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Viatris (VTRS) to Report Q3 Earnings: What's in the Cards?

Viatris' (VTRS) Q3 earnings might have gained from the solid performance of Viagra, Dymista, and the Thrombosis portfolio.

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This story originally appeared on Zacks

Viatris VTRS, a global healthcare company, is scheduled to report third-quarter 2021 results on Nov 8.

- Zacks

The company was formed in November 2020 through the combination of Mylan and Upjohn. It beat earnings estimates in each of the trailing four quarters, the average surprise being 14.2%. In the last reported quarter, the company beat expectations by 11.36%.

Factors to Consider

Viatris reports segment information based on markets and geography. Following the formation of Viatris, the company changed its reportable segments from North America, Europe and the Rest of the World to Developed Markets, Emerging Markets, JANZ (Japan, Australia, and New Zealand), and Greater China.

Net Sales from Developed markets came in at $2.6 billion, up 33% in the previous quarter driven by the addition of the Upjohn business. This trend is likely to have continued in the to-be-reported quarter. 

Sales from Emerging Markets came in at $870 million in the previous quarter and are likely to have increased in the to-be-reported quarter, driven by net sales from the Upjohn business and new product sales.

Sales from JANZ came in at $501 million in the previous quarter. The third quarter is likely to have seen a sequential increase.

Sales from Greater China markets have also likely witnessed growth owing to the Upjohn business. Sales in the previous quarter came in at $550.3 million and the third quarter has most likely witnessed sequential growth.

Brands performed better than management expectations in the previous quarter, driven by products such as Viagra, Dymista, and the Thrombosis portfolio.  A similar or better performance has likely been witnessed by the company in the to-be-reported quarter. Generics, which includes diversified product forms such as extended-release oral solids, injectables, transdermals and topicals, performed better than expectations in the second quarter, driven primarily by COVID-19 related products. This trend is likely to have continued in the third quarter too.

In July, Viatris and Biocon Biologics Ltd. announced that the FDA approved Semglee (insulin glargine-yfgn) injection as the first interchangeable biosimilar product under the 351(k) regulatory pathway.

Last year, Viatris announced a widespread global restructuring program in order to achieve synergies. The restructuring initiative incorporates and expands on the restructuring program announced by Mylan N.V. earlier in 2020, as part of its business transformation efforts. The company expects to optimize its commercial capabilities and enabling functions, and close, downsize or divest up to 13 manufacturing facilities globally that are deemed to be no longer viable either due to surplus capacity, challenging market dynamics or a shift in product portfolio toward more complex products.  Last quarter, management stated that it is on track to realize approximately $500 million of cost synergies this year and to achieve at least $1 billion of cost synergies by 2023. Further updates on the same are expected on the call.

Share Price Performance

Viatris’ stock has lost 26.3% in the year so far compared with the industry’s decline of 38.6%.

 

Zacks Investment ResearchImage Source: Zacks Investment Research

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Viatris this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you will see below. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP for Viatris is 0.00%.

Zacks Rank: The company currently carries a Zacks Rank #3.

Stocks to Consider

Here are a few stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season.

Regeneron Pharmaceuticals REGN has an Earnings ESP of +8.78% and a Zacks Rank #1.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Intercept ICPT has an Earnings ESP of +29.91% and a Zacks Rank #3.

Zoetis ZTS has an Earnings ESP of +5.46% and a Zacks Rank #3.

 



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