Viatris Inc.

Good morning and welcome to the VHRS Q4 and full year 2023 earnings 2024 guidance call. All participants will be in a listen-only mode. Should you need assistance, please say no to a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on your touch-tone telephones. To withdraw your questions, you may press star and two. Also note, today's event is being recorded. At this time, I'd like to turn the floor over to Bill Cebulski, Head of Capital Markets. Please go ahead.

Good morning, everyone. Welcome to our Q4 2023 earnings call. With us today is our CEO, Scott Smith, President Rajiv Malik, CFO Sanjeev Narua, and CFO-elect, Doretta Miestras. During today's call, we will be making forward-looking statements on a number of matters, including our financial guidance for 2024 and various strategic initiatives. These statements are subject to risk and uncertainties. We will also be referring to certain actual and projected non-GAAP financial measures. Please refer to today's slide presentation and our SEC filings for more information, including reconciliations of those non-GAAP measures to the most directly comparable GAAP measures. When discussing 2023 actual results, we will be making certain comparisons to 2022 results on a divestiture adjusted operational basis, which excludes the impact of foreign currency rates and also excludes the results from the divested biosimilars business and proportionate results from the divestitures that closed in 2023 from the 2022 period. When discussing our expectations for 2024, we will be making certain comparisons to 2023 results on a divestiture adjusted operational basis, which excludes the impact of foreign currency rates and also excludes the results of the divestitures that closed in 23 from the 2023 period. With that, I'll hand the call over to our CEO, Scott Smith.

Good morning, everyone. 2023 was an outstanding year for Beatrice in which we delivered strong operational results, streamlined the company, and finished the year with our third consecutive quarter of operational revenue growth. I am pleased to say that as we begin 2024, I could not be more excited about the future ahead. We are already executing on our vision for our next chapter. We continue to generate strong free cash flows. This provides us with the flexibility to balance returning capital with shareholders through share repurchases and dividends with continuing to fuel our base business and make strategic investments in future growth. As I've said, in addition to continuing to develop the three core therapeutic areas that we previously identified, ophthalmology, dermatology, and GI, we are also going to be opportunistic in seeking out assets that fit our company well and have the potential to contribute significantly for future revenue growth. Today's announcement that we've entered into a global research and development collaboration with Idorsia is a great example of this approach in action. We are bringing in two late-stage potential blockbuster assets with long-dated patent protection, and we are connecting IDORSI's proven, highly productive drug development team and innovation engine with our own strong existing infrastructure experience. We believe that together we will be able to execute on the potential of these global assets and any future assets as we work to deliver on our goal of building a more durable, predictable portfolio on the foundation of our strong-based business. We believe that Salada Grill and Sanera Mod can become meaningful components of Vietris' business over the long term. I'll talk more about the deal in a moment, but first, 2023. We finished the year strong with full year results in line operationally with our 2023 adjusted guidance. Importantly, our fourth quarter results represent our third consecutive quarter of operational revenue growth, giving us good momentum going into the new year. We expect that momentum to continue into 2024 and beyond. In 2023, we delivered total revenues of approximately $15.4 billion, adjusted EBITDA of approximately $5.1 billion, and free cash flow of approximately $2.4 billion. We have already completed certain of our divestitures and are on track to complete all remaining divestitures by mid-year, subject to final regulatory approvals. Turning to 2024, today we are sharing our full-year guidance ranges for total revenue, adjusted EBITDA, free cash flow, and adjusted earnings per share. Adjusted EPS will increasingly become an important metric to reflect earnings growth and balance capital allocation for us in 2024 and beyond. From a capital allocation perspective, we continue to pay down debt and expect to reach our long-term gross leverage target this year. We are maintaining our dividend for 2024. We completed 250 million share repurposes earlier this year. Our board of directors has provided us with an additional 1 billion share repurpose authorization to use at the appropriate time, bringing our total authorization to $2 billion, of which we have used 500 million and have 1.5 billion in authorization remaining. And earlier today, we announced a significant global research and development collaboration. Diving further into our IDORSEA announcement, we are very excited about this new partnership. The agreement combines Viatris' financial strength and worldwide operational infrastructure with a portfolio of novel assets that we believe will provide the foundation for accelerated top-line growth. Viatris will receive exclusive global development and commercialization rights to two assets, Vodagro, a potential life-saving, self-administered medicine for patients at risk of recurring heart attack, and Saneramod, a novel immunology asset that has the potential to be a first-in-class oral therapy for the treatment of SLE, with potential broad application across multiple other autoimmune diseases. The global collaboration also includes future optionality to expand the collaboration with additional pipeline assets in a transaction that minimizes near-term P&L impact and provides significant upside following Phase III readouts and regulatory approvals. The addition of Saladagrow builds on Beatrice's existing global cardiovascular franchise and her deep knowledge and expertise in self-administered medicine for acute, life-threatening conditions. Naramod has the potential to be a cornerstone asset in Beatrice's immunology platform, an area in which I personally and our chief R&D officer, Philippe Martin, and others at Beatrice have deep development and commercialization expertise. The agreement also highlights VHS's capability to identify, vet, and secure high-growth assets in areas of unmet medical need and do it in a way that reinforces our disciplined approach to capital allocation. We will be hosting an R&D event March 27th in New York City to discuss the collaboration with Idorsia and other elements of the company's pipeline in more depth. Before I move on, I want to take this opportunity to welcome Doretta Mistras, who will become our new Chief Financial Officer on March 1st. Doretta joined us in January as CFO-elect. She has been spending valuable time getting to know the company even better than she already did as a former company advisor. I'm pleased to have Doretta coming on board for what I expect to be an extremely successful next phase for Beatrice. She'll share a few comments later in the call. But now, let me turn the call over to Rajiv as we continue our discussion of our strong fourth quarter and full year 2023 results and our expectations for 2024.