S. Dollars, the reporting currency of Viatris. Statements of
Operations and Cash Flows of all of the Company’s subsidiaries that have functional currencies other than U.S. Dollars are translated at a weighted average
exchange rate for the period for inclusion in the consolidated statements of operations and cash flows, whereas assets and liabilities are translated at the end
of the period exchange rates for inclusion in the consolidated balance sheets. Translation differences are recorded directly in shareholders’ equity as foreign
currency translation adjustments. Gains or losses on transactions denominated in a currency other than the subsidiaries’ functional currency, which arise as
a result of changes in foreign currency exchange rates, are recorded in the consolidated statements of operations.
Under ASC 830, Foreign Currency Matters (“ASC 830”), a highly inflationary economy is one that has cumulative inflation of approximately
100% or more over a three-year period. Effective October 1, 2024, we classified Egypt as highly inflationary and began to utilize the U.S. dollar as our
functional currency in Egypt, which historically utilized the Egyptian pound as the functional currency. Effective April 1, 2022, we classified Turkey as
highly inflationary and began to utilize the U.S. dollar as our functional currency in Turkey, which historically utilized the Turkish lira as the functional
currency. Application of the guidance in ASC 830 did not have a material impact on our consolidated financial statements for the years ended
December 31, 2024, 2023 and 2022.
Cash and Cash Equivalents. Cash and cash equivalents are comprised of highly liquid investments with an original maturity of three months or
less at the date of purchase.
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Debt and Equity Securities. Debt securities classified as available-for-sale on the date of purchase are recorded at fair value, with net unrealized
gains and losses, net of income taxes, reflected in accumulated other comprehensive loss as a component of shareholders’ equity. Net realized gains and
losses on sales of available-for-sale debt securities are computed on a specific security basis and are included in Other expense (income), net in the
consolidated statements of operations. Debt securities classified as trading securities are valued using the quoted market price from broker or dealer
quotations or transparent pricing sources at the reporting date, with gains and losses included in Other expense (income), net in the consolidated statements
of operations. Fair value is determined based on observable market quotes or valuation models using assessments of counterparty credit worthiness, credit
risk or underlying security and overall capital market liquidity. Debt securities are reviewed for impairment by assessing if the decline in market value of
the investment below the carrying value is other than temporary.
Changes in the fair value of equity securities are recorded in Other expense (income), net in the consolidated statements of operations. Investments
in equity securities with readily determinable fair values are recorded at fair value. Investments in equity securities without readily determinable fair values
for which the Company has elected to utilize the measurement alternative under ASC 321, Investments - Equity Securities are recorded at cost minus any
impairment, plus or minus changes in their estimated fair value resulting from observable price changes in orderly transactions for the identical or a similar
investment of the same issuer. Investments in equity securities without readily determinable fair values are assessed for potential impairment on a quarterly
basis based on qualitative factors.
Concentrations of Credit Risk. Financial instruments that potentially subject the Company to credit risk consist principally of interest-bearing
investments, derivatives and accounts receivable.
Viatris invests its excess cash in high-quality, liquid money market instruments, principally overnight deposits and highly rated money market
funds. The Company maintains deposit balances at certain financial institutions in excess of federally insured amounts. Periodically, the Company reviews
the creditworthiness of its counterparties to derivative transactions, and it does not expect to incur a loss from failure of any counterparties to perform under
agreements it has with such counterparties.
Inventories. Inventories are stated at the lower of cost and net realizable value, with cost principally determined by the weighted average cost
method. Provisions for potentially obsolete or slow-moving inventory, including pre-launch inventory, are made based on our analysis of product dating,
inventory levels, historical obsolescence and future sales forecasts. Included as a component of cost of sales is expense related to the net realizable value of
inventories.
Property, Plant and Equipment. Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is computed and
recorded on a straight-line basis over the assets’ estimated service lives (3 to 18 years for machinery and equipment and other fixed assets and 15 to 39
years for buildings and improvements). Capitalized software is included in property, plant and equipment and is amortized over estimated useful lives
ranging from 3 to 7 years.
Intangible Assets and Goodwill. Intangible assets are stated at cost less accumulated amortization. Amortization is generally recorded on a
straight-line basis over estimated useful lives ranging from 3 to 20 years. The Company periodically reviews the estimated useful lives of intangible assets
and makes adjustments when events indicate that a shorter life is appropriate.
The Company accounts for acquired businesses using the acquisition method of accounting in accordance with the provisions of ASC 805,
Business Combinations, which requires that the assets acquired and liabilities assumed be recorded at the date of acquisition at their respective estimated
fair values. The cost to acquire businesses is allocated to the underlying net assets of the acquired business based on estimates of their respective fair
values. Amounts allocated to acquired IPR&D are capitalized at the date of acquisition and, at that time, such IPR&D assets have indefinite lives. As
products in development are approved for sale, amounts are allocated to product rights and licenses and will be amortized over their estimated useful lives.
Finite-lived intangible assets are amortized over the expected life of the asset. Any excess of the purchase price over the estimated fair values of
the net assets acquired is recorded as goodwill.
Purchases of developed products and licenses that are accounted for as asset acquisitions, including milestone payments related to development
compounds due upon receipt of regulatory approvals, are capitalized as intangible assets and amortized over an estimated useful life. IPR&D assets
acquired as part of an asset acquisition are expensed immediately if they have no alternative future uses.
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The Company reviews goodwill for impairment at least annually or more frequently if events or changes in circumstances indicate that the
carrying value of goodwill may not be recoverable based on management's assessment of the fair value of the Company's reporting units as compared to
their related carrying value. Under the authoritative guidance issued by the FASB, we have the option to first assess the qualitative factors to determine
whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to
perform a quantitative goodwill impairment test. If we choose to use qualitative factors and determine that it is more likely than not that the fair value of a
reporting unit is less than its carrying amount, then the goodwill impairment test would be required. The goodwill impairment test requires the Company to
estimate the fair value of the reporting unit and to compare the fair value of the reporting unit with its carrying amount. If the carrying amount is less than
its fair value, then no impairment is recognized. If the carrying amount recorded exceeds the fair value calculated, an impairment charge is recorded for the
difference. The judgments made in determining the projected cash flows used to estimate the fair value can materially impact the Company’s financial
condition and results of operations.
Indefinite-lived intangible assets, principally IPR&D acquired as part of business combinations, are tested at least annually for impairment or upon
the occurrence of a triggering event. The impairment test for IPR&D consists of a comparison of the asset’s fair value with its carrying value. Impairment is
determined to exist when the fair value of IPR&D assets, which is based upon updated forecasts and commercial development plans, is less than the
carrying value of the assets being tested.
Contingent Consideration. Viatris records contingent consideration liabilities resulting from business acquisitions or divestitures at its estimated
fair value on the acquisition or divestiture date. Each reporting period thereafter, the Company revalues these obligations and records increases or decreases
in their fair value as adjustments to litigation settlements and other contingencies, net within the consolidated statements of operations. Changes in the fair
value of the contingent consideration obligations can result from adjustments to the discount rates, payment periods and adjustments in the probability of
achieving future development steps, regulatory approvals, market launches, operating results, sales targets and profitability. These fair value measurements
represent Level 3 measurements as they are based on significant inputs not observable in the market.
Significant judgment is employed in determining the assumptions utilized as of the acquisition or divestiture date and for each subsequent
measurement period. Accordingly, changes in the assumptions described above could have a material impact on the Company’s consolidated financial
condition and results of operations.
Viatris records contingent consideration assets resulting from divestitures when the contingent consideration is resolved.
Impairment of Long-Lived Assets. The carrying values of long-lived assets, which include property, plant and equipment and intangible assets
with finite lives, are evaluated periodically in relation to the expected future undiscounted cash flows of the underlying assets and monitored for other
potential triggering events. The assessment for impairment is based on our ability to recover the carrying value of the long-lived assets or asset grouping by
analyzing the expected future undiscounted pre-tax cash flows specific to the asset or asset grouping. If the carrying amount is greater than the
undiscounted cash flows, the Company recognizes an impairment loss for the excess of the carrying amount over the estimated fair value based on
discounted cash flows.
Significant management judgment is involved in estimating the recoverability of these assets and is dependent upon the accuracy of the
assumptions used in making these estimates, as well as how the estimates compare to the eventual future operating performance of the specific asset or
asset grouping. Any future long-lived assets impairment charges could have a material impact on the Company’s consolidated financial condition and
results of operations.
Divestitures. For businesses that are divested, including divestitures of products that qualify as a business, the Company records the net gain or
loss on the sale within Other expense (income), net, and allocates the relative fair value of goodwill associated with the businesses in the determining the
gain or loss on sale. Any resulting goodwill impairment is recorded within SG&A. The Company records amounts received as part of TSAs within Other
expense (income), net. For divestitures of products that qualify as assets, the Company records the gain or loss on sale within SG&A.
Short-Term Borrowings. The Company’s subsidiaries in India have working capital facilities with several banks which are secured by its current
assets. The Company also has the Commercial Paper Program and Receivables Facility. Under the terms of the Receivables Facility, certain of our accounts
receivable secure the amounts borrowed and cannot be used to pay our other debts or liabilities. As the accounts receivable do not transfer to the banks, any
amounts outstanding under the facility are recorded as borrowings and the underlying receivables continue to be included in accounts receivable, net, in the
consolidated balance sheets.
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Revenue Recognition. The Company recognizes revenues in accordance with ASC 606, Revenue from Contracts with Customers. Under ASC
606, the Company recognizes net revenue for product sales when control of the promised goods or services is transferred to our customers in an amount
that reflects the consideration we expect to be entitled to in exchange for those goods or services. Revenues are recorded net of provisions for variable
consideration, including discounts, rebates, governmental rebate programs, price adjustments, returns, chargebacks, promotional programs and other sales
allowances. Accruals for these provisions are presented in the consolidated financial statements as reductions in determining net sales and as a contra asset
in accounts receivable, net (if settled via credit) and other current liabilities (if paid in cash). Amounts recorded for revenue deductions can result from a
complex series of judgements about future events and uncertainties and can rely heavily on estimates and assumptions. The following section briefly
describes the nature of our provisions for variable consideration and how such provisions are estimated:
•
Chargebacks: the Company has agreements with certain indirect customers, such as independent pharmacies, retail pharmacy chains, managed
care organizations, hospitals, nursing homes, governmental agencies and pharmacy benefit managers, which establish contract prices for certain
products. The indirect customers then independently select a wholesaler from which to purchase the products at these contracted prices.
Alternatively, certain wholesalers may enter into agreements with indirect customers that establish contract pricing for certain products, which the
wholesalers provide. Under either arrangement, Viatris will provide credit to the wholesaler for any difference between the contracted price with
the indirect party and the wholesaler’s invoice price. Such credits are called chargebacks. The provision for chargebacks is based on expected sell-
through levels by our wholesaler customers to indirect customers, as well as estimated wholesaler inventory levels.
•
Rebates, promotional programs and other sales allowances: this category includes rebate and other programs to assist in product sales. These
programs generally provide that the customer receives credit directly related to the amount of purchases or credits upon the attainment of pre-
established volumes. Also included in this category are prompt pay discounts, administrative fees and price adjustments to reflect decreases in the
selling prices of products.
•
Returns: consistent with industry practice, Viatris maintains a return policy that allows customers to return a product, which varies country by
country in accordance with local practices, generally within a specified period prior (six months) and subsequent (twelve months) to the expiration
date. The Company’s estimate of the provision for returns is generally based upon historical experience with actual returns. Generally, returned
products are destroyed and customers are refunded the sales price in the form of a credit.
•
Governmental rebate programs: government reimbursement programs in the U.S. include Medicare, Medicaid, and State Pharmacy Assistance
Programs established according to statute, regulations and policy. Manufacturers of pharmaceutical products that are covered by the Medicaid
program are required to pay rebates to each state based on a statutory formula set forth in the Social Security Act. Medicare beneficiaries are
eligible to obtain discounted prescription drug coverage from private sector providers. In addition, certain states have also implemented
supplemental rebate programs that obligate manufacturers to pay rebates in excess of those required under federal law. Our estimate of these
rebates is based on the historical trends of rebates paid as well as on changes in wholesaler inventory levels and increases or decreases in the level
of sales. We estimate discounts on branded prescription drug sales to Medicare Part D participants in the Medicare “coverage gap” based on
historical experience of prescriptions and utilization expected to result in the discount of the “coverage gap”.
Outside the U.S., the majority of our pharmaceutical sales are contractually or legislatively governed. In certain European countries, certain
rebates are calculated on the governments total pharmaceutical spending or on specific product sale thresholds. We utilize historical data and
obtain third party information to determine the adequacy of these accruals. Also, this provision includes price reductions that are mandated by law
outside of the U.S.
Our net sales may be impacted by wholesaler and distributor inventory levels of our products, which can fluctuate throughout the year due to the
seasonality of certain products, pricing, the timing of product demand, purchasing decisions and other factors. Such fluctuations may impact the
comparability of our net sales between periods.
Consideration received from licenses of intellectual property is recorded as other revenues. Royalty or profit share amounts, which are based on
sales of licensed products or technology, are recorded when the customer’s subsequent sales or usages occur. Such consideration is included in other
revenues in the consolidated statements of operations.
Receivables, including deferred consideration, with terms in excess of one year are initially recorded at their net present value using discount rates
reflecting the relative credit risk.
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Research and Development. R&D expenses are charged to operations as incurred. R&D expense consists of costs incurred in performing research
and development activities, including but not limited to, compensation and benefits, facilities and overhead expense, clinical trial expense and fees paid to
contract research organizations.
Acquired IPR&D. Acquired IPR&D expense includes the initial cost of externally developed IPR&D projects, acquired directly in a transaction
other than a business combination, that do not have an alternative future use. Additionally, the related milestone payment obligations that are incurred prior
to regulatory approval of the compound are recorded as acquired IPR&D expense when the event triggering the obligation to pay the milestone occurs.
Income Taxes. Income taxes have been provided for using an asset and liability approach in which deferred income taxes reflect the tax
consequences on future years of events that the Company has already recognized in the financial statements or tax returns. Changes in enacted tax rates or
laws may result in adjustments to the recorded tax assets or liabilities in the period that the new tax law is enacted.
Earnings per Share. Basic (loss) earnings per share is computed by dividing net (loss) earnings attributable to holders of Viatris Inc. common
stock by the weighted average number of shares outstanding during the period. Diluted (loss) earnings per share is computed by dividing net (loss) earnings
attributable to holders of Viatris Inc. common stock by the weighted average number of shares outstanding during the period increased by the number of
additional shares that would have been outstanding related to potentially dilutive securities or instruments, if the impact is dilutive.
Basic and diluted (loss) earnings per share attributable to Viatris Inc. are calculated as follows:
Year Ended December 31,
(In millions, except per share amounts)
2024
2023
2022
Basic (loss) earnings attributable to Viatris Inc. common shareholders (numerator):
Net (loss) earnings attributable to Viatris Inc. common shareholders
$
(634.2)
$
54.7 
$
2,078.6 
Shares (denominator):
Weighted average shares outstanding
1,193.3 
1,200.3 
1,212.1 
Basic (loss) earnings per share attributable to Viatris Inc. shareholders
$
(0.53)
$
0.05 
$
1.71 
Diluted (loss) earnings attributable to Viatris Inc. common shareholders (numerator):
Net (loss) earnings attributable to Viatris Inc. common shareholders
$
(634.2)
$
54.7 
$
2,078.6 
Shares (denominator):
Weighted average shares outstanding
1,193.3 
1,200.3 
1,212.1 
Share-based awards
— 
6.6 
5.3 
Total dilutive shares outstanding
1,193.3 
1,206.9 
1,217.4 
Diluted (loss) earnings per share attributable to Viatris Inc. shareholders
$
(0.53)
$
0.05 
$
1.71 
Additional stock awards and Restricted Stock Awards were outstanding during the years ended December 31, 2024, 2023 and 2022 but were not
included in the computation of diluted earnings per share for each respective period because the effect would be anti-dilutive. Excluded shares also include
certain share-based compensation awards and restricted shares whose performance conditions had not been fully met. Such excluded shares and anti-
dilutive awards represented 19.9 million, 16.4 million and 11.8 million shares for the years ended December 31, 2024, 2023 and 2022, respectively.
The Company paid quarterly cash dividends of $0.12 per share on the Company’s issued and outstanding common stock on March 18, 2024, June
14, 2024, September 13, 2024 and December 13, 2024. On February 24, 2025, the Company’s Board of Directors declared a quarterly cash dividend of
$0.12 per share on the Company’s issued and outstanding common stock, which will be payable on March 18, 2025 to shareholders of record as of the
close of business on March 10, 2025. The declaration and payment of future dividends to holders of the Company’s common stock will be at the discretion
of the Board of Directors, and will depend upon factors, including but not limited to, the Company’s financial condition, earnings, capital requirements of
its businesses, legal requirements, regulatory constraints, industry practice, and other factors that the Board of Directors deems relevant. The Company also
paid quarterly cash dividends of $0.12 per share on the Company’s issued and outstanding common stock in each of the four quarters of 2023 and 2022.
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On May 6, 2022, the Company announced that its Board of Directors had authorized a Dividend Reinvestment and Share Purchase Plan, which
allows shareholders to automatically reinvest all or a portion of the cash dividends paid on their shares of the Company’s common stock and to make
certain additional optional cash investments in the Company’s common stock.
On February 28, 2022, the Company announced that its Board of Directors had authorized a share repurchase program for the repurchase of up to
$1.0 billion of the Company’s shares of common stock. The Company subsequently announced that on February 26, 2024, its Board of Directors
authorized a $1.0 billion increase to the Company’s previously announced $1.0 billion share repurchase program. As a result, the Company’s share
repurchase program now authorizes the repurchase of up to $2.0 billion of the Company’s shares of common stock. Such repurchases may be made from
time-to-time at the Company’s discretion and effected by any means, including but not limited to, open market repurchases, pursuant to plans in accordance
with Rules 10b5-1 or 10b-18 under the Exchange Act, privately negotiated transactions (including accelerated stock repurchase programs) or any
combination of such methods as the Company deems appropriate. The program does not have an expiration date. During the years ended December 31,
2024 and 2023, the Company repurchased approximately 19.2 million shares of common stock at a cost of approximately $250 million, and approximately
21.2 million shares of common stock at a cost of approximately $250 million, respectively, under the program. The Company did not repurchase any shares
of common stock under the share repurchase program in 2022. The share repurchase program does not obligate the Company to acquire any particular
amount of common stock. The Company had repurchased a total of $500 million in shares through December 31, 2024 under the program.
Share-Based Compensation. The fair value of share-based compensation is recognized as expense in the consolidated statements of operations
over the vesting period.
Derivatives. From time to time the Company may enter into derivative financial instruments (mainly foreign currency exchange forward contracts,
interest rate swaps and purchased equity call options) designed to: 1) hedge the cash flows resulting from existing assets and liabilities and transactions
expected to be entered into over the next 24 months in currencies other than the functional currency, 2) hedge the variability in interest expense on floating
rate debt, 3) hedge the fair value of fixed-rate notes, 4) hedge against changes in interest rates that could impact future debt issuances, 5) hedge cash or
share payments required on conversion of issued convertible notes, 6) hedge a net investment in a foreign operation, or 7) economically hedge the foreign
currency exposure associated with the purchase price of non-U.S. acquisitions or divestitures. Derivatives are recognized as assets or liabilities in the
consolidated balance sheets at their fair value. When the derivative instrument qualifies as a cash flow hedge, changes in the fair value are deferred through
other comprehensive earnings. If a derivative instrument qualifies as a fair value hedge, the changes in the fair value, as well as the offsetting changes in
the fair value of the hedged items, are generally included in within the same line item in the consolidated statements of operations as the hedged item.
When such instruments do not qualify for hedge accounting the changes in fair value are recorded in the consolidated statements of operations within Other
expense (income), net.
Financial Instruments. The Company’s financial instruments consist primarily of short-term and long-term debt, interest rate swaps, forward
contracts and option contracts. The Company’s financial instruments also include cash and cash equivalents as well as accounts and other receivables and
accounts payable, the fair values of which approximate their carrying values. As a policy, the Company does not engage in speculative or leveraged
transactions.
The Company carries derivative instruments in the consolidated balance sheets at fair value, determined by reference to market data such as
forward rates for currencies, implied volatility, and interest rate swap yield curves. The accounting for changes in the fair value of a derivative instrument
depends on whether it has been designated and qualifies as part of a hedging relationship and, if so, the reason for holding it. In addition, the Company has
designated certain long-term debt instruments as net investment hedges.
Recent Accounting Pronouncements.
Adoption of New Accounting Standards
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on
Financial Reporting (“ASU 2020-04”), which for a limited period of time adds ASC 848 to provide optional expedients and exceptions for applying U.S.
GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. ASU 2020-04 applies only to
contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference
rate reform. On December 21, 2022, the FASB issued ASU 2022-06 to defer the sunset date of ASC 848 until December 31, 2024. ASU
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2022-06 became effective upon issuance. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements
and disclosures.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU
2023-07”), which includes amendments to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant
segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple
segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure
requirements. The standard requires retrospective application to all prior periods presented. We adopted this ASU effective December 31, 2024. Refer to
Note 15 Segment Information for additional information. The adoption of ASU 2023-07 did not affect the Company’s financial condition, results of
operations or cash flows as the guidance only requires additional disclosures.
Accounting Standards and Disclosure Rules Issued Not Yet Adopted
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which
requires expanded income tax disclosures, including greater disaggregation of information in the effective tax rate reconciliation and of income taxes paid.
The amendments in ASU 2023-09 are effective for all public entities for fiscal years beginning after December 15, 2024, with early adoption permitted.
The Company is currently assessing the impact of the adoption of this guidance on its consolidated financial statement disclosures.
In March 2024, the SEC adopted final rules under SEC Release No. 34-99678 and No. 33-11275, “The Enhancement and Standardization of
Climate-Related Disclosures for Investors” (the “Final Rules”), which will require registrants to provide certain climate-related information in their
registration statements and annual reports. The Final Rules require, among other things, disclosure in the notes to the audited financial statements of the
effects of severe weather events and other natural conditions, subject to certain thresholds, as well as amounts related to carbon offsets and renewable
energy credits or certificates in certain circumstances. The Final Rules will also require disclosure outside of the financial statements of material scope 1
and scope 2 greenhouse gas emissions, among other climate-related disclosures. In April 2024, the SEC stayed the effectiveness of the Final Rules and the
timing of the effectiveness of these disclosure requirements remains uncertain. Prior to the effectiveness of the Final Rules being stayed, the disclosure
requirements of the Final Rules were scheduled to begin phasing in for the Company for fiscal year 2025. The Company is currently monitoring the status
of the Final Rules and assessing their impact on its consolidated financial statement disclosures.
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which requires entities to disclose specified
information about certain costs and expenses, including amounts of purchases of inventory, employee compensation, depreciation, and intangible asset
amortization. The amendments in ASU 2024-03 are effective for annual reporting periods beginning after December 15, 2026, and interim reporting
periods beginning after December 15, 2027, with early adoption permitted. The Company is currently assessing the impact of the adoption of this guidance
on its consolidated financial statement disclosures.
3.
Revenue Recognition and Accounts Receivable
The following table presents the Company’s net sales by product category for each of our reportable segments for the years ended December 31,
2024, 2023, and 2022, respectively:
(In millions)
2024 Net Sales
Product Category
Developed Markets
Greater China
JANZ
Emerging Markets
Total
Brands
4,731.6 
2,156.7 
744.2 
1,567.8 
9,200.3 
Generics
4,197.8 
9.8 
602.0 
682.9 
5,492.5 
Total Viatris
$
8,929.4 
$
2,166.5 
$
1,346.2 
$
2,250.7 
$
14,692.8 
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(In millions)
2023 Net Sales
Product Category
Developed Markets
Greater China
JANZ
Emerging Markets
Total
Brands
5,239.0 
2,152.1 
782.9 
1,626.5 
9,800.5 
Generics
4,012.9 
8.3 
641.6 
925.1 
5,587.9 
Total Viatris
$
9,251.9 
$
2,160.4 
$
1,424.5 
$
2,551.6 
$
15,388.4 
(In millions)
2022 Net Sales
Product Category
Developed Markets
Greater China
JANZ
Emerging Markets
Total
Brands
5,160.4 
2,190.7 
922.6 
1,615.9 
9,889.6 
Generics
4,608.5 
10.5 
709.8 
999.7 
6,328.5 
Total Viatris
$
9,768.9 
$
2,201.2 
$
1,632.4 
$
2,615.6  $
16,218.1 
____________
Amounts include the impact of foreign currency translations compared to the prior year period.
Amounts reflected in the above tables include net sales attributable to divested businesses until the date of disposition. Refer to Note 5 Divestitures
for additional information.
The following table presents net sales on a consolidated basis for select key products for the years ended December 31, 2024, 2023, and 2022,
respectively:
Year Ended December 31,
(In millions)
2024
2023
2022
Select Key Global Products
Lipitor ®
$
1,468.8  $
1,559.3  $
1,635.2 
Norvasc ®
673.3 
732.4 
775.1 
Lyrica ®
495.4 
556.5 
623.8 
Viagra ®
395.6 
428.8 
458.9 
EpiPen® Auto-Injectors
392.0 
442.2 
378.0 
Creon ®
328.2 
304.9 
304.0 
Celebrex ®
285.6 
330.6 
338.1 
Effexor ®
252.9 
262.9 
279.6 
Zoloft ®
235.7 
235.7 
246.2 
Xalabrands
166.4 
193.2 
195.1 
Select Key Segment Products
Yupelri ®
$
238.5  $
220.8  $
202.1 
Dymista ®
188.0 
200.0 
179.8 
Influvac ®
178.7 
192.4 
225.5 
Amitiza ®
149.2 
157.0 
167.9 
Xanax ®
145.0 
154.8 
156.5 
____________
The Company does not disclose net sales for any products considered competitively sensitive.
Products disclosed may change in future periods, including as a result of seasonality, competition or new product launches.
Amounts include the impact of foreign currency translations compared to the prior year period.
Refer to intellectual property matters included in Note 19 Litigation for additional information regarding Yupelri® and Amitiza®.
(a)
(b)
(a)
(b)
(c)
(d)
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Variable Consideration and Accounts Receivable    
The following table presents a reconciliation of gross sales to net sales by each significant category of variable consideration during the years
ended December 31, 2024, 2023 and 2022, respectively:
Year Ended December 31,
(In millions)
2024
2023
2022
Gross sales
$
24,905.2 
$
25,693.1 
$
27,662.1 
Gross to net adjustments:
Chargebacks
(5,008.7)
(5,457.9)
(6,192.2)
Rebates, promotional programs and other sales allowances
(4,193.1)
(3,857.6)
(4,346.2)
Returns
(292.5)
(223.2)
(296.7)
Governmental rebate programs
(718.1)
(766.0)
(608.9)
Total gross to net adjustments
$
(10,212.4)
$
(10,304.7)
$
(11,444.0)
Net sales
$
14,692.8 
$
15,388.4 
$
16,218.1 
____________
Amounts reflected in the above table include net sales attributable to divested businesses until the date of disposition. Refer to Note 5 Divestitures
for additional information.
The following is a rollforward of the categories of variable consideration during 2024:
(In millions)
Balance at
December 31,
2023
Current Provision
Related to Sales
Made in the Current
Period
Checks/ Credits
Issued to Third
Parties
Effects of Foreign
Exchange
Balance at
December 31,
2024
Chargebacks
$
530.3 
$
5,008.7 
$
(5,043.6)
$
(1.5)
$
493.9 
Rebates, promotional programs and other sales allowances
1,102.9 
4,193.1 
(3,986.8)
(42.3)
1,266.9 
Returns
425.4 
292.5 
(312.5)
(4.5)
400.9 
Governmental rebate programs
421.3 
718.1 
(751.6)
(13.1)
374.7 
Total
$
2,479.9 
$
10,212.4 
$
(10,094.5)
$
(61.4)
$
2,536.4 
Accruals for these provisions are presented in the consolidated financial statements as reductions in determining net revenues and as a contra asset
in accounts receivable, net (if settled via credit) and other current liabilities (if paid in cash). Accounts receivable are presented net of allowances relating to
these provisions, which were comprised of the following at December 31, 2024 and 2023, respectively:
(In millions)
December 31,

