Viatris Inc.

was primarily driven by stronger operating performance and favorable working capital dynamics. Turning to capital allocation, through early August, we have deployed approximately $1.4 billion of capital, consistent with our balanced capital allocation strategy, including the return of approximately $550 million of capital to shareholders. through dividends and approximately $270 million of share purchases. Additionally, we continued to strengthen our balance sheet by repaying approximately $900 million of debt that matured in June while refinancing the remaining balance. As a result, we ended the quarter with a gross leverage ratio of approximately 2.9 times below the midpoint of our long-term target range of 2.8 to 3.2 times. For the remainder of the year, we expect to have approximately $1.6 billion in deployable capital. This includes approximately $380 million of pre-tax proceeds from the sale of our EquiStake and Biocon. Now a few comments on our updated financial guidance and phasing for the remainder of the year. Based primarily on our strong first half performance and our continued confidence in the momentum of our businesses, We are raising our 2026 financial guidance for all key metrics. The midpoint of each of our revised guidance ranges represents expected operational growth of approximately 2% for total revenues, 5% for adjusted EBITDA, and 7% for adjusted EPS versus the prior year. To provide further visibility into the segments, our updated four-year guidance for total revenues reflects the following expectations compared to the prior year. Low double-digit growth in Greater China, developed markets roughly flat with North America declining slightly, low single-digit growth in emerging markets, and low single-digit decline in JANs. In addition, this takes into account the following expected second half dynamics. Moderation in Greater China growth due to the implementation of a procurement policy change expected to negatively impact volumes in our hospital chain. Additional competitive pressure in developed markets, including for Brena and Uxella in North America. And additional expected supply disruptions, primarily resulting from our NOSIC facility and primarily impacting our low margin oral solid dose generics in emerging markets and certain generic products in Europe. We currently anticipate the impact of supply disruptions to be between $100 and $150 million to total revenues in the second half of 2026. Lastly, as Scott mentioned, we reached an agreement to divest our global product rights for Tier VIA. The transaction is expected to close in the second half of 2026, subject to customary closing conditions. The anticipated impact of this transaction has been fully considered in our updated 2026 financial guidance. Turning to phasing for the remainder of the year, total revenues are expected to be weighted to the second half at approximately 51% or full year out. Adjusted EBITDA and adjusted EPS are now expected to be slightly lower in the second half, and free cash flow is still expected to be more heavily weighted to the second half. In closing, we are pleased with our performance through the first half of the year, reflecting strong execution against our strategy. As we look ahead, we believe our diversified portfolio, strong commercial execution, and financial flexibility positions us well to deliver sustainable revenue and earnings growth. With that, I'll hand it back to the operator to begin the Q&A.

We will now begin the question and answer session. To ask a question, you may press star and then one on your touchtone phones. If you are using a speakerphone, we do ask that you please pick up your handset before pressing the keys to ensure the best sound quality. To withdraw your questions, you may press star and two. Again, that is star and then one to join the question queue. We'll pause momentarily to assemble the roster. Our first question today comes from Ash Verma from UBS. Please go ahead with your question.

Okay, yeah, thanks for taking our questions. Congrats on the progress. Maybe just on China, so great to see solid operational growth here that you've seen in the first two quarters. I know you've noted e-commerce has been a big source of growth. Just help us understand what percentage of your revenue right now is coming from e-commerce, retail or the government channel, whereas I know you mentioned some headwinds on the procurement in the hospital channel. So if you can just give us a little bit of a breakdown, that'll be helpful. And then secondly, just to help us understand the guidance. So at the midpoint of 2026 guide, you're raising revenue by 50 million, but EBITDA by 100 million. Is this because you're expecting some very high margin products to launch or is there a chance that your reiterated OPEX guides come towards the lower end? Thanks.

