Viatris Inc. (NASDAQ:VTRS) reported its financial results for the third quarter of 2026, revealing adjusted earnings per share of $0.71. This figure exceeded the Zacks Consensus Estimate of $0.64 and marked a 6% increase from the $0.67 reported in the same period last year. The improvement in earnings was largely attributed to an enhanced adjusted gross margin.
Despite the earnings beat, Viatris experienced a slight year-over-year decline in total revenues, which fell by 0.3% to $3.75 billion, missing the Zacks Consensus Estimate of $3.78 billion. The company faced ongoing supply chain issues and competitive pressures in various markets, although a 14.2% increase in net sales in Greater China provided some relief.
Detailed Sales Performance
Viatris reported a 0.3% decline in total net sales to $3.73 billion, down from $3.75 billion in the previous year’s quarter. Other revenues, however, increased to $14.8 million from $12.4 million. The company’s revenue stability was supported by new product launches and strong performance in North America and Greater China. Nevertheless, supply disruptions in Europe and Emerging Markets, coupled with competitive challenges, negatively impacted the top line.
Regional Sales Breakdown
In Developed Markets, net sales decreased by 1.8% to $2.22 billion, failing to meet the Zacks Consensus Estimate of $2.23 billion. Sales in Emerging Markets also dropped by 7.2% to $529.1 million, which was below the $565.37 million estimate. The Japan, Australia, and New Zealand (JANZ) region generated $287.1 million in sales, representing a 6.3% decline from $306.3 million and falling short of the $291.56 million estimate.
Greater China emerged as the strongest performing region, with sales climbing to $702.6 million from $615.2 million, surpassing the consensus estimate of $675.37 million. This growth reflects the continued strength of Viatris’ brand portfolio in the region.
Product Category Insights
Brand sales increased by 1% to $2.46 billion, driven by gains in Greater China and Emerging Markets. Notable performers included Lipitor, with sales up 14.1% to $451.9 million, Norvasc, which rose 5.8% to $190.2 million, and Zoloft, up 18% to $78.8 million. Creon also saw a 5.4% increase to $98.1 million.
Conversely, Lyrica sales fell by 9.7% to $114.2 million, Viagra declined by 10.6% to $94.1 million, and EpiPen Auto-Injectors slipped by 0.9% to $155.8 million. Influvac sales experienced a significant drop of 27.8% to $90.6 million.
Generics sales decreased by 2.9% to $1.27 billion. While new product launches and growth in certain North American products provided some support, they were offset by supply constraints in Europe and Emerging Markets. New products contributed approximately $115 million in quarterly revenues.
Cost Management and Margin Expansion
Viatris achieved a 3.4% increase in adjusted gross profit to $2.18 billion, with the adjusted gross margin expanding to 58% from 56%. The adjusted cost of sales decreased by 5% to $1.57 billion, reflecting improved cost performance despite relatively flat revenues.
Adjusted research and development expenses fell by 5% to $225.7 million, while adjusted selling, general, and administrative expenses rose slightly by 0.6% to $825.8 million. Adjusted EBITDA increased by 3.6% to $1.20 billion, with management attributing this to momentum in higher-margin businesses and continued cost discipline.
Updated Guidance and Strategic Developments
Viatris revised its full-year revenue guidance to a range of $14.70-$14.90 billion, compared to the previous range of $14.55-$14.95 billion. The midpoint of the guidance increased to $14.80 billion from $14.75 billion, although the upper end was reduced. Adjusted earnings per share are now projected at $2.56-$2.63, up from the previous guidance of $2.45-$2.59. Adjusted EBITDA guidance was also raised to $4.45-$4.55 billion from $4.30-$4.50 billion. The company targets approximately $450 million in new product revenues for 2026, excluding contributions from the planned acquisition of Pacira BioSciences.
In October, Viatris entered into a definitive agreement to acquire Pacira BioSciences for $36.50 per share in cash, representing a $1.65 billion equity value. The transaction is expected to close by the end of November 2026.
Despite these positive developments, supply concerns persist. Viatris suspended manufacturing at its Nashik, India, facility following an FDA inspection classification, estimating a $100 million revenue impact in the third quarter and anticipating a similar impact in the fourth quarter. Production is expected to resume in the first quarter of 2027.
Overall, Viatris’ third-quarter performance was mixed, with an earnings beat but revenue challenges. The company’s focus on higher-margin businesses and cost management is evident in the improved adjusted gross margin. However, supply constraints and competitive pressures continue to pose challenges to growth.
Footnotes:
- Viatris reported third-quarter 2026 adjusted earnings per share of 71 cents, surpassing the Zacks Consensus Estimate of 64 cents. Source.
- Total revenues of $3.75 billion slipped 0.3% year over year and missed the Zacks Consensus Estimate of $3.78 billion. Source.
- Viatris now expects full-year revenues of $14.70-$14.90 billion compared with the previous $14.55-$14.95 billion range. Source.
- In October, Viatris entered into a definitive agreement to acquire Pacira BioSciences for $36.50 per share in cash. Source.
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