2024
December 31,

2023
Accounts receivable, net
$
1,547.0 
$
1,483.6 
Other current liabilities
989.4 
996.3 
Total
$
2,536.4 
$
2,479.9 
We have not made and do not anticipate making any significant changes to the methodologies that we use to measure provisions for variable
consideration; however, the balances within these reserves can fluctuate significantly through the consistent application of our methodologies. Historically,
we have not recorded in any current period any material amounts related to adjustments made to prior period reserves.
(a)
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Accounts receivable, net was comprised of the following at December 31, 2024 and 2023, respectively:
(In millions)
December 31,
2024
December 31,
2023
Trade receivables, net
$
2,675.3 
$
2,823.8 
Other receivables
546.0 
876.6 
Accounts receivable, net
$
3,221.3 
$
3,700.4 
Total allowances for doubtful accounts were $107.6 million and $118.8 million at December 31, 2024 and 2023, respectively. The reduction in
accounts receivable includes the impact of divestitures. Refer to Note 5 Divestitures for additional information. Viatris performs ongoing credit evaluations
of its customers and generally does not require collateral. Approximately 29% and 28% of the accounts receivable balances represent amounts due from
three customers at December 31, 2024 and 2023, respectively.
Accounts Receivable Factoring Arrangements
We have entered into accounts receivable factoring agreements with financial institutions to sell certain of our non-U.S. accounts receivable.
These transactions are accounted for as sales and result in a reduction in accounts receivable because the agreements transfer effective control over and risk
related to the receivables to the buyers. Our factoring agreements do not allow for recourse in the event of uncollectibility, and we do not retain any interest
in the underlying accounts receivable once sold. We derecognized $68.5 million and $30.8 million of accounts receivable as of December 31, 2024 and
2023, respectively, under these factoring arrangements. Additionally, in 2023, we entered into a similar arrangement for certain European countries. As of
December 31, 2024 and 2023, we assigned and derecognized approximately $29.9 million and $415.7 million, respectively, of Trade Receivables, Net,
which were included in Other Receivables.
4.
Acquisitions and Other Transactions
Acquisition of Idorsia Products
On March 15, 2024, the Company acquired exclusive global development and commercialization rights to two Phase 3 assets from Idorsia, as well
as the potential to add additional innovative assets in the future. Under the terms of the original agreements, the development programs and certain
personnel for selatogrel and cenerimod were transferred to Viatris from Idorsia in exchange for an upfront payment to Idorsia of $350 million, potential
contingent milestone payments (including $300 million payable upon the achievement of certain development and regulatory milestones, and $2.1 billion
payable upon the achievement of certain tiered sales milestones), as well as potential contingent tiered sales royalties. Viatris and Idorsia are both
contractually obligated to contribute to the development costs for both programs. Viatris has worldwide commercialization rights for both selatogrel and
cenerimod (excluding, for cenerimod only, Japan, South Korea and certain countries in the Asia-Pacific region). A joint development committee was
formed to oversee the development of the ongoing Phase 3 programs through regulatory approval. The agreements also provide Viatris a right of first
refusal and a right of first negotiation for certain other assets in Idorsia’s pipeline. The transaction expanded our portfolio of innovative assets by adding
two Phase 3 assets and combines our financial strength and worldwide operational infrastructure with Idorsia’s proven, highly-productive drug
development team and innovation engine.
In accordance with U.S. GAAP, the transaction has been accounted for as a business combination under the acquisition method of accounting.
Under the acquisition method of accounting, the assets acquired and liabilities assumed in the transaction were recorded at their respective estimated fair
values at the acquisition date. During the year ended December 31, 2024, the Company incurred acquisition-related costs of approximately $3.9 million,
which were recorded primarily in SG&A in the consolidated statements of operations.
The U.S. GAAP purchase price allocated to the transaction was $695 million, which consisted of $350 million of cash consideration paid and
estimated contingent consideration at the date of acquisition valued at approximately $345 million. The fair value of the contingent consideration was
valued using a Monte Carlo simulation model using Level 3 inputs. The fair value is sensitive to changes in the forecasts of operating metrics, probability
of success, and discount rates. Refer to Note 9, Financial Instruments and Risk Management for additional information.
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The allocation of the purchase price to the assets acquired and liabilities assumed is shown below. There were no measurement period adjustments
during 2024.
(In millions)
Current assets
$
2.1 
IPR&D
675.0 
Goodwill
19.5 
Total assets acquired
$
696.6 
Current liabilities
1.6 
Net assets acquired
$
695.0 
The amount allocated to IPR&D represents an estimate of the fair value of purchased in-process technology for research projects that, as of the
closing date of the acquisition, had not reached technological feasibility and had no alternative future use. The fair value of IPR&D of $675 million was
based on the excess earnings method, which utilizes forecasts of expected cash inflows (including estimates for ongoing costs) and other contributory
charges. A discount rate of 20% was utilized to discount net cash inflows to present values. IPR&D is accounted for as an indefinite-lived intangible asset
and will be subject to impairment testing until completion or abandonment of the projects. Upon successful completion and launch of each product, the
Company will make a determination of the estimated useful life of the individual asset. Viatris and Idorsia are both contractually obligated to contribute to
the development costs for both programs, which are expected to be incurred through 2026. There are risks and uncertainties associated with the timely and
successful completion of the projects included in IPR&D, including but not limited to the high cost and uncertainty of conducting clinical trials
(particularly with respect to new and/or complex or innovative drugs), obtaining approval by relevant regulatory bodies and our partner’s financial
condition, and no assurances can be given that the underlying assumptions used to estimate the fair value of IPR&D will not change or the timely
completion of each project to commercial success will occur.
On February 25, 2025, in order to preserve the ongoing continuity of the development programs for selatogrel and cenerimod considering certain
capital structuring steps announced by Idorsia to secure its ongoing operations, Viatris and Idorsia entered into a letter agreement to amend certain terms of
the original agreements described above. Under the terms of the letter agreement, Viatris will receive additional territory rights in Japan, South Korea and
certain other countries in the Asia-Pacific region for cenerimod, a $250 million reduction in contingent milestone payments, including $200 million of
development milestones, and additional personnel to expedite transitioning the development programs to Viatris in exchange for Viatris assuming
$100 million of Idorsia’s obligation to contribute to development costs. In addition, the letter agreement provides for the replacement of the joint
development committee with a transition committee to oversee the transition of both development programs to Viatris.
The goodwill of $19.5 million arising from the acquisition consisted largely of the value of the employee workforce and the expected value of
products, including additional indications, to be developed in the future. All of the goodwill was assigned to the Developed Markets segment. None of the
goodwill recognized in this transaction is expected to be deductible for income tax purposes. The acquisition did not have a material impact on the
Company’s results of operations since the acquisition date or on a pro forma basis during the year ended December 31, 2024.
Oyster Point Acquisition
During the first quarter of 2023, the Company completed the acquisition of Oyster Point for approximately $427.4 million in cash, which included
$11 per share paid to Oyster Point stockholders through a tender offer, payment for vested share-based awards, and the repayment of the Oyster Point debt.
Vested share-based awards to acquire Oyster Point common stock that were outstanding immediately prior to the closing of the acquisition were
cancelled in exchange for the right to receive an amount in cash based upon a formula contained within the merger agreement. The unvested share-based
awards were converted into Viatris share-based awards based upon a formula contained within the merger agreement.
In accordance with U.S. GAAP, the Company used the acquisition method of accounting to account for this transaction. Under the acquisition
method of accounting, the assets acquired and liabilities assumed in the transaction were recorded at their respective estimated fair values at the acquisition
date. During the year ended December 31, 2023, the Company incurred acquisition related costs of approximately $22.8 million, which were recorded
primarily in SG&A in the consolidated statement of operations.
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During the year ended December 31, 2023, adjustments were made to the preliminary purchase price recorded at January 3, 2023, and are
reflected as “Measurement Period Adjustments” in the table below. The U.S. GAAP purchase price was $392.7 million, net of cash acquired. The
allocation of the purchase price to the assets acquired and liabilities assumed for Oyster Point is as follows:
(In millions)
Preliminary Purchase Price
Allocation as of January 3,
2023 
Measurement Period
Adjustments 
Purchase Price Allocation
as of December 31, 2023 (as
adjusted)
Current assets (excluding inventories and net of cash acquired)
$
26.9  $
—  $
26.9 
Inventories
37.8 
— 
37.8 
Property, plant and equipment
1.4 
— 
1.4 
Identified intangible assets
334.0 
— 
334.0 
Goodwill
5.9 
0.8 
6.7 
Deferred income tax benefit
17.7 
(0.8)
16.9 
Other assets
7.7 
— 
7.7 
Total assets acquired
$
431.4  $
—  $
431.4 
Current liabilities
37.0 
— 
37.0 
Other noncurrent liabilities
1.7 
— 
1.7 
Net assets acquired (net of $34.7 of cash acquired)
$
392.7  $
—  $
392.7 
__________
 As previously reported in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2023.
 The measurement period adjustments were recorded in the fourth quarter of 2023 and are related to income taxes.
The Company recorded a step-up in the fair value of inventory of approximately $29.3 million, which was fully amortized during the year ended
December 31, 2023 and was included in Cost of sales in the consolidated statement of operations.
The identified intangible assets of $334.0 million are comprised of product rights and licenses related to a commercial asset, Tyrvaya®, for the
treatment of dry eye disease, that have an estimated useful life of 10 years. Significant assumptions utilized in the valuation of identified intangible assets
were based on company specific information and projections which are not observable in the market and are thus considered Level 3 measurements as
defined by U.S. GAAP.
The goodwill of $6.7 million arising from the acquisition consisted largely of the value of the employee workforce and the expected value of
products to be developed in the future. All of the goodwill was assigned to the Developed Markets segment. None of the goodwill recognized in this
transaction is expected to be deductible for income tax purposes. The operating results of Oyster Point have been included in the Company’s consolidated
statements of operations since the acquisition date. The total revenues of Oyster Point for the period from the acquisition date to December 31, 2023 were
$41.7 million and net loss, net of tax, was approximately $163.1 million. The net loss for the period includes the effect of the purchase accounting
adjustments and acquisition related costs.
The following table presents supplemental unaudited pro forma information for the acquisition, as if it had occurred on January 1, 2022. The
unaudited pro forma results reflect certain adjustments related to past operating performance and acquisition accounting adjustments, such as increased
amortization expense based on the fair value of assets acquired, the impact of transaction costs and the related income tax effects. The unaudited pro forma
results do not include any anticipated synergies which may be achievable, or have been achieved, subsequent to the closing of the acquisition. Accordingly,
the unaudited pro forma results are not necessarily indicative of the results that actually would have occurred had the acquisitions been completed on the
stated date above, nor are they indicative of the future operating results of Viatris and its subsidiaries.
(a)
(b)
(a)
(b)
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Year Ended
(Unaudited, in millions, except per share amounts)
December 31, 2023
December 31, 2022
Total revenues
$
15,426.9  $
16,283.4 
Net earnings
$
93.8  $
1,905.7 
Earnings per share:
Basic
$
0.08  $
1.57 
Diluted
$
0.08  $
1.57 
Weighted average shares outstanding:
Basic
1,200.3 
1,212.1 
Diluted
1,206.9 
1,217.4 
Famy Life Sciences Acquisition
On November 7, 2022, the Company entered into a definitive agreement to acquire the remaining equity shares of Famy Life Sciences, a
privately-owned research company with a complementary portfolio of ophthalmology therapies under development, for consideration of $281 million. The
Company had previously entered into a Master Development Agreement with Famy Life Sciences on December 20, 2019 under which the Company
obtained rights with respect to acquiring certain pharmaceutical products and a 13.5% equity interest in Famy Life Sciences for $25.0 million. The
investment was accounted for in accordance with ASC 321, Investments - Equity Securities.
The transaction to acquire the remaining equity shares of Famy Life Sciences closed during the first quarter of 2023. The Company recognized a
gain of $18.9 million during the first quarter of 2023 as a result of remeasuring its pre-existing 13.5% equity interest in Famy Life Sciences to fair value,
which was recognized as a component of Other expense (income), net in the consolidated statements of operations.
In accordance with U.S. GAAP, the Company used the acquisition method of accounting to account for this transaction. Under the acquisition
method of accounting, the assets acquired and liabilities assumed in the transaction were recorded at their respective estimated fair values at the acquisition
date. The U.S. GAAP purchase price allocated to the transaction was $325.0 million, which consisted of $281 million of cash consideration paid for the
remaining equity shares and $43.9 million for the fair value of the pre-existing 13.5% equity interest.
During the year ended December 31, 2023, an adjustment was made to the preliminary purchase price recorded at January 3, 2023, and is reflected
as “Measurement Period Adjustments” in the table below. The allocation of the purchase price to the assets acquired and liabilities assumed for Famy Life
Sciences is as follows:
(In millions)
Preliminary Purchase Price
Allocation as of January 3,
2023 
Measurement Period
Adjustments 
Purchase Price Allocation
as of December 31, 2023 (as
adjusted)
IPR&D
$
290.0  $
—  $
290.0 
Goodwill
89.3 
(0.1)
89.2 
Total assets acquired
$
379.3  $
(0.1) $
379.2 
Current liabilities
2.2 
— 
2.2 
Deferred tax liabilities
52.1 
(0.1)
52.0 
Net assets acquired (net of $0.2 of cash acquired)
$
325.0  $
—  $
325.0 
__________
 As previously reported in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2023.
 The measurement period adjustment was recorded in the fourth quarter of 2023 and is related to income taxes.
The amount allocated to IPR&D represents an estimate of the fair value of purchased in-process technology for research projects that, as of the
closing date of the acquisition, had not reached technological feasibility and had no alternative future use. The fair value of IPR&D of $290.0 million was
based on the excess earnings method, which utilizes forecasts of expected cash inflows (including estimates for ongoing costs) and other contributory
charges. A discount rate of 23.9% was utilized to discount net cash inflows to present values. IPR&D is accounted for as an indefinite-lived intangible asset
and will
(a)
(b)
(a)
(b)
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be subject to impairment testing until completion or abandonment of the projects. Upon successful completion and launch of each product, the Company
will make a determination of the estimated useful life of the individual asset. The acquired IPR&D projects are in various stages of completion. There are
risks and uncertainties associated with the timely and successful completion of the projects included in IPR&D, and no assurances can be given that the
underlying assumptions used to estimate the fair value of IPR&D will not change or the timely completion of each project to commercial success will
occur. Refer to Note 8 Goodwill and Intangible Assets for additional information.
The goodwill of $89.2 million arising from the acquisition consisted largely of the value of the employee workforce and the expected value of
products to be developed in the future. All of the goodwill was assigned to the Developed Markets segment. None of the goodwill recognized in this
transaction is expected to be deductible for income tax purposes. The acquisition did not have a material impact on the Company’s results of operations
since the acquisition date or on a pro forma basis for the years ended December 31, 2023 and 2022.
Ophthalmology is one of the key therapeutic areas of focus that the Company announced in February 2022 when it announced plans for certain
strategic actions. With the combination of Viatris' global commercial footprint, R&D and regulatory capabilities and supply chain, along with Oyster
Point's deep knowledge of the ophthalmology space from a clinical, medical, regulatory and commercial perspective, the Company believes it has the
foundation to create a leading global ophthalmology franchise, accelerating efforts to address the unmet needs of patients with ophthalmic disease and the
eye care professionals who treat them.
5.
Divestitures
In October 2023, the Company announced it had received an offer for the divestiture of its OTC Business and had entered into definitive
agreements to divest its women’s healthcare business primarily related to oral and injectable contraceptives, its API business in India, its rights to two
women’s healthcare products in certain countries, and commercialization rights in the Upjohn Distributor Markets. The Company has substantially
completed all these divestitures by the end of 2024. The OTC, API and women’s healthcare businesses were deemed businesses for U.S. GAAP accounting
purposes. As such, the assets and liabilities included an allocation of goodwill. The sale of the rights to two women’s healthcare products in certain
countries was accounted for as an asset sale. In conjunction with these transactions, Viatris and the respective buyers entered into various agreements to
provide a framework for our relationship with the respective buyers after the closing of the divestitures, including transition services agreements,
manufacturing and supply agreements, and distribution agreements, as necessary.
During the years ended December 31, 2024, 2023 and 2022, the Company recognized TSA income related to all divestitures of approximately
$69.9 million, $168.0 million, and $17.7 million, respectively. TSA income is recorded as a component of Other Expense (Income), Net.
Women’s Healthcare
In the third quarter of 2023, Viatris executed an agreement to divest its women’s healthcare business to Insud Pharma, S.L., a leading Spanish
multinational pharmaceutical company. The divestiture of the women’s healthcare business was primarily related to our oral and injectable contraceptives
and did not include all of our women’s healthcare related products. The transaction included two manufacturing facilities in India. Assets and liabilities
associated with the women’s healthcare business divested were classified as held for sale in the consolidated balance sheet as of December 31, 2023. The
transaction closed in March 2024 and during the year ended December 31, 2024, the Company recognized a pre-tax gain on sale of approximately
$77.8 million for the difference between the consideration received and the carrying value of the assets transferred (including an allocation of goodwill),
which was recorded as a component of Other Expense (Income), Net in the consolidated statement of operations.
In the third quarter of 2023, Viatris also entered into a separate agreement to divest its rights to women’s healthcare products Duphaston® and
Femoston® in certain countries to Theramex HQ UK Limited, a leading global specialty pharmaceutical company dedicated to women’s health. The
transaction (other than in the U.K.) closed in December 2023, and upon closing, the Company recognized a pre-tax gain on sale of approximately
$156.2 million in that quarter for the difference between the consideration received and the carrying value of the assets transferred. In the third quarter of
2024, the Company closed the divestiture of the product rights to Duphaston® and Femoston® in the U.K. to Insud Pharma, S.L., and recognized a pre-tax
gain on sale of approximately $10.8 million. The respective pre-tax gains were recorded as a component of SG&A expense in the consolidated statement of
operations.
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OTC
On October 1, 2023, Viatris received an offer from Cooper Consumer Health SAS, a leading European OTC drug manufacturer and distributor, for
Viatris to divest its OTC Business, including two manufacturing sites located in Merignac, France, and Confienza, Italy, and an R&D site in Monza, Italy.
In January 2024, we exercised our option to accept the offer in the OTC Transaction and entered into a definitive transaction agreement with respect to such
OTC Transaction. The Company retained the rights for Viagra®, Dymista® (which, in certain limited markets, are sold as OTC products) and select OTC
products in certain markets. The OTC Transaction closed on July 3, 2024.
The OTC Business divested met the criteria to be classified as held for sale on October 1, 2023. As such, the related assets and liabilities were
classified as held for sale in the consolidated balance sheet as of December 31, 2023. Upon classification as held for sale in the fourth quarter of 2023, we
recognized a total charge of approximately $734.7 million, which was comprised of a goodwill impairment charge of approximately $580.1 million
(recorded as a component of SG&A expense), and a charge of approximately $154.7 million to write down the disposal group to fair value, less cost to sell
(recorded as a component of Other Expense (Income), Net) in the consolidated statement of operations. During the year ended December 31, 2024, the
Company recorded additional pre-tax charges of approximately $369.0 million to further write down the disposal group to fair value, less cost to sell. The
additional charges were recorded as a component of Other Expense (Income), Net in the consolidated statement of operations, and were primarily due to an
increase in estimated transaction related costs, including the assumption of additional contractual obligations, as well as the impact of working capital and
other transaction-related adjustments on the proceeds.
API
On October 1, 2023, Viatris executed an agreement to divest its API business in India to Matrix Pharma Private Limited, a privately held
pharmaceutical company based in India. The transaction included three manufacturing sites and a R&D lab in Hyderabad, three manufacturing sites in
Vizag and third-party API sales. Viatris retained some selective R&D capabilities in API. The transaction closed in June 2024. The API business in India
met the criteria to be classified as held for sale on October 1, 2023 and the related assets and liabilities were reclassified as held for sale in the consolidated
balance sheet as of December 31, 2023. During the year ended December 31, 2024, the Company recognized pre-tax charges of approximately
$47.8 million on the disposal of the business, which were recorded as a component of Other Expense (Income), Net in the consolidated statement of
operations.
Upjohn Distributor Markets
In the fourth quarter of 2022, the commercialization rights in the Upjohn Distributor Markets met the criteria to be classified as held for sale. Upon
classification as held for sale, the Company recognized a total charge of $374.2 million in 2022, which was comprised of a goodwill impairment charge of
$117.0 million, other charges, principally inventory write-offs, of $84.3 million and a charge of approximately $172.9 million to write down the disposal
group to fair value, less cost to sell. During the year ended December 31, 2023, the Company recorded charges totaling $136.4 million, primarily consisting
of losses on the disposals of $85.2 million, which were recorded as a component of Other Expense (Income), Net. The divestitures of the commercialization
rights in the majority of the Upjohn Distributor Markets closed during 2023 and 2024.
Biocon Biologics Transaction
On November 29, 2022, Viatris completed a transaction to contribute its biosimilars portfolio to Biocon Biologics. Under the terms of the Biocon
Agreement, Viatris received $3 billion in consideration in the form of a $2 billion cash payment, adjusted as set forth in the Biocon Agreement, and
approximately $1 billion of CCPS representing a stake of approximately 12.9% (on a fully diluted basis) in Biocon Biologics at closing. During the years
ended December 31, 2024 and 2023, the Company recorded a gain of $373.5 million and a loss of $21.1 million, respectively, as a result of remeasuring the
CCPS in Biocon Biologics to fair value. The current year gain is primarily related to changes in certain market factors, including Biocon’s share price. The
Company’s CCPS in Biocon Biologics are classified as equity securities and are included in Other Assets in the consolidated balance sheets, and gains and
losses recorded as a result of remeasuring the CCPS in Biocon Biologics to fair value are recorded as a component of Other Expense (Income), Net. The
fair value is reassessed quarterly. Refer to Note 9 Financial Instruments and Risk Management for further discussion.
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The Biocon Agreement provided for a closing working capital target of $250 million, of which $220 million was paid by Viatris to Biocon
Biologics during 2023. In addition, pursuant to the terms of the Biocon Agreement, the Company was entitled to receive a total of $335 million of
additional cash payments in 2024 as deferred consideration. The Company received $245 million in deferred cash consideration payments from Biocon
Biologics during 2024, and Viatris and Biocon Biologics agreed to offset certain amounts due between the parties, including the remaining $30 million of
the closing working capital target, against the deferred cash consideration. In conjunction with the final settlement of amounts due between the parties, the
Company recorded a pre-tax loss of $60.0 million as a component of Other Expense (Income), Net in the consolidated statements of operations during the
fourth quarter of 2024. Biocon Biologics has fulfilled its obligations with respect to all deferred cash consideration and Viatris has fulfilled its obligations
with respect to the closing working capital target under the Biocon Agreement pursuant to the final settlement.
At the time of closing of the Biocon Biologics Transaction, Viatris and Biocon Biologics also entered an agreement pursuant to which Viatris was
providing commercialization and certain other transition services on behalf of Biocon Biologics, including billings, collections and the remittance of
rebates, to ensure business continuity for patients, customers and colleagues. Biocon Biologics had substantially exited all transition services with Viatris as
of December 31, 2023.
Upon closing of the Biocon Biologics Transaction, the Company recognized a gain on sale of approximately $1.75 billion for the difference
between the consideration received, including the fair value of the CCPS, and the carrying value of the biosimilars portfolio (including an allocation of
goodwill). The gain was recognized as a component of Other Expense (Income), Net in the consolidated statement of operations during the year ended
December 31, 2022. The Company has not recognized the results of the business in its consolidated financial statements subsequent to November 29, 2022.
The Company had previously entered into an exclusive collaboration with Biocon on the development, manufacturing, supply and
commercialization of multiple, high value biosimilar compounds and three insulin analog products for the global marketplace. The collaboration was
terminated upon closing of the Biocon Biologics Transaction.
Assets and Liabilities Held for Sale
The Company did not have assets and liabilities classified as held for sale at December 31, 2024. Assets and liabilities held for sale consisted of
the following at December 31, 2023:
(In millions)
December 31, 2023
Assets held for sale
Accounts receivable, net
$
112.1 
Inventories
422.4 
Prepaid expenses and other current assets
7.5 
Property, plant and equipment, net
262.2 
Intangible assets, net
1,946.0 
Goodwill
188.0 
Other assets
5.1 
Valuation allowance on assets held for sale
(157.3)
Total assets held for sale
$
2,786.0 
Liabilities held for sale
Accounts payable
$
137.4 
Other current liabilities
35.3 
Deferred income tax liability
77.2 
Other long-term obligations
25.2 
Total liabilities held for sale
$
275.1 
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6.
Balance Sheet Components
Selected balance sheet components consist of the following:
Cash and restricted cash
(In millions)
December 31,