Good. So thank you. Good morning, Ashton. Thank you for the questions. Let me make some comments. I'll kick it over to Paul for some more detail. You know, relative to China, a really strong quarter for China. Our commercial team, I believe, is doing an outstanding job. I think we've got great leadership there. We've made the right investments in China and are participating very, very well in healthcare in China. There's a real focus right now in China on healthcare, quality of life. There's a sizable aging middle class, et cetera, which really allows us to participate strongly in China. We're very, very pleased with the progress there. And we continue to see what I believe is real and strong demand for the iconic brands that we have in China, which is really nice to see. Relative to the guidance, very pleased based on the strength of the first half and the strength that we see throughout the rest of the year, being able to raise guidance on all our key financial metrics. I think we're in really good shape as we sit here in August in 26 and are moving towards the second half of 26 and 27 and feel very, very good about the strength of the business. Now, I'll kick it over to Paul to comment specifically on China and also the guidance.

Yeah, thanks.

Thanks, Ash.

So as far as China goes, I think it's important to note that we have seen growth across all channels in the market, not just the retail platform or e-commerce. However, e-commerce is between 10% and 15% of the overall business, which is specifically why, I know you didn't ask, but in the second half of the year, we expect some decline in the hospital channel growth. as a result of the implementation of the policy. But we do expect, I think in first quarter we said it was too early. We do expect the growth overall to continue similar to the trajectory we saw in the first half. It's just going to be muted because of the policy issue. As far as the guidance goes, so we ran ahead of expectations for the first half, both revenue and EBITDA. Adjusted EBITDA was approximately twice the growth or the increase in expectation over revenue. And a lot of that is because of the cost containment measures are on track and even ahead of schedule in certain instances. However, in the back half of the year, We do see the challenges on the additional competition that we have in the North America products, which are high margin, and the China business, which is high margin, kind of muting that. But if you also think about the revenue challenges from Noshik that we've talked about the back half of the year, there are lower margin generic products that are impacted. So the revenue component of the guidance, we had to mute a little bit because of that. whereas EBITDA ran pretty strong in the first half of the year and even with the challenges in the second half of the year we expect that that will for the full year you know exceed the midpoint to where we we put it compared to revenue.

Paul hit on I think an issue that I think it's good for us to expand on a little bit and that's the enterprise-wide strategic review which we've engaged in taking a look at the company making sure we got the resources in the right place and You know, we're executing that. We're delivering on that. And from that, we're seeing real even leverage here for the second quarter in a row. So we're very pleased with the outcome of that particular enterprise-wide strategic review.

Our next question comes from Omer Ratif from Evercore. Please go ahead with your question.

Hi, guys. Thanks for taking my question. I just wanted to ask a three-part question on Saladogrel, if I may. First, At what point in the patient's journey post an event are they initiating an oral antiplatelet? I understand in the trial, if you're on an active arm, you'll be on salatogrel perhaps right away. But at what point, once you're in the hospital, after the index event, are you initiating an oral antiplatelet, number one? Which sort of leads me to my second part, which is, I know what the half-life is, but what's the off time where no more platelet inhibition is in place? And I ask because If I go by your EC50, which is, I think, 14 nanomolars, it looks like the 16-meg dose doesn't get to that EC50 until 8 to 10 hours post the dosing. And then finally, for patients that do end up needing a more intensive procedure like a CABG, I guess, how is that being handled in the trial in terms of how they're taking out the blood thinner or the timing post-initial psilocybin administration? Thank you.

Before we get to answer the technicalities of your question, first of all, good morning and thank you for the question. We're really excited about Solatogrel. We expect a readout when we get into the first half of 27 on this. We've enrolled a lot of patients. Philippe can give you some context on that. I think we've been very, very pleased with the execution and enrollment and progress of this particular trial. You know, we see, you know, if positive, we see real blockbuster opportunities for Saladagrow here and a major expansion. I say the same thing for Saneramod. There's a lot of attention on Saladagrow, which is great, very unique product, but we're also really excited about the progress execution and the potential of Saneramod as well. So, really appreciate the question. Love talking about new interesting products that can help drive our revenue future. Let me kick it over to Philippe to give you some context.

