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Viatris Inc VTRS

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Morningstar’s Analysis

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Viatris: Less-Than-Ideal Start Out of the Gates, With Lower Guidance and Deeper Trough

Soo Romanoff Equity Analyst

Analyst Note

| Soo Romanoff |

The newly formed management team of the recently announced combination of Mylan and Upjohn, Viatris, launched its first investor call to revise guidance lower. The call was presented to establish a baseline, but the various moving parts, including lower fiscal 2021 expectations before reporting normalized fourth-quarter 2020 results and its investor day both next week gave us pause. The interesting timing of guidance was likely to let off some pressure ahead of the events next week and management’s interest to de-emphasize the deeper trough of the business, fiscal 2020, while possibly attempting to turn attention to its longer-term prospects. We view this attempted pivot to be a tough sell when granular pipeline or restructuring details are not shared. We will take a closer look at our projections but do not anticipate a material change to our fair value estimate of $25 or no-moat rating at this time.

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Company Profile

Business Description

The new entity will largely be led by Pfizer executives and will be registered in Delaware. The new entity is anticipated to leverage the stand-alone Mylan infrastructure consisting of roughly 55 manufacturing and research and development facilities and that were largely acquired, including Matrix Laboratories and the generics business of Germany-based Merck KGaA. The combined portfolio will consist of the mature Upjohn drugs with notably better economics and Mylan's portfolio of more than 7,500 generic, specialty, and over-the-counter active ingredients and medicines, including EpiPen (treatment for anaphylaxis acquired through the Merck KGaA transaction). Unlike its generic peers, the company has made the most progress on the biosimilar front.

1000 Mylan Boulevard
Canonsburg, PA, 15317
T +1 724 514-1800
Sector Healthcare
Industry Drug Manufacturers - Specialty & Generic
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2021
Stock Type Slow Growth
Employees 45,000