2024
December 31,

2023
December 31,

2022
Cash and cash equivalents
$
734.8 
$
991.9  $
1,259.9 
Restricted cash, included in prepaid expenses and other current assets
1.3 
1.7 
2.6 
Cash, cash equivalents and restricted cash
$
736.1 
$
993.6  $
1,262.5 
Inventories
(In millions)
December 31, 2024
December 31, 2023
Raw materials
$
1,345.9 
$
731.7 
Work in process
527.3 
602.1 
Finished goods
1,980.9 
2,135.9 
Inventories
$
3,854.1 
$
3,469.7 
Inventory reserves totaled $454.5 million and $479.3 million at December 31, 2024 and 2023, respectively. Included as a component of cost of
sales is expense related to the net realizable value of inventories of $289.3 million, $226.9 million and $326.1 million for the years ended December 31,
2024, 2023 and 2022, respectively.
Prepaid expenses and other current assets
(In millions)
December 31,
2024
December 31,
2023
Prepaid expenses
$
140.9 
$
155.9 
Deferred consideration due from Biocon Biologics
— 
321.2 
Available-for-sale fixed income securities
38.0 
37.0 
Fair value of financial instruments
261.6 
106.2 
Equity securities
55.5 
49.3 
Deferred charge for taxes on intercompany profit
526.6 
747.3 
Income tax receivable
300.7 
340.2 
Other current assets
387.2 
271.0 
Prepaid expenses and other current assets
$
1,710.5 
$
2,028.1 
Prepaid expenses consist primarily of prepaid rent, insurance and other individually insignificant items.
Property, plant and equipment, net
(In millions)
December 31,
2024
December 31,
2023
Machinery and equipment
$
2,894.7 
$
2,774.5 
Buildings and improvements
1,464.3 
1,444.4 
Construction in progress
397.1 
431.2 
Land and improvements
113.2 
120.2 
Gross property, plant and equipment
4,869.3 
4,770.3 
Accumulated depreciation
2,203.2 
2,010.7 
Property, plant and equipment, net
$
2,666.1 
$
2,759.6 
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Capitalized software costs included in our consolidated balance sheets were $157.7 million and $167.2 million, net of accumulated depreciation, at
December 31, 2024 and 2023, respectively. The Company periodically reviews the estimated useful lives of assets and makes adjustments when
appropriate. Depreciation expense was approximately $357.0 million, $362.1 million and $349.5 million for the years ended December 31, 2024, 2023 and
2022, respectively.
Other assets
(In millions)
December 31, 2024
December 31, 2023
CCPS in Biocon Biologics
$
1,349.8 
$
976.3 
Operating lease right-of-use assets
253.1 
245.6 
Non-marketable equity investments 
— 
165.7 
Other long-term assets
754.0 
821.1 
Other assets
$
2,356.9 
$
2,208.7 
Refer to Note 18 Licensing and Other Partner Agreements for further discussion.
Accounts payable
(In millions)
December 31, 2024
December 31, 2023
Trade accounts payable
$
1,355.3 
$
1,381.4 
Other payables
498.4 
556.8 
Accounts payable
$
1,853.7 
$
1,938.2 
The Company has certain voluntary supply chain finance programs with financial intermediaries which provide participating suppliers the option
to be paid by the intermediary earlier than the original invoice due date. The Company’s responsibility is limited to making payments on the terms
originally negotiated with the suppliers, regardless of whether the intermediary pays the supplier in advance of the original due date. The range of payment
terms the Company negotiates with suppliers are consistent, regardless of whether a supplier participates in a supply chain finance program. The total
amounts due to financial intermediaries to settle supplier invoices under supply chain finance programs as of December 31, 2024 and 2023 were
$41.9 million and $65.1 million, respectively. These amounts are included within Accounts payable in the consolidated balance sheets.
The rollforward of the Company’s outstanding obligations under its supply chain finance program for the year ended December 31, 2024 is as
follows:
(In millions)
December 31, 2024
Confirmed obligations outstanding at the beginning of the year
$
65.1 
Invoices confirmed during the year
157.5 
Confirmed invoices paid during the year
(180.7)
Confirmed obligations outstanding at the end of the year
$
41.9 
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Other current liabilities
(In millions)
December 31, 2024
December 31, 2023
Accrued sales allowances
$
989.4 
$
996.3 
Payroll and employee benefit liabilities
729.3 
844.5 
Legal and professional accruals, including litigation accruals
472.8 
244.0 
Contingent consideration
59.5 
76.1 
Accrued restructuring
63.4 
36.4 
Accrued interest
49.9 
66.8 
Fair value of financial instruments
125.8 
124.6 
Operating lease liability
87.1 
83.0 
Other
1,147.5 
922.2 
Other current liabilities
$
3,724.7 
$
3,393.9 
Other long-term obligations
(In millions)
December 31, 2024
December 31, 2023
Employee benefit liabilities
$
467.9 
$
504.3 
Contingent consideration 
496.6 
139.0 
Tax related items, including contingencies
341.9 
399.3 
Operating lease liability
179.3 
165.4 
Accrued restructuring
128.5 
59.2 
Other
325.0 
249.7 
Other long-term obligations
$
1,939.2 
$
1,516.9 
Balance as of December 31, 2024 includes a total of $378.0 million related to the Idorsia Transaction. Refer to Note 9 Financial Instruments and
Risk Management for additional information.
7.
Leases
The Company has operating leases of real estate, consisting primarily of administrative offices, manufacturing and distribution facilities, and R&D
facilities. We also have operating leases of certain equipment, primarily automobiles, and certain limited supply arrangements.
We elected to apply the practical expedient to not separate lease and non-lease components for our leases except for those related to certain limited
supply arrangements. We have also elected to apply the short-term lease recognition exemption which means we will not recognize ROU assets or lease
liabilities for leases with an initial term of 12 months of less.
As of December 31, 2024, the Company recognized ROU assets of $253.1 million and total lease liabilities of $266.4 million. The Company’s
ROU assets are recorded in other assets. The related lease liability balances are recorded in other current liabilities and other long-term obligations in the
consolidated balance sheets. Refer to Note 6 Balance Sheet Components for additional information.
ROU assets and liabilities are recognized at the present value of the future minimum lease payments over the lease term at commencement date.
As most of our leases do not provide an implicit rate, we use an applicable incremental borrowing rate based on the information available at
commencement date in determining the present value of future payments. Options to extend or terminate the ROU assets are reviewed at lease inception
and these options are accounted for when they are reasonably certain of being exercised.
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Other information related to leases was as follows:
As of December 31, 2024
Remaining lease terms
1 year to 15 years
Weighted-average remaining lease term
6 years
Weighted-average discount rate
3.7 %
As of December 31, 2024, maturities of lease liabilities were as follows for each of the years ending December 31:
(In millions)
2025
$
78.2 
2026
71.1 
2027
46.4 
2028
25.6 
2029
16.8 
Thereafter
59.5 
Total lease payments
$
297.6 
Less imputed interest
31.2 
Total lease liability
$
266.4 
As of December 31, 2024, the Company had additional leases, primarily for administrative offices, that have not yet commenced totaling
approximately $5.8 million. For the years ended December 31, 2024, 2023 and 2022, the Company had operating lease expense of approximately $89.8
million, $87.6 million and $90.9 million, respectively. Operating lease costs are classified primarily as SG&A and cost of sales in the consolidated
statements of operations.
8.
Goodwill and Intangible Assets
Goodwill
The changes in the carrying amount of goodwill for the years ended December 31, 2024 and 2023 are as follows:
(In millions)
Developed
Markets
Greater China
JANZ 
Emerging Markets
Total
Balance at December 31, 2022
$
7,461.5 
$
940.6 
$
689.0 
$
1,334.7 
$
10,425.8 
Acquisitions
95.9 
— 
— 
— 
95.9 
Impairment
(544.0)
— 
(30.0)
(7.0)
(581.0)
Reclassification to assets held for sale
(52.0)
— 
— 
(137.0)
(189.0)
Foreign currency translation
146.0 
(7.8)
(13.3)
(9.5)
115.4 
Balance at December 31, 2023
$
7,107.4 
$
932.8 
$
645.7 
$
1,181.2 
$
9,867.1 
Acquisitions
19.5 
— 
— 
— 
19.5 
Impairment
— 
— 
(321.0)
— 
(321.0)
Foreign currency translation
(374.0)
(11.3)
(29.6)
(17.4)
(432.3)
Balance at December 31, 2024
$
6,752.9 
$
921.5 
$
295.1 
$
1,163.8 
$
9,133.3 
____________
Balances as of December 31, 2024 and 2023 include an accumulated impairment loss of $929.0 million. Balance as of December 31, 2022
includes an accumulated impairment loss of $385.0 million.
Balance as of December 31, 2024 includes an accumulated impairment loss of $351.0 million. Balance as of December 31, 2023 includes an
accumulated impairment loss of $30.0 million.
Balances as of December 31, 2024 and 2023 include an accumulated impairment loss of $124.0 million. Balance as of December 31, 2022
includes an accumulated impairment loss of $117.0 million.
Reflects goodwill relating to the divestitures. Refer to Note 5 Divestitures for additional information.
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The Company reviews goodwill for impairment annually on April 1st or more frequently if events or changes in circumstances indicate that the
carrying value of goodwill may not be recoverable. The Company performed the annual goodwill impairment test as of April 1, 2024.
The Company performed its annual goodwill impairment test on a quantitative basis for its five reporting units, North America, Europe, Emerging
Markets, JANZ, and Greater China. In estimating each reporting unit’s fair value, the Company performed an extensive valuation analysis, utilizing a
discounted cash flow approach. The determination of the fair value of the reporting units requires the Company to make significant estimates and
assumptions that affect the reporting unit’s expected future cash flows. These estimates and assumptions, utilizing Level 3 inputs, primarily include, but are
not limited to, the discount rate, terminal growth rates, operating income before depreciation and amortization, capital expenditures forecasts and control
premiums.
When compared to the prior year’s annual goodwill impairment test completed on April 1, 2023, due to certain macroeconomic conditions, the
Company has experienced fluctuations in foreign exchange rates in certain international markets, combined with an increase in market interest rates. These
conditions impacted all reporting units, with the most significant impact in JANZ and Emerging Markets. The impact in the other reporting units was offset
by changes in other discount rate assumptions.
As of April 1, 2024, the allocation of the Company’s total goodwill was as follows: North America $3.12 billion, Europe $3.86 billion, Emerging
Markets $1.17 billion, JANZ $0.62 billion and Greater China $0.93 billion.
In conjunction with its annual goodwill impairment test, the Company recorded a goodwill impairment charge of $321.0 million during the second
quarter of 2024 related to its JANZ reporting unit, which was recorded within SG&A in the consolidated statement of operations. The impairment charge
was primarily the result of a 1.0% increase in the discount rate and a 0.5% reduction in the terminal growth rate assumption for the reporting unit.
For the JANZ reporting unit at April 1, 2024, the Company forecasted cash flows for the next 10 years. During the forecast period, the revenue
compound annual growth rate was approximately negative 0.3%. A terminal year value was calculated with a 1.0% revenue growth rate applied. The
discount rate utilized was 8.0% and the estimated tax rate was 30.3%.
Following the goodwill impairment charge recorded in the JANZ reporting unit, the carrying value of the reporting unit was equal to its estimated
fair value as of April 1, 2024. If market conditions or the projected results were to change materially, it may be necessary to record further impairment
charges to the JANZ reporting unit in future periods.
As of April 1, 2024, the Company determined that the fair values of the North America, Greater China, and Emerging Markets reporting units
were substantially in excess of the respective unit’s carrying value.
For the Europe reporting unit, the estimated fair value exceeded its carrying value by approximately $882 million or 7.9% for the annual goodwill
impairment test. As it relates to the discounted cash flow approach for the Europe reporting unit at April 1, 2024, the Company forecasted cash flows for
the next 10 years. During the forecast period, the revenue compound annual growth rate was approximately 2.5%. A terminal year value was calculated
with a 2.0% revenue growth rate applied. The discount rate utilized was 10.0% and the estimated tax rate was 15.7%. If all other assumptions are held
constant, a reduction in the terminal value growth rate by 1.5% or an increase in discount rate by 1.0% would result in an impairment charge for the Europe
reporting unit.
In the third quarter of 2023, the Company allocated goodwill of $69 million to its women’s healthcare business using a relative fair value approach
and reclassified the amount to Assets Held for Sale.
In the fourth quarter of 2023, the Company allocated goodwill of $120 million to its API business in India using a relative fair value approach and
reclassified the amount to Assets Held for Sale.
In the fourth quarter of 2023, the OTC Business met the criteria to be classified as held for sale. The Company allocated goodwill to its OTC
Business using a relative fair value approach and recorded a goodwill impairment charge of $580.1 million in that quarter within the Europe (majority of
the charge), JANZ and Emerging Markets reporting units, which was recorded within SG&A in the consolidated statement of operations. The goodwill
impairment charge was the result of the estimated proceeds less selling costs from the planned divestiture of the OTC Business being below the carrying
value of the net assets of the disposal group.
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In conjunction with the Biocon Biologics Transaction, the Company allocated goodwill to its biosimilars portfolio using a relative fair value
approach and reclassified the amount to assets held for sale. Upon closing of the Biocon Biologics Transaction on November 29, 2022, we derecognized
goodwill of $919.7 million allocated to the biosimilars portfolio.
In the fourth quarter of 2022, the commercialization rights in the Upjohn Distributor Markets met the criteria to be classified as held for sale. The
Company allocated goodwill to its commercialization rights in the Upjohn Distributor Markets using a relative fair value approach and recorded a goodwill
impairment charge of $117.0 million in that quarter within the Emerging Markets reporting unit, which was recorded within SG&A in the consolidated
statement of operations. The goodwill impairment charge was the result of the estimated proceeds less selling costs from the disposal of the
commercialization rights in the Upjohn Distributor Markets being below the carrying value of the net assets of the disposal group.
Refer to Note 5 Divestitures for additional information on these divestitures.
Due to the inherent uncertainty involved in making these estimates, actual results could differ from those estimates. In addition, changes in
underlying assumptions, especially as they relate to the key assumptions detailed, could have a significant impact on the fair value of the reporting units.
Intangible Assets, Net
Intangible assets consist of the following components at December 31, 2024 and 2023:
(In millions)
Weighted Average
Life (Years)
Cost
Accumulated
Amortization
Net Book Value
December 31, 2024
Product rights, licenses and other 
13
$
33,348.5 
$
17,091.8 
$
16,256.7 
In-process research and development
814.2 
— 
814.2 
$
34,162.7 
$
17,091.8 
$
17,070.9 
December 31, 2023
Product rights, licenses and other 
13
$
34,178.1 
$
15,316.4 
$
18,861.7 
In-process research and development
319.4 
— 
319.4 
$
34,497.5 
$
15,316.4 
$
19,181.1 
____________
Represents amortizable intangible assets. Other intangible assets consist principally of customer lists and contractual rights.
During the year ended December 31, 2024, the Company recorded IPR&D assets of approximately $675.0 million as part of the Idorsia
Transaction. Refer to Note 4 Acquisitions and Other Transactions for additional information.
Product rights and licenses are primarily comprised of the products marketed at the time of acquisition. These product rights and licenses relate to
numerous individual products, the net book value of which, by product category, is as follows:
(In millions)
Developed Markets
Greater China
JANZ
Emerging Markets
December 31, 2024
Brands
$
6,464.6  $
4,779.7  $
860.5  $
2,583.9  $
14,688.7 
Generics
1,214.6 
8.7 
183.8 
160.8 
1,567.9 
Total Product Rights and Licenses
$
7,679.2  $
4,788.4  $
1,044.3  $
2,744.7  $
16,256.6 
(In millions)
Developed Markets
Greater China
JANZ
Emerging Markets
December 31, 2023
Brands
$
7,723.4  $
5,206.8  $
961.0  $
2,855.9  $
16,747.1 
Generics
1,708.2 
9.7 
216.2 
179.8 
2,113.9 
Total Product Rights and Licenses
$
9,431.6  $
5,216.5  $
1,177.2  $
3,035.7  $
18,861.0 
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Amortization expense, intangible asset disposal & impairment charges and IPR&D intangible asset impairment charges (which are included as a
component of amortization expense) are classified primarily within Cost of Sales in the consolidated statements of operations, and were as follows for the
years ended December 31, 2024, 2023 and 2022:
Year ended December 31,
(In millions)
2024
2023
2022
Intangible asset amortization expense
$
2,351.5 
$
2,317.1 
$
2,504.6 
IPR&D intangible asset impairment charges
177.1 
— 
0.6 
Intangible asset disposal & impairment charges
7.5 
32.0 
172.9 
Total intangible asset amortization expense (including disposal & impairment charges)
$
2,536.1 
$
2,349.1 
$
2,678.1 
During 2024, the Company concluded that certain of its IPR&D assets were fully impaired due to unfavorable clinical results and/or changes in
market conditions which led to the termination of the development programs.
The assessment for impairment of finite-lived intangibles is based on our ability to recover the carrying value of the long-lived assets or asset
grouping by analyzing the expected future undiscounted pre-tax cash flows specific to the asset or asset grouping. If the carrying amount is greater than the
undiscounted cash flows, the Company recognizes an impairment loss for the excess of the carrying amount over the estimated fair value based on
discounted cash flows.
Significant management judgment is involved in estimating the recoverability of these assets and is dependent upon the accuracy of the
assumptions used in making these estimates, as well as how the estimates compare to the eventual future operating performance of the specific asset or
asset grouping. The fair value of finite-lived intangible assets was calculated as the present value of the estimated future net cash flows using a market rate
of return. The assumptions inherent in the estimated future cash flows include, among other things, the impact of the current competitive environment and
future market expectations. Any future long-lived assets impairment charges could have a material impact on the Company’s consolidated financial
condition and results of operations.
During the years ended December 31, 2023 and 2022, the Company recognized intangible asset charges of approximately $32.0 million and
$172.9 million, respectively, recorded within Cost of Sales in the consolidated statements of operations, to write down the disposal group to fair value, less
cost to sell, related to our commercialization rights in the Upjohn Distributor Markets, which was classified as held for sale. Refer to Note 5 Divestitures
for additional information.
The Company’s IPR&D assets are tested at least annually for impairment or upon the occurrence of a triggering event. Impairment is determined
to exist when the fair value of IPR&D assets, which is based upon updated forecasts and commercial development plans, is less than the carrying value of
the assets being tested. The fair value of IPR&D was calculated as the present value of the estimated future net cash flows using a market rate of return.
The assumptions inherent in the estimated future cash flows include, among other things, the impact of changes to the development programs, the projected
development and regulatory time frames and the current competitive environment. Discount rates ranging between 11.0% and 24.0% were utilized in the
valuations performed during the year ended December 31, 2024. Discount rates ranging between 10.0% and 24.0% were utilized in the valuations
performed during the year ended December 31, 2023. A discount rate of 10.5% was utilized in the valuations performed during the year ended December
31, 2022.
The fair value of both IPR&D and finite-lived intangible assets was determined based upon detailed valuations employing the income approach
which utilized Level 3 inputs, as defined in Note 9 Financial Instruments and Risk Management. Changes to any of the Company’s assumptions including
changes to or abandonment of development programs, regulatory timelines, discount rates or the competitive environment related to the assets could lead to
future material impairment charges.
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Intangible asset amortization expense for the years ending December 31, 2025 through 2029 is estimated to be as follows:
(In millions)
2025
$
2,228 
2026
2,179 
2027
1,966 
2028
1,738 
2029
1,210 
9.
Financial Instruments and Risk Management
The Company is exposed to certain financial risks relating to its ongoing business operations. The primary financial risks that are managed by
using derivative instruments are foreign currency risk and interest rate risk.
Foreign Currency Risk Management
In order to manage certain foreign currency risks, the Company enters into foreign exchange forward contracts to mitigate risk associated with
changes in spot exchange rates of mainly non-functional currency denominated assets or liabilities. The foreign exchange forward contracts are measured at
fair value and reported as current assets or current liabilities in the consolidated balance sheets. Any gains or losses on the foreign exchange forward
contracts are recognized in earnings in the period incurred in the consolidated statements of operations.
The Company has also entered into forward contracts to hedge forecasted foreign currency denominated sales from certain international
subsidiaries and a portion of forecasted intercompany inventory sales denominated in Euro, Japanese Yen, Chinese Renminbi and Indian Rupee for up to
twenty-four months. These contracts are designated as cash flow hedges to manage foreign currency transaction risk and are measured at fair value and
reported as current assets or current liabilities in the consolidated balance sheets. Any changes in the fair value of designated cash flow hedges are deferred
in AOCE and are reclassified into earnings when the hedged item impacts earnings.
Net Investment Hedges
The Company may hedge the foreign currency risk associated with certain net investment positions in foreign subsidiaries by either borrowing
directly in foreign currencies and designating all or a portion of the foreign currency debt as a hedge of the applicable net investment position or entering
into foreign currency swaps that are designated as hedges of net investments.
The Company has designated certain Euro and Yen borrowings as a hedge of its investment in certain Euro-functional and Yen-functional
currency subsidiaries in order to manage foreign currency translation risk. Borrowings designated as net investment hedges are marked-to-market using the
current spot exchange rate as of the end of the period, with gains and losses included in the foreign currency translation component of AOCE until the sale
or substantial liquidation of the underlying net investments. In addition, the Company manages the related foreign exchange risk of the Euro and Yen
borrowings not designated as net investment hedges through certain Euro and Yen denominated financial assets and forward currency swaps.
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The following table summarizes the principal amounts of the Company’s outstanding Euro and Yen borrowings and the notional amounts of the
Euro and Yen borrowings designated as net investment hedges:
Notional Amount Designated as a Net
Investment Hedge
(In millions)
Principal Amount
December 31,
2024
December 31,
2023
Euro
2.250% Euro Senior Notes due 2024 
€
1,000.0 
€
— 
€
1,000.0 
1.023% Euro Senior Notes due 2024 
750.0 
— 
750.0 
2.125% Euro Senior Notes due 2025 
500.0 
— 
500.0 
1.362% Euro Senior Notes due 2027
850.0 
850.0 
850.0 
3.125% Euro Senior Notes due 2028
750.0 
750.0 
750.0 
1.908% Euro Senior Notes due 2032
1,250.0 
1,250.0 
1,250.0 
Foreign currency forward contracts 
— 
— 
500.0 
Euro Total
€
5,100.0 
€
2,850.0 
€
5,600.0 
Yen
YEN Term Loan
¥
40,000.0 
¥
40,000.0 
¥
40,000.0 
Yen Total
¥
40,000.0 
¥
40,000.0 
¥
40,000.0 
____________
The Company de-designated €189.2 million of the 2.250% Euro Senior Notes due 2024 as net investment hedges in the third quarter of 2024 and
an additional €200.0 million in October 2024. The Euro Senior Notes were repaid at maturity during the fourth quarter of 2024.
The Euro Senior Notes were repaid at maturity during the second quarter of 2024.
In conjunction with the partial Senior Notes repayment during the third quarter of 2024 (refer to Note 10 Debt for more information), the
Company de-designated the €500 million 2.125% Euro Senior Notes due 2025 as net investment hedges. The remaining Senior Notes were fully
redeemed in October 2024.
The principal amount of the foreign currency forward contracts at December 31, 2023 was €500 million. The contracts matured in July 2024.
At December 31, 2024, the principal amount of the Company’s outstanding Yen borrowings and the notional amount of the Yen borrowings
designated as net investment hedges was $254.4 million.
During the third quarter of 2023, the Company executed fixed-rate cross-currency interest rate swaps with notional amounts totaling Japanese Yen
14.6 billion with settlement dates through 2026. During the second quarter of 2024, the Company executed fixed-rate cross-currency interest rate swaps
with notional amounts totaling €500 million with settlement dates through 2026. The transactions hedge a portion of the Company’s net investment in
certain Yen- and Euro-functional currency subsidiaries. All changes in the fair value of these derivative instruments, which are designated as net investment
hedges, are marked-to-market using the current spot exchange rate as of the end of the period. The portion of these changes related to the excluded
component will be amortized in interest expense over the life of the derivative while the remainder will be recorded in AOCE until the sale or substantial
liquidation of the underlying net investments. The semiannual net interest payment received related to the fixed-rate component of the cross-currency
interest rate swaps will be reflected in operating cash flows.
During the fourth quarter of 2023, the Company executed foreign currency forward contracts with notional amounts totaling €500 million. During
the second quarter of 2024, the Company executed additional foreign currency forward contracts with notional amounts totaling €600 million. The
transactions hedged a portion of the Company’s net investment in certain Euro functional currency subsidiaries. The contracts were designated as a net
investment hedge and matured in July 2024.
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Interest Rate Risk Management
The Company enters into interest rate swaps from time to time in order to manage interest rate risk associated with the Company’s fixed-rate and
floating-rate debt. Interest rate swaps that meet specific accounting criteria are accounted for as fair value or cash flow hedges. All derivative instruments
used to manage interest rate risk are measured at fair value and reported as current assets or current liabilities in the consolidated balance sheets. For fair
value hedges, the changes in the fair value of both the hedging instrument and the underlying debt obligations are included in interest expense. For cash
flow hedges, the change in fair value of the hedging instrument is deferred through AOCE and is reclassified into earnings when the hedged item impacts
earnings.
Cash Flow Hedging Relationships
The Company’s interest rate swaps designated as cash flow hedges fix the interest rate on a portion of the Company’s variable-rate debt or hedge
part of the Company’s interest rate exposure associated with the variability in the future cash flows attributable to changes in interest rates. Any changes in
fair value are included in earnings or deferred through AOCE, depending on the nature and effectiveness of the offset. Any ineffectiveness in a cash flow
hedging relationship is recognized immediately in earnings in the consolidated statements of operations.
Credit Risk Management
The Company regularly reviews the creditworthiness of its financial counterparties and does not expect to incur a significant loss from the failure
of any counterparties to perform under any agreements. The Company is not subject to any obligations to post collateral under derivative instrument
contracts. Certain derivative instrument contracts entered into by the Company are governed by master agreements, which contain credit-risk-related
contingent features that would allow the counterparties to terminate the contracts early and request immediate payment should the Company trigger an
event of default on other specified borrowings. The Company records all derivative instruments on a gross basis in the consolidated balance sheets.
Accordingly, there are no offsetting amounts that net assets against liabilities.
The following table summarizes the classification and fair values of derivative instruments in our consolidated balance sheets:
Asset Derivatives
Liability Derivatives
(In millions)
Balance Sheet Location
December 31,
2024 Fair
Value
December 31,
2023 Fair Value
Balance Sheet
Location
December 31,
2024 Fair
Value
December 31,
2023 Fair Value
Derivatives designated as hedges:
Cross-currency interest rate swaps
Prepaid expenses & other
current assets
$
24.1  $
— 
Other current
liabilities
$
—  $
— 
Foreign currency forward contracts
Prepaid expenses & other
current assets
39.2 
17.5 
Other current
liabilities
— 
35.8 
Total derivatives designated as hedges
63.3 
17.5 
— 
35.8 
Derivatives not designated as hedges:
Foreign currency forward contracts
Prepaid expenses & other
current assets
198.3 
88.7 
Other current
liabilities
125.8 
88.8 
Total derivatives not designated as hedges
198.3 
88.7 
125.8 
88.8 
Total derivatives
$
261.6  $
106.2 
$
125.8  $
124.6 
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The following tables summarize information about the gains/(losses) incurred to hedge or offset operational foreign exchange or interest rate risk:
Amount of Gains/(Losses) Recognized in
Earnings
Year Ended December 31,
(In millions)
Location of Gain/(Loss)
2024
2023
2022
Derivative Financial Instruments in Net Investment Hedging Relationships:
Cross-currency interest rate swaps
Interest expense
$
10.7  $
1.8  $
— 
Derivative Financial Instruments Not Designated as Hedging Instruments:
Foreign currency option and forward contracts
Other expense (income), net 
72.5 
56.3 
(82.1)
Total
$
83.2  $
58.1  $
(82.1)
Amount of Gains/(Losses) Recognized in
AOCE (Net of Tax) on Derivatives
Amount of Gains/(Losses) Reclassified
from AOCE into Earnings
Year Ended December 31,
Year Ended December 31,
(In millions)
Location of Gain/(Loss)
2024
2023
2022
2024
2023
2022
Derivative Financial Instruments in Cash Flow
Hedging Relationships 
:
Foreign currency forward contracts
Net sales 
$
54.4  $
44.3  $
34.2  $
29.6  $
45.3  $
89.2 
Interest rate swaps
Interest expense 
(4.7)
(3.8)
(3.5)
(6.0)
(4.8)
(4.5)
Interest rate swaps
Other expense (income),
net 
— 
— 
— 
(3.4)
— 
— 
Derivative Financial Instruments in Net Investment
Hedging Relationships:
Cross-currency interest rate swaps
20.5 
(1.7)
— 
— 
— 
— 
Foreign currency forward contracts
9.5 
(18.3)
— 
— 
— 
— 
Non-derivative Financial Instruments in Net
Investment Hedging Relationships:
Foreign currency borrowings
225.2 
(120.1)
360.1 
— 
— 
— 
Total
$
304.9  $
(99.6) $
390.8  $
20.2  $
40.5  $
84.7 
____________
At December 31, 2024, the Company expects that approximately $19.0 million of pre-tax net gains on cash flow hedges will be reclassified from
AOCE into earnings during the next twelve months.
Represents the location of the gain/(loss) recognized in earnings on derivatives.
Represents the location of the gain/(loss) reclassified from AOCE into earnings.
Fair Value Measurement
Fair value is based on the price that would be received from the sale of an identical asset or paid to transfer an identical liability in an orderly
transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, a fair
value hierarchy has been established that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are
described below:
Level 1:        Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. The fair
value hierarchy gives the highest priority to Level 1 inputs.
Level 2:        Observable market-based inputs other than quoted prices in active markets for identical assets or liabilities.
Level 3:        Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3
inputs.
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of
unobservable inputs to the extent possible, as well as considers counterparty credit risk in its assessment of fair value.
 (2)
(2)
(1) 
(3)
(3)
(2)
(1)
(2)
(3)
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Financial assets and liabilities carried at fair value are classified in the tables below in one of the three categories described above:
December 31, 2024
December 31, 2023
(In millions)
Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
Recurring fair value measurements
Financial Assets
Cash equivalents:
Money market funds
$
387.7 
$
— 
$
—  $
651.4  $
—  $
— 
Total cash equivalents
387.7 
— 
— 
651.4 
— 
— 
Equity securities:
Exchange traded funds
54.8 
— 
— 
49.1 
— 
— 
Marketable securities
0.7 
— 
— 
0.2 
— 
— 
Total equity securities
55.5 
— 
— 
49.3 
— 
— 
CCPS in Biocon Biologics
— 
— 
1,349.8 
— 
— 
976.3 
Available-for-sale fixed income investments:
Corporate bonds
— 
12.9 
— 
— 
15.9 
— 
U.S. Treasuries
— 
17.2 
— 
— 
11.2 
— 
Agency mortgage-backed securities
— 
3.2 
— 
— 
4.6 
— 
Asset backed securities
— 
4.4 
— 
— 
5.1 
— 
Other
— 
0.3 
— 
— 
0.2 
— 
Total available-for-sale fixed income investments
— 
38.0 
— 
— 
37.0 
— 
Foreign exchange derivative assets
— 
237.5 
— 
— 
106.2 
— 
Interest rate swap derivative assets
— 
24.1 
— 
— 
— 
— 
Total assets at recurring fair value measurement
$
443.2 
$
299.6 
$
1,349.8  $
700.7  $
143.2  $
976.3 
Financial Liabilities
Foreign exchange derivative liabilities
$
— 
$
125.8 
$
—  $
—  $
124.6  $
— 
Contingent consideration
— 
— 
556.1 
— 
— 
215.1 
Total liabilities at recurring fair value measurement
$
— 
$
125.8 
$
556.1  $
—  $
124.6  $
215.1 
For financial assets and liabilities that utilize Level 2 inputs, the Company utilizes both direct and indirect observable price quotes, including
interest rate yield curves, foreign exchange forward prices and bank price quotes. For the years ended December 31, 2024 and 2023, there were no transfers
between Level 1 and 2 of the fair value hierarchy. Below is a summary of valuation techniques for the Company’s financial assets and liabilities:
•
Cash equivalents — valued at observable net asset value prices.
•
Equity securities, exchange traded funds — valued at the active quoted market prices from broker or dealer quotations or transparent pricing
sources at the reporting date. Unrealized gains and losses attributable to changes in fair value are included in Other Expense (Income), Net, in
the consolidated statements of operations.
•
Equity securities, marketable securities — valued using quoted stock prices from public exchanges at the reporting date. Unrealized gains and
losses attributable to changes in fair value are included in Other Expense (Income), Net, in the consolidated statements of operations.
•
CCPS in Biocon Biologics — valued using a Monte Carlo simulation model using Level 3 inputs. The fair value of the CCPS is sensitive to
changes in the forecasts of operating metrics, changes in volatility and discount rates, and share dilution. The Company elected the fair value
option for the CCPS under ASC 825. The fair value is reassessed quarterly and any change in the fair value estimate is recorded in Other
Expense (Income), Net in the consolidated statements of operations for that period.
•
Available-for-sale fixed income investments — valued at the quoted market prices from broker or dealer quotations or transparent pricing
sources at the reporting date. Unrealized gains and losses attributable to changes in fair value, net of income taxes, are included in
accumulated other comprehensive loss as a component of shareholders’ equity.
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•
Foreign exchange derivative assets and liabilities — valued using quoted forward foreign exchange prices and spot rates at the reporting date.
Counterparties to these contracts are highly rated financial institutions.
Contingent Consideration
In December 2011, the Company completed the acquisition of the exclusive worldwide rights to develop, manufacture and commercialize a
generic equivalent to GlaxoSmithKline’s Advair Diskus® incorporating Pfizer’s Respiratory Delivery Platform. The Company accounted for this
transaction as a purchase of a business and utilized the acquisition method of accounting. On January 30, 2019, the Company received FDA approval of
Wixela Inhub® (fluticasone propionate and salmeterol inhalation powder, USP), the first generic of GlaxoSmithKline’s Advair Diskus®. The commercial
launch of the Wixela Inhub® occurred in February 2019.
As of December 31, 2024, the Company had a contingent consideration liability of $378.0 million related to the Idorsia Transaction. As of
December 31, 2024 and 2023, the Company had a contingent consideration liability of $176.3 million and $177.6 million, respectively, related to the
Respiratory Delivery Platform, and as of December 31, 2023, the Company had a contingent consideration liability of $15.8 million related to the Biocon
Biologics Transaction. Refer to Note 5 Divestitures for additional information. The measurement of these contingent consideration liabilities is calculated
using unobservable Level 3 inputs based on the Company’s own assumptions primarily related to the probability and timing of future events and payments
which are discounted using a market rate of return. At December 31, 2024 and 2023, discount rates ranging from 9.0% to 19.0%, and 6.4% to 8.0%,
respectively, were utilized in the valuations. Significant changes in unobservable inputs could result in material changes to the contingent consideration
liabilities.
A rollforward of the activity in the Company’s fair value of contingent consideration from December 31, 2022 to December 31, 2024 is as
follows:
(In millions)
Current Portion 
Long-Term
Portion
Total Contingent
Consideration
Balance at December 31, 2022
$
64.4 
$
310.6 
$
375.0 
Payments
(43.0)
(220.0)
(263.0)
Reclassifications
54.7 
(54.7)
— 
Accretion
— 
22.7 
22.7 
Fair value loss 
— 
80.4 
80.4 
Balance at December 31, 2023
$
76.1 
$
139.0 
$
215.1 
Payments
(97.0)
— 
(97.0)
Acquisition
— 
345.0 
345.0 
Reclassifications
80.4 
(80.4)
— 
Accretion
— 
38.2 
38.2 
Fair value loss 
— 
54.8 
54.8 
Balance at December 31, 2024
$
59.5 
$
496.6 
$
556.1 
____________
Included in other current liabilities in the consolidated balance sheets.
Included in other long-term obligations in the consolidated balance sheets.
Included in litigation settlements and other contingencies, net in the consolidated statements of operations.
Although the Company has not elected the fair value option for financial assets and liabilities other than the CCPS, any future transacted financial
asset or liability will be evaluated for the fair value election.
(1)
 (2)
(3)
(3)
(1)
(2)
(3)
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Available-for-Sale Securities
The amortized cost and estimated fair value of available-for-sale securities were as follows:
(In millions)
Balance Sheet Location
Cost
Gross

Unrealized

Losses
Fair

Value
December 31, 2024
Available-for-sale fixed income investments
Prepaid expenses and other current
assets
$
38.9 
$
(0.9)
$
38.0 
$
38.9 
$
(0.9)
$
38.0 
December 31, 2023
Available-for-sale fixed income investments
Prepaid expenses and other current
assets
$
37.8 
$
(0.8)
$
37.0 
$
37.8 
$
(0.8)
$
37.0 
Maturities of available-for-sale fixed income investments at fair value as of December 31, 2024, were as follows:
(In millions)
 
Mature within one year
$
1.1 
Mature in one to five years
20.9 
Mature in five years and later
16.0 
$
38.0 
10. Debt
The following provides an overview of the Company’s short-term credit facilities.
Receivables Facility
The Company has a $400 million Receivables Facility which expires in April 2025. Under the terms of the Receivables Facility, certain of our
accounts receivable secure the amounts borrowed and cannot be used to pay our other debts or liabilities. The amount that we may borrow at a given point
in time is determined based on the amount of qualifying accounts receivable that are present at such point in time.
Borrowings outstanding under the Receivables Facility bear interest at the applicable base rate plus 0.775% and are included as a component of
short-term borrowings, while the accounts receivable securing these obligations remain as a component of accounts receivable, net, in our consolidated
balance sheets. In addition, the agreement governing the Receivables Facility contains various customary affirmative and negative covenants, and
customary default and termination provisions with which the Company was compliant as of December 31, 2024. As of December 31, 2024 and 2023, the
Company had $484.1 million and $564.5 million, respectively, of accounts receivable balances sold to its subsidiary Mylan Securitization LLC under the
Receivables Facility.
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Long-Term Debt
A summary of long-term debt is as follows:
($ in millions)
Interest Rate as of
December 31, 2024
December 31,
2024
December 31,
2023
Current portion of long-term debt:
2024 Euro Senior Notes  **
2.250 % $
— 
$
1,103.5 
2024 Euro Senior Notes  ****
1.023 %
— 
831.5 
Other
0.6 
0.4 
Deferred financing fees
— 
(0.7)
Current portion of long-term debt
$
0.6 
$
1,934.7 
Non-current portion of long-term debt:
2025 Euro Senior Notes  *
2.125 % $
— 
$
551.7 
2025 Senior Notes 
***
1.650 %
— 
755.7 
2026 Senior Notes 
**
3.950 %
1,672.8 
2,245.1 
2027 Euro Senior Notes ****
1.362 %
899.4 
967.2 
2027 Senior Notes ***
2.300 %
764.2 
769.8 
2028 Euro Senior Notes **
3.125 %
773.7 
824.1 
2028 Senior Notes *
4.550 %
749.3 
749.1 
2030 Senior Notes ***
2.700 %
1,497.0 
1,505.0 
2032 Euro Senior Notes ****
1.908 %
1,376.2 
1,478.4 
2040 Senior Notes ***
3.850 %
1,637.1 
1,644.0 
2043 Senior Notes *
5.400 %
497.5 
497.5 
2046 Senior Notes **
5.250 %
999.9 
999.9 
2048 Senior Notes *
5.200 %
747.9 
747.8 
2050 Senior Notes ***
4.000 %
2,191.6 
2,196.3 
YEN Term Loan Facility
Variable
254.4 
283.6 
Other
2.2 
2.4 
Deferred financing fees
(24.3)
(29.5)
Long-term debt
$
14,038.9 
$
16,188.1 
____________    
The 2024 Euro Senior Notes were repaid at maturity in the fourth quarter of 2024.
The 2024 Euro Senior Notes were repaid at maturity in the second quarter of 2024.
Refer to Senior Notes – Senior Notes Repayment section below for additional details.
     Instrument was issued by Mylan Inc.
Instrument was originally issued by Mylan N.V.; now held by Utah Acquisition Sub Inc.
Instrument was issued by Viatris Inc.
Instrument was issued by Upjohn Finance B.V.
Senior Notes
Assumptions and Guarantees of Senior Unsecured Notes
Viatris Inc. is the issuer of the Upjohn U.S. Dollar Notes, which are fully and unconditionally guaranteed on a senior unsecured basis by Mylan
Inc., Mylan II B.V. and Utah Acquisition Sub Inc.
Upjohn Finance B.V. is the issuer of the Upjohn Euro Notes, which are fully and unconditionally guaranteed on a senior unsecured basis by Viatris
Inc., Mylan Inc., Mylan II B.V. and Utah Acquisition Sub Inc.
(a)
(b)
(c)
(c) 
(c) 
(a)    
(b)    
(c)    
*
**     
***     
****     
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Table of Contents
Following the Combination, Utah Acquisition Sub Inc. is the issuer of the Utah U.S. Dollar Notes and the Utah Euro Notes, which are each fully
and unconditionally guaranteed on a senior unsecured basis by Mylan Inc., Viatris Inc. and Mylan II B.V.
Mylan Inc. is the issuer of the Mylan Inc. U.S. Dollar Notes, which are each fully and unconditionally guaranteed on a senior unsecured basis by
Mylan II B.V., Viatris Inc. and Utah Acquisition Sub Inc.
Senior Notes Repayment
On September 16, 2024, Viatris and Mylan Inc. completed cash tender offers for their then-outstanding 1.650% Senior Notes due 2025 (the “2025
Senior Notes”) and 2.125% Senior Notes due 2025 (the “2025 Euro Senior Notes”), respectively. Viatris paid $422.3 million to repurchase $432.0 million
aggregate principal amount of the 2025 Senior Notes at a repurchase price equal to 97.8% of the aggregate principal amount of the 2025 Senior Notes
accepted for tender, and also paid accrued and unpaid interest. Mylan Inc. paid €206.9 million to repurchase €208.1 million aggregate principal amount of
the 2025 Euro Senior Notes at a repurchase price equal to 99.4% of the aggregate principal amount of the 2025 Euro Senior Notes accepted for tender, and
also paid accrued and unpaid interest. On September 20, 2024, Utah Acquisition Sub Inc. also completed a cash tender offer for its then-outstanding
3.950% Senior Notes due 2026 (the “2026 Senior Notes” and, together with the 2025 Senior Notes and the 2025 Euro Senior Notes, the “Senior Notes”)
and paid $572.5 million to repurchase $575.0 million aggregate principal amount at a repurchase price equal to 99.6% of the aggregate principal amount of
the 2026 Senior Notes accepted for tender, and also paid accrued and unpaid interest.
On September 16, 2024, after completing the tender offer, the Company irrevocably deposited with the trustee under the indenture governing the
2025 Senior Notes, U.S. government obligations in an amount sufficient to fund the payment of accrued and unpaid interest and the remaining
$318.0 million aggregate principal amount as it becomes due. After the deposit of such funds with the trustee, the Company’s obligations under the 2025
Senior Notes Indenture with respect to the 2025 Senior Notes were satisfied and discharged. In addition, on September 16, 2024, after completing the
tender offer, Mylan Inc. issued a notice of redemption for the remaining €291.9 million aggregate principal amount of the 2025 Euro Senior Notes and such
redemption was completed on October 16, 2024.
The tender offers and satisfaction and discharge of the Senior Notes were completed using cash and cash equivalents on hand and accounted for as
a debt extinguishment. The total gain recognized on the debt extinguishment (net of the write off of related unamortized deferred financing fees) for the
year ended December 31, 2024 was $16.5 million and is included within Other Expense (Income), Net in the consolidated statements of operations.
YEN Term Loan Facility and 2024 Revolving Facility
In July 2021, Viatris entered into the ¥40 billion YEN Term Loan Facility with various syndicates of banks. The YEN Term Loan Facility will
mature in July 2026. On September 27, 2024, Viatris entered into a $3.5 billion amended and restated revolving credit agreement (the “2024 Revolving
Facility”) with a syndicate of banks. The 2024 Revolving Facility amended and restated the 2021 Revolving Facility. The 2024 Revolving Facility bears
interest at variable rates based on current market conditions and will mature in September 2029.
The YEN Term Loan Facility and the 2024 Revolving Facility contain customary affirmative covenants for facilities of this type, including among
others, covenants pertaining to the delivery of financial statements, notices of default and certain material events, maintenance of corporate existence and
rights, property, and insurance and compliance with laws, as well as customary negative covenants for facilities of this type, including a financial covenant,
which require maintenance of a Maximum Leverage Ratio no greater than 3.75 to 1.00 as of the last day of any fiscal quarter, except in circumstances as
defined in the related credit agreement, and other limitations on the incurrence of subsidiary indebtedness, liens, mergers and certain other fundamental
changes, investments and loans, acquisitions, transactions with affiliates, payments of dividends and other restricted payments and changes in our lines of
business. Up to $1.65 billion of the 2024 Revolving Facility may be used to support borrowings under our Commercial Paper Program.
Fair Value
At December 31, 2024 and 2023, the aggregate fair value of the Company’s outstanding notes was approximately $11.53 billion and $15.25
billion, respectively. The fair values of the outstanding notes were valued at quoted market prices from broker or dealer quotations and were classified as
Level 2 in the fair value hierarchy.
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Mandatory minimum repayments remaining on the notional amount of outstanding long-term debt at December 31, 2024 were as follows for each
of the years ending December 31:
(In millions)
Total
2025
$
— 
2026
1,929 
2027
1,630 
2028
1,527 
2029
— 
Thereafter
8,494 
Total
$
13,580 
11. Comprehensive (Loss) Earnings
Accumulated other comprehensive loss, as reflected in the consolidated balance sheets, is comprised of the following:
(In millions)
December 31, 2024
December 31, 2023
Accumulated other comprehensive loss:
Net unrealized loss on available-for-sale fixed income securities, net of tax
$
(1.2)
$
(1.2)
Net unrecognized gain and prior service cost related to defined benefit plans, net of tax
254.2 
271.4 
Net unrecognized loss on derivatives in cash flow hedging relationships, net of tax
32.3 
(8.0)
Net unrecognized gain on derivatives in net investment hedging relationships, net of tax
492.6 
237.1 
Foreign currency translation adjustment
(3,990.8)
(3,246.7)
$
(3,212.9)
$
(2,747.4)
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Table of Contents
Components of accumulated other comprehensive (loss) earnings, before tax, consist of the following:
Year Ended December 31, 2024
Gains and Losses on Derivatives in
Cash Flow Hedging Relationships
Gains and
Losses on Net
Investment
Hedges
Gains and
Losses on
Available-For-
Sale Fixed
Income
Securities
Defined
Pension
Plan Items
Foreign
Currency
Translation
Adjustment
Totals
(In millions)
Foreign
Currency
Forward
Contracts
Interest
Rate
Swaps
Total
Balance at December 31, 2023, net of tax
$
(8.0) $
237.1  $
(1.2) $
271.4  $
(3,246.7) $
(2,747.4)
Other comprehensive earnings (loss) before
reclassifications, before tax
73.6 
325.4 
(0.1)
(36.4)
(744.1)
(381.6)
Amounts reclassified from accumulated
other comprehensive earnings (loss), before
tax:
Gain on foreign exchange forward
contracts classified as cash flow hedges,
included in net sales
(29.6)
(29.6)
(29.6)
Loss on interest rate swaps classified as
cash flow hedges, included in interest
expense
6.0 
6.0 
6.0 
Loss on interest rate swaps classified as
cash flow hedges, included in other
(expense) income, net
3.4 
3.4 
3.4 
Amortization of prior service costs
included in SG&A
(2.2)
(2.2)
Amortization of actuarial loss included in
SG&A
18.0 
18.0 
Net other comprehensive earnings (loss),
before tax
53.4 
325.4 
(0.1)
(20.6)
(744.1)
(386.0)
Income tax provision (benefit)
13.1 
69.9 
(0.1)
(3.4)
— 
79.5 
Balance at December 31, 2024, net of tax
$
32.3  $
492.6  $
(1.2) $
254.2  $
(3,990.8) $
(3,212.9)
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Table of Contents
Year Ended December 31, 2023
Gains and Losses on Derivatives in Cash
Flow Hedging Relationships
Gains and
Losses on Net
Investment
Hedges
Gains and
Losses on
Available-
For-Sale
Fixed Income
Securities
Defined
Pension
Plan Items
Foreign
Currency
Translation
Adjustment
Totals
(In millions)
Foreign
Currency
Forward
Contracts
Interest
Rate
Swaps
Total
Balance at December 31, 2022, net of tax
$
(18.5) $
377.0  $
(2.3) $
268.5  $
(3,385.9) $
(2,761.2)
Other comprehensive earnings (loss) before
reclassifications, before tax
54.4 
(178.5)
1.5 
(37.3)
139.2 
(20.7)
Amounts reclassified from accumulated other
comprehensive earnings (loss), before tax:
Gain on foreign exchange forward
contracts classified as cash flow hedges,
included in net sales
(45.3)
(45.3)
(45.3)
Loss on interest rate swaps classified as
cash flow hedges, included in interest
expense
4.8 
4.8 
4.8 
Gain on divestiture of defined pension
plan included in SG&A
(3.0)
(3.0)
Amortization of prior service costs
included in SG&A
(0.3)
(0.3)
Amortization of actuarial loss included in
SG&A
21.9 
21.9 
Net other comprehensive earnings (loss),
before tax
13.9 
(178.5)
1.5 
(18.7)
139.2 
(42.6)
Income tax provision (benefit)
3.4 
(38.6)
0.4 
(21.6)
— 
(56.4)
Balance at December 31, 2023, net of tax
$
(8.0) $
237.1  $
(1.2) $
271.4  $
(3,246.7) $
(2,747.4)
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Table of Contents
Year Ended December 31, 2022
Gains and Losses on Derivatives in Cash
Flow Hedging Relationships
Gains and
Losses on Net
Investment
Hedges
Gains and
Losses on
Available-
For-Sale
Fixed Income
Securities
Defined
Pension
Plan Items
Foreign
Currency
Translation
Adjustment
Totals
(In millions)
Foreign
Currency
Forward
Contracts
Interest
Rate
Swaps
Total
Balance at December 31, 2021, net of tax
$
9.2  $
16.7  $
—  $
32.2  $
(1,802.4) $
(1,744.3)
Other comprehensive earnings (loss) before
reclassifications, before tax
47.8 
460.1 
(2.8)
276.3 
(1,583.5)
(802.1)
Amounts reclassified from accumulated other
comprehensive earnings (loss), before tax:
Gain on foreign exchange forward
contracts classified as cash flow hedges,
included in net sales
(89.2)
(89.2)
(89.2)
Loss on interest rate swaps classified as
cash flow hedges, included in interest
expense
4.5 
4.5 
4.5 
Amortization of prior service costs
included in SG&A
(0.4)
(0.4)
Amortization of actuarial loss included in
SG&A
3.2 
3.2 
Net other comprehensive earnings (loss),
before tax
(36.9)
460.1 
(2.8)
279.1 
(1,583.5)
(884.0)
Income tax (benefit) provision
(9.2)
99.8 
(0.5)
42.8 
— 
132.9 
Balance at December 31, 2022, net of tax
$
(18.5) $
377.0  $
(2.3) $
268.5  $
(3,385.9) $
(2,761.2)
12. Income Taxes
The income tax provision (benefit) consisted of the following components:
 
Year Ended December 31,
(In millions)
2024
2023
2022
U.S. Federal:
Current
$
113.0 
$
2.6 
$
115.3 
Deferred
(113.2)
293.4 
263.7 
(0.2)
296.0 
379.0 
U.S. State:
Current
7.2 
1.9 
26.5 
Deferred
(7.2)
2.6 
20.3 
— 
4.5 
46.8 
Non-U.S.:
Current
658.4 
530.8 
618.7 
Deferred
(647.2)
(683.1)
(309.9)
11.2 
(152.3)
308.8 
Income tax provision
$
11.0 
$
148.2 
$
734.6 
(Loss) earnings before income taxes:
United States
(571.9)
(951.5)
794.8 
Foreign - Other
(51.3)
1,154.4 
2,018.4 
Total (loss) earnings before income taxes
$
(623.2)
$
202.9 
$
2,813.2 
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For all periods presented, the allocation of earnings before income taxes between U.S. and non-U.S. operations includes intercompany interest
allocations between certain domestic and foreign subsidiaries. These amounts are eliminated on a consolidated basis.
Temporary differences and carry-forwards that result in deferred tax assets and liabilities were as follows:
(In millions)
December 31, 2024
December 31, 2023
Deferred tax assets:
Employee benefits
$
138.5 
$
148.7 
Litigation reserves
79.6 
32.2 
Accounts receivable allowances
392.2 
413.7 
Inventory
129.3 
143.8 
Tax credit and loss carry-forwards
1,482.9 
758.2 
Operating lease assets
50.8 
51.3 
Interest expense
96.8 
114.8 
Intangible assets
241.7 
167.7 
Other
273.5 
326.1 
2,885.3 
2,156.5 
Less: Valuation allowance
(1,233.4)
(421.4)
Total deferred tax assets
1,651.9 
1,735.1 
Deferred tax liabilities:
Plant and equipment
56.3 
54.0 
Operating lease liabilities
50.8 
51.3 
Intangible assets and goodwill
1,695.8 
2,506.2 
Equity investments
164.6 
— 
Other
39.3 
166.4 
Total deferred tax liabilities
2,006.8 
2,777.9 
Deferred tax liabilities, net
$
(354.9)
$
(1,042.8)
For those foreign subsidiaries whose investments are permanent in duration, income and foreign withholding taxes have not been provided on the
unremitted earnings of those subsidiaries. This amount may become taxable upon a repatriation of assets from the subsidiary or a sale or liquidation of the
subsidiary. The amount of such unremitted earnings is approximately $1.11 billion at December 31, 2024. Determination of the amount of any
unrecognized deferred income tax liability on these unremitted earnings is not practicable as such determination involves material uncertainties about the
potential extent and timing of any distributions, the availability and complexity of calculating foreign tax credits, and the potential indirect tax
consequences of such distributions, including withholding taxes.
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Our effective tax rate from continuing operations differs from the applicable U.S. statutory federal income tax rate of 21.0%, due to the following:
 
