Viatris Inc.

Good morning, everyone, and welcome to the Vietris Q4 and full year 2024 earnings call. All participants will be in a listen-only mode. Should you need assistance, please signal 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 one on a touch-tone telephone. To withdraw your questions, you may press star and two. Please also note today's event is being recorded. At this time, I'd like to turn the conference call over to Bill Zabluski, head of capital markets. Sir, please go ahead.

Good morning, everyone. Welcome to our Q4 2024 earnings call. With us today is our CEO, Scott Smith, CFO, Doretta Mestris, Chief R&D Officer, Philippe Martine, and Chief Commercial Officer, Karine Lagoff. During today's call, we'll be making forward-looking statements on a number of matters, including our financial guidance for 2025 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 2024 actual or reported results, we will be making certain comparisons to 2023 actual or reported results on a divestiture adjusted operational basis, which excludes the impact of foreign currency rates and also excludes the proportionate results from the divestitures that closed in 2024 and 2023 from the 2023 period. When discussing our expectations for 2025, we will be making certain comparisons to 2024 actual or reported results on a divestiture adjusted operational basis, which excludes the impact of foreign currency rates and also excludes the proportionate results from the divestitures that closed in 2024 from the 2024 period. We may refer to those as changes on an operational basis. With that, I'll hand the call over to our CEO, Scott Smith.

Good morning, everyone. 2024 was an important year for Viatress across all three of our strategic pillars. We saw growth in our base business, increasing our new product revenues to $582 million. We completed our planned divestitures to simplify and streamline our organizations. We returned approximately $825 million in capital to shareholders through dividends and share repurchases. We retired approximately $3.7 billion of debt and achieved our long-term gross leverage target. And we expanded our innovative portfolio with three new products, Saladagro, Scenarimod, and Soda Vaglosin, or Soda, to help build our pipeline of the future. We finished 2024 with a full-year revenue growth of 2%, on a divestiture adjusted operational basis in line with our guidance. On a reported basis, we had total revenues of approximately $14.7 billion, adjusted EBITDA of approximately $4.7 billion, and adjusted EPS of $2.65 per share. Free cash flow was approximately $2.6 billion, excluding divestiture related taxes and transaction costs. All in all, a very good year. Before we dive into our 2025 priorities, I want to give you an update on the remediation efforts at our facility in Indore, India, and the estimated impact for this year. The FDA inspected the facility in June. Following the inspection, we immediately began implementing a comprehensive remediation plan to address the FDA feedback. The necessary corrective actions are well underway, including, but not limited to, related personnel actions, and we have engaged independent third-party subject matter experts to support our efforts. I assure you we take these matters very seriously, as well as our commitment to quality across our entire network. We recently traveled to Indoor to review the progress. I can tell you we are more than halfway through our efforts. We expect to be completed in a few months, at which time we anticipate asking the FDA to conduct a re-inspection of the facility. We received a warning letter and import alert from the FDA at the end of December. The import alert affects 11 actively distributed products in the U.S., including lenalidomide. The FDA made exceptions subject to certain conditions for four products based on shortage concerns. We recently finished interactions with the FDA about potential additional product exceptions, and we do not expect any additional exceptions will be granted at this time. While product continues to be shipped from the facility to markets outside the U.S., we currently anticipate some impact in other markets, including parts of our ARV business and emerging markets, and to select generic products in Europe. We currently estimate the negative impact on 2025 total revenues to be approximately $500 million and on 2025 adjusted EBITDA to be approximately $385 million. To meet the needs of the patients we serve, we are working closely with our customers to mitigate any supply disruptions, including potential site transfers and third-party arrangements. Turning our attention to our 2025 priorities, we are very focused on continuing to drive our base business with strong execution across commercial markets, and we are expecting several notable new product launches this year. From a pipeline perspective, we have 10 unique molecules in phase three clinical development across our portfolio, and we are expecting six phase three readouts this year, including from WalkScan, which is being developed as a potential opioid sparing treatment in acute pain. In addition, we expect to achieve several important late stage development milestones for our three innovative assets, Saladagrow, Cenarimod, and Soda. To preserve the ongoing continuity of the development programs for Salada Grill and Cenarimod, we have updated certain terms of our original global research and development collaboration with Eidosia. Under the updated terms, we will receive the rights to additional territories for Cenarimod, including important markets in Asia, a reduction in certain contingent milestone payments, which will help improve the long-term economics of these assets, and certain other considerations in exchange for assuming a portion of IDORSI as remaining development cost obligation. We continue to be excited by the promise of these two assets and we'll take full control over the development to help ensure development timelines remain on track. From a capital allocation perspective, we said that we expect our approach to be equally balanced between capital return and business investment over the next three to five years. And then any given year, we may prioritize one over the other. In 2025, we are prioritizing returning capital to shareholders. We will continue to support our dividend and are targeting at least $500 million to $650 million in share repurchases this year. As we progress through the year, we expect to have additional flexibility. And as a reminder, we still have $1.5 billion in share repurchase authorization available to us. From a business development perspective, we will target accretive regional opportunities that leverage our unique commercial and R&D infrastructure and capabilities. Finally, we have begun an enterprise-wide initiative to review our global infrastructure and identify additional cost savings. We expect this program to deliver OpEx savings in 2026 and beyond. Later this year, we'll hold an investor day to talk about our long-term outlook, how we are advancing our base and innovative pipelines, and the progress we are making on our enterprise-wide review. Overall, I'm proud of what we accomplished in 2024, and I'm very confident in our future. We have our arms around the situation at Endor. In 2025, we have significant opportunity to drive our base business, execute on our pipeline, return capital to shareholders, and position ourselves for growth in 2026 and beyond. Now I'll turn it over to Philippe to share an update on how we are advancing our pipeline. Philippe?