Year Ended December 31,
 
2024
2023
2022
Statutory tax rate
21.0 %
21.0 %
21.0 %
Research credits
2.2 %
(5.2)%
— %
Foreign rate differential
11.2 %
(58.8)%
(3.6)%
Recognition of tax carryforwards
114.7 %
1.5 %
9.8 %
Goodwill impairment
(10.7)%
60.8 %
6.5 %
State income taxes and credits
(0.2)%
(3.9)%
1.3 %
Tax settlements and resolution of certain tax positions
(2.6)%
14.2 %
1.0 %
Impact of the Combination and divestitures
5.5 %
11.2 %
(6.7)%
Incremental U.S. tax on foreign earnings
9.9 %
69.4 %
2.0 %
Valuation allowance
(137.0)%
10.9 %
(13.6)%
Deferred tax impact of tax law changes
0.7 %
(1.0)%
5.4 %
Withholding taxes
(4.3)%
7.4 %
1.5 %
Deferred tax impact of internal restructuring
(8.3)%
(74.0)%
— %
Other items
(3.9)%
19.5 %
1.5 %
Effective tax rate
(1.8)%
73.0 %
26.1 %
In all years, our effective tax rate is impacted by the jurisdictional location of earnings and the corresponding tax rates in those jurisdictions. The
Company realizes benefits from lower tax rates in Singapore and Puerto Rico due to manufacturing and other incentives.
During the year ended December 31, 2024, as a result of legislation changes surrounding Pillar Two Global Anti-Base Erosion Rules (“Pillar Two
Rules”), the Company recognized $734.6 million of previously unrecorded Luxembourg net operating losses which are offset by a corresponding valuation
allowance. During the year ended December 31, 2022, a Puerto Rico net operating loss, which was recorded in conjunction with the Combination, expired
unutilized resulting in a $274.4 million write-off of deferred tax asset and corresponding valuation allowance. The expiration and valuation allowance
impacts are reflected in the above table.
Valuation Allowance
A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. At
December 31, 2024, a valuation allowance has been applied to certain deferred tax assets in the amount of $1.23 billion.
When assessing the realizability of deferred tax assets, management considers all available evidence, including historical information, long-term
forecasts of future taxable income and possible tax planning strategies. Amounts recorded for valuation allowances can result from a complex series of
estimates, assumptions and judgments about future events. Due to the inherent uncertainty involved in making these estimates, assumptions and judgments,
actual results could differ materially. Any future increases to the Company’s valuation allowances could materially impact the Company’s consolidated
financial condition and results of operations.
Net Operating Losses
As of December 31, 2024, the Company had the following carryforwards and attributes:
•
U.S. federal net operating loss carryforwards of $247.6 million, which were recorded in connection with the Oyster Point acquisition.
While the utilization of these carryforwards is subject to Section 382 of the Code, the Company does not anticipate that this limitation
will impair our ability to utilize the carryovers.
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•
U.S. state income tax loss carryforwards of approximately $3.40 billion, which are largely offset by a valuation allowance.
•
Non-U.S. net operating loss carryforwards of approximately $4.47 billion, of which $2.34 billion can be carried forward indefinitely, with
the remaining $2.13 billion expiring in years 2025 through 2044.
•
U.S. and foreign credit carryovers of $276.6 million, expiring in various amounts through 2044.
•
Anticipatory foreign tax credits of $48.0 million which will generate from the reversal of future taxable income in certain non-U.S.
jurisdictions which are taxed both in their local jurisdictions and in the U.S.
On November 16, 2020, the Company had a change in ownership pursuant to Section 382 of the Code. Under this provision of the Code, the
utilization of any NOL or tax credit carryforwards incurred prior to the date of ownership change may be limited. Analyses of the limits for each ownership
change indicates the annual limitation would not impair the Company's ability to utilize our U.S. federal credit carryovers. While state loss carryforwards
may be limited by Section 382 of the Code, the carryforwards are largely offset by a valuation allowance.
Legislative Updates
On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 into law, which includes a new corporate alternative
minimum tax (“CAMT”) and an excise tax of 1% on the fair market value of net stock repurchases. Both provisions are effective for years after December
31, 2022. The Company reflected the applicable estimated excise tax in treasury stock as part of the cost basis of the stock repurchased and recorded a
corresponding liability in Other current liabilities in our consolidated balance sheets as of December 31, 2024 and 2023. The share repurchase and
authorization amounts otherwise disclosed in this Form 10-K exclude the excise tax. The Company does not anticipate being subject to the 15% CAMT tax
in 2024 based on enacted law and regulatory guidance; however, our CAMT status could change in the future, depending on new regulations or regulatory
guidance issued by the U.S. Department of the Treasury.
In addition, many countries are actively considering or have proposed or enacted changes to their tax laws based on the Pillar Two Rules proposed
by the OECD. The Pillar Two Rules impose a global minimum tax of 15%, and under these rules, the Company may be required to pay a “top-up” tax to
the extent our effective tax rate in any given country is below 15%. Several countries have enacted the Pillar Two Rules effective January 1, 2024, with
many countries postponing implementation to January 1, 2025 or later, if at all. After determining which jurisdictions are not required to calculate a Pillar
Two liability as a result of the existing safe harbors, the Company has determined that the impact of the Pillar Two Rules in the countries that have enacted
such rules effective for tax years ending on or before December 31, 2024, is not material to our results of operations for the year ended December 31, 2024.
While the Pillar Two Rules did not have a significant impact on the 2024 tax provision or financial results, the Company will continue to monitor and
evaluate the evolving tax legislation in the jurisdictions in which we operate which could impact future tax provision and financial results.
Tax Examinations
The Company is subject to income taxes and tax audits in many jurisdictions. A certain degree of estimation is thus required in recording the
assets and liabilities related to income taxes. Tax audits and examinations can involve complex issues, interpretations, and judgments and the resolution of
matters that may span multiple years, particularly if subject to litigation or negotiation.
Although the Company believes that adequate provisions have been made for these uncertain tax positions, the Company’s assessment of
uncertain tax positions, including those arising from legal entity restructuring transactions in connection with the Combination, is based on estimates and
assumptions that the Company believes are reasonable but the estimates for unrecognized tax benefits and potential tax benefits may not be representative
of actual outcomes, and variations from such estimates could materially affect the Company’s financial condition, results of operations or cash flows in the
period of resolution, settlement or when the statutes of limitations expire.
The Company is subject to ongoing IRS examinations. The years 2020 through 2023 are open years, with 2020 and 2021 under examination.
Several international audits are currently in progress. In some cases, the tax auditors have proposed adjustments or issued assessments to our tax
positions, including with respect to intercompany transactions, and we are in ongoing discussions with some of the auditors regarding the validity of their
tax positions.
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In instances where assessments have been issued, we disagree with these assessments and believe they are without merit and incorrect as a matter
of law. As a result, we anticipate that certain of these matters may become the subject of litigation before tax courts where we intend to vigorously defend
our position.
In Australia, the tax authorities issued notices of assessments to the Company for the years ended December 2009 to December 2020, subject to
additional interest and penalties, concerning our tax position with respect to certain intercompany transactions. The tax authorities denied our objections to
the assessments for the years ended December 2009 to December 2020 and we commenced litigation in the Australian Federal Court challenging those
decisions. A trial took place in October 2023 and on March 20, 2024, the Court issued a decision in favor of the Company. The tax authorities did not
appeal the Court decision. The Company made a partial payment of $56.0 million in 2021 and $5.2 million in 2022 in order to stay potential interest and
penalties resulting from this litigation, which has been refunded.
In France, the tax authorities have issued notices of assessments to the Company for the years ended December 2013 to December 2015
concerning our tax position with respect to whether income earned by a Company entity not domiciled in France should be subject to French tax. We have
commenced litigation before the French tax courts where the tax authorities will seek unpaid taxes, penalties, and interest. A decision is pending.
In India, the tax authorities have issued notices of assessments to the Company seeking unpaid taxes and interest for the financial years covering
2013 to 2018 concerning our tax position with respect to certain corporate tax deductions and certain intercompany transactions. Some of these issues were
resolved through the Company entering into an agreement with the tax authorities in March 2023 in respect of the pricing of its international transactions.
The Company recorded tax expense of approximately     $22.3 million during the year ended December 31, 2023, due to the terms of this agreement. The
remaining issues are in the audit phase or are being challenged in the Indian tax courts.
In 2020, the Swedish Tax Authorities (“STA”) asserted an underpayment of tax against Meda A.B. for the tax years 2014 to 2019. The claim was
that profits earned by its Luxembourg subsidiary should have been attributed to Meda A.B. The Company appealed the STA’s assessment to the
Administrative Court of Stockholm. On September 16, 2022, the Court ruled in favor of Meda A.B. that no tax was due. The STA appealed that decision.
On April 10, 2024, the Administrative Court of Appeals overturned the lower Court’s ruling and issued a decision in favor of the STA upholding its
original assessment. The amount due including interest and penalties is approximately $18.2 million, which was paid during the second quarter of 2024.
The Company has filed a petition seeking review of the decision to the Supreme Administrative Court.
The Company has recorded a net reserve for uncertain tax positions of $277.0 million and $287.1 million, including interest and penalties, in
connection with its international audits at December 31, 2024 and 2023, respectively. In connection with our international tax audits, it is possible that we
will incur material losses above the amounts reserved.
The Company’s major U.S. state taxing jurisdictions remain open from fiscal year 2015 through 2023, with several state audits currently in
progress. The Company’s major international taxing jurisdictions remain open from 2012 through 2023.
Accounting for Uncertainty in Income Taxes
The impact of an uncertain tax position that is more likely than not of being sustained upon audit by the relevant taxing authority must be
recognized at the largest amount that is more likely than not to be sustained. No portion of an uncertain tax position will be recognized if the position has
less than a 50% likelihood of being sustained.
As of December 31, 2024 and 2023, the Company’s consolidated balance sheets reflect net liabilities for unrecognized tax benefits of $255.7
million and $272.8 million, respectively, of which $180.5 million as of December 31, 2024 would affect the Company’s effective tax rate if recognized,
with the remainder being offset by potential correlative adjustments. Related accrued interest and penalties included in the consolidated balance sheets were
$106.4 million and $115.7 million as of December 31, 2024 and 2023, respectively. For the years ended December 31, 2024, 2023 and 2022, the Company
recognized $(0.3) million, $15.4 million, and $21.1 million of tax (benefit)/expense, respectively, related to interest and penalties on uncertain tax positions.
Interest and penalties related to income taxes are included in the tax provision.
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A reconciliation of the unrecognized tax benefits is as follows:
Year Ended December 31,
(In millions)
2024
2023
2022
Unrecognized tax benefit — beginning of year
$
272.8 
$
296.7 
$
322.9 
Additions for current year tax positions
22.5 
— 
8.2 
Additions for prior year tax positions
33.8 
3.0 
1.0 
Reductions for prior year tax positions
(34.6)
(4.6)
(5.8)
Settlements
(15.6)
(2.1)
(0.4)
Reductions due to expirations of statute of limitations
(13.4)
(13.0)
(1.9)
Reduction due to acquisition
— 
— 
(27.3)
Impact of foreign currency translation
(9.8)
(7.2)
— 
Unrecognized tax benefit — end of year
$
255.7 
$
272.8 
$
296.7 
The Company believes that it is reasonably possible that the amount of unrecognized tax benefits will decrease in the next twelve months by
approximately $21.0 million, involving international and state audits and settlements and expiring statutes of limitations. The Company does not anticipate
significant increases to the reserve within the next twelve months.
13. Share-Based Incentive Plan
Prior to the Distribution, Viatris adopted and Pfizer, in the capacity as Viatris’ sole stockholder at such time, approved the 2020 Incentive Plan (the
Viatris Inc. 2020 Stock Incentive Plan) which became effective as of the Distribution. In connection with the Combination, as of November 16, 2020, the
Company assumed the 2003 LTIP (Mylan N.V. Amended and Restated 2003 Long-Term Incentive Plan), which had previously been approved by Mylan
shareholders. The 2020 Incentive Plan includes 72,500,000 shares of Viatris’ common stock authorized for grant pursuant to the 2020 Incentive Plan,
which may include dividend payments payable in common stock on unvested shares granted under awards. No shares remain available for issuance under
the 2003 LTIP, however, certain awards remain outstanding under the plan. The Board had approved an amendment to the 2020 Incentive Plan, subject to
the approval of Viatris shareholders, to increase the maximum aggregate number of shares of Viatris common stock available for issuance under the 2020
Incentive Plan by 49,000,000 and on December 6, 2024, Viatris shareholders approved the amendment.
Under the 2020 Incentive Plan, shares are reserved for issuance to key employees, consultants, independent contractors and non-employee
directors of the Company through a variety of incentive awards, including: stock options, SARs, restricted stock and units, PSUs, other stock-based awards
and short-term cash awards. Stock option awards are granted with an exercise price equal to the fair market value of the shares underlying the stock options
at the date of the grant, generally become exercisable over periods ranging from three to four years, and generally expire in ten years.
The following table summarizes stock awards (stock options and SARs) activity:
Number of Shares

Under Stock Awards
Weighted Average

Exercise Price

per Share
Outstanding at December 31, 2021
5,576,490 
$
37.19 
Forfeited
(1,126,848)
31.91 
Outstanding at December 31, 2022
4,449,642 
$
38.53 
Granted
283,361 
7.68 
Exercised
(26,457)
5.65 
Forfeited
(547,213)
32.63 
Outstanding at December 31, 2023
4,159,333 
$
37.41 
Exercised
(57,952)
7.01 
Forfeited
(750,595)
46.36 
Outstanding at December 31, 2024
3,350,786 
$
35.94 
Vested and expected to vest at December 31, 2024
3,345,183 
$
35.99 
Exercisable at December 31, 2024
3,310,219 
$
36.28 
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As of December 31, 2024, stock awards outstanding, stock awards vested and expected to vest and stock awards exercisable each had average
remaining contractual terms of 3.1 years. Also, at December 31, 2024, stock awards outstanding, stock awards vested and expected to vest and stock
awards exercisable had aggregate intrinsic values of $0.5 million, $0.5 million, and $0.3 million, respectively.
A rollforward of the changes in the Company’s nonvested Restricted Stock Awards (restricted stock and restricted stock unit awards, including
PSUs) from December 31, 2023 to December 31, 2024 is presented below:
Number of Restricted
Stock Awards
Weighted Average
Grant-Date

Fair Value Per Share
Nonvested at December 31, 2023
31,096,783 
$
11.20 
Granted
13,859,002 
12.33 
Released
(11,455,355)
11.88 
Forfeited
(4,416,496)
11.12 
Nonvested at December 31, 2024
29,083,934 
$
11.49 
Of the 13,859,002 Restricted Stock Awards granted during the year ended December 31, 2024, 9,592,720 vest ratably in three years or less and are
not subject to market or performance conditions. Of the remaining Restricted Stock Awards granted, 12,920 are not subject to market conditions and will
cliff vest within a three-year period, and 4,253,362 are subject to market or performance conditions and will cliff vest in three years or less.
As of December 31, 2024, the Company had $163.4 million of total unrecognized compensation expense, net of estimated forfeitures, related to all
of its stock-based awards, which we expect to recognize over the remaining weighted average vesting period of 1.4 years. The total intrinsic value of
Restricted Stock Awards released and stock options exercised during the years ended December 31, 2024 and 2023 was $141.7 million and $169.2 million,
respectively.
14. Employee Benefit Plans
Defined Benefit Plans
The Company sponsors various defined benefit pension plans in several countries. Benefits provided generally depend on length of service, pay
grade and remuneration levels. Employees in the U.S., Puerto Rico and certain international locations are also provided retirement benefits through defined
contribution plans.
The Company also sponsors other postretirement benefit plans including plans that provide for postretirement supplemental medical coverage.
Benefits from these plans are provided to employees and their spouses and dependents who meet various minimum age and service requirements. In
addition, the Company sponsors other plans that provide for life insurance benefits and postretirement medical coverage for certain officers and
management employees.
Accounting for Defined Benefit Pension and Other Postretirement Plans
The Company recognizes on its balance sheet an asset or liability equal to the over- or under-funded benefit obligation of each defined benefit
pension and other postretirement plan. Actuarial gains or losses and prior service costs or credits that arise during the period are not recognized as
components of net periodic benefit cost, but are recognized, net of tax, as a component of other comprehensive (loss) earnings.
Included in accumulated other comprehensive loss as of December 31, 2024 and 2023 are:
Pension Benefits
Other Postretirement Benefits
December 31,
December 31,
(In millions)
2024
2023
2024
2023
Unrecognized actuarial net gain
$
(275.6)
$
(268.1)
$
(2.3)
$
(43.4)
Unrecognized prior service cost (credit)
17.1 
19.7 
(16.9)
(3.0)
Total
$
(258.5)
$
(248.4)
$
(19.2)
$
(46.4)
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The unrecognized net actuarial gains exceeded 10% of the higher of the market value of plan assets or the projected benefit obligation at the
beginning of the year for certain of the plans, therefore, amortization of such excess has been included in net periodic benefit costs for pension and other
postretirement benefits in each of the last three years. The amortization period is the average remaining service period that active employees are expected to
receive benefits, unless a plan is mostly inactive in which case the amortization period is the average remaining life expectancy of the plan participants.
Unrecognized prior service cost (credit) is amortized over the future service periods of those employees who are active at the dates of the plan amendments
and who are expected to receive benefits. If all or almost all of a plan's participants are inactive, unrecognized prior service cost is amortized over the
remaining life expectancy of those participants.
The change in accumulated other comprehensive loss in 2024 relating to pension benefits and other postretirement benefits consists of:
(In millions)
Pension Benefits
Other
Postretirement
Benefits
Unrecognized actuarial (gain) loss
$
(26.9)
$
36.0 
Amortization of actuarial gain
12.9 
5.1 
Unrecognized prior service cost
— 
(14.6)
Amortization of prior service (credit) cost
(2.9)
0.7 
Impact of foreign currency translation
6.8 
— 
Net change
$
(10.1)
$
27.2 
Components of net periodic benefit cost, change in projected benefit obligation, change in plan assets, funded status, fair value of plan assets,
assumptions used to determine net periodic benefit cost, funding policy and estimated future benefit payments are summarized below for the Company’s
pension plans and other postretirement plans.
Net Periodic Benefit Cost
Components of net periodic benefit cost for the years ended December 31, 2024, 2023 and 2022 were as follows:
Pension Benefits
Other Postretirement Benefits
December 31,
December 31,
(In millions)
2024
2023
2022
2024
2023
2022
Service cost
$
28.4 
$
26.6 
$
32.6 
$
1.5 
$
2.1 
$
3.4 
Interest cost
59.7 
63.6 
36.8 
5.3 
6.9 
3.7 
Expected return on plan assets
(67.1)
(62.6)
(64.6)
— 
— 
— 
Plan curtailment, settlement and termination
(1.2)
(3.8)
2.3 
— 
— 
(3.9)
Amortization of prior service cost (credit)
2.9 
2.1 
0.9 
(0.7)
(0.7)
(0.6)
Recognized net actuarial (gains)
(11.7)
(18.3)
(0.2)
(5.1)
(1.4)
0.3 
Net periodic benefit cost
$
11.0 
$
7.6 
$
7.8 
$
1.0 
$
6.9 
$
2.9 
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Change in Projected Benefit Obligation, Change in Plan Assets and Funded Status
The table below presents components of the change in projected benefit obligation, change in plan assets and funded status at December 31, 2024
and 2023.
Pension Benefits
Other Postretirement Benefits
(In millions)
2024
2023
2024
2023
Change in Projected Benefit Obligation
Projected benefit obligation, beginning of year
$
1,443.6 
$
1,379.0 
$
112.6 
$
137.5 
Service cost
28.4 
26.6 
1.5 
2.1 
Interest cost
59.7 
63.6 
5.3 
6.9 
Participant contributions
2.2 
0.5 
1.8 
4.1 
Divestitures
(30.2)
(8.8)
— 
— 
Plan settlements and terminations
(8.6)
8.6 
(14.6)
— 
Actuarial losses (gains)
0.8 
40.8 
36.0 
(22.8)
Benefits paid
(83.3)
(74.0)
(14.4)
(15.2)
Impact of foreign currency translation
(46.3)
7.3 
— 
— 
Projected benefit obligation, end of year
$
1,366.3 
$
1,443.6 
$
128.2 
$
112.6 
Change in Plan Assets
Fair value of plan assets, beginning of year
$
1,109.4 
$
1,067.1 
$
— 
$
— 
Actual return on plan assets
94.8 
95.2 
— 
— 
Company contributions
40.4 
41.7 
12.6 
11.1 
Participant contributions
2.2 
0.5 
1.8 
4.1 
Divestitures
(18.6)
(12.1)
— 
— 
Plan settlements
(8.6)
(7.1)
— 
— 
Benefits paid
(83.3)
(74.0)
(14.4)
(15.2)
Impact of foreign currency translation
(35.8)
(1.9)
— 
— 
Fair value of plan assets, end of year
1,100.5 
1,109.4 
— 
— 
Funded status of plans
$
(265.8)
$
(334.2)
$
(128.2)
$
(112.6)
Net accrued benefit costs for pension plans and other postretirement benefits are reported in the following components of the Company’s
consolidated balance sheets at December 31, 2024 and 2023:
Pension Benefits
Other Postretirement Benefits
December 31,
December 31,
(In millions)
2024
2023
2024
2023
Noncurrent assets
$
89.8 
$
89.3 
$
— 
$
— 
Current liabilities
(19.6)
(20.0)
(12.6)
(13.8)
Noncurrent liabilities
(336.0)
(403.5)
(115.6)
(98.8)
Net accrued benefit costs
$
(265.8)
$
(334.2)
$
(128.2)
$
(112.6)
The projected benefit obligation is the actuarial present value of benefits attributable to employee service rendered to date, including the effects of
estimated future pay increases. The accumulated benefit obligation is the actuarial present value of benefits attributable to employee service rendered to
date, but does not include the effects of estimated future pay increases. The accumulated benefit obligation for the Company’s pension plans was $1.29
billion and $1.36 billion at December 31, 2024 and 2023, respectively.
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The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for pension plans with an accumulated benefit
obligation in excess of the fair value of plan assets at December 31, 2024 and 2023 were as follows:
December 31,
(In millions)
2024
2023
Plans with accumulated benefit obligation in excess of plan assets:
Projected benefit obligation
$
1,008.2 
$
1,058.1 
Accumulated benefit obligation
976.2 
1,023.5 
Fair value of plan assets
657.9 
642.4 
Fair Value of Plan Assets
The Company measures the fair value of plan assets based on the prices that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. Fair value measurements are based on a three-tier hierarchy described in Note 9
Financial Instruments and Risk Management. The table below presents total plan assets by investment category as of December 31, 2024 and 2023 and the
classification of each investment category within the fair value hierarchy with respect to the inputs used to measure fair value:
December 31, 2024
(In millions)
Level 1
Level 2
Level 3
Total
Cash and cash equivalents
$
10.1 
$
— 
$
— 
$
10.1 
Equity securities
270.1 
20.4 
— 
290.5 
Fixed income securities
217.3 
427.9 
— 
645.2 
Assets held by insurance companies and other
138.1 
12.4 
4.2 
154.7 
Total
$
635.6 
$
460.7 
$
4.2 
$
1,100.5 
December 31, 2023
(In millions)
Level 1
Level 2
Level 3
Total
Cash and cash equivalents
$
17.4 
$
— 
$
— 
$
17.4 
Equity securities
401.6 
30.3 
— 
431.9 
Fixed income securities
175.9 
281.6 
— 
457.5 
Assets held by insurance companies and other
181.4 
17.2 
4.0 
202.6 
Total
$
776.3 
$
329.1 
$
4.0 
$
1,109.4 
Risk tolerance on invested pension plan assets is established through careful consideration of plan liabilities, plan funded status and corporate
financial condition. Investment risk is measured and monitored on an ongoing basis through annual liability measures, periodic asset/liability studies and
investment portfolio reviews. The Company’s investment strategy is to maintain, where possible, a diversified investment portfolio across several asset
classes that, when combined with the Company’s contributions to the plans, will ensure that required benefit obligations are met.
Assumptions
The following weighted average assumptions were used to determine the benefit obligations for the Company’s defined benefit pension and other
postretirement plans as of December 31, 2024 and 2023:
Pension Benefits
Other Postretirement Benefits
2024
2023
2024
2023
Discount rate
4.6 %
4.5 %
5.5 %
5.0 %
Expected return on plan assets
6.3 %
6.1 %
— %
— %
Rate of compensation increase
3.7 %
3.7 %
— %
— %
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The following weighted average assumptions were used to determine the net periodic benefit cost for the Company’s defined benefit pension and
other postretirement benefit plans for the three years in the period ended December 31, 2024:
Pension Benefits
Other Postretirement Benefits
2024
2023
2022
2024
2023
2022
Discount rate
4.5 %
4.8 %
2.3 %
5.0 %
5.4 %
2.5 %
Expected return on plan assets
6.3 %
6.1 %
5.0 %
— %
— %
— %
Rate of compensation increase
3.7 %
3.7 %
3.1 %
— %
— %
— %
The assumptions for each plan are reviewed on an annual basis. The discount rate reflects the current rate at which the pension and other benefit
liabilities could be effectively settled at the measurement date. In setting the discount rates, we utilize comparable corporate bond indices as an indication
of interest rate movements and levels. Corporate bond indices were selected based on individual plan census data and duration. The expected return on plan
assets was determined using historical market returns and long-term historical relationships between equities and fixed income securities. The Company
compares the expected return on plan assets assumption to actual historic returns to ensure reasonableness. Current market factors such as inflation and
interest rates are also evaluated.
The weighted-average healthcare cost trend rate used for 2024 was 8.6% declining to a projected 4.0% in the year 2048. For 2025, the assumed
weighted-average healthcare cost trend rate used will be 8.7% declining to a projected 4.0% in the year 2049. In selecting rates for current and long-term
healthcare cost assumptions, the Company takes into consideration a number of factors including the Company’s actual healthcare cost increases, the
design of the Company’s benefit programs, the demographics of the Company’s active and retiree populations and external expectations of future medical
cost inflation rates.
Estimated Future Benefit Payments
The Company’s funding policy for its funded pension plans is based upon local statutory requirements. The Company’s funding policy is subject
to certain statutory regulations with respect to annual minimum and maximum company contributions. Plan benefits for the non-qualified plans are paid as
they come due.
Estimated benefit payments over the next ten years for the Company’s pension plans and retiree health plan are as follows:
(In millions)
Pension Benefits
Other
Postretirement
Benefits
2025
$
99.8 
$
12.5 
2026
95.7 
13.1 
2027
102.6 
13.5 
2028
97.2 
13.1 
2029
98.0 
12.6 
Thereafter
494.3 
57.1 
Total
$
987.6 
$
121.9 
Defined Contribution Plans
The Company sponsors defined contribution plans covering its employees in the U.S. and Puerto Rico, as well as certain employees in a number
of countries outside the U.S. The Company’s domestic defined contribution plans consist primarily of a Profit Sharing 401(k) Plan and other 401(k)
retirement plans. Profit sharing contributions are made at the discretion of the Company. The Company’s non-domestic plans vary in form depending on
local legal requirements. The Company’s contributions are based upon employee contributions, service hours, or pre-determined amounts depending upon
the plan. Obligations for contributions to defined contribution plans are recognized as expense in the consolidated statements of operations when they are
earned.
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The Company maintains a 401(k) Restoration Plan, which permits employees who earn compensation in excess of the limits imposed by
Section 401(a)(17) of the Code to (i) defer a portion of base salary and bonus compensation, (ii) be credited with a Company matching contribution in
respect of deferrals under the 401(k) Restoration Plan, and (iii) be credited with Company non-elective contributions (to the extent so made by the
Company), in each case, to the extent that participants otherwise would be able to defer or be credited with such amounts, as applicable, under the Profit
Sharing 401(k) Plan if not for the limits on contributions and deferrals imposed by the Code.
The Company maintains an Income Deferral Plan, which permits certain management or highly compensated employees who are designated by
the plan administrator to participate in the Income Deferral Plan to elect to defer up to 50% of base salary and up to 100% of bonus compensation, in each
case, in addition to any amounts that may be deferred by such participants under the Profit Sharing 401(k) Plan and the 401(k) Restoration Plan. In
addition, under the Income Deferral Plan, eligible participants may be granted employee deferral awards, which awards will be subject to the terms and
conditions (including vesting) as determined by the plan administrator at the time such awards are granted.
Total employer contributions to defined contribution plans were approximately $148.4 million, $129.3 million and $111.5 million for the years
ended December 31, 2024, 2023 and 2022, respectively.
15. Segment Information
Viatris has four reportable segments: Developed Markets, Greater China, JANZ, and Emerging Markets. The Company reports segment
information on the basis of markets and geography, which reflects its focus on bringing its large and diversified portfolio of branded and generic products,
including complex products, to people in markets everywhere. Our Developed Markets segment comprises our operations primarily in North America and
Europe. Our Greater China segment includes our operations in mainland China, Taiwan and Hong Kong. Our JANZ segment consists of our operations in
Japan, Australia and New Zealand. Our Emerging Markets segment encompasses our presence in more than 125 countries with developing markets and
emerging economies including in Asia, Africa, Eastern Europe, Latin America and the Middle East as well as the Company’s ARV franchise.
The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer, who evaluates the performance of its segments and
allocates resources based on total revenues and our measure of segment profit or loss, segment profitability. These financial metrics are used to review
operating trends, perform comparisons between periods, and monitor budget and forecast-to-actual variances on a regular basis. Net sales of our business
segments exclude intersegment sales as these activities are not regularly reviewed by the CODM and are eliminated in consolidation.
Certain costs and gains are not included in the measurement of segment profitability, or in segment cost of sales, and segment SG&A, as
management excludes these costs in assessing segment financial performance. Such costs and gains include:
◦
Intangible asset amortization expense;
◦
Asset impairments (including of goodwill, intangible assets (including IPR&D), and long-lived assets);
◦
R&D and Acquired IPR&D expense;
◦
Net charges or net gains for litigation settlements and other contingencies;
◦
Certain costs related to transactions and events such as: (i) purchase accounting adjustments, where we incur expenses associated with the
amortization of fair value adjustments to inventory and property, plant and equipment; (ii) share-based compensation expense; (iii) acquisition-
related costs, where we incur costs for executing the transaction, integrating the acquired operations and restructuring the combined company; and
(iv) other significant items, which are substantive and/or unusual, and in some cases recurring, items (such as restructuring, including costs
associated with facilities to be closed or divested, employee separation costs, impairment charges, accelerated depreciation, incremental
manufacturing variances, equipment relocation costs, decommissioning and other restructuring related costs) that are evaluated on an individual
basis by management and that either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular
basis. Such special items can include, but are not limited to, non-acquisition-related restructuring costs, as well as costs incurred for asset
impairments and costs, as well as gains and losses, related to disposals of assets or businesses, including those related to divestitures, and, as
applicable, any associated transition activities;
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◦
Corporate and other unallocated costs associated with global functions (such as IT, facilities, legal, finance, human resources, insurance,
public affairs, compliance, and procurement), patient advocacy activities and certain compensation and other corporate costs (such as certain
expenses associated with our manufacturing, including manufacturing variances associated with production) and operations that are not directly
assessed to an operating segment as business unit (segment) management does not manage these costs;
◦
Other Expense (Income), Net (including interest and dividend income, gains and losses from investments, business divestitures, and
foreign exchange); and
◦
Interest expense.
The Company does not report depreciation expense, total assets and capital expenditures by segment, as such information is not used by the
CODM.
The accounting policies of the segments are the same as those described in Note 2 Summary of Significant Accounting Policies.
Presented in the table below is segment information for the periods identified and a reconciliation of segment information to total consolidated
information.
Year Ended December 31, 2024
(In millions)
Developed
Markets
Greater China
JANZ
Emerging
Markets
Total Reportable
Segments
Net sales
$
8,929.4  $
2,166.5  $
1,346.2  $
2,250.7  $
14,692.8 
Other revenues
32.0 
1.3 
3.5 
9.7 
46.5 
Total revenues
$
8,961.4  $
2,167.8  $
1,349.7  $
2,260.4  $
14,739.3 
Less:
Cost of sales
4,014.3 
245.7 
798.3 
1,016.4 
6,074.7 
Selling, general and administration
1,097.0 
518.5 
168.3 
309.9 
2,093.7 
Segment profit
$
3,850.1  $
1,403.6  $
383.1  $
934.1  $
6,570.9 
Reconciliation of segment profit:
Intangible asset amortization expense
(2,351.5)
Intangible asset (including IPR&D) disposal & impairment charges
(184.6)
Impairment of goodwill
(321.0)
Research and development
(808.7)
Acquired IPR&D
(28.3)
Litigation settlements and other contingencies, net
(350.9)
Transaction related and other special items
(973.6)
Corporate and other unallocated
(1,542.2)
Earnings from operations
$
10.1 
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Year Ended December 31, 2023
(In millions)
Developed
Markets
Greater China
JANZ
Emerging
Markets
Total Reportable
Segments
Net sales
$
9,251.9  $
2,160.4  $
1,424.5  $
2,551.6  $
15,388.4 
Other revenues
26.1 
— 
1.1 
11.3 
38.5 
Total revenues
$
9,278.0  $
2,160.4  $
1,425.6  $
2,562.9  $
15,426.9 
Less:
Cost of sales
4,067.1 
205.5 
725.5 
1,116.2 
6,114.3 
Selling, general and administration
1,124.4 
528.1 
177.2 
354.8 
2,184.5 
Segment profit
$
4,086.5  $
1,426.8  $
522.9  $
1,091.9  $
7,128.1 
Reconciliation of segment profit:
Intangible asset amortization expense
(2,317.1)
Intangible asset (including IPR&D) disposal & impairment charges
(32.0)
Impairment of goodwill
(580.1)
Research and development
(805.2)
Acquired IPR&D
(105.5)
Litigation settlements and other contingencies, net
(111.6)
Transaction related and other special items
(774.4)
Corporate and other unallocated
(1,636.0)
Earnings from operations
$
766.2 
Year Ended December 31, 2022
(In millions)
Developed
Markets
Greater China
JANZ
Emerging
Markets
Total Reportable
Segments
Net sales
$
9,768.9  $
2,201.2  $
1,632.4  $
2,615.6  $
16,218.1 
Other revenues
21.8 
— 
1.4 
21.4 
44.6 
Total revenues
$
9,790.7  $
2,201.2  $
1,633.8  $
2,637.0  $
16,262.7 
Less:
Cost of sales
4,028.6 
195.8 
774.3 
1,086.8 
6,085.5 
Selling, general and administration
884.0 
492.9 
194.0 
343.1 
1,914.0 
Segment profit
$
4,878.1  $
1,512.5  $
665.5  $
1,207.1  $
8,263.2 
Reconciliation of segment profit:
Intangible asset amortization expense
(2,504.6)
Intangible asset (including IPR&D) disposal & impairment charges
(173.5)
Impairment of goodwill
(117.0)
Research and development
(662.2)
Acquired IPR&D
(36.4)
Litigation settlements and other contingencies, net
(4.4)
Transaction related and other special items
(1,026.9)
Corporate and other unallocated
(2,123.3)
Earnings from operations
$
1,614.9 
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The following table represents the percentage of consolidated net sales to Viatris’ major customers during the years ended December 31, 2024,
2023, and 2022:
Percentage of Consolidated Net Sales
2024
2023
2022
McKesson Corporation
*
10 %
11 %
Cencora, Inc. (formerly AmerisourceBergen Corporation)
12 %
10 %
10 %
Cardinal Health, Inc.
*
5 %
5 %
     Net sales represented less than 10% of consolidated net sales during the period.
Net sales from these customers were primarily in the Developed Markets segment.
Sales by Country Information
Net sales by country are presented on the basis of geographic location of our subsidiaries:
Year Ended December 31,
(In millions)
2024
2023
2022
United States
$
3,434.7 
$
3,551.8 
$
3,946.6 
China
1,911.3 
1,889.0 
1,951.3 
____________
No other country’s net sales represents more than 10% of consolidated net sales.
16. Commitments
The Company has entered into employment and other agreements with certain executives and other employees that provide for compensation,
retirement and certain other benefits. These agreements provide for severance payments under certain circumstances. Additionally, the Company has split-
dollar life insurance agreements with certain retired executives.
In addition, the Company periodically enters into retention agreements with certain key employees, whereby they may agree to continue to
provide service to the Company for a period of time. The Company records the expense for these agreements over the applicable service periods.
At the time of closing of the Biocon Biologics Transaction, Viatris and Biocon Biologics also entered an agreement pursuant to which Viatris was
providing commercialization and certain other transition services on behalf of Biocon Biologics, including billings, collections and the remittance of
rebates, to ensure business continuity for patients, customers and colleagues. Biocon Biologics had substantially exited all transition services with Viatris as
of December 31, 2023.
In connection with the divestitures, Viatris and the respective buyers entered into transition services and/or manufacturing and supply agreements
pursuant to which the Company is providing services to the respective purchasers, substantially the same as we previously provided to the related
businesses, generally for a period of up to 12 months for transition services and for periods between one to 10 years for manufacturing and supply
agreements, depending on the geographic market and the products subject to such agreement, subject to potential extensions in certain circumstances. In
addition, in connection with the OTC Transaction and the divestiture of our women’s healthcare business, we entered into distribution agreements for
certain markets for a limited period of time. In connection with the API business divestiture, we entered into a manufacturing and supply agreement
pursuant to which we are purchasing a significant amount of API from the purchaser in that transaction.
In the normal course of business, Viatris periodically enters into acquisition, divestiture, collaboration, employment, legal settlement and other
agreements which incorporate indemnification provisions. The maximum amount to which Viatris may be exposed under such agreements cannot be
reasonably estimated due to the conditional nature of the Company’s obligations and the unique facts and circumstances involved in each particular
agreement. Historically, we have not paid material amounts under these indemnification provisions. Further, for certain agreements, the Company
maintains insurance coverage, which management believes will effectively mitigate the Company’s obligations under these indemnification provisions. No
amounts have been recorded in the consolidated financial statements with respect to the Company’s obligations under such agreements.
*
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17. Restructuring
2020 Restructuring Program
During 2020, Viatris announced a significant global restructuring program in order to achieve synergies and ensure that the organization was
optimally structured and efficiently resourced to deliver sustainable value to patients, shareholders, customers, and other stakeholders. As part of the
restructuring, the Company optimized its commercial capabilities and enabling functions, and closed, downsized or divested certain manufacturing
facilities globally that were deemed to be no longer viable either due to surplus capacity, challenging market dynamics or a shift in its product portfolio
toward more complex products. The actions under the 2020 restructuring program were substantially completed during 2023.
Since the initiation of the 2020 restructuring program, the Company has incurred total pre-tax charges of approximately $1.4 billion through
December 31, 2023. Such charges included approximately $450 million of non-cash charges mainly related to accelerated depreciation and asset
impairment charges, including inventory write-offs, and cash costs of approximately $950 million, primarily related to severance and employee benefits
expense, as well as other costs, including those related to contract terminations and other plant disposal costs.
The following table summarizes the restructuring charges and the reserve activity for the restructuring program:
(In millions)
Employee
Related Costs
Other Exit Costs
Total
Balance at December 31, 2021
$
292.6 
$
4.1 
$
296.7 
Charges 
38.2 
48.3 
86.5 
Cash payment
(170.1)
(15.3)
(185.4)
Utilization
— 
(34.9)
(34.9)
Foreign currency translation
(5.1)
(0.3)
(5.4)
Balance at December 31, 2022
$
155.6 
$
1.9 
$
157.5 
Charges 
17.6 
107.6 
125.2 
Cash payment
(77.8)
(10.3)
(88.1)
Utilization 
(4.0)
(99.2)
(103.2)
Foreign currency translation
0.8 
— 
0.8 
Balance at December 31, 2023
$
92.2 
$
— 
$
92.2 
____________
     For the year ended December 31, 2023, total restructuring charges in Developed Markets, Greater China, JANZ, Emerging Markets, and
Corporate/Other were approximately $80.3 million, $0.4 million, $29.5 million, $13.9 million, and $1.1 million, respectively.
     For the year ended December 31, 2022, total restructuring charges in Developed Markets, Greater China, JANZ, Emerging Markets, and
Corporate/Other were approximately $74.6 million, $2.5 million, $0.9 million, $8.2 million and $0.3 million, respectively.
     For the year ended December 31, 2023, other exit costs included expense of $71.6 million relating to plant divestitures.
Additional restructuring charges, primarily for facilities to be closed or disposed of, were incurred during the year ended December 31, 2024 and
are not a component of the 2020 restructuring program. At December 31, 2024, accrued liabilities for restructuring and other cost reduction programs of
$63.4 million were included in other current liabilities and $128.5 million were included in other long-term obligations in the consolidated balance sheets.
(2)
(1)
(3)
(1)
(2)
(3)
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18. Licensing and Other Partner Agreements
We periodically enter into licensing and other partner agreements with other pharmaceutical companies for the development, manufacture,
marketing and/or sale of pharmaceutical products. Our significant licensing and other partner agreements are primarily focused on the development,
manufacturing, supply and commercialization of multiple complex products. Under these agreements, we have future potential milestone payments and co-
development expenses payable to third parties as part of our licensing, development and co-development programs. Payments under these agreements
generally become due and are payable upon the satisfaction or achievement of certain developmental, regulatory or commercial milestones or as
development expenses are incurred on defined projects. Milestone payment obligations are uncertain, including the prediction of timing and the occurrence
of events triggering a future obligation and are not reflected as liabilities in the consolidated balance sheets, except for obligations reflected as acquisition
related contingent consideration, including those related to the Idorsia Transaction. Refer to Note 9 Financial Instruments and Risk Management for further
discussion of contingent consideration.
Our potential maximum development milestones not accrued for at December 31, 2024 totaled approximately $419 million. We estimate that the
amounts that may be paid during the next twelve months to be approximately $33 million. These agreements may also include potential sales-based
milestones and call for us to pay a percentage of amounts earned from the sale of the product as a royalty or a profit share. The amounts disclosed do not
include sales-based milestones or royalty or profit share obligations on future sales of product as the timing and amount of future sales levels and costs to
produce products subject to these obligations is not reasonably estimable. These sales-based milestones or royalty or profit share obligations may be
significant depending upon the level of commercial sales for each product.
Mapi
In 2018, the Company entered into an exclusive license and commercialization agreement with Mapi for the development and commercialization
on a world-wide basis of GA Depot. Under the terms of the license and commercialization agreement, as of December 31, 2024, Mapi is eligible to receive
regulatory approval and commercial launch milestone payments of up to $90.0 million. Additionally, upon commercial launch of GA Depot, Mapi is
eligible to receive potential contingent payments, such as tiered royalties and tiered sales-based milestones.
In December 2023, the Company entered into a letter agreement, as amended, with Mapi for the development and commercialization of certain
additional products, which is subject to finalization pending the execution of a definitive agreement. The Company made an initial upfront payment of
$75.0 million which was accounted for as Acquired IPR&D expense in the consolidated statements of operations during the year ended December 31, 2023.
The Company holds investments in preferred shares of Mapi that are accounted for at cost, less impairment, if any, adjusted for observable price
changes, in accordance with ASC 321, Investments – Equity Securities. During the year ended December 31, 2023, the Company made an additional
investment of $30.0 million in preferred shares of Mapi. The preferred shares are convertible on a one-to-one basis into Mapi ordinary shares at Viatris’
option. The Company recognized a gain of $45.6 million during the year ended December 31, 2023 as a result of remeasuring our pre-existing equity
interest in Mapi, which was recorded as a component of Other Expense (Income), Net in the consolidated statements of operations. The Company has
determined that Mapi represents a variable interest entity (“VIE”), but has concluded that Viatris is not the primary beneficiary of Mapi as we do not have
the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance. Accordingly, we have not consolidated Mapi’s
results of operations and financial position into our consolidated financial statements.
As of December 31, 2023, our consolidated balance sheets included, within Other Assets, $132.1 million related to our equity investments in
Mapi, which included cumulative unrealized gains of $62.1 million, and within Prepaid Expenses and Other Current Assets, $52.5 million related to
advances, including for initial orders of commercial launch supply of GA Depot under our supply agreement with Mapi. Our maximum exposure to loss as
a result of our involvement with Mapi is limited to the carrying value of the investments and advances. In 2024, the Company was informed that Mapi
received a Complete Response Letter (“CRL”) regarding the NDA for GA Depot 40 mg from the FDA. In December 2024, the companies met with the
FDA and reviewed the content of the CRL. As a result of the meeting, Viatris and Mapi are discussing and determining the appropriate next steps for the
program. We do not expect Mapi to generate positive operating cash or earnings unless and until marketing approval and commercial success for its
development programs, particularly GA Depot, is attained. As a result of the additional uncertainty of regulatory and commercial timing and success of GA
Depot and the financial condition of Mapi, the Company has impaired its equity investment and prepaid assets related to advances for the initial supply of
commercial product. Total charges of $184.6 million were recorded during the year ended December 31, 2024 as a component of Other Expense (Income),
Net in the consolidated statements of operations.
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Revance
The Company and Revance have entered into an agreement pursuant to which the Company and Revance are collaborating exclusively, on a
world-wide basis (excluding Japan), to develop, manufacture and commercialize a biosimilar to the branded biologic product (onabotulinumtoxinA)
marketed as BOTOX®. Under the agreement, the Company is primarily responsible for (a) clinical development activities outside of North America
(excluding Japan) (b) regulatory activities, and (c) commercialization for any approved product. Revance is primarily responsible for (a) non-clinical
development activities, (b) clinical development activities in North America, and (c) manufacturing and supply of clinical drug substance and drug product;
Revance is solely responsible for an initial portion of non-clinical development costs. The remaining portion of any non-clinical development costs and
clinical development costs for obtaining approval in the U.S. and Europe is being shared equally between the parties, and the Company is responsible for
all other clinical development costs and commercialization expenses. In February 2025, Revance was acquired by Crown Laboratories, Inc.
Theravance Biopharma
The Company has a development and commercialization collaboration with Theravance Biopharma, for revefenacin. On November 9, 2018, the
Company announced that the FDA approved the NDA for YUPELRI® (revefenacin) inhalation solution for the maintenance treatment of patients with
COPD. YUPELRI®, a long-acting muscarinic antagonist, is the first and only once-daily, nebulized bronchodilator approved for the treatment of COPD in
the U.S. Viatris is responsible for commercial manufacturing and commercialization. Theravance Biopharma is co-promoting the product in the hospital
channel under a profit-sharing arrangement.
The Company has also acquired exclusive development and commercialization rights to nebulized revefenacin in China and adjacent territories,
which include Hong Kong, Macau and Taiwan, for an upfront payment of $18.5 million and additional potential development and sales milestones together
with tiered royalties on net sales of nebulized revefenacin, if approved. Viatris is responsible for all aspects of development and commercialization in the
partnered regions, including pre- and post-launch activities and product registration and all associated costs.
Under the terms of the agreements, Theravance Biopharma is eligible to receive potential development and sales milestone payments totaling
approximately $293 million in the aggregate. As of December 31, 2024, the Company has paid a total of $50.0 million in milestone payments to
Theravance Biopharma.
Other Development Agreements
In October 2024, the Company entered into an exclusive licensing agreement with Lexicon for sotagliflozin in all markets outside of the U.S. and
Europe in exchange for an upfront payment of $25.0 million, and additional potential contingent payments, including regulatory milestones, sales
milestones and tiered royalties ranging from low-double-digit to upper-teens on annual net sales. Viatris will be responsible for all regulatory and
commercialization activities for sotagliflozin in the licensed territories. Lexicon will be responsible for providing clinical and commercial supply of
sotagliflozin to Viatris. The Company accounted for the transaction as an asset acquisition, with the upfront payment expensed as Acquired IPR&D in
2024.
We are actively pursuing, and are currently involved in, joint projects related to the development, distribution and marketing of both generic and
branded products. Many of these arrangements provide for payments by us upon the attainment of specified milestones. While these arrangements help to
reduce the financial risk for unsuccessful projects, fulfillment of specified milestones or the occurrence of other obligations may result in fluctuations in
cash flows and Acquired IPR&D expense.
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19. Litigation
The Company is involved in various disputes, governmental and/or regulatory inquiries, investigations and proceedings, and litigation matters,
both in the U.S. and abroad, that arise from time to time, some of which could result in losses, including damages, fines and/or civil penalties, and/or
criminal charges against the Company. These matters are often complex and have outcomes that are difficult to predict.
In addition, in connection with the Combination, the Company has generally assumed liability for, and control of, pending and threatened legal
matters relating to the Upjohn Business – including certain matters initiated against Pfizer described below – and has agreed to indemnify Pfizer for
liabilities arising out of such assumed legal matters. Pfizer, however, has agreed to retain various matters – including certain specified competition law
matters – to the extent they arise from conduct during the pre-Distribution period and has agreed to indemnify the Company for liabilities arising out of
such matters.
While the Company believes that it has meritorious defenses with respect to the claims asserted against it and the assumed legal matters referenced
above, and intends to vigorously defend its position, the process of resolving these matters is inherently uncertain and may develop over a long period of
time, and so it is not possible to predict the ultimate resolution of any such matter. It is possible that an unfavorable resolution of any of the ongoing matters
could have a material effect on the Company’s business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares
and/or stock price.
Some of these governmental inquiries, investigations, proceedings and litigation matters with which the Company is involved are described below,
and unless otherwise disclosed, the Company is unable to predict the outcome of the matter or to provide an estimate of the range of reasonably possible
material losses. The Company records accruals for loss contingencies to the extent we conclude it is probable that a liability has been incurred and the
amount of the loss can be reasonably estimated. The Company is also involved in other pending proceedings for which, in the opinion of the Company
based upon facts and circumstances known at the time, either the likelihood of loss is remote or any reasonably possible loss associated with the resolution
of such proceedings is not expected to be material to the Company’s business, financial position, results of operations, cash flows, ability to pay dividends
or repurchase shares and/or stock price. If and when any reasonably possible losses associated with the resolution of such other pending proceedings, in the
opinion of the Company, become material, the Company will disclose such matters.
Legal costs are recorded as incurred and are classified in SG&A in the Company’s consolidated statements of operations.
EpiPen® Auto-Injector Litigation
On February 14, 2020, the Company, together with other non-Viatris affiliated companies, were named as defendants in a putative direct purchaser
class action filed in the U.S. District Court for the District of Kansas relating to the pricing and/or marketing of the EpiPen® Auto-Injector. On September
21, 2021, Plaintiffs filed an amended complaint asserting federal antitrust claims which are based on allegations concerning a patent settlement between
Pfizer and Teva and other alleged actions regarding the launch of Teva’s generic epinephrine auto-injector. Plaintiffs seek monetary damages, declaratory
relief, attorneys’ fees and costs. In December 2024, the Company reached an agreement and paid $73.5 million to fully resolve this matter. The settlement
is subject to final court approval and contains an express provision disclaiming and denying any wrongdoing by the Company.
Beginning in March 2020, the Company, together with other non-Viatris affiliated companies, were named as defendants in putative direct
purchaser class actions filed in the U.S. District Court for the District of Minnesota relating to contracts with certain pharmacy benefit managers concerning
EpiPen® Auto-Injector. The plaintiffs claim that the alleged conduct resulted in the exclusion or restriction of competing products and the elimination of
pricing constraints in violation of RICO and federal antitrust law. Class certification was denied. The case is proceeding with Rochester Drug Company,
Dakota Drug, and Morris & Dickson Company as plaintiffs and they seek monetary damages, attorneys’ fees and costs.
In January 2025, the State of Indiana filed a complaint in Superior Court in Marion County, Indiana against the Company and other non-Viatris
affiliated companies alleging harm under Indiana state laws, including antitrust and consumer protection laws, and unjust enrichment claims. Indiana
generally seeks monetary damages, restitution, disgorgement, civil penalties, injunctive relief, and attorneys’ fees and costs.
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In June 2024, the Company received a civil subpoena from the Attorney General of the State of Mississippi seeking information relating to the
sales and/or marketing of EpiPen® Auto-Injector. The Company is fully cooperating with this request and has communicated with certain other State
Attorneys General regarding related issues.
The issues covered in the Indiana complaint, Mississippi subpoena, and communications with certain other States, generally relate to issues from
litigations and/or investigations that have been previously disclosed, including the indirect purchaser class action that was resolved in 2022 and the direct
purchaser litigation matters described above.
The Company has a total accrual of approximately $20.5 million related to these matters at December 31, 2024, which is included in other current
liabilities in the consolidated balance sheets. Although it is reasonably possible that the Company may incur additional losses from these matters, any
amount cannot be reasonably estimated at this time. In addition, the Company expects to incur additional legal and other professional service expenses
associated with such matters in future periods and will recognize these expenses as services are received. The Company believes that the ultimate amount
paid for these services and claims could have a material effect on the Company's business, financial condition, results of operations, cash flows, ability to
pay dividends or repurchase shares and/or stock price in future periods.
Drug Pricing Matters
Department of Justice
Beginning in December 2015, the Company received subpoenas from the Antitrust Division of the DOJ seeking information relating to the
marketing, pricing, and sale of certain of our generic products and any communications with competitors about such products.
On May 10, 2018, the Company received a civil investigative demand from the Civil Division of the DOJ seeking information relating to the
pricing and sale of its generic drug products.
We had fully cooperated with these investigations, which we believe were related to a broader industry-wide investigation of the generic
pharmaceutical industry. The Antitrust Division of the DOJ has advised that it no longer considers the Company, and its former President, a subject of its
antitrust investigation. The Civil Division of the DOJ also informed the Company that it did not expect to take any further actions in connection with its
civil investigative demand.
Civil Litigation
Beginning in 2016, the Company, along with other manufacturers, has been named as a defendant in lawsuits filed in the United States and Canada
generally alleging anticompetitive conduct with respect to generic drugs. The lawsuits have been filed by plaintiffs, including putative classes of direct
purchasers, indirect purchasers, and indirect resellers, as well as individual direct and indirect purchasers and certain cities and counties. The lawsuits
allege harm under federal laws and the United States lawsuits also allege harm under state laws, including antitrust laws, state consumer protection laws
and unjust enrichment claims. Some of the United States lawsuits also name as defendants the Company’s former President, including allegations against
him with respect to a single drug product, and one of the Company’s sales employees, including allegations against him with respect to certain generic
drugs. The vast majority of the lawsuits have been consolidated in an MDL proceeding in the Eastern District of Pennsylvania (“EDPA”). Plaintiffs
generally seek monetary damages, restitution, declaratory and injunctive relief, attorneys’ fees and costs. The EDPA Court has ordered certain plaintiffs’
complaints regarding two single-drug product cases to proceed as bellwethers. The Company is named in those plaintiffs’ complaints that regard one of the
two individual drug products and class certification and summary judgment motions are pending, with a potential for trial as soon as 2025 in those cases.
Attorneys General Litigation
On December 21, 2015, the Company received a subpoena and interrogatories from the Connecticut Office of the Attorney General seeking
information relating to the marketing, pricing and sale of certain of the Company’s generic products and communications with competitors about such
products. On December 14, 2016, attorneys general of certain states filed a complaint in the United States District Court for the District of Connecticut
against several generic pharmaceutical drug manufacturers, including the Company, alleging anticompetitive conduct with respect to, among other things, a
single drug product. The complaint has subsequently been amended, including on June 18, 2018, to add attorneys general alleging violations of federal and
state antitrust laws, as well as violations of various states’ consumer protection laws. This lawsuit was transferred to the aforementioned MDL proceeding
in the EDPA. The operative complaint includes attorneys general of forty-
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three states, the District of Columbia and the Commonwealth of Puerto Rico. The Company is alleged to have engaged in anticompetitive conduct with
respect to four generic drug products. The amended complaint also includes claims asserted by attorneys general of thirty-three states and the
Commonwealth of Puerto Rico against certain individuals, including the Company’s former President, with respect to a single drug product. The operative
complaint seeks declaratory and injunctive relief, disgorgement, attorneys’ fees and costs, and certain states seek monetary damages, civil penalties,
restitution, and other equitable monetary relief. The states’ claim for disgorgement and restitution under federal law in this case has been dismissed.
On May 10, 2019, certain attorneys general filed a new complaint in the United States District Court for the District of Connecticut against various
drug manufacturers and individuals, including the Company and one of its sales employees, alleging anticompetitive conduct with respect to additional
generic drugs. The complaint has been subsequently amended, including on November 22, 2024, to add states as plaintiffs. The operative complaint is
brought by attorneys general of forty-five states, certain territories and the District of Columbia. The amended complaint also includes claims asserted by
attorneys general of forty-one states and certain territories against several individuals, including a Company sales employee. The operative complaint seeks
declaratory and injunctive relief, disgorgement, attorneys’ fees and costs, and certain states seek monetary damages, civil penalties, restitution, and other
equitable monetary relief. This lawsuit was transferred to the aforementioned MDL proceeding in the EDPA.
On June 10, 2020, certain attorneys general filed a new complaint in the United States District Court for the District of Connecticut against drug
manufacturers, including the Company, and individual defendants (none from the Company), alleging anticompetitive conduct with respect to additional
generic drugs. On September 9, 2021, the complaint was amended, adding an additional state as a plaintiff. The operative complaint is brought by attorneys
general of forty-three states, certain territories and the District of Columbia. The operative complaint seeks declaratory and injunctive relief, disgorgement,
attorneys’ fees and costs, and certain states seek monetary damages, civil penalties, restitution, and other equitable monetary relief. The states’ claim for
disgorgement and restitution under federal law, and certain state law claims brought by certain states, have been dismissed. This lawsuit was transferred to
the aforementioned MDL proceeding in the EDPA and was ordered to proceed as a bellwether. The Company has filed a motion for summary judgment
seeking to dismiss this case in its entirety, which remains pending.
The aforementioned complaints have now been transferred back to the U.S. District Court for the District of Connecticut.
Securities Related Litigation
Purported class action complaints were filed in October 2016 against Mylan N.V. and Mylan Inc. (collectively, for the purposes of this paragraph,
“Mylan”), certain of Mylan’s former directors and officers, and certain of the Company’s current directors and officers (collectively, for purposes of this
paragraph, the “defendants”) in the United States District Court for the Southern District of New York (“SDNY”) on behalf of certain purchasers of
securities of Mylan on the NASDAQ (“SDNY Class Action Litigation”). The complaints alleged that defendants made false or misleading statements and
omissions of purportedly material fact, in violation of federal securities laws, in connection with disclosures relating to the classification of their EpiPen®
Auto-Injector as a non-innovator drug for purposes of the Medicaid Drug Rebate Program. On March 20, 2017, a consolidated amended complaint was
filed alleging substantially similar claims, but adding allegations that defendants made false or misleading statements and omissions of purportedly material
fact in connection with allegedly anticompetitive conduct with respect to EpiPen® Auto-Injector and certain generic drugs.
The operative complaint was the third amended consolidated complaint, which was filed on June 17, 2019, and contained the allegations as
described above against Mylan, certain of Mylan’s former directors and officers, and certain of the Company’s current directors, officers, and employees
(collectively, for purposes of this paragraph, the “defendants”). A class was certified covering all persons or entities that purchased Mylan common stock
between February 21, 2012 and May 24, 2019 excluding defendants, certain of the Company’s current directors and officers, former directors and officers
of Mylan, members of their immediate families and their legal representatives, heirs, successors or assigns, and any entity in which defendants have or had
a controlling interest. Plaintiffs sought damages and costs and expenses, including attorneys’ fees and expert costs. On March 30, 2023, the Court
dismissed all of Plaintiffs’ claims by granting Defendants’ motion for summary judgment and denying Plaintiffs’ cross-motion for partial summary
judgment. Plaintiffs’ appeals to the U.S. Court of Appeals for the Second Circuit were rejected and the SDNY’s decision dismissing Plaintiffs’ claims was
affirmed. Plaintiffs’ petition seeking review by the U.S. Supreme Court was also denied, which concludes this matter.
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On April 30, 2017, a similar lawsuit was filed in the Tel Aviv District Court (Economic Division) in Israel (“Israel Litigation”), which had been
stayed pending a decision in the SDNY Class Action Litigation. The Israel Litigation was dismissed by the Court.
On February 14, 2020, the Abu Dhabi Investment Authority filed a complaint against Mylan in the SDNY asserting allegations pertaining to
EpiPen® Auto-Injector and certain generic drugs under the federal securities laws (“ADIA Litigation”) that overlap with those asserted in the SDNY Class
Action Litigation. The complaint filed in the ADIA Litigation seeks monetary damages as well as the plaintiff’s fees and costs.
On June 26, 2020, a putative class action complaint was filed by the Public Employees Retirement System of Mississippi, which was subsequently
amended on November 13, 2020, against Mylan N.V., certain of Mylan N.V.’s former directors and officers, and a former officer/current director of the
Company (collectively for the purposes of this paragraph, the “defendants”) in the U.S. District Court for the Western District of Pennsylvania (“WDPA”)
on behalf of certain purchasers of securities of Mylan N.V. (“WDPA Mylan N.V. Class Action Litigation”). The amended complaint alleges that defendants
made false or misleading statements and omissions of purportedly material fact, in violation of federal securities laws, in connection with disclosures
relating to the Nashik and Morgantown manufacturing plants and inspections at the plants by the FDA. Plaintiff seeks certification of a class of purchasers
of Mylan N.V. securities between February 16, 2016 and May 7, 2019. On May 18, 2023, the Court dismissed 45 of the 46 challenged statements. The
complaint seeks monetary damages, as well as the plaintiff’s fees and costs.
On February 15, 2021, a complaint was filed in the SDNY by Skandia Mutual Life Ins. Co., Lansforsakringar AB, KBC Asset Management N.V.,
and GIC Private Limited, against the Company, certain of Mylan N.V.’s former directors and officers, a former officer/current director of the Company, and
certain former and current employees of the Company (“Skandia Litigation”). The Complaint filed in the Skandia Litigation asserts claims which are based
on allegations that are similar to those in the SDNY Class Action Litigation and WDPA Mylan N.V. Class Action Litigation. Plaintiffs seek compensatory
damages, costs and expenses and attorneys’ fees. The parties have reached an agreement in principle to resolve this matter.
On October 28, 2021, the Company and certain of its then officers and directors were named as defendants in a putative class action lawsuit filed
in the Court of Common Pleas of Allegheny County, Pennsylvania on behalf of former Mylan shareholders who received Company common stock in
connection with the Combination. A non-Viatris affiliated company and persons were also named as defendants. The complaint alleged violations of
Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 for purportedly failing to disclose or misrepresenting material information in the registration
statement and related prospectus issued in connection with the Combination. On January 3, 2023, an amended complaint was filed naming the same
defendants and alleging the same violations as the original complaint. Plaintiffs sought monetary damages, reasonable costs and expenses, and certain other
equitable and injunctive relief. The Court has approved the settlement to fully resolve this matter.
Beginning in May 2023, putative class action complaints were filed against the Company and certain of the Company’s current and former
officers, directors, and employees in the WDPA on behalf of certain purchasers of securities of the Company. These actions have been consolidated and, on
October 23, 2023, a consolidated amended putative class action complaint was filed in the WDPA against the Company, a director, and a former officer and
director (“WDPA Viatris Class Action Litigation”). The operative complaint alleges that defendants made false or misleading statements and omissions of
material fact, in violation of federal securities laws, in connection with disclosures relating to the Company’s projected financial performance and
biosimilars business. Plaintiffs seek certification of a class of purchasers of Company securities between March 1, 2021 and February 25, 2022. Plaintiffs
seek monetary damages, reasonable costs and expenses, and certain other relief. On September 20, 2024, the Court granted Defendants’ motion to dismiss
all of Plaintiffs’ claims. Plaintiffs have filed an appeal to the United States Court of Appeal for the Third Circuit, which remains pending.
Beginning in August 2023, stockholder derivative actions purportedly on behalf of Viatris were filed in the WDPA against certain of the
Company’s current and former officers, directors, and employees alleging that defendants failed to ensure that the Company was making truthful and
accurate statements in connection with the disclosures alleged in the WDPA Viatris Class Action Litigation. Viatris is named as a nominal defendant in
these derivative actions. Certain of the complaints also assert claims for corporate waste and unjust enrichment. Plaintiffs seek various forms of relief,
including damages, disgorgement, restitution, costs and fees.
Opioids
The Company, along with other manufacturers, distributors, pharmacies, pharmacy benefit managers, and individual healthcare providers, is a
defendant in more than 1,000 cases in the United States and Canada filed by various plaintiffs,
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including counties, cities and other local governmental entities, asserting civil claims related to sales, marketing and/or distribution practices with respect to
prescription opioid products. In addition, lawsuits have been filed as putative class actions including on behalf of children with Neonatal Abstinence
Syndrome due to alleged exposure to opioids.
The lawsuits generally seek equitable relief and monetary damages (including punitive and/or exemplary damages) based on a variety of legal
theories, including various statutory and/or common law claims, such as negligence, public nuisance and unjust enrichment. The vast majority of these
lawsuits have been consolidated in an MDL in the U.S. District Court for the Northern District Court of Ohio.
On January 13, 2023, the Company received a civil subpoena from the Attorney General of the State of New York seeking information relating to
opioids manufactured, marketed, or sold by the Company and related subject matter. Beginning in January 2024, the Company has received similar
subpoenas from the Attorneys General of Alaska, Oregon, Utah, Maryland, and Louisiana. The Company is fully cooperating with these subpoena requests.
The Company has accrued approximately $270 million in connection with the possible resolution of certain of these matters at December 31,
2024, which is included in other current liabilities in the consolidated balance sheets. Although it is reasonably possible that the Company may incur
additional losses from these matters, any amount cannot be reasonably estimated at this time. In addition, the Company expects to incur additional legal
and other professional service expenses associated with such matters in future periods and will recognize these expenses as services are received. The
Company believes that the ultimate amount paid for these services and claims could have a material effect on the Company's business, financial condition,
results of operations, cash flows, ability to pay dividends or repurchase shares and/or stock price in future periods.
Citalopram
In 2013, the European Commission issued a decision finding that Lundbeck and several generic companies, including Generics [U.K.] Limited
(“GUK”), had violated EU competition rules relating to various settlement agreements entered into in 2002 for citalopram. After various appeals, the
European Commission’s decision was upheld in March 2021. On March 28, 2023, bodies of the national health authorities in England & Wales filed a case
in the U.K. Competition Appeals Tribunal against parties to the citalopram investigation, including GUK, seeking monetary damages, plus interest,
purportedly arising from the settlement agreements. GUK, beginning in approximately 2018, has received notices from other health service authorities and
insurers asserting an intention to file similar claims. Pursuant to an indemnification agreement, Merck KGaA and GUK have agreed to equally share any
damages claimed against Merck KGaA and/or GUK alleged to have been caused by the conduct which is the subject of the European Commission
decision.
The Company has accrued approximately €12.7 million as of December 31, 2024 related to this matter. It is reasonably possible that we will incur
additional losses above the amount accrued but we cannot estimate a range of such reasonably possible losses at this time. There are no assurances,
however, that settlements reached and/or adverse judgments received, if any, will not exceed amounts accrued.
Perindopril
In 2014, the European Commission issued a decision finding that Servier SAS, and certain of its subsidiaries (“Servier”), along with several
generic companies, including the Company, had violated EU competition rules relating to various settlement agreements for perindopril. The settlement
agreement involving the Company is a 2005 agreement entered into between Servier and Matrix Laboratories Ltd., which the Company acquired in 2007.
After various appeals, the European Commission’s decision was upheld in June 2024. The Company satisfied its monetary obligation in 2014.
Bodies of national health authorities in England, Wales, Scotland, and Northern Ireland filed a case in the English High Court against Servier,
seeking monetary damages, plus interest, purportedly arising from the settlement agreements. Servier has joined the generic companies, including the
Company, as defendants in this litigation.
In December 2024, health insurance funds located in the EU filed a case in the Amsterdam District Court against Servier and the generic
companies, including the Company, seeking monetary damages, plus interest, purportedly arising from the settlement agreements.
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Product Liability
Like other pharmaceutical companies, the Company is involved in a number of product liability lawsuits related to alleged personal injuries
arising out of certain products manufactured/or distributed by the Company, including but not limited to those discussed below. Plaintiffs in these cases
generally seek damages and other relief on various grounds for alleged personal injury and economic loss.
The Company has accrued approximately $70.1 million as of December 31, 2024 for its product liability matters. It is reasonably possible that we
will incur additional losses and fees above the amount accrued but we cannot estimate a range of such reasonably possible losses or legal fees related to
these claims at this time. There are no assurances, however, that settlements reached and/or adverse judgments received, if any, will not exceed amounts
accrued.
Nitrosamines
The Company, along with numerous other manufacturers, retailers, and others, are parties to litigation relating to alleged trace amounts of
nitrosamine impurities in certain products, including valsartan and ranitidine. The vast majority of these lawsuits naming the Company in the United States
are pending in two MDLs, namely an MDL pending in the United States District Court for the District of New Jersey concerning valsartan and an MDL
pending in the United States District Court for the Southern District of Florida concerning ranitidine. The lawsuits against the Company in the MDLs
include putative and certified classes seeking the refund of the purchase price and other economic and punitive damages allegedly sustained by consumers
and end payors as well as individuals seeking compensatory and punitive damages for personal injuries allegedly caused by ingestion of the medications. A
similar lawsuit pertaining to valsartan is pending in Israel. Third party payor, consumer and medical monitoring classes were certified in the valsartan
MDL. The Company has also received requests to indemnify purchasers of the Company’s API and/or finished dose forms of these products. The original
master complaints concerning ranitidine were dismissed on December 31, 2020. The end-payor plaintiff immediately appealed to the U.S. Court of Appeals
for the Eleventh Circuit, which affirmed the dismissal. The personal injury and consumer putative class plaintiffs filed amended master complaints. The
Company was not named as a defendant in the amended master complaints, though it was still named in certain short form complaints filed by personal
injury plaintiffs. The trial court has dismissed all remaining claims against the generic defendants. Certain of the personal injury plaintiffs appealed this
dismissal, which remains pending.
Lipitor
A number of individual and multi-plaintiff lawsuits have been filed against Pfizer in various federal and state courts alleging that the plaintiffs
developed type 2 diabetes purportedly as a result of the ingestion of Lipitor. Plaintiffs seek compensatory and punitive damages. In February 2014, the
federal actions were transferred for consolidated pre-trial proceedings to an MDL in the U.S. District Court for the District of South Carolina. The District
Court granted Pfizer’s motion for summary judgment and dismissed all of the federal cases in 2017, which was subsequently affirmed on appeal. Since
2016, certain cases in the MDL were remanded to certain state courts. State court proceedings remain pending in Missouri and New York.
Depo-Provera
Beginning in October 2024, the Company (including Greenstone LLC), Pfizer and certain entities related to Pfizer, and Prasco Labs have been
named in a number of lawsuits filed in federal and state courts related to claims pertaining to Depo-Provera. Certain of these lawsuits include allegations
that individual plaintiffs developed meningiomas purportedly as a result of the ingestion of Depo-Provera or its authorized generic equivalent and seek
compensatory and punitive damages. Putative class complaints seeking relief in the form of medical monitoring for individuals from certain states who
have taken Depo-Provera or its authorized generic equivalent, but have not developed meningiomas, have also been filed. In February 2025, the federal
lawsuits were transferred for consolidated pre-trial proceedings to an MDL in the U.S. District Court for the Northern District of Florida. Pfizer is the new
drug application holder of Depo-Provera and markets and sells the branded version of the product. Greenstone LLC was a subsidiary of Pfizer until the
closing of the Combination and sold the authorized generic of Depo-Provera until the closing of the Combination. Concurrently with the closing of the
Combination, Pfizer divested the authorized generic of Depo-Provera to Prasco Labs. The Company has sought to tender its defense and is seeking
indemnification for these claims from Pfizer pursuant to the Separation and Distribution Agreement and Pfizer is seeking cross-indemnification from the
Company pursuant to the Separation and Distribution Agreement with respect to the authorized generic product previously sold by Greenstone LLC.
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Intellectual Property
The Company is involved in a number of patent litigation lawsuits involving the validity and/or infringement of patents held by branded
pharmaceutical manufacturers. The Company uses its business judgment to decide to market and sell certain products, in each case based on its belief that
the applicable patents are invalid and/or that its products do not infringe, notwithstanding the fact that allegations of patent infringement(s) or other
potential third party rights have not been finally resolved by the courts. The risk involved in doing so can be substantial because the remedies available to
the owner of a patent for infringement may include, a reasonable royalty on sales or damages measured by the profits lost by the patent owner. If there is a
finding of willful infringement, damages may be increased up to three times. Moreover, because of the discount pricing typically involved with
bioequivalent products, patented branded products generally realize a substantially higher profit margin than generic and biosimilar products. The
Company also faces challenges to its patents, including suits in various jurisdictions pursuant to which generic drug manufacturers, payers, governments, or
other parties are seeking damages for allegedly causing delay of generic entry. An adverse decision in any of these matters could have an adverse effect that
is material to our business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares and/or stock price.
The Company has approximately $2.9 million accrued related to its intellectual property matters at December 31, 2024. It is reasonably possible
that we may incur additional losses and fees but we cannot estimate a range of such reasonably possible losses or legal fees related to these claims at this
time.
Yupelri
Beginning in January 2023, certain generic companies notified us that they had filed ANDAs with the FDA seeking approval to market generic
versions of Yupelri® with associated Paragraph IV certifications. The companies assert the invalidity and/or non-infringement of polymorph patents
expiring in 2030 and 2031, and a method of use patent expiring in 2039. The companies have not filed Paragraph IV certifications to our compound
patents, which currently expire in December 2025, with one compound patent subject to a patent term extension to October 2028. Beginning in February
2023, we brought patent infringement actions against the generic filers in federal district courts, including the U.S. District Court for the District of New
Jersey, the U.S. District Court for the District of Delaware, the U.S. District Court for the Middle District of North Carolina, and the U.S. District Court for
the Eastern District of Pennsylvania asserting infringement of the patents by the generic companies. The actions filed in Delaware, North Carolina and
Pennsylvania have been dismissed and the remaining actions will proceed in New Jersey. The Company has entered into settlement agreements with Teva,
Accord, Orbicular, Lupin, and Qilu granting licenses to commercialize their generic versions of Yupelri® in April 2039 or earlier depending on certain
circumstances. Three ANDA filers remain in the litigation.
Tyrvaya
In June 2023, a generic company notified Oyster Point that it had filed an ANDA with the FDA seeking approval to market a generic version of
Tyrvaya® with associated Paragraph IV certifications. The generic company asserts the invalidity and/or non-infringement of six Orange Book listed
patents that all have expiration dates in October 2035. In July 2023, Oyster Point brought a patent infringement action against the generic filer in the U.S.
District Court of the District of New Jersey asserting infringement by the generic company. In March 2024, Oyster Point filed an amended complaint
asserting infringement with respect to four additional patents that were recently listed in the Orange Book for Tyrvaya® and also have expiration dates in
October 2035. This lawsuit automatically stays FDA approval of the generic company’s ANDA until December 6, 2025, or until an adverse court decision,
if any, whichever may occur earlier. The parties are awaiting the scheduling of a trial.
Amitiza
In September 2023, Sawai Pharmaceutical Co. (“Sawai”) filed challenges with the Japanese Patent Office (“JPO”) asserting invalidity of patent
term extensions for the JPP ‘4332353 patent (the ‘353 patent) relevant to Amitiza®, which the Company commercializes in Japan as a licensee of the
relevant patents, including the ‘353 patent. Towa Pharmaceutical Co. Ltd. also filed a challenge to the ‘353 patent term extension in January 2024.
Separately, in December 2023, Sawai filed an invalidity action with the JPO against the ‘353 patent itself. With the granted extensions, the ‘353 patent has
expiration dates for the Company’s 24µg and 12µg strengths of April 2025 and April 2027, respectively. Beginning in April 2024, Sawai filed challenges
with the JPO with respect to the 12µg strength, asserting invalidity of patent term extensions of five additional patents expiring in October 2025, September
2026, August 2027, November 2027, and December 2028, and challenged the validity of the August 2027 patent itself.
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Other Litigation
The Company is involved in various other legal proceedings including commercial, contractual, employment, or other similar matters that are
considered normal to its business. The Company has approximately $5.7 million accrued related to these various other legal proceedings at December 31,
2024.
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ITEM 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
None.
ITEM 9A.
Controls and Procedures
An evaluation was performed under the supervision and with the participation of the Company’s management, including the Principal Executive
Officer and the Principal Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of
December 31, 2024. Based upon that evaluation, the Principal Executive Officer and the Principal Financial Officer concluded that the Company’s
disclosure controls and procedures were effective.
Management has not identified any changes in the Company’s internal control over financial reporting (“ICFR”) that occurred during the fourth
quarter of 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s ICFR.
Management’s Report on ICFR is on page 78, which is incorporated herein by reference. The effectiveness of the Company’s ICFR as of
December 31, 2024 has been audited by Deloitte & Touche LLP (PCAOB ID No. 34), an independent registered public accounting firm, as stated in their
report on page 82, which is incorporated herein by reference.
ITEM 9B.
Other Information
Trading Arrangements
During the three months ended December 31, 2024, no director or “officer” of the Company adopted or terminated a “Rule 10b5-1 trading
arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.
ITEM 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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PART III
ITEM 10.
Directors, Executive Officers and Corporate Governance
Certain information required by this Item will be provided in an amendment to this Annual Report on Form 10-K in accordance with General
Instruction G(3) to Form 10-K.
Code of Ethics
The Viatris board of directors has adopted a Code of Ethics for the Company’s Chief Executive Officer, Chief Financial Officer and Controller.
The Viatris board of directors also has adopted a Code of Business Conduct and Ethics applicable to all directors, officers, and employees. The Code of
Ethics for our Chief Executive Officer, Chief Financial Officer and Controller and the Code of Business Conduct and Ethics are posted on Viatris’ website
at http://www.viatris.com/en/About-Us/Corporate-Governance, and Viatris intends to post any amendments to and waivers from each of the Code of Ethics
for the Company’s Chief Executive Officer, Chief Financial Officer and Controller and the Code of Business Conduct and Ethics that are required to be
disclosed on that website.
Insider Trading Policies and Procedures
We have adopted a Global Insider Trading Policy and Insider Trading Policy Additional Procedures governing the purchase, sale, and/or other
dispositions of our securities by our directors, officers, and employees, as well as by Viatris itself, that we believe are reasonably designed to promote
compliance with insider trading laws, rules and regulations, and listing standards applicable to us. A copy of our Global Insider Trading Policy and Insider
Trading Policy Additional Procedures is filed as Exhibit 19 to this Form 10-K.
ITEM 11.
Executive Compensation
The information required by this Item will be provided in an amendment to this Annual Report on Form 10-K in accordance with General
Instruction G(3) to Form 10-K.
ITEM 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The additional information required by this Item will be provided in an amendment to this Form 10-K in accordance with General Instruction G(3)
to Form 10-K.
Equity Compensation Plan Information
The following table shows information about the securities authorized for issuance under Viatris’ equity compensation plans as of December 31,
2024:
Number of Securities to be

Issued upon Exercise of

Outstanding Options,

Warrants and Rights

(a)
Weighted-Average Exercise

Price of Outstanding

Options, Warrants and

Rights

(b)
Number of Securities

Remaining Available for

Future Issuance Under

Equity Compensation Plans

(excluding securities reflected

in column (a))

(c)
Plan Category
Equity compensation plans approved by security
holders
32,434,720 
$
14.02 
67,843,687 
Equity compensation plans not approved by security
holders
— 
— 
— 
Total
32,434,720 
$
14.02 
67,843,687 
ITEM 13.
Certain Relationships and Related Transactions, and Director Independence
The information required by this Item will be provided in an amendment to this Annual Report on Form 10-K in accordance with General
Instruction G(3) to Form 10-K.
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ITEM 14.
Principal Accounting Fees and Services
The information required by this Item will be provided in an amendment to this Annual Report on Form 10-K in accordance with General
Instruction G(3) to Form 10-K.
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PART IV
ITEM 15.
Exhibits, Consolidated Financial Statement Schedules
1.
Consolidated Financial Statements
The Consolidated Financial Statements listed in the Index to Consolidated Financial Statements are filed as part of this Form.
2.
Consolidated Financial Statement Schedules
VIATRIS INC. AND SUBSIDIARIES
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
(In millions)
Description
Beginning

Balance
Additions Charged to
Costs and Expenses
Additions Charged to
Other

Accounts
Deductions
Ending

Balance
Allowance for doubtful accounts:
Year ended December 31, 2024
$
118.8 
17.4 
— 
(28.6)
$
107.6 
Year ended December 31, 2023
$
114.7 
26.6 
— 
(22.5)
$
118.8 
Year ended December 31, 2022
$
154.5 
21.5 
— 
(61.3)
$
114.7 
Valuation allowance for deferred tax assets:
Year ended December 31, 2024
$
421.4 
925.4 
1.0 
(114.4)
$
1,233.4 
Year ended December 31, 2023
$
387.0 
41.0 
16.1 
(22.7)
$
421.4 
Year ended December 31, 2022
$
780.4 
42.7 
— 
(436.1)
$
387.0 
____________ 
These amounts include balances from acquisitions.
These amounts include balances reclassified to Assets Held for Sale and Liabilities Held for Sale.
3.
Exhibits
2.1(a)
Business Combination Agreement, dated as of July 29, 2019, by and among Pfizer Inc., Upjohn Inc., Utah Acquisition Sub Inc.,
Mylan N.V., Mylan I B.V. and Mylan II B.V., included as Annex A to the Information Statement included as Exhibit 99.1 to the
Report on Form 8-K filed by Upjohn Inc. with the SEC on August 6, 2020, and incorporated herein by reference.^

2.1(b)
Amendment No. 1, dated as of May 29, 2020, to the Business Combination Agreement, dated as of July 29, 2019, by and among
Pfizer Inc., Upjohn Inc., Utah Acquisition Sub Inc., Mylan N.V., Mylan I B.V. and Mylan II B.V., included as Annex B to the
Information Statement included as Exhibit 99.1 to the Report on Form 8-K filed by Upjohn Inc. with the SEC on August 6, 2020,
and incorporated herein by reference.^
2.2(a)
Separation and Distribution Agreement, dated as of July 29, 2019, by and between Pfizer Inc. and Upjohn Inc., filed as Exhibit 2.2 to
the Report on Form 8-K filed by Mylan N.V. with the SEC on July 29, 2019, and incorporated herein by reference.^
2.2(b)
Amendment No. 1, dated as of February 18, 2020, to the Separation and Distribution Agreement, dated as of July 29, 2019, by and
between Pfizer Inc. and Upjohn Inc., filed by Mylan N.V. as Exhibit 2.1 to Form 10-Q for the quarter ended March 31, 2020, and
incorporated herein by reference.
2.2(c)
Amendment No. 2, dated as of May 29, 2020, to the Separation and Distribution Agreement, dated as of July 29, 2019, by and
between Pfizer Inc. and Upjohn Inc., filed as Exhibit 2.2 to the Report on Form 8-K filed by Mylan N.V. with the SEC on June 1,
2020, and incorporated herein by reference.^
2.2(d)
Amendment No. 3, dated as of September 18, 2020, to the Separation and Distribution Agreement, dated as of July 29, 2019, by and
between Pfizer Inc. and Upjohn Inc., filed as Exhibit 2.6 to the Report on Form 8-K filed by Viatris Inc. with the SEC on November
19, 2020, and incorporated herein by reference.^
 (1)
 (2)
(1)
(2)
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2.2(e)
Amendment No. 4, dated as of November 15, 2020, to the Separation and Distribution Agreement, dated as of July 29, 2019, by and
between Pfizer Inc. and Upjohn Inc., filed as Exhibit 2.7 to the Report on Form 8-K filed by Viatris Inc. with the SEC on November
19, 2020, and incorporated herein by reference.^
2.3(a)
Transaction Agreement, dated as of February 27, 2022, by and among Biocon Biologics Limited and Viatris Inc., filed as Exhibit 2.1
to the Report on Form 8-K filed by Viatris Inc. with the SEC on February 28, 2022, and incorporated herein by reference.^
2.3(b)
Amendment No. 1 to Transaction Agreement, dated as of November 28, 2022, by and between Biocon Biologics Limited and Viatris
Inc., filed as Exhibit 2.1 to the Report on Form 8-K filed by Viatris Inc. with the SEC on November 29, 2022, and incorporated
herein by reference.^
2.3(c)
Omnibus Amendment No. 1, effective as of May 17, 2023, by and among Viatris Inc., Biocon Biologics UK Limited, Biosimilar
Collaborations Ireland Limited, Biosimilars Newco Limited, and Biocon Biologics Limited, filed by Viatris Inc. as Exhibit 2.1 to
Form 10-Q for the quarter ended June 30, 2023, and incorporated herein by reference.
2.3(d)
Omnibus Amendment No. 2, effective as of December 19, 2023, by and among Viatris Inc., Biocon Biologics UK Limited,
Biosimilars Newco Limited, and Biocon Biologics Limited, filed by Viatris Inc. as Exhibit 2.3(d) to Form 10-K for the fiscal year
ended December 31, 2023, and incorporated herein by reference.^
2.3(e)
Omnibus Amendment No. 3, effective as of December 24, 2024, by and among Viatris Inc., Biocon Biologics UK Limited,
Biosimilar Collaborations Ireland Limited, Biosimilars Newco Limited, and Biocon Biologics Limited.^
2.4(a)
Put Option Agreement, dated October 1, 2023, between Cooper Consumer Health SAS and Viatris Inc., filed by Viatris Inc. as
Exhibit 2.1 to Form 10-Q for the quarter ended September 30, 2023, and incorporated herein by reference.^
2.4(b)
Transaction Agreement, dated as of January 29, 2024, by and among Cooper Consumer Health SAS, Cooper Consumer Health IT
S.r.l., Viatris Inc., Viatris Italia S.r.l. and Ipex AB, filed as Exhibit 2.1 to the Report on Form 8-K/A filed by Viatris Inc. with the SEC
on January 30, 2024, and incorporated herein by reference. ^
3.1(a)
Amended and Restated Certificate of Incorporation of Upjohn Inc., effective as of November 13, 2020, filed as Exhibit 3.1 to the
Report on Form 8-K filed by Viatris Inc. with the SEC on November 19, 2020, and incorporated herein by reference.
3.1(b)
Certificate of Amendment of Amended and Restated Certificate of Incorporation of Upjohn Inc., effective as of November 16, 2020,
filed as Exhibit 3.3 to the Report on Form 8-K filed by Viatris Inc. with the SEC on November 19, 2020, and incorporated herein by
reference.

3.1(c)
Certificate of Amendment of Amended and Restated Certificate of Incorporation of Viatris Inc., effective as of December 15, 2023,
filed by Viatris Inc. as Exhibit 3.1(c) to Form 10-K for the fiscal year ended December 31, 2023, and incorporated herein by
reference.
3.1(d)
Certificate of Amendment of Amended and Restated Certificate of Incorporation of Viatris Inc., effective as of December 15, 2023,
filed by Viatris Inc. as Exhibit 3.1(d) to Form 10-K for the fiscal year ended December 31, 2023, and incorporated herein by
reference.
3.2
Amended and Restated Bylaws of Viatris Inc., effective as of December 15, 2023, filed as Exhibit 3.1 to the Report on Form 8-K
filed by Viatris Inc. with the SEC on December 15, 2023, and incorporated herein by reference.

4.1(a)
Indenture, dated December 21, 2012, between and among Mylan Inc., as issuer, the guarantors named therein, and The Bank of New
York Mellon, as trustee, filed as Exhibit 4.1 to the Report on Form 8-K filed by Mylan Inc. with the SEC on December 24, 2012, and
incorporated herein by reference.
4.1(b)
First Supplemental Indenture, dated February 27, 2015, between and among Mylan Inc., as issuer, Mylan N.V., as guarantor, and The
Bank of New York Mellon, as trustee, to the Indenture, dated December 21, 2012, filed as Exhibit 4.4 to the Report on Form 8-K
filed by Mylan N.V. with the SEC on February 27, 2015, and incorporated herein by reference.
4.1(c)
Second Supplemental Indenture, dated March 12, 2015, between and among Mylan Inc., as issuer, Mylan N.V., as parent, and The
Bank of New York Mellon, as trustee, to the Indenture, dated December 21, 2012, filed by Mylan N.V. as Exhibit 4.3(b) to Form 10-
Q for the quarter ended March 31, 2015, and incorporated herein by reference.
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4.1(d)
Third Supplemental Indenture dated November 16, 2020, by and among Mylan Inc., Viatris Inc., Utah Acquisition Sub Inc., Mylan II
B.V. and the Bank of New York Mellon, as trustee, to the Indenture dated December 21, 2012, by and between Mylan Inc. and the
Bank of New York Mellon, as trustee, filed as Exhibit 4.6 to the Report on Form 8-K/A filed by Viatris Inc. with the SEC on
November 19, 2020, and incorporated herein by reference.
4.2(a)
Indenture, dated November 29, 2013, between Mylan Inc. and The Bank of New York Mellon, as trustee, filed as Exhibit 4.1 to the
Report on Form 8-K filed by Mylan Inc. with the SEC on November 29, 2013, and incorporated herein by reference.
4.2(b)
First Supplemental Indenture, dated November 29, 2013, between Mylan Inc. and The Bank of New York Mellon, as trustee, filed as
Exhibit 4.2 to the Report on Form 8-K filed by Mylan Inc. with the SEC on November 29, 2013, and incorporated herein by
reference.
4.2(c)
Second Supplemental Indenture, dated February 27, 2015, among Mylan Inc., as issuer, Mylan N.V., as guarantor, and The Bank of
New York Mellon, as trustee, to the Indenture, dated November 29, 2013, filed as Exhibit 4.6 to the Report on Form 8-K filed by
Mylan N.V. with the SEC on February 27, 2015, and incorporated herein by reference.
4.2(d)
Third Supplemental Indenture, dated March 12, 2015, between and among Mylan Inc., as issuer, Mylan N.V., as parent, and The
Bank of New York Mellon, as trustee, to the Indenture, dated November 29, 2013, filed by Mylan N.V. as Exhibit 4.5(b) to Form 10-
Q for the quarter ended March 31, 2015, and incorporated herein by reference.
4.2(e)
Fourth Supplemental Indenture dated November 16, 2020, by and among Mylan Inc., Viatris Inc., Utah Acquisition Sub Inc., Mylan
II B.V. and the Bank of New York Mellon, as trustee, to the Indenture dated November 29, 2013, by and between Mylan Inc. and the
Bank of New York Mellon, as trustee, filed as Exhibit 4.7 to the Report on Form 8-K/A filed by Viatris Inc. with the SEC on
November 19, 2020, and incorporated herein by reference.
4.3(a)
Indenture, dated as of June 9, 2016, among Mylan N.V., as issuer, Mylan Inc., as guarantor, and The Bank of New York Mellon, as
trustee, filed as Exhibit 4.1 to the Report on Form 8-K filed by Mylan N.V. with the SEC on June 15, 2016, and incorporated herein
by reference.
4.3(b)
First Supplemental Indenture dated November 16, 2020, by and among Viatris Inc., Utah Acquisition Sub Inc., Mylan II B.V., Mylan
Inc. and the Bank of New York Mellon, as trustee, to the Indenture dated June 9, 2016, by and among Mylan N.V., Mylan Inc. and
the Bank of New York Mellon, as trustee, filed as Exhibit 4.4 to the Report on Form 8-K/A filed by Viatris Inc. with the SEC on
November 19, 2020, and incorporated herein by reference.
4.4(a)
Indenture, dated November 22, 2016, among Mylan N.V., as issuer, Mylan, Inc., as guarantor and Citibank, N.A., London Branch, as
trustee, paying agent, transfer agent, registrar and calculation agent, filed by Mylan N.V. as Exhibit 4.9 to Form 10-K for the fiscal
year ended December 31, 2016, and incorporated herein by reference.
4.4(b)
First Supplemental Indenture dated November 16, 2020, by and among Viatris Inc., Utah Acquisition Sub Inc., Mylan II B.V., Mylan
Inc. and Citibank, N.A., London Branch, as trustee, paying agent, transfer agent, and registrar, to the Indenture dated November 22,
2016, by and among Mylan N.V., Mylan Inc. and Citibank, N.A., London Branch, as trustee, paying agent, transfer agent, registrar
and calculation agent, filed as Exhibit 4.5 to the Report on Form 8-K/A filed by Viatris Inc. with the SEC on November 19, 2020,
and incorporated herein by reference.
4.5(a)
Indenture, dated as of April 9, 2018, among Mylan Inc., as issuer, Mylan N.V., as guarantor, and the Bank of New York Mellon, as
trustee, filed as Exhibit 4.1 to the Report on Form 8-K filed by Mylan N.V. with the SEC on April 9, 2018, and incorporated herein
by reference.
4.5(b)
First Supplemental Indenture dated November 16, 2020, by and among Mylan Inc., Viatris Inc., Utah Acquisition Sub Inc., Mylan II
B.V. and the Bank of New York Mellon, as trustee, to the Indenture dated April 9, 2018, by and among Mylan Inc., Mylan N.V. and
the Bank of New York Mellon, as trustee, filed as Exhibit 4.8 to the Report on Form 8-K/A filed by Viatris Inc. with the SEC on
November 19, 2020, and incorporated herein by reference.
4.6(a)
Indenture, dated as of May 23, 2018, among Mylan Inc., as issuer, Mylan N.V., as guarantor, and Citibank, N.A., London Branch, as
trustee, paying agent, transfer agent and registrar, filed as Exhibit 4.1 to the Report on Form 8-K filed by Mylan N.V. with the SEC
on May 23, 2018, and incorporated herein by reference.

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4.6(b)
First Supplemental Indenture dated November 16, 2020, by and among Mylan Inc., Viatris Inc., Utah Acquisition Sub Inc., Mylan II
B.V. and Citibank, N.A., London Branch, as trustee, paying agent, transfer agent, and registrar, to the Indenture dated May 23, 2018,
by and among Mylan Inc., Mylan N.V. and Citibank, N.A., London Branch, as trustee, paying agent, transfer agent, and registrar,
filed as Exhibit 4.9 to the Report on Form 8-K/A filed by Viatris Inc. with the SEC on November 19, 2020, and incorporated herein
by reference.
4.7(a)
Indenture, dated as of June 22, 2020, between Upjohn Inc., as issuer, and The Bank of New York Mellon, as trustee, filed as Exhibit
4.1 to the Report on Form 8-K filed by Upjohn Inc. with the SEC on June 26, 2020, and incorporated herein by reference.
4.7(b)
First Supplemental Indenture dated November 16, 2020, by and among Viatris Inc., Utah Acquisition Sub Inc., Mylan II B.V., Mylan
Inc. and the Bank of New York Mellon, as trustee, to the Indenture dated June 22, 2020, by and among Viatris Inc. and the Bank of
New York Mellon, as trustee, filed as Exhibit 4.1 to the Report on Form 8-K/A filed by Viatris Inc. with the SEC on November 19,
2020, and incorporated herein by reference.
4.8(a)
Indenture, dated as of June 23, 2020, among Upjohn Finance B.V., as issuer, Upjohn Inc., as guarantor, and Citibank, N.A., London
Branch, as trustee, transfer agent, paying agent and registrar, filed as Exhibit 4.9 to the Report on Form 8-K filed by Upjohn Inc. with
the SEC on June 26, 2020, and incorporated herein by reference.
4.8(b)
First Supplemental Indenture dated November 16, 2020, by and among Upjohn Finance B.V., Viatris Inc., Utah Acquisition Sub Inc.,
Mylan II B.V., Mylan Inc. and Citibank, N.A., London Branch, as trustee, paying agent, transfer agent, and registrar, to the Indenture
dated June 23, 2020, by and among Upjohn Finance B.V., Viatris Inc. and Citibank, N.A., London Branch, as trustee, paying agent,
transfer agent, and registrar, filed as Exhibit 4.2 to the Report on Form 8-K/A filed by Viatris Inc. with the SEC on November 19,
2020, and incorporated herein by reference.
4.9
Description of Viatris Inc. Securities Registered Under Section 12 of the Exchange Act, filed by Viatris Inc. as Exhibit 4.9 to Form
10-K for the fiscal year ended December 31, 2023, and incorporated herein by reference.
10.1(a)
Viatris Inc. 2020 Stock Incentive Plan, included as Exhibit 10.1 to Amendment No. 1 to Form 10 filed by Upjohn Inc. with the SEC
on February 6, 2020, and incorporated herein by reference.*
10.1(b)
Amendment to the Viatris Inc. 2020 Stock Incentive Plan dated December 6, 2024.*
10.1(c)
Form of Make-Whole Restricted Stock Unit Award Agreement under the Viatris 2020 Stock Incentive Plan, filed by Viatris Inc. as
Exhibit 10.1(b) to Form 10-K for the fiscal year ended December 31, 2020, and incorporated herein by reference.*
10.1(d)
Form of Retention Restricted Stock Unit Award Agreement under the Viatris 2020 Stock Incentive Plan, filed by Viatris Inc. as
Exhibit 10.1(c) to Form 10-K for the fiscal year ended December 31, 2020, and incorporated herein by reference.*
10.1(e)
Form of Restricted Stock Unit Award Agreement under the Viatris 2020 Stock Incentive Plan for Michael Goettler and Sanjeev
Narula, filed by Viatris Inc. as Exhibit 10.1(d) to Form 10-K for the fiscal year ended December 31, 2020, and incorporated herein
by reference.*
10.1(f)
Value Creation Incentive Award Performance-Based Restricted Stock Unit Award Agreement for Robert J. Coury under the Viatris
Inc. 2020 Stock Incentive Plan, effective as of November 23, 2020, filed by Viatris Inc. as Exhibit 10.1(e) to Form 10-K for the fiscal
year ended December 31, 2020, and incorporated herein by reference.*
10.1(g)
Form of Restricted Stock Unit Award Agreement under the Viatris Inc. 2020 Stock Incentive Plan for awards granted on or after
March 2, 2021, filed by Viatris Inc. as Exhibit 10.1 to Form 10-Q for the quarter ended March 31, 2021, and incorporated herein by
reference.*
10.1(h)
Form of Performance-Based Restricted Stock Unit Award Agreement under the Viatris Inc. 2020 Stock Incentive Plan for awards
granted on or after March 2, 2021, filed by Viatris Inc. as Exhibit 10.2 to Form 10-Q for the quarter ended March 31, 2021, and
incorporated herein by reference.*
10.1(i)
Form of Director Restricted Stock Unit Award Agreement under the Viatris Inc. 2020 Stock Incentive Plan for non-employee
directors for awards granted on or after March 2, 2021, filed by Viatris Inc. as Exhibit 10.3 to Form 10-Q for the quarter ended
March 31, 2021, and incorporated herein by reference.*
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Table of Contents
10.1(j)
Form of Performance-Based Restricted Stock Unit Award Agreement under the Viatris Inc. 2020 Stock Incentive Plan for awards
granted on or after March 3, 2023, filed by Viatris Inc. as Exhibit 10.3 to Form 10-Q for the quarter ended March 31, 2023, and
incorporated herein by reference.*
10.1(k)
Oyster Point Pharma, Inc. 2016 Equity Incentive Plan, filed as Exhibit 99.1 to Form S-8 filed by Viatris Inc. with the SEC on March
3, 2023, and incorporated herein by reference.*
10.1(l)
Oyster Point Pharma, Inc. 2019 Equity Incentive Plan, filed as Exhibit 99.2 to Form S-8 filed by Viatris Inc. with the SEC on March
3, 2023, and incorporated herein by reference.*
10.1(m)
Oyster Point Pharma, Inc. 2021 Inducement Plan, filed as Exhibit 99.3 to Form S-8 filed by Viatris Inc. with the SEC on March 3,
2023, and incorporated herein by reference.*
10.2
Separation Agreement with Michael Goettler, dated February 24, 2023, filed as Exhibit 10.2 to the Report on Form 8-K filed by
Viatris Inc. with the SEC on February 27, 2023, and incorporated herein by reference.*
10.3
Executive Employment Agreement, entered into on November 20, 2020, by and between Viatris Inc. and Robert J. Coury, filed by
Viatris Inc. as Exhibit 10.9 to Form 10-K for the fiscal year ended December 31, 2020, and incorporated herein by reference.*
10.4
Transition and Advisory Agreement and Release, dated May 19, 2023, by and between Viatris Inc. and Robert J. Coury, filed by
Viatris Inc. as Exhibit 10.2 to Form 10-Q for the quarter ended June 30, 2023, and incorporated herein by reference.*
10.5
Offer Letter with Scott A. Smith, dated February 24, 2023, filed as Exhibit 10.1 to the Report on Form 8-K filed by Viatris Inc. with
the SEC on February 27, 2023, and incorporated herein by reference.*
10.6
Offer Letter with Theodora (Doretta) Mistras, dated December 15, 2023, filed by Viatris Inc. as Exhibit 10.13 to Form 10-K for the
fiscal year ended December 31, 2023, and incorporated herein by reference.*
10.7
Retirement and Operating Consulting Agreement and Release with Rajiv Malik, dated October 20, 2023, filed by Viatris Inc. as
Exhibit 10.14 to Form 10-K for the fiscal year ended December 31, 2023, and incorporated herein by reference.*
10.8
Separation Agreement and Release with Anthony Mauro, dated October 20, 2023, filed by Viatris Inc. as Exhibit 10.15 to Form 10-K
for the fiscal year ended December 31, 2023, and incorporated herein by reference.*
10.9
Separation Agreement and Release with Sanjeev Narula, dated December 15, 2023, filed by Viatris Inc. as Exhibit 10.16 to Form 10-
K for the fiscal year ended December 31, 2023, and incorporated herein by reference.*
10.10(a)
Mylan N.V. Amended and Restated 2003 Long-Term Incentive Plan, filed as Appendix B to Mylan N.V.’s Definitive Proxy
Statement on Schedule 14A filed by Mylan N.V. with the SEC on May 25, 2016, and incorporated herein by reference.*
10.10(b)
Amendment to Mylan N.V. Amended and Restated 2003 Long-Term Incentive Plan, filed as Appendix B to Mylan N.V.’s Definitive
Proxy Statement on Schedule 14A filed by Mylan N.V. on May 25, 2016, and incorporated herein by reference.*
10.10(c)
Amendment to the Mylan N.V. Amended and Restated 2003 Long-Term Incentive Plan, adopted as of February 23, 2017, filed by
Mylan N.V. as Exhibit 10.1 to Form 10-Q for the quarter ended March 31, 2017, and incorporated herein by reference.*
10.10(d)
Amended and Restated Form of Stock Option Agreement under the Mylan N.V. 2003 Long-Term Incentive Plan for Robert J. Coury
and Rajiv Malik, filed by Mylan Inc. as Exhibit 10.2 to Form 10-Q for the quarter ended September 30, 2013, and incorporated
herein by reference.*
10.10(e)
Amended and Restated Form of Stock Option Agreement under the Mylan N.V. 2003 Long-Term Incentive Plan for awards granted
following fiscal year 2012, filed by Mylan Inc. as Exhibit 10.4(i) to Form 10-K for the fiscal year ended December 31, 2013, and
incorporated herein by reference.*
10.10(f)
Form of Stock Option Agreement under the Mylan N.V. 2003 Long-Term Incentive Plan for Robert J. Coury and Rajiv Malik for
awards granted after February 27, 2015, filed by Mylan N.V. as Exhibit 10.1(i) to Form 10-K for the fiscal year ended December 31,
2015, and incorporated herein by reference.*
10.10(g)
Form of Stock Option Agreement under the Mylan N.V. 2003 Long-Term Incentive Plan for awards granted after February 27, 2015,
filed by Mylan N.V. as Exhibit 10.1(l) to Form 10-K for the fiscal year ended December 31, 2015, and incorporated herein by
reference.*
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10.10(h)
Form of Stock Option Agreement under the Mylan N.V. 2003 Long-Term Incentive Plan for Rajiv Malik for awards granted on or
after February 19, 2019, filed by Mylan N.V. as Exhibit 10.7 to Form 10-Q for the quarter ended March 31, 2019, and incorporated
herein by reference.*

10.10(i)
Form of Stock Option Agreement under the Mylan N.V. 2003 Long-Term Incentive Plan for independent directors for awards
granted on or after March 2, 2020, filed by Mylan N.V. as Exhibit 10.2 to Form 10-Q for the quarter ended March 31, 2020, and
incorporated herein by reference.*
10.11
Mylan N.V. Severance Plan and Global Guidelines, filed by Mylan N.V. as Exhibit 10.1 to Form 10-Q for the quarter ended
September 30, 2019, and incorporated herein by reference.*

10.12
Retirement Benefit Agreement, dated August 31, 2009, by and between Mylan Inc. and Rajiv Malik, filed by Mylan Inc. as Exhibit
10.4 to Form 10-Q for the quarter ended September 30, 2009, and incorporated herein by reference.*
10.13(a)
Transition and Succession Agreement, dated January 31, 2007, between Mylan Inc. and Rajiv Malik, filed by Mylan Inc. as Exhibit
10.5 to Form 10-Q for the quarter ended March 31, 2008, and incorporated herein by reference.*
10.13(b)
Amendment No. 1 to Transition and Succession Agreement, dated December 22, 2008, between Mylan Inc. and Rajiv Malik, filed by
Mylan Inc. as Exhibit 10.28(b) to Form 10-K for the fiscal year ended December 31, 2008, and incorporated herein by reference.*
10.14(a)
Transition and Succession Agreement, dated February 25, 2008, by and between Mylan Inc. and Anthony Mauro, filed by Mylan Inc.
as Exhibit 10.5(a) to Form 10-Q for the quarter ended March 31, 2012, and incorporated herein by reference.*
10.14(b)
Amendment No. 1 to Transition and Succession Agreement, dated December 15, 2008, by and between Mylan Inc. and Anthony
Mauro, filed by Mylan Inc. as Exhibit 10.5(b) to Form 10-Q for the quarter ended March 31, 2012, and incorporated herein by
reference.*
10.14(c)
Amendment No. 2 to Transition and Succession Agreement, dated October 15, 2009, by and between Mylan Inc. and Anthony
Mauro, filed by Mylan Inc. as Exhibit 10.5(c) to Form 10-Q for the quarter ended March 31, 2012, and incorporated herein by
reference.*
10.15(a)
Mylan 401(k) Restoration Plan, dated January 1, 2010, filed as Exhibit 10.1 to the Report on Form 8-K filed by Mylan Inc. with the
SEC on December 14, 2009, and incorporated herein by reference.*
10.15(b)
Amendment to Mylan 401(k) Restoration Plan, dated November 4, 2014, filed by Mylan Inc. as Exhibit 10.41(b) to Form 10-K for
the fiscal year ended December 31, 2014, and incorporated herein by reference.*
10.16(a)
Mylan Executive Income Deferral Plan, filed as Exhibit 10.2 to the Report on Form 8-K filed by Mylan Inc. with the SEC on
December 14, 2009, and incorporated herein by reference.*
10.16(b)
Amendment to Mylan Executive Income Deferral Plan, dated November 4, 2014, filed by Mylan Inc. as Exhibit 10.42(b) to Form
10-K for the fiscal year ended December 31, 2014, and incorporated herein by reference.*
10.17
The Executive Nonqualified Excess Plan Adoption Agreement, effective as of December 28, 2007, between Mylan International
Holdings, Inc. and Rajiv Malik, filed by Mylan Inc. as Exhibit 10.27(b) to Form 10-K for the fiscal year ended December 31, 2013,
and incorporated herein by reference.*
10.18
The Executive Nonqualified Excess Plan, effective as of December 28, 2007, between Mylan International Holdings, Inc. and Rajiv
Malik, filed by Mylan Inc. as Exhibit 10.57 to Form 10-K for the fiscal year ended December 31, 2013, and incorporated herein by
reference.*
10.19
Third Amended and Restated Executive Employment Agreement, entered into on February 25, 2019, and effective as of April 1,
2019, by and between Mylan Inc. and Rajiv Malik, filed by Mylan N.V. as Exhibit 10.20(c) to Form 10-K for the fiscal year ended
December 31, 2018, and incorporated herein by reference.*
10.20
Executive Employment Agreement, dated as of February 25, 2019, and effective as of April 1, 2019, by and between Mylan Inc. and
Anthony Mauro, filed by Mylan N.V. as Exhibit 10.21(b) to Form 10-K for the fiscal year ended December 31, 2018, and
incorporated herein by reference.*

10.21
2007 Supplemental Health Insurance Plan for Certain Key Employees of Mylan Laboratories Inc., adopted as of January 29, 2007,
filed by Mylan N.V. as Exhibit 10.29 to the Form 10-K for the fiscal year ended December 31, 2019, and incorporated herein by
reference.*
157

Table of Contents
10.22
Form of Indemnification Agreement between Viatris Inc. and each of its directors and its executive officers, filed by Viatris Inc. as
Exhibit 10.25 to Form 10-K for the fiscal year ended December 31, 2020, and incorporated herein by reference.*
10.23
Amended and Restated Form of Indemnification Agreement between Mylan Inc. and each Director, filed by Mylan Inc. as Exhibit
10.38 to Form 10-K for the fiscal year ended December 31, 2013, and incorporated herein by reference.*
10.24
Form of Indemnification Agreement between Mylan N.V. and directors, filed as Exhibit 10.1 to the Report on Form 8-K filed by
Mylan N.V. with the SEC on February 27, 2015, and incorporated herein by reference.*
10.25
Second Amended and Restated Revolving Credit Agreement, dated as of September 27, 2024, among Viatris, certain affiliates and
subsidiaries of Viatris from time to time party thereto as guarantors, each lender and issuing bank from time to time party thereto and
Bank of America, N.A., as administrative agent, filed as Exhibit 10.1 to the Report on Form 8-K filed by Viatris Inc. with the SEC
on September 27, 2024 and incorporated herein by reference.^
10.26
Term Loan Credit Agreement, dated as of July 1, 2021, among Viatris, the guarantors from time to time party thereto, the lenders
from time to time party thereto and Mizuho Bank, Ltd., as administrative agent, filed as Exhibit 10.2 to the Report on Form 8-K filed
by Viatris Inc. with the SEC on July 1, 2021, and incorporated herein by reference. ^
10.27
Form of Commercial Paper Dealer Agreement among Viatris Inc., Utah Acquisition Sub Inc., Mylan II B.V., Mylan Inc. and the
dealer thereto, filed as Exhibit 10.1 to the Report on Form 8-K/A filed by Viatris Inc. with the SEC on November 19, 2020, and
incorporated herein by reference.
10.28
Transition Services Agreement, dated as of November 16, 2020, by and between Pfizer Inc. (as Service Provider) and Upjohn Inc.
(as Service Recipient), filed as Exhibit 10.1 to the Report on Form 8-K filed by Viatris Inc. with the SEC on November 19, 2020, and
incorporated herein by reference. ^
10.29
Transition Services Agreement, dated as of November 16, 2020, by and between Upjohn Inc. (as Service Provider) and Pfizer Inc.
(as Service Recipient), filed as Exhibit 10.2 to the Report on Form 8-K filed by Viatris Inc. with the SEC on November 19, 2020, and
incorporated herein by reference. ^
10.30
Tax Matters Agreement, dated as of November 16, 2020, by and between Pfizer Inc. and Upjohn Inc., filed as Exhibit 10.3 to the
Report on Form 8-K filed by Viatris Inc. with the SEC on November 19, 2020, and incorporated herein by reference. ^
10.31
Employee Matters Agreement, dated as of November 16, 2020, by and between Pfizer Inc. and Viatris Inc., filed as Exhibit 10.4 to
the Report on Form 8-K filed by Viatris Inc. with the SEC on November 19, 2020, and incorporated herein by reference.^
10.32
Manufacturing and Supply Agreement, dated as of November 16, 2020, by and between Pfizer Inc. (as Manufacturer) and Viatris
Inc. (as Customer), filed as Exhibit 10.5 to the Report on Form 8-K filed by Viatris Inc. with the SEC on November 19, 2020, and
incorporated herein by reference.^
10.33
Manufacturing and Supply Agreement, dated as of November 16, 2020, by and between Viatris Inc. (as Manufacturer) and Pfizer
Inc. (as Customer), filed as Exhibit 10.6 to the Report on Form 8-K filed by Viatris Inc. with the SEC on November 19, 2020, and
incorporated herein by reference. ^
10.34
Intellectual Property Matters Agreement, dated as of November 16, 2020, by and between Pfizer Inc. and Viatris Inc., filed as Exhibit
10.7 to the Report on Form 8-K filed by Viatris Inc. with the SEC on November 19, 2020, and incorporated herein by reference. ^
10.35
Trademark License Agreement, dated as of November 16, 2020, by and between Pfizer Inc. and Viatris Inc., filed as Exhibit 10.8 to
the Report on Form 8-K filed by Viatris Inc. with the SEC on November 19, 2020, and incorporated herein by reference. ^
19
Viatris Inc. Global Insider Trading Policy and Insider Trading Policy Additional Procedures.
21
Subsidiaries of the registrant.
22
List of subsidiary guarantors and issuers of guaranteed securities.
23
Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.
158

Table of Contents
31.1
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
97
Viatris Inc. Incentive-Based Compensation Recovery Policy, effective December 1, 2023, filed by Viatris Inc. as Exhibit 97 to Form
10-K for the fiscal year ended December 31, 2023, and incorporated herein by reference.
101.INS
Inline XBRL Instance Document
101.SCH
Inline XBRL Taxonomy Extension Schema
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase
104
Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL
tags are embedded within the Inline XBRL document (included in Exhibit 101).
*
Denotes management contract or compensatory plan or arrangement.
^
Annexes, schedules and/or exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. Viatris agrees to furnish supplementally a
copy of any omitted attachment to the SEC on a confidential basis upon request.
159

Table of Contents
SIGNATURES
Pursuant to the requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Form to be signed
on its behalf by the undersigned, thereunto duly authorized on February 27, 2025.
Viatris Inc.
by  /s/ SCOTT A. SMITH
Scott A. Smith
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this Form has been signed below by the following persons on behalf of the
registrant and in the capacities indicated as of February 27, 2025.
 
Signature
  
Title
/s/ SCOTT A. SMITH
Chief Executive Officer and Director
Scott A. Smith
  
(Principal Executive Officer)
/s/ THEODORA MISTRAS
Chief Financial Officer
Theodora Mistras
  
(Principal Financial Officer)
/s/    PAUL CAMPBELL
Chief Accounting Officer and Corporate Controller
Paul Campbell
  
(Principal Accounting Officer)
/s/    MELINA HIGGINS
Chair of the Board of Directors
Melina Higgins
/s/    W. DON CORNWELL
Director
W. Don Cornwell
  
/s/    JOELLEN LYONS DILLON
Director
JoEllen Lyons Dillon
  
/s/    ELISHA FINNEY
Director
Elisha Finney
  
/s/    LEO GROOTHUIS
Director
Leo Groothuis
  
/s/    JAMES M. KILTS
Director
James M. Kilts
/s/    HARRY KORMAN
Director
Harry Korman
/s/    RAJIV MALIK
Director
Rajiv Malik
/s/    RICHARD MARK
Director
Richard Mark
/s/    MARK PARRISH
Vice Chair and Director
Mark Parrish
  
/s/    ROGÉRIO VIVALDI COELHO
Director
Rogério Vivaldi Coelho
160

Exhibit 2.3(e)
OMNIBUS AMENDMENT NO. 3
This OMNIBUS AMENDMENT NO. 3, effective as of December 24, 2024 (this “Amendment”), is by and among Viatris
Inc., a Delaware corporation (“Viatris”), Biocon Biologics UK Limited, a U.K. private limited company (“Biocon UK”),
Biosimilar Collaborations Ireland Limited, an Irish private limited company (“Biosimilar Collaborations”), Biosimilars Newco
Limited, a U.K. private limited company (“Biosimilars Newco”), and Biocon Biologics Limited, a public limited company
incorporated under the Indian Companies Act, 2013 (“Biocon”, together with Biocon UK, Biosimilar Collaborations and
Biosimilars Newco, the “Biocon Parties” and each of them, a “Biocon Party”). Each of the parties hereto is referred to
individually as a “Party” and collectively as the “Parties.”
RECITALS
WHEREAS, Viatris and Biocon are parties to that certain Transaction Agreement, dated as of February 27, 2022, as
amended by Amendment No. 1 to Transaction Agreement, dated as of November 28, 2022, Omnibus Amendment No. 1, dated as
of May 17, 2023 (“Omnibus Amendment No. 1”), and Omnibus Amendment No. 2, dated as of December 19, 2023 (“Omnibus
Amendment No. 2”) (the “Transaction Agreement”);
WHEREAS, Viatris and Biocon UK are parties to that certain letter agreement, dated as of February 27, 2022, relating to
payments of Closing Working Capital, as amended by that certain Amendment No. 1 to Letter Agreement, dated as of November
29, 2022, Omnibus Amendment No. 1 and Omnibus Amendment No. 2 (the “Working Capital Letter”);
WHEREAS, Viatris and the Biocon Parties are parties to that certain Transition Services Agreement, dated as of
November 29, 2022, as amended by Omnibus Amendment No. 1 and by that certain Letter Agreement Regarding Requested
Extended Services, Wind-Down Activities and Essential Financial Services, dated as of January 24, 2024 (the “Transition
Services Agreement”);
WHEREAS, Viatris and Biocon are parties to that certain Employee Matters Agreement, dated as of November 29, 2022
(the “Employee Matters Agreement” and, collectively with the Transaction Agreement, the Working Capital Letter and the
Transition Services Agreement, the “Specified Documents”); and
WHEREAS, the Parties desire to amend the Specified Documents with the terms set forth herein.
NOW, THEREFORE, in consideration of the premises and the representations, warranties, covenants and agreements
contained in this Amendment and the Specified Documents, and subject to the conditions set forth herein and therein, the Parties
hereby agree as follows:
1. Capitalized Terms. Capitalized terms which are used but not otherwise defined herein shall have the respective meanings
ascribed to such terms in the Transaction Agreement.

2. Amendments to the Working Capital Letter. Notwithstanding anything to the contrary in the Working Capital Letter or the
other Transaction Documents:
(a) Effective as of April 10, 2024, for all purposes of the Working Capital Letter (but, for the avoidance of doubt, not for
purposes of any other Transaction Documents) the definition of Working Capital Target shall be deemed amended
such that the Working Capital Target is $0 (zero dollars), rather than $30,000,000 (thirty million dollars).
(b) For the avoidance of doubt, effective upon, and as a result of, such amendment to the definition of Working Capital
Target, (i) the Specified WC/Cash shall be $0 (zero dollars), rather than $30,000,000 (thirty million dollars) and (ii)
the Parties shall have no further obligations under the Working Capital Letter.
3. Reconciliations of Amounts Under the Transition Services Agreement. Notwithstanding anything to the contrary in the
Transition Services Agreement or the other Transaction Documents:
(a) Each Party acknowledges that, as of April 10, 2024, there was (i) an amount owed by Viatris and its Affiliates to
Biocon and its Affiliates and (ii) an amount owed by Biocon and its Affiliates to Viatris and its Affiliates, in the case
of each of clauses (i) and (ii), under the Transition Services Agreement, the net amount of which was $45,000,000
(forty-five million dollars) owed by Viatris and its Affiliates to Biocon and its Affiliates (the “Net Receivables
Amount”). Each Party further acknowledges that, effective as of April 10, 2024, Viatris and its Affiliates shall be
deemed to have remitted to Biocon and its Affiliates the Net Receivables Amount, of which Biocon hereby
acknowledges and confirms receipt.
(b) The Parties agree that, subject to Section 3(c) hereof, as of the date of this Amendment, there are no outstanding
amounts owed under the Transition Services Agreement by Viatris and its Affiliates to Biocon and its Affiliates or by
Biocon and its Affiliates to Viatris and its Affiliates.
(c) The Parties further agree that (i) as of the date of this Amendment, there is an Allowance for Bad Debt balance (the
“Outstanding Bad Debt Allowance”) equal to $11,200,000 (eleven million two hundred thousand dollars) under the
Transition Services Agreement and (ii) to the extent any portion of the Outstanding Bad Debt Allowance is collected,
the first $8,000,000 (eight million dollars) shall be remitted to Biocon and its Affiliates and any remaining portion
shall be retained by Viatris and its Affiliates.
4. Amounts Owed with respect to Additional Services. Each Party hereby acknowledges and agrees that Viatris and its
Affiliates shall (i) provide the services set forth on Schedule 1 to Biosimilar Collaborations and Biosimilars Newco for the
period set forth on Schedule 1 (the “Additional Services”), which Additional Services shall be invoiced and paid in
accordance with Section 3.03 of the Transition Services Agreement at the

applicable rates set forth on Schedule 1, and (ii) not provide any other services to Biocon or any of its Affiliates following
November 30, 2024.
5. Amendments to the Transaction Agreement. Notwithstanding anything to the contrary in the Transaction Agreement or
the other Transaction Documents:
(a) Effective as of April 10, 2024, Biocon and Biocon UK shall be deemed to have satisfied their obligations in full
under Section 1.05(a) of the Transaction Agreement with respect to the Irish Future Cash Payment of $175,000,000
(one hundred seventy-five million dollars) through the release of $30,000,000 (thirty million dollars) by Viatris in
accordance with Section 2 hereof, the deemed remittance of $45,000,000 (forty-five million dollars) to Biocon UK
and its Affiliates in accordance with Section 3 hereof and the payment in cash by Biocon UK on April 10, 2024 of
$100,000,000, of which Viatris hereby acknowledges and confirms receipt.
(b) The ROW Future Cash Payment of $160,000,000 (one hundred sixty million dollars) due from Biosimilars Newco to
the ROW Seller pursuant to Section 1.05(b) of the Transaction Agreement shall be paid as follows:
i.
$100,000,000 (one hundred million dollars) in cash shall be paid to the ROW Seller by wire transfer of
immediately available funds on or before December 24, 2024.
ii. With respect to the residual $60,000,000 (sixty million dollars), such amount shall be retained by Biocon
Parties (and shall not be remitted to Viatris or its Affiliates). However, if the Biocon Parties pay or are
obligated to pay, inclusive of cost shares or contingent payments such as profit shares, royalties or
milestones, to Johnson & Johnson or one of its Affiliates (collectively, “JNJ”) an amount (such amount, the
“Aflibercept Amount”) less than $60,000,000 (sixty million dollars) in respect of the Compound aflibercept,
then the amount (such amount, the “Excess Amount”), if any, by which $60,000,000 (sixty million dollars)
exceeds the Aflibercept Amount shall be paid to the ROW Seller in cash within two (2) Business Days after
the determination of the Excess Amount.
Without limiting the obligations of the Biocon Parties under Section 5(b)(ii) of this Amendment, the Biocon Parties
shall be deemed to have satisfied their obligations in full under Section 1.05(b) of the Transaction Agreement with
respect to the ROW Future Cash Payment upon payment to ROW Seller of $100,000,000 (one hundred million
dollars) in cash pursuant to Section 5(b)(i) of this Amendment.
(c) Viatris acknowledges and agrees that the Affidavit of Confession of Judgement against Biocon UK and Biosimilars
Newco dated December 19, 2023 and executed in connection with Omnibus Amendment No. 2 (the “2023 COJ”) is
hereby revoked and is null and void. Viatris agrees that it will not attempt to enforce the 2023 COJ against Biocon
UK and Biosimilars Newco under any circumstances.

6. Waiver of Claims.
(a) Each of the Biocon Parties for itself and for any respective Affiliate (a “Biocon Affiliate”), on the one hand, and each
of Viatris for itself and for any of its Affiliates (a “Viatris Affiliate”), on the other hand, hereby remises, waives,
releases and forever discharges Viatris and the Viatris Affiliates (in the case of the Biocon Parties and the Biocon
Affiliates) and the Biocon Parties and the Biocon Affiliates (in the case of Viatris and the Viatris Affiliates) from any
and all claims, debts, demands, allegations, actions, causes of action, counterclaims, claims of offset (including, but
not limited to, any exercise of the right of offset under Section 8.09 of the Transaction Agreement or Section 5 the
Working Capital Letter), suits, duties, dues, interest, sum and sums of money, bills, accounts, accountings,
reckonings, bonds, special fees, indemnities, exonerations, covenants, contracts, controversies, agreements,
promises, doings, omissions, trespasses, variances, damages, judgments, extents, costs, expenses, losses, exposures,
executions, obligations and liabilities of any kind whatsoever, whether in law, equity, tort or otherwise and whether
or not presently known (and including, without limitation, any that are unknown or unsuspected) that any
Biocon Party or any Biocon Affiliate, on the one hand, or Viatris or any Viatris Affiliate, on the other hand, has or
ever had, may have, could have or hereafter can, shall or may have (from the beginning of time to the date of this
Amendment) against Viatris and the Viatris Affiliates (in the case of the Biocon Parties and the Biocon Affiliates) or
the Biocon Parties and the Biocon Affiliates (in the case of Viatris and the Viatris Affiliates), based upon, consisting
of, resulting from, in connection with, arising out of or related, directly or indirectly, to the Specified Documents on
or prior to the date of this Amendment, including, but not limited to, any purported claim detailed in Biocon’s letter
dated February 29, 2024 re: “Notice of Claims”, any claim related to customer rebates or adjustments, any claim that
Viatris or its Affiliates were operating in the United Kingdom without required permits or authorizations, any claim
that certain Inventory was not useable or saleable in the normal and ordinary course of business or fit for the purpose
for which it was procured or manufactured, any claim related to the Transition Services Agreement, any claim
related to the Compound aflibercept or any claim related to the Employee Matters Agreement.
(b) Each of the Biocon Parties, on the one hand, and Viatris, on the other hand, hereby acknowledges familiarity with
and understanding of Section 1542 of the California Civil Code, which section provides as follows:
A general release does not extend to claims that the creditor or releasing party does not know or suspect to
exist in his or her favor at the time of executing the release and that, if known by him or her, would have
materially affected his or her settlement with the debtor or released party.
With respect to Section 6(a) above, each of the Biocon Parties (on behalf of itself and any Biocon Affiliate), on the
one hand, and Viatris (on behalf of itself and any Viatris Affiliate) hereby waives and relinquishes any rights or
benefits that it has or

may have against Viatris and the Viatris Affiliates (in the case of the Biocon Parties and the Biocon Affiliates) and
the Biocon Parties and the Biocon Affiliates (in the case of Viatris and the Viatris Affiliates) under Section 1542 of
the California Civil Code (to the extent it may be applicable) or under any similar provision of statutory or non-
statutory law of California or of any other jurisdiction to the fullest extent that such rights and benefits may
lawfully be waived. Without limiting the generality of the foregoing, each of the Biocon Parties (on behalf of itself
and any Biocon Affiliate), on the one hand, and Viatris (on behalf of itself and any Viatris Affiliate), on the other
hand, acknowledges that it may hereafter discover claims or facts (whether or not now known to or suspected by any
person) in addition to or different from those which are now known, suspected or believed to exist and each of the
Biocon Parties (on behalf of itself and any Biocon Affiliate), on the one hand, and Viatris (on behalf of itself and any
Viatris Affiliate), on the other hand, agrees that this Amendment and the release contained herein shall remain
effective, and is intended to remain effective, in all respects notwithstanding any such discovery of different or
additional facts or claims.
(c) Each of the Biocon Parties hereby covenants and agrees that neither it nor any Biocon Affiliate, on the one hand, and
Viatris hereby covenants and agrees that neither it nor any Viatris Affiliate, on the other hand, nor any person acting
on behalf or at the direction of any of the foregoing, (i) will directly or indirectly bring, file, initiate or commence, or
(except as may be required by any governmental authority or by legal process) participate or assist or cooperate in
the prosecution of, any action, proceeding, suit, claim or complaint, or otherwise pursue any remedy before any
court, governmental or private regulatory body, arbitrator or arbitration body, or any other office or tribunal, which is
an action, proceeding, suit, claim, complaint or remedy that has been released (or is based upon a matter that has
been released) pursuant to the releases set forth herein, or (ii) will initiate, prosecute or defend any action,
proceeding, suit, claim or complaint in whole or in part on the grounds that any or all of the terms of this
Amendment or the Transaction Documents were entered into pursuant to a fraudulent inducement or a
misrepresentation or are for any reason illegal, invalid, not binding, unenforceable or against public policy. This
Section 6 shall not prevent the bringing of an action to enforce the terms of this Amendment.
(d) Wherever in this Amendment any of the Parties purports to waive, release, remise, discharge, acknowledge,
relinquish, agree, covenant, represent, warrant or otherwise act as to any matter on behalf of any Affiliate who is not
a direct signatory to this Amendment, such Affiliate shall be bound by such terms or provisions (and the applicable
Party shall be deemed to have so acted on behalf of such Affiliate) to the maximum extent legally possible, and in
any case all of the Parties shall be bound by such terms or provisions.
(e) For the avoidance of doubt, this Section 6 will not modify, prejudice or otherwise affect (i) the exercise or
performance of the rights or obligations of the Parties and their respective Affiliates under Sections 3 and 4 of this
Amendment or (ii) the

scope of the Assumed Liabilities or the Retained Liabilities, or the indemnification provisions relating to the
Assumed Liabilities or the Retained Liabilities set forth in the Transaction Agreement.
7. Effect of Amendment.
(a) Notwithstanding anything to the contrary in this Amendment or the Transaction Documents, this Amendment will
become effective only if, on or before 4:59 p.m., New York City time, on December 24, 2024, (i) Biocon provides to
Viatris reasonable evidence of the payment of $100,000,000 (one hundred million dollars) in cash pursuant to
Section 5(b)(i) of this Amendment and (ii) Viatris’ designated bank confirms to Viatris receipt of such $100,000,000
(one hundred million dollars) in cash in Viatris’ designated bank account. For the avoidance of doubt, if the
conditions set forth in the immediately preceding sentence are not met, this Amendment shall be null and void and
have no force or effect.
(b) Each Party acknowledges and agrees that this Amendment constitutes an instrument in writing signed on behalf of
each of the Parties in accordance with Section 9.05 of the Transaction Agreement, Section 7 of the Working Capital
Letter, Section 7.06 of the Transition Services Agreement and Section 5.01 of the Employee Matters Agreement. For
the avoidance of doubt, (i) references to the date of the Transaction Agreement and the Working Capital Letter, and
references to the “date hereof”, “the date of this Agreement” or words of similar meaning in the Transaction
Agreement and the Working Capital Letter, shall continue to refer to February 27, 2022, and (ii) references to the
date of the Transition Services Agreement and the Employee Matters Agreement, and references to the “date hereof”,
“the date of this Agreement” or words of similar meaning in the Transition Services Agreement and the Employee
Matters Agreement, shall continue to refer to November 29, 2022.
(c) Except as expressly set forth herein, this Amendment shall not amend, waive, affect or otherwise alter any term or
provision of the Specified Documents or the other Transaction Documents and all terms and provisions of the
Specified Documents and the other Transaction Documents shall continue in full force and effect.
8. Miscellaneous. The provisions set forth in Sections 9.01, 9.04 through 9.15 and 9.18 of the Transaction Agreement shall
apply to this Amendment, mutatis mutandis, and are hereby incorporated by reference as if fully set forth herein.

[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, the Parties have duly executed this Amendment, all as of the date first written above.
For VIATRIS INC.
For BIOCON BIOLOGICS UK LIMITED
By: /s/ Brian Roman    
Name: Brian Roman

Title: Chief Legal Officer
By: /s/ Shreehas P Tambe    
Name: Shreehas P Tambe 

Title: Authorized Signatory
By: /s/ Kedar Narayan Upadhye    
Name: Kedar Narayan Upadhye 

Title: Authorized Signatory
For BIOSIMILARS NEWCO LIMITED
By: /s/ Shreehas P Tambe        
Name: Shreehas P Tambe 

Title: Authorized Signatory
By: /s/ Kedar Narayan Upadhye    
Name: Kedar Narayan Upadhye 

Title: Authorized Signatory
For BIOSIMILAR COLLABORATIONS

IRELAND LIMITED
By: /s/ Shreehas P Tambe        
Name: Shreehas P Tambe 

Title: Authorized Signatory
By: /s/ Kedar Narayan Upadhye    
Name: Kedar Narayan Upadhye 

Title: Authorized Signatory
For BIOCON BIOLOGICS LIMITED
By: /s/ Shreehas P Tambe        
Name: Shreehas P Tambe
Title: CEO & Managing Director
By: /s/ Kedar Narayan Upadhye    
Name: Kedar Narayan Upadhye 

Title: Chief Financial Officer

IN WITNESS WHEREOF, the Parties have duly executed this Amendment, all as of the date first written above.
VIATRIS INC.
By:     /s/ Brian Roman________
Name: Brian S. Roman

Title: Chief Legal Officer
[Signature Page to Omnibus Amendment No. 3]

SCHEDULE 1
ADDITIONAL SERVICES
[Attached.]

Exhibit 10.1(b)
Amendment to the
Viatris Inc. 2020 Stock Incentive Plan
WHEREAS, the Company currently maintains and sponsors the 2020 Plan;
WHEREAS, Section 13(a) of the 2020 Plan provides that the Board may amend the Plan from time to time, except that shareholder approval
shall be required for any amendment that would increase the maximum number of shares of common stock, par value $0.01 per share, of the
Company (“Shares”) for which awards may be granted under the 2020 Plan; and
WHEREAS, the Board has determined it to be in its best interests to amend the 2020 Plan as set forth herein (this “Amendment”).
NOW, THEREFORE, the 2020 Plan shall be amended as follows:
1.
Capitalized terms that are not defined in this Amendment shall have the meanings ascribed thereto in the 2020 Plan, except as
otherwise provided herein. As used in this Amendment, the word “herein” refers to this Amendment as a whole and not to any
particular article, section or other subdivision of this instrument.
2.
Effective upon approval by the shareholders of the Company at the Company’s Annual Meeting of Shareholders on December 6,
2024, Section 4(a) of the 2020 Plan shall be, and hereby is, amended to increase the Share Limit by forty-nine million (49,000,000)
Shares. Therefore, a new sentence is hereby added to Section 4(a) immediately following the first sentence thereof to read as
follows:        
“In addition, effective as of December 6, 2024, subject to adjustment as provided in Section 4(c), the Share Limit shall be increased
by an additional forty-nine million (49,000,000) Shares.”
3.
Effective immediately, Section 4(b) of the 2020 Plan shall be, and hereby is, deleted in its entirety and replaced with the following:
“Notwithstanding any other provision of the 2020 Plan to the contrary, any Awards granted under the 2020 Plan (excluding, for this
purpose, any (i) Substitute Awards, (ii) Shares delivered in lieu of fully vested cash-denominated Awards and (iii) Awards to Non-
Employee Directors that vest on the earlier of the one year anniversary of the date of grant or the next annual meeting of stockholders
which is at least 50 weeks after the immediately preceding year’s annual meeting) shall be granted subject to a minimum vesting
period of at least twelve (12) months, such that no such Awards shall vest prior to the first anniversary of the applicable grant date
(subject to any accelerated vesting otherwise permitted by the terms of the 2020 Plan); provided that the Committee may grant any
such Awards without regard to the foregoing minimum vesting requirement with respect to a maximum of five (5) percent of the
shares of Common Stock reserved for issuance under the 2020 Plan pursuant to Section 4(a) hereof (subject to adjustment under
Section 4(c)).”
4.
Except as modified by this Amendment, all of the terms and conditions of the 2020 Plan shall remain valid and in full force and
effect.

Exhibit 10.1(b)
IN WITNESS WHEREOF, the Company has executed this Amendment to the 2020 Plan as of December 6, 2024.
    
VIATRIS INC.
By:  /s/ Andrew Enrietti         
Name: Andrew Enrietti
Title: Chief People Officer

Exhibit 19
Viatris Inc.
Global Insider Trading Policy
APPLICABILITY
This Global Insider Trading Policy (the “Policy”) applies globally to Viatris Inc. and all of its subsidiaries and Affiliates around the
world (collectively the “Company”), all of the Company’s employees, Officers, members of the Company’s Board of Directors
(“Directors”), and consultants, contractors and agents acting on behalf of the Company (collectively “Company Personnel”), as
well as Family Members and Controlled Entities of Company Personnel.
PURPOSE
This Policy prohibits Company Personnel from trading in Company Securities when aware or in possession of Material
Information about the Company that is “nonpublic,” or not yet made widely available to the investing public in a broad, non-
exclusionary manner.
This Policy also prohibits certain Company Personnel, as designated from time to time by the Chief Executive Officer or by the Securities
Compliance Committee, as defined below, from trading in Company Securities during certain specific periods (“Blackout Periods”).
KEY TERMS
Term
Definition
Affiliate
Any corporation, partnership, company, joint venture, or other legal entity which Viatris Inc.
controls or of which Viatris Inc. directly or indirectly owns more than fifty percent (50%) of its
outstanding equity interests shall be considered an “Affiliate” for purposes of this Policy.
Company Securities
All securities that the Company has issued, including common stock and options to purchase
common stock, and any other type of securities that the Company may issue, including but not
limited to, preferred shares, notes, debentures, and warrants as well as any derivative financial
instruments pertaining to the Company’s securities, whether or not issued by the Company,
such as options and forward contracts. Company Securities include any such securities issued by
Viatris Inc. or any parent, subsidiary, or subsidiary of any parent of Viatris Inc. Please refer any
questions about this definition to the Chief Legal Officer.
Controlled Entities
Any entities influenced or controlled by Company Personnel or Family Members,
including corporations, partnerships, trusts, and any entity established as, or part of, an
investment club.
Exchange Act
The Securities Exchange Act of 1934, as amended.
Page | 1

Exhibit

Family Members
Family members (including a spouse and children, children away at college, stepchildren,
grandchildren, parents, stepparents, grandparents, siblings, and in-laws), who reside with
Company Personnel, any family members who do not live in the household of Company
Personnel but whose transactions in Company Securities are directed by Company Personnel or
are subject to the influence or control of Company Personnel (such as parents or children who
consult with Company Personnel prior to making a trade in Company Securities), and any other
person who lives with or is supported by Company Personnel, including any domestic
employees.

Material Information
Information about a company that a reasonable investor would be substantially likely to
consider to be important in deciding whether or not to buy, sell or retain securities. Any
information, including event specific information, that could be expected to affect the price of
any Company Securities (whether it relates directly or indirectly to the Company or to trading in
Company Securities), whether it is positive or negative, should be considered material. Examples
of information which may be considered “material” include, but are not limited to: projections
of future earnings or losses, or other earnings guidance; merger, acquisition or divestiture
discussions; the signing of a major new material contract or the loss of a major material existing
contract; a planned securities offering; management changes; material litigation or regulatory
proceedings or significant developments related thereto; bankruptcy proceedings; a
cybersecurity breach or incident significantly impacting the Company’s information technology
systems; or significant developments related to research and development, clinical trials, or new
product opportunities. This list is not exhaustive, and there is no bright-line standard for
assessing materiality; rather, it is based on an assessment of all of the facts and circumstances at
a particular time. Please refer any questions about whether information concerning the
Company is “material” and/or “nonpublic” to the Global General Counsel.
Officers
Any “officer”, as defined in Rule 16a-1(f) promulgated under the Exchange Act , of the Company.
Securities Compliance Committee
The committee consisting of the Chief Financial Officer, Chief Legal Officer, and such other
persons as may be appointed from time to time by the Chief Executive Officer (such other
persons’ appointments may be revoked by the Chief Executive Officer at any time), having the
responsibilities set forth in this Policy. The Securities Compliance Committee may act or approve
transactions with the confirmation of at least a majority of its members.
Page | 2

Exhibit
POLICY
Trading Restrictions
•
Company Personnel with knowledge of nonpublic Material Information about the Company are not permitted to (1) buy Company
Securities (other than through the exercise of stock options or the vesting of restricted stock units the Company Personnel
received under any Company employee benefit plans, or the automatic reinvestment of dividends paid on stock pursuant to a
dividend reinvestment plan (provided that these restrictions do apply to voluntary purchases of stock resulting from additional
contributions to such a dividend reinvestment plan and to elections to participate in, or changes to existing elections under, such a
dividend reinvestment plan)); (2) sell Company Securities (including stock acquired through a dividend reinvestment plan or the
exercise of options but not including shares withheld by the Company in an amount limited to the number of shares necessary to
pay the exercise price of any option or the withholding taxes attributable to the exercise of options or to the vesting of restricted
stock units); or (3) cause others (including, but not limited to, Controlled Entities, Family Members, and friends) to, or recommend
that others, buy or sell Company Securities, or provide nonpublic Material Information to others who might be expected to trade
while in possession of such information, whether or not such Company Personnel intend to realize a profit from such “tip”. Refer to
the below information under “Trading Plans” with respect to making trades in Company Securities pursuant to a Trading Plan (as
defined below).
•
Company Personnel who in the course of working for the Company learn of nonpublic Material Information about any other
company (in particular, a company with which the Company does business or with which the Company has or is considering a
relationship, including a customer or supplier of the Company), may not (1) trade in such other company’s securities, or (2) cause
others (including, but not limited to, Controlled Entities, Family Members, and friends) to, or recommend that others, buy or sell
such company’s securities, or provide nonpublic Material Information about such company to others who might be expected to
trade while in possession of such information whether or not such Company Personnel intend to realize a profit from such “tip”, in
each case until the information becomes widely available to the investing public or is no longer material.
•
Company Personnel are responsible for making Family Members aware of this Policy. Company Personnel must treat all
transactions in Company Securities by Family Members as if the transactions were made for the account of such Company
Personnel; provided, that this Policy does not apply to trades in Company Securities by Family Members where the decision to
make the trade is made independently by a third party not controlled or influenced by Company Personnel or their Family
Members.
•
Transactions made by Controlled Entities of Company Personnel are treated for purposes of this Policy as if they were made for the
account of such Company Personnel.
•
The Company may not, directly or indirectly, buy or sell Company Securities while in possession of nonpublic Material Information
related to the Company unless the transaction otherwise complies with all applicable securities laws.
Trading Plans
•
The requirements and restrictions set forth in this Policy do not apply to transactions effected pursuant to a trading plan adopted
in accordance with all of the provisions of Rule 10b5-1 under the Exchange Act (“Rule 10b5-1”) or any successor rule (a “Trading
Plan”), provided, that: (a) the Trading Plan must be approved in advance, or pursuant to procedures and on terms established
Page | 3

Exhibit
from time to time, by the Securities Compliance Committee, and (b) as of the execution date of the Trading Plan, (i) the person
entering into the Trading Plan represents and warrants to the Company that such person is not then aware or in possession of
nonpublic Material Information about the Company, and (ii) a Blackout Period applicable to such person is not in effect. Once the
Trading Plan is approved and adopted, the person entering into the Trading Plan (a) may not cancel or make any modifications to
the Trading Plan unless approved in advance, or pursuant to procedures and on terms established from time to time, by the
Securities Compliance Committee, (b) must not exercise any influence over the amount of Company Securities to be traded, the
price at which they are to be traded, or the date of any trades and (c) must act in good faith with respect to the Trading Plan. The
Company reserves right to suspend trading under any authorized Trading Plan at any time if the Securities Compliance Committee
deems it to be in the best interest of the Company to do. Transactions otherwise prohibited under this Policy or any other
Company policy (including short sales and hedging) may not be effected through a Trading Plan. The Company does not assume
liability for any loss caused by a delay in the Company’s approval processes with respect to Trading Plans and approval of a Trading
Plan will not be deemed a representation by the Company that the Trading Plan complies with Rule 10b5-1, nor an assumption by
the Company of any liability or responsibility to the Trading Plan owner or any other party if the Trading Plan does not comply with
Rule 10b5-1.
•
This Policy does not prohibit the purchase or sale of Company Securities by the Company in accordance with a Trading Plan that
complies with all applicable securities laws. Any such Trading Plan must be approved in advance by the Securities Compliance
Committee.
Gifts and Estate Planning Transfers
•
Bona fide gifts of Company Securities are not subject to the prohibitions of this Policy, unless the donor has reason to believe that
the recipient intends to sell the Company Securities while the donor is aware or in possession of nonpublic Material Information.
Bona fide gifts are subject to the “Additional Procedures” set forth below.
•
Estate planning transfers are not subject to the prohibitions of this Policy, provided that the transferor continues to control and
directly or indirectly own such transferred Company Securities. Estate planning transfers are subject to the “Additional Procedures”
set forth below.
Prohibited Transactions
•
As a matter of Company policy, Company Personnel (and their Family Members and Controlled Entities) may not engage in the
purchase or sale of standardized or exchange-traded options involving Company Securities. Directors and Officers and their
respective designees are also subject to the Company’s Anti-Hedging and Pledging Policy, which, among other things, prohibits
them from trading in certain types of hedging instruments relating to Company Securities or otherwise engaging in any transaction
that limits or eliminates, or is designed to limit or eliminate, economic risks associated with the ownership of Company Securities.
The Company’s Anti-Hedging and Pledging Policy also prohibits Directors and Officers and their respective designees from holding
Company Securities in a margin account (other than the "cashless exercise" of stock options) or pledging Company Securities as
collateral for a loan, in each case without prior authorization by the Compensation Committee of the Company’s Board of
Directors.
•
Company Personnel (and their Family Members and Controlled Entities) are not permitted to engage in “short sales” and sales
“against the box” of Company Securities. A “short sale” is a sale of securities that the trader does not yet own. In a short sale, the
trader sells securities for a particular price, which the trader is expecting will be higher than the price at which the trader
Page | 4

Exhibit
must buy the securities to cover the sale. Short sellers only profit if the price of the securities declines. A sale “against the box” is a
sale of securities that are owned but are not delivered within twenty days or deposited in the mail for delivery within five (5) days
of the sale. A sale "against the box" has the same effect as a short sale.
•
Directors and Officers are not permitted to engage in short-term trades of purchasing and selling or selling and purchasing
Company Securities within one hundred and eighty (180) calendar days.
Termination of Service
•
This Policy continues to apply to transactions in Company Securities even after termination of service to the Company. If a person
is aware or in possession of nonpublic Material Information when their service terminates, that person may not trade in Company
Securities until that information becomes widely available to the investing public or is no longer material. The “Additional
Procedures” described below will no longer apply upon expiration of any Blackout Period applicable at the time of termination of
service.
Section 16 Filings
•
Directors and Officers have obligations to make the following filings in connection with trades of Company Securities: (a) Forms 3,
4, and 5 under Section 16(a) of the Exchange Act, and (b) Form 144 under the Securities Act of 1933, as amended. Please refer any
questions about these filing obligations to the Chief Legal Officer.
Additional Procedures
•
The Company has established additional procedures in order to assist in the administration of this Policy that apply to “Insiders”
(and to their Family Members and Controlled Entities). “Insiders” consist of Directors, Officers, and other Company Personnel
designated as such, or pursuant to procedures established from time to time, by the Securities Compliance Committee. Lists of
Insiders are maintained by the Human Relations Department (Global Total Rewards Team). Please refer any questions about any
lists of Insiders to the Chief Legal Officer.
•
Quarterly Blackout Periods
-
In order to avoid any appearance that Insiders are trading with an informational advantage relating to the Company’s financial
results, the Company has established a “Quarterly Blackout Period” during which Insiders may not trade Company Securities.
The Quarterly Blackout Period generally commences on the 15th day prior to the end of a quarterly or annual financial
reporting period and generally ends on the earlier to occur of (1) the conclusion of one full trading day on the NASDAQ stock
market or (2) 24 hours after the public issuance of a press release or other filing with the U.S. Securities and Exchange
Commission (“SEC”) announcing the Company’s quarterly or annual financial results for that reporting period.
-
The Chief Executive Officer or the Securities Compliance Committee may alter the commencement and ending of any
Quarterly Blackout Period at their discretion.
-
In addition to trades made pursuant to a Trading Plan as described above, the Securities Compliance Committee may allow an
Insider to enter into a Trading Plan or trade during a Quarterly Blackout Period only after consideration of all of the relevant
facts and circumstances concerning the matter and if it has been demonstrated to the satisfaction of the Securities Compliance
Committee that the person requesting a trade is not in possession of nonpublic Material Information.
Page | 5

Exhibit
-
Even if a Blackout Period is not in effect as specified in this Policy, Company Personnel (including their Family Members and
Controlled Entities) may not trade in Company Securities or those of another publicly traded company if they are aware of
nonpublic Material Information about the Company or any such other company, respectively.
•
Pre-Clearance Procedures
-
Certain Insiders are required to receive clearance prior to trading in Company Securities and/or implementing a Trading Plan
by submitting a Share Transaction Authorization Form to Human Relations Total Rewards and receiving approval of such
request from, or pursuant to procedures established from time to time by, the Securities Compliance Committee.
-
An approval of a transaction or Trading Plan will only be valid for the time specified in the approval and transactions or Trading
Plans not initiated/implemented within the specified time must be resubmitted through the pre-clearance procedures before
the transaction or Trading Plan may proceed. An approval of a transaction or Trading Plan submitted pursuant to these pre-
clearance procedures does not constitute legal advice and does not relieve the applicable Company Personnel of their legal
obligation to refrain from trading in Company Securities if in possession of nonpublic Material Information.
-
The Securities Compliance Committee is under no obligation to approve a transaction or Trading Plan and may determine not
to approve the transaction or Trading Plan in its discretion. Company Personnel may not inform any person if the Securities
Compliance Committee denies such Company Personnel’s request to trade in the Company Securities, as such denial may itself
be considered under this Policy to be nonpublic Material Information.
-
Discretionary purchases or sales of Company Securities by the Company must be approved in advance by the Securities
Compliance Committee.
•
Special Blackout Periods
-
The Chief Executive Officer or the Securities Compliance Committee may designate, from time to time, a “Special Blackout
Period” independent of the Quarterly Blackout Period described above during which Company Personnel that have been
designated as being subject to the Special Blackout Period may not trade Company Securities. The Chief Executive Officer or
Securities Compliance Committee may also apply such Special Blackout Period to the trading in the securities of certain other
companies, as they deem appropriate or advisable, including certain of the Company’s peers or competitors. The existence of a
Special Blackout Period will be communicated to those subject to it, but will not be announced to the Company generally,
should not be communicated to any other person, and may itself be considered under this Policy to be nonpublic Material
Information.
-
In addition to trades made pursuant to a Trading Plan as described under “Trading Plans” above, the Securities Compliance
Committee may allow an Insider to enter into a Trading Plan or trade during a Special Blackout Period only after consideration
of all of the relevant facts and circumstances concerning the matter and if it has been demonstrated to the satisfaction of the
Securities Compliance Committee that the person requesting a trade is not in possession of nonpublic Material Information.
•
Without limiting the generality of the trading restrictions described in this Policy, Quarterly Blackout Periods and Special Blackout
Periods do not apply to purchases of Company Securities through the exercise of stock options or the vesting of restricted stock
units the Company Personnel received under any Company employee benefit plans, the automatic reinvestment of
Page | 6

Exhibit
dividends paid on stock pursuant to a dividend reinvestment plan, or shares withheld by the Company in an amount limited to the
number of shares necessary to pay the exercise price of any option or the withholding taxes attributable to the exercise of options
or to the vesting of restricted stock units.
The Company reserves the right to amend or rescind this Policy, in whole or part, at any time and without notice.
Failure to comply with the terms of this Policy may subject the individual to disciplinary action, up to and including termination of
employment.
Page | 7

Exhibit
Viatris Inc.
Insider Trading Policy Additional Procedures
Note: No open market trades (i.e., purchases or sales of Viatris Inc. common stock) may be made, and no Trading Plan may be
entered into, amended or terminated by any employee, Executive or Director who possesses nonpublic Material Information,
even if a trading window is open.
As used herein:
•
“Section 16 Filers” refers to Viatris Inc. Board of Directors members and “officers” (as defined in Rule 16a-1(f) promulgated under
the Securities Exchange Act of 1934, as amended)
•
“Permanent Insiders” refers to employees of Viatris Inc. and/or all of its subsidiaries and Affiliates around the world (collectively,
the “Company”) who have been identified (and notified) as Insiders due to ongoing access to nonpublic Material Information in
connection with their roles and responsibilities (see Appendix A for list of categories of Permanent Insiders)
•
“Temporary Insiders” refers to employees of the Company who temporarily become Insiders upon receipt of financial results in
the draft Form 10-K or Form 10-Q, or as a result of involvement in a specific project
•
All other terms used but not defined herein have the same definition as included in the Company’s Global Insider Trading Policy
Pre-Clearance Procedures
Section 16 Filers must, prior to trading in Company Securities:
•
Ensure that they are not in possession of any nonpublic Material Information
•
Ensure that they are not subject to any Quarterly Blackout Period or Special Blackout Period and that the trading window is not
otherwise closed
•
Submit Share Transaction Authorization Form to Global Human Relations in advance of proposed trade or gift of Company
Securities
•
Receive email from Global Human Relations confirming approval of trade or gift by the Securities Compliance Committee and
ensure that trade or gift conforms to approval
•
Inform Global Human Relations about an approved trade or gift on or prior to the date that trade occurs
•
Provide Global Human Relations or Legal with any requested information about the trade or gift promptly, and within requested
time frames, to ensure that an appropriate and timely Form 4 filing is made
Permanent Insiders must, prior to trading in Company Securities:
•
Ensure that they are not in possession of any nonpublic Material Information
•
Ensure that they are not subject to any Quarterly Blackout Period or Special Blackout Period and that the trading window is not
otherwise closed
•
Submit Share Transaction Authorization Form to Global Human Relations in advance of proposed trade or gift of Company
Securities
•
Receive email from Global Human Relations confirming approval of trade or gift by the Securities Compliance Committee and
ensure that trade or gift conforms to approval
Temporary Insiders must, prior to trading in Company Securities:
Page | 8

Exhibit
•
Ensure that they are not in possession of any nonpublic Material Information
•
Ensure that they are not subject to any Quarterly Blackout Period or Special Blackout Period and that the trading window is not
otherwise closed
Quarterly Trading Window Open and Close Procedures
For Section 16 Filers and Permanent Insiders:
•
Trading Window Opening
o
Earlier of 24 hours or one full trading day after quarterly or annual earnings results are announced, email sent from
Legal:
Indicating that the trading window is open
Providing Share Transaction Authorization Form
Reminding when the trading window will close (i.e., 15 days prior to the end of the fiscal quarter)
Noting that Trading Plans and trade requests should be made at least 48 hours prior to trading window closing
•
Trading Window Closing
o
15 days prior to the end of the fiscal quarter, email sent from Legal alerting that trading window is closed
o
Flag placed on individual account by Global Human Relations
For Temporary Insiders:
•
Trading Window Opening
•
Earlier of 24 hours or one full trading day after quarterly or annual earnings results are announced, email sent from Legal:
o
Indicating that the trading window is open
o
Reminding when the trading window will close (i.e., distribution of next Form 10- K or 10-Q)
o
Noting that Trading Plans and trade requests should be made at least 48 hours prior to trading window closing
•
Trading Window Closing
o
Upon distribution to Temporary Insider of draft Form 10-K or 10-Q for review and comment, email from Legal
alerting that trading window is closed
o
Flag placed on individual account by Global Human Relations
Special Blackout Period Procedures
•
The Chief Executive Officer (“CEO”) or the Securities Compliance Committee may designate, from time to time, a Special Blackout
Period with respect to certain projects, acquisitions, or otherwise.
•
Insiders subject to a Special Blackout Period will be notified by email and may be asked to sign a non-disclosure agreement at the
discretion of the CEO or the Securities Compliance Committee. The existence of a Special Blackout Period will not be announced
to the Company generally, should not be communicated to any other person, and may itself be considered to be nonpublic
Material Information.
Page | 9

Exhibit
•
The list of Insiders subject to the Special Blackout Period should be presented to Global Human Relations and Legal – Securities
and Corporate governance groups for implementation.
•
Any Insiders subject to a Special Blackout Period will not be permitted to trade in Company Securities, or the securities of any
other company specified by the Securities Compliance Committee or the CEO, until the Special Blackout Period is terminated.
Trading Plan Procedures
•
Any Insider may seek to enter into a Trading Plan by coordinating with Global Human Relations.
•
Any new Trading Plan, amendment or modification to an existing Trading Plan or termination of a Trading Plan prior to its
expiration (an “early termination”) must be approved by the Securities Compliance Committee.
•
Trading Plans can only be adopted, amended or terminated during an open trading window and when an Insider is not in
possession of any nonpublic Material Information.
•
An Insider may not enter into multiple Trading Plans providing for transactions during overlapping periods except with respect to
(1) separate contracts with different broker-dealers or other agents acting on behalf of the Insider that may be treated as a single
plan, (2) one later-commencing Trading Plan under which trading is not authorized to begin until after all trades under the earlier
commencing Trading Plan are completed or expired without execution and (3) a Trading Plan providing for an eligible sell-to-
cover transaction, in each case as allowed under Rule 10b5-1.
•
If a Trading Plan does not provide for an “eligible sell-to-cover transaction” (as defined in Rule 10b5-1) and is designed to effect
the open-market purchase or sale of the total amount of securities as a single transaction, the Trading Plan may not be entered
into unless (1) the Insider entering into the Trading Plan has not, during the prior 12-month period, adopted a Trading Plan that
was designed to effect the open-market purchase or sale of the total amount of securities subject to that plan in a single
transaction and (2) such other Trading Plan in fact was eligible to receive the affirmative defense under paragraph (c)(1) of Rule
10b5-1.
•
Any Section 16 Filer entering into a Trading Plan must include in the Trading Plan a written representation that they are (i) not
aware of any material nonpublic information about the security or issuer and (ii) is adopting the Trading Plan in good faith and
not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1.
•
No purchases or sales may occur under a Trading Plan until the expiration of a “cooling-off period” consisting of the later of (i) 90
days after adoption of the Trading Plan or (ii) two business days following the disclosure of the Company’s financial results in a
Form 10-Q or Form 10-K for the completed fiscal quarter in which the Trading Plan was adopted (but not to exceed 120 days in
total).
•
Any modification or change to the amount, price or timing of the purchase or sale of the securities underlying a Trading Plan is
considered a termination of such Trading Plan and the adoption of a new Trading Plan. A Trading Plan modification, such as the
substitution or removal of a broker that is executing trades pursuant to a Trading Plan on behalf of the person, that changes the
price or date on which purchases or sales are to be executed, is considered a termination of such Trading Plan and the adoption
of a new Trading Plan.
•
Early termination of a Trading Plan is strongly discouraged, and the Securities Compliance Committee will only approve an early
termination under extenuating circumstances. In any event, a new cooling-off period must be observed before any transaction
occurs pursuant to the terms and conditions of a new Trading Plan.
•
Global Human Relations will maintain a list of all currently active Trading Plans.
Page | 10

Exhibit
Appendix A
Permanent Insider Categories
•
Senior management at grade level V02 or equivalent and above
•
Members of the Disclosure Committee and attendees at Disclosure Committee Meetings
•
Employees at grade levels V03 to V07 or equivalent who work in the following or equivalent functions:
o
Finance
Controllership
Business Development
FP&A
Internal Audit
Segment Finance Leads
Treasury
o
Investor Relations
o
Legal – Securities and Corporate Governance
o
Human Relations – Global Total Rewards
o
Business Development
o
Communications
o
Strategy
•
Executive assistants and Chiefs of Staff to direct reports of the Chief Executive Officer
Page | 11

                                            Exhibit 21
Subsidiaries as of December 31, 2024
Name
State or Country of
Organization
Agila Australasia Pty Ltd
Australia
Alphapharm Pty. Ltd.
Australia
Mylan Australia Holding Pty Ltd
Australia
Mylan Australia Pty Limited
Australia
Upjohn Australia Pty Ltd
Australia
Viatris Pty. Ltd.
Australia
Arcana Arzneimittel GmbH
Austria
Viatris Austria GmbH
Austria
Upjohn BV
Belgium
Viatris BV
Belgium
Viatris GX BV
Belgium
Viatris Healthcare NV
Viatris International Supply Point BV
Belgium
Belgium
Mylan Bermuda Ltd.
Bermuda
Viatris BH, društvo sa ograničenom odgovornošću za trgovinu i usluge
Bosnia and Herzegovina
Mylan Laboratórios Ltda
Brazil
Viatris Brasil Importadora e Distribuidora De Medicamentos Ltda
Brazil
Mylan EOOD
Bulgaria
BGP Pharma ULC
Canada
Mylan Pharmaceuticals ULC
Canada
Upjohn Canada ULC
Canada
V Investment Co.
Ge Zhi (Hainan) Health Investment Co., Ltd.
Cayman Islands
China
Ge Zhi (Hainan) Medical Technology Co., Ltd.
China
Ge Zhi Health Management Co., Ltd.
Hai Nan Ge Zhi Telemedicine Center Co., Ltd
China
China
Idorsia (Beijing) Pharmaceuticals Ltd.
Mylan Pharmaceutical Science and Technology (Shanghai) Co., Ltd.
China
China
Viatris (Hainan) Investment Co., Ltd.
China

Viatris Pharmaceutical Co., Ltd.
China
Viatris Pharmaceuticals (Dalian) Co., Ltd.
China
Viatris Hrvatska d.o.o.
Croatia
Onco Laboratories Limited
Cyprus
Viatris CZ s.r.o.
Czech Republic
Acton Pharmaceuticals, Inc.
Delaware
Alaven Pharmaceutical LLC
Delaware
ALVP Holdings, LLC
Delaware
Delcor Asset Corporation
Delaware
Denco Asset, LLC
Delaware
Deogun Manufacturing, LLC
Delaware
Dey Limited Partner LLC
Delaware
Dey, Inc.
Delaware
EMD, Inc.
Delaware
Ezio Pharma, Inc.
Delaware
Franklin Pharmaceutical LLC
Delaware
Greenstone LLC
Delaware
Madaus Inc.
Delaware
Marquis Industrial Company, LLC
Delaware
Meda Pharmaceuticals Inc.
Delaware
Mylan API Inc.
Delaware
Mylan Consumer Healthcare, Inc.
Delaware
Mylan D.T. (U.S.) Holdings, Inc.
Delaware
Mylan D.T. DPT Partner Sub, LLC
Delaware
Mylan D.T., Inc.
Delaware
Mylan Holdings Inc.
Delaware
Mylan Holdings I LLC
Delaware
Mylan Holdings II LLC
Delaware
Mylan Institutional LLC
Delaware
Mylan Investment Holdings 4 LLC
Delaware
Mylan Investment Holdings 5 LLC
Delaware
Mylan Investment Holdings 6 LLC
Delaware
Mylan Securitization LLC
Delaware
Mylan Special Investments LLC
Delaware

Mylan Special Investments II, LLC
Delaware
Mylan Special Investments III, LLC
Delaware
Mylan Special Investments IV, LLC
Delaware
Mylan Special Investments V, LLC
Delaware
Mylan Special Investments VI, LLC
Delaware
Nimes Inc.
Oyster Point Pharma, Inc.
Delaware
Delaware
Powder Street, LLC
Delaware
Prestium Pharma, Inc.
Delaware
Somerset Pharmaceuticals, Inc.
Delaware
Upjohn US 2 LLC
Delaware
Upjohn US Employment Inc.
Delaware
Upjohn US Holdings Inc.
Delaware
Upjohn Worldwide Holdings Inc.
Delaware
Utah Acquisition Holdco Inc.
Delaware
Utah Acquisition Sub Inc.
Delaware
Viatris Enterprises LLC
Viatris Holdings LLC
Viatris Overseas Inc.
Viatris Pharmaceuticals LLC
Delaware
Delaware
Delaware
Delaware
Viatris Specialty LLC
Viatris US Holdings 4 LLC
Delaware
Delaware
Viatris US Holdings 5 LLC
Viatris US Supply Hub LLC
Delaware
Delaware
Wallace Pharmaceuticals Inc.
Delaware
Mylan ApS
Denmark
Viatris ApS
Denmark
Viatris Egypt Pharmaceutical S.A.E.
Egypt
Viatris Egypt S.A.E.
Egypt
Viatris Health Care
Egypt
Agila Specialties Investments Limited
England & Wales
Generics (U.K.) Limited
England & Wales
Mylan Holdings Acquisition Limited
England & Wales
Mylan Holdings Acquisition 2 Limited
England & Wales

Mylan Holdings Ltd.
England & Wales
Mylan Pharma UK Limited
England & Wales
Mylan Products Limited
England & Wales
Upjohn UK 2 Ltd.
England & Wales
Upjohn UK Limited
England & Wales
Viatris UK Healthcare Limited
Viatris OÜ
England & Wales
Estonia
Viatris Oy
Finland
Mylan Generics France Holding S.A.S.
France
Mylan Laboratories S.A.S.
France
Viatris Healthcare
France
Viatris Medical
France
Viatris Sante
France
Viatris Up
France
Erste Madaus Beteiligungs GmbH
Germany
Madaus GmbH
Germany
MEDA Germany Holding GmbH
Germany
MEDA Manufacturing GmbH
Germany
MEDA Pharma GmbH & Co. KG
Germany
MWB Pharma GmbH
Germany
Mylan dura GmbH
Germany
Mylan Germany GmbH
Germany
Pharmazeutische Union GmbH
Germany
PharmLog Pharma Logistik GmbH
Germany
ROTTAPHARM | MADAUS GmbH
Germany
VIATRIS GmbH
Germany
Viatris Healthcare GmbH
Germany
Viatris Pharma GmbH
Germany
Zweite Madaus Beteiligungs GmbH
Germany
Mylan (Gibraltar) 4 Limited
Gibraltar
Mylan (Gibraltar) 5 Limited
Gibraltar
Mylan (Gibraltar) 6 Limited
Gibraltar
Mylan (Gibraltar) 7 Limited
Gibraltar
Mylan (Gibraltar) 8 Limited
Gibraltar

Mylan (Gibraltar) 9 Limited
Gibraltar
Viatris Hellas Pharmaceutical Limited Liability Company
Greece
Mylan Pharmaceutical Hong Kong Limited
Hong Kong
Viatris Healthcare Hong Kong Limited
Hong Kong
Mylan Hungary Kft.
Hungary
Viatris Healthcare Kft.
Hungary
Viatris Services Kft.
Hungary
Mylan Institutional Inc.
Famy Life Sciences Private Limited
Illinois
India
Mylan Laboratories Limited
India
Mylan Pharmaceuticals Private Limited
India
McDermott Laboratories Limited
Ireland
Meda Health Sales Ireland Limited
Ireland
Mylan Investments Limited
Ireland
Mylan IRE Healthcare Limited
Ireland
Mylan Ireland Investment Designated Activity Company
Ireland
Mylan Ireland Limited
Ireland
Mylan Pharma Acquisition Limited
Ireland
Mylan Pharma Group Limited
Ireland
Mylan Pharma Holdings Limited
Ireland
Mylan Pharmaceuticals Limited
Ireland
Mylan Teoranta
Ireland
Rottapharm Limited
Ireland
Upjohn Manufacturing Ireland Unlimited
Ireland
Viatris Healthcare Limited
Ireland
Viatris Limited
Ireland
Mylan S.p.A.
Italy
Viatris Italia S.r.l.
Italy
Viatris Pharma S.r.l.
Italy
Mylan Seiyaku Ltd.
Japan
Viatris Healthcare G.K
Japan
Viatris Pharmaceuticals Japan G.K.
Japan
Viatris SIA
Latvia
Viatris UAB
Lithuania

BGP Products S.à r.l.
Luxembourg
Integral S.A.
Luxembourg
Meda Pharma S.à r.l.
Luxembourg
Mylan Luxembourg 1 S.à r.l.
Luxembourg
Mylan Luxembourg 2 S.à r.l.
Luxembourg
Mylan Luxembourg 3 S.à r.l.
Luxembourg
Mylan Luxembourg 6 S.à r.l.
Luxembourg
Mylan Luxembourg 7 S.à r.l.
Luxembourg
Mylan Luxembourg S.à r.l.
Luxembourg
SIM S.A.
Luxembourg
VI Lux Newco S.à r.l.
Luxembourg
Mylan Healthcare Sdn. Bhd.
Malaysia
Pfizer Parke Davis Sdn. Bhd.
Malaysia
Viatris Sdn. Bhd.
Malaysia
MP Laboratories (Mauritius) Ltd.
Mauritius
Meda Phama, S. de R.L. de C.V.
Mexico
Meda Pharma Servicios, S. de R.L. de C.V.
Mexico
Viatris Healthcare Mexico S. de R.L. de C.V.
Mexico
Viatris Pharmaceuticals S.A.S.
Morocco
Meda Pharma B.V.
Netherlands
Mylan B.V.
Netherlands
Mylan Group B.V.
Netherlands
Mylan Healthcare B.V.
Netherlands
Mylan II B.V.
Netherlands
Upjohn Belgium B.V.
Netherlands
Upjohn EESV
Netherlands
Upjohn Europe Holdings B.V.
Netherlands
Upjohn Export B.V.
Netherlands
Upjohn Finance B.V.
Netherlands
Upjohn Global Holdings B.V.
Netherlands
Upjohn Group Holdings B.V.
Netherlands
Upjohn International Holdings B.V.
Netherlands
Upjohn Vietnam Dutch B.V.
Netherlands

Viatris Enterprise Holding B.V.
Viatris Ireland Holding B.V.
Viatris Manufacturing B.V.
Viatris Mexico Holding B.V.
Viatris Netherlands B.V.
Viatris Pharmaceuticals Holding B.V.
Viatris Philippines Holding B.V.
Viatris Turkey Holding B.V.
FamyGen Life Sciences, Inc.
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Nevada
Agila Specialties Inc.
New Jersey
BGP Products
New Zealand
Upjohn New Zealand ULC
New Zealand
Viatris Limited
New Zealand
Viatris Pharmaceuticals Pty Ltd
Nigeria
Mylan Health Management LLC
North Carolina
Viatris AS
Norway
ZpearPoint AS
Norway
MLRE LLC
Pennsylvania
Mylan Holdings Sub Inc.
Pennsylvania
Mylan Inc.
Pennsylvania
Synerx Pharma, LLC
Pennsylvania
Viatris, Inc.
Philippines
Viatris Pharmaceuticals, Inc.
Philippines
Viatris Healthcare spółka z o.o.
Poland
Viatris Trade sp. z o.o.
Poland
BGP Products, Unipessoal, LDA
Portugal
Laboratorios Anova - Produtos Farmaceuticos, LDA
Portugal
Laboratorios Delta, S.A.
Portugal
Mylan, Lda
Portugal
Viatris Healthcare, Lda.
Portugal
BGP Products S.r.l.
Romania
Mylan Pharma LLC
Russian Federation
Viatris LLC
Viatris Arabia Limited “LLC”
Viatris Arabia Regional Headquarters
Russian Federation
Saudi Arabia
Saudi Arabia

Viatris Healthcare Drustvo SA Ogranicenom Odgovornoscu Beograd
Serbia
Mylan Pharmaceuticals Pte. Ltd.
Singapore
Viatris Asia Pacific Pte Ltd.
Singapore
Viatris Private Limited
Singapore
Viatris Singapore Pte Ltd.
Singapore
Viatris Slovakia s.r.o.
Slovakia
Viatris, farmacevtsko podjetje, d.o.o.
Slovenia
Meda Pharma South Africa (Pty) Limited
South Africa
Mylan Pharmaceuticals (Pty) Ltd.
South Africa
SCP Pharmaceuticals (Proprietary) Limited
South Africa
Upjohn South Africa Proprietary Limited
South Africa
Viatris Healthcare (Pty) Ltd
South Africa
Viatris South Africa (Proprietary) Limited
South Africa
Viatris Korea
South Korea
Fundacion Viatris para la Salud
Spain
Meda Pharma, S.L.
Spain
Viatris Pharmaceuticals, S.L.
Spain
Abbex AB
Sweden
BGP Products AB
Sweden
Ipex AB
Sweden
Ipex Medical AB
Sweden
Meda AB
Sweden
Meda OTC AB
Sweden
Mylan AB
Sweden
Mylan Sweden Holdings AB
Sweden
Recip AB
Sweden
Scandinavian Pharmaceuticals-Generics AB
Sweden
Viatris AB
Sweden
BGP Products Operations GmbH
Switzerland
MEDA Pharma GmbH
Switzerland
MEDA Pharmaceuticals Switzerland GmbH
Switzerland
Mylan Holdings GmbH
Switzerland

Mylan Pharma GmbH
Viatris Innovation GmbH
Switzerland
Switzerland
Viatris Pharma GmbH
Switzerland
Mylan (Taiwan) Limited
Taiwan
Viatris Pharmaceutical Company Limited
Taiwan
DPT Laboratories, Ltd.
Texas
Mylan Bertek Pharmaceuticals Inc.
Texas
Viatris Healthcare (Thailand) Limited
Thailand
Viatris Pharmaceuticals (Thailand) Limited
Thailand
Viatris (Thailand) Limited
Thailand
Viatris Ilaclari Limited Sirketi
Turkey
Meda Pharmaceuticals MEA FZ-LLC
United Arab Emirates
Mylan FZ-LLC
United Arab Emirates
Viatris Middle East FZ-LLC
United Arab Emirates
American Triumvirate Insurance Company
Vermont
Mylan International Holdings, Inc.
Vermont
Viatris Vietnam Limited Company
Vietnam
MP AIR, Inc.
West Virginia
Mylan Pharmaceuticals Inc.
West Virginia
Mylan Technologies, Inc.
West Virginia
Mylan ASI LLC
Wyoming

Exhibit 22
List of Subsidiary Guarantors and Issuers of Guaranteed Securities
As of December 31, 2024, Viatris Inc., a Delaware corporation (“Viatris”), Mylan Inc., a Pennsylvania corporation
(“Mylan Inc.”), and Mylan II B.V., a company incorporated under the laws of the Netherlands (“Mylan II”), were the guarantors
of the 3.950% Senior Notes due 2026 and 5.250% Senior Notes due 2046 issued by Utah Acquisition Sub Inc., a Delaware
corporation (“Utah”).
As of December 31, 2024, Viatris, Utah and Mylan II were the guarantors of the 4.550% Senior Notes due 2028, 5.400%
Senior Notes due 2043 and 5.200% Senior Notes due 2048 issued by Mylan Inc.
As of December 31, 2024, Utah, Mylan Inc. and Mylan II were the guarantors of the 2.300% Senior Notes due 2027,
2.700% Senior Notes due 2030, 3.850% Senior Notes due 2040 and 4.000% Senior Notes due 2050 issued by Viatris.

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement Nos. 333-250845 and 333-270274 on Form S-8, Registration
Statement No. 333-264760 on Form S-3ASR and Registration Statement No. 333-264762 on Form S-3 of our reports dated February 27,
2025, relating to the consolidated financial statements of Viatris Inc. (the “Company”) and the effectiveness of the Company's internal
control over financial reporting appearing in this Annual Report on Form 10-K for the year ended December 31, 2024.
/s/ Deloitte & Touche LLP
Pittsburgh, Pennsylvania
February 27, 2025

EXHIBIT 31.1
Certification of Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
I, Scott A. Smith, certify that:
1.
I have reviewed this Form 10-K of Viatris Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
/s/ Scott A. Smith
Scott A. Smith
Chief Executive Officer
(Principal Executive Officer)
Date: February 27, 2025

EXHIBIT 31.2
Certification of Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
I, Theodora Mistras, certify that:
1.
I have reviewed this Form 10-K of Viatris Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
/s/ THEODORA MISTRAS
Theodora Mistras
Chief Financial Officer
(Principal Financial Officer)
Date: February 27, 2025

EXHIBIT 32
CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER AND
PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Form 10-K of Viatris Inc. (the “Company”) for the year ended December 31, 2024 as filed with the Securities and Exchange
Commission on the date hereof (the “Report”), each of the undersigned, in the capacities and on the date indicated below, hereby certifies pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:
1.
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Company.
Date: February 27, 2025
/s/ SCOTT A. SMITH
Scott A. Smith
Chief Executive Officer
(Principal Executive Officer)
 
/s/ THEODORA MISTRAS
Theodora Mistras
Chief Financial Officer
(Principal Financial Officer)
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and
furnished to the Securities and Exchange Commission or its staff upon request.
The foregoing certification is being furnished in accordance with Securities and Exchange Commission Release No.  34-47551 and shall not be
considered filed as part of the Form 10-K.