Thanks, Scott, and thank you, Merck, for the question. So patients that are on the study, the vast majority are on dual anti-fletlet therapy to begin with. So they're already on an oral clopidogrel for the most part is what we expect to see. So that while a cilatogrel is added on top of that. Now, for those that are not necessarily on it, they could be post-treatment. Within 24 hours or so, the effect of Celadabrel is no longer present. Therefore, treatment with a normal P2Y12 could be initiated at that point in time, should it be required. With regards to the To the offset, as I said, I think we know that within six to seven hours, we get to peak platelet inhibition, 80% platelet inhibition after 15 minutes, more than 80% after 15 minutes is what we've seen in phase two. The offset is, as I said, within 24 hours, psilocybin is no longer present. Now, in terms of the cabbage, I think cabbage can be initiated at any point should it be required. Should it be deemed required, it's the current guidelines. There's no need to wait if it is deemed urgent. But that being said, again, within post-eight hours, cabbage can be initiated. Post 8-hour post-silateral injection, cabbage can be initiated safely. Again, it is not a requirement to wait.

Our next question comes from Matt Delator from Goldman Sachs. Please go ahead with your question.

Great. Good morning and congrats on the progress. Maybe a couple on the branded pipeline, starting with fast-acting meloxicam or FAM. Could you comment on any recent interactions with the FCA regarding the label being opioid sparing? And then just remind us how this asset is factored into your longer-term guidance targets and the degree to which success could represent upside to those, either the base or bull case. And then on salatagrel, could you just remind us what magnitude of benefit you believe we need to see? I think you've disclosed in the past the study is powered for 20% benefit. So I guess what's the minimum benefit that could drive meaningful uptake? And then when we see the data, will there be any subtleties that we need to keep in mind, you know, given it is a composite endpoint, for instance, does it matter which of the components is driving the benefit? It seems like they're all fairly serious, but I just wanted to confirm. Thank you.

Thanks, Matt. First of all, on Meloxicam fast-acting, We think it's going to be a significant contributor to our pipeline, to our revenue, to the U.S. business between now and 2030. I'm not getting into specific numbers at this point in time. We don't have a label yet, and there's some other things that we really need to look at. We see it being a very significant contributor in the U.S. to high-margin branded portfolio in the United States. Philippe can talk a little bit about the label and the progression of discussions with the FDA and Salada Grillin. Then maybe we can loop back to Corinne to talk a little bit about the potential she sees in slide roughly.

Yeah, thank you. So we look out to Meloxicam first and the progress of the review currently ongoing with FBA. We are reaching mid-cycle. Things are progressing as planned. FBA is very engaged. We're answering all the queries that they have. and expect to get approval towards the end of the year at the time of the DUFA. In terms of the labeling negotiations, there's interaction on the clinical data with the agency. Labeling negotiations won't start until October, November timeframe. So this is when really we will start talking about the exact language around opioid sparing. As I previously mentioned, this was heavily discussed with the agency during phase two and during the putting the protocol together for phase three. And we've followed every recommendation that the agency had for us in order to be able to get this language included in the label section. Where in the label section, in exactly what language? I can't tell you as of today, but we should get a better idea around the October to November timers.

And we see a lot of excitement about this product. We are getting very positive feedback from KOLs. Definitely, the results of the phase three program and notably on the opioid spraying effect is seen as a real positive. So in terms of potential that we see for fast-acting meloxicam spam, as you call it. The potential is large. You know that pain is, and acute pain is a broad market with about 80 million patients suffering from acute pain every year. And unfortunately, half of those patients already are dependent on opioids for pain relief. So we see that this product has the right profile. It is generating a lot of interest and we can imagine that with a market activity that could potentially go beyond three years as we are finding more patents, we could reach up to $500 million in big sales with these assets and that will contribute meaningfully to our long-term guidance.

On your question on silatogrel, so the actual benefit that the study is sized for is approximately a 20% risk reduction. We have discussed this obviously heavily with our KOLs and investigators. The minimal bar is much lower than that in the mind of the investigators. and KOL. I think if we were to be able to show a risk closer than 15%, that would be very much acceptable and the lowest bar commercially to get this drug to patients. So again, the study is overpowered for that 20% risk reduction. And that's really the minimum bar we're seeking at this point in time. In terms of the endpoint itself, as you know, the endpoint is ranked according to the outcome and according to their clinical importance. What we expect to see is that Sedatogrel is blunting acute MI from happening if injected at the right time. And we also expect to see that Sedatogrel will reduced the severity of VMI that these patients are expecting, making them a lot more manageable for the patient with a lot less sequelae over time, which leads to patients being in the hospital a lot less for a much shorter amount of time as well, so adds a lot of benefits to the patient and to the payers of the law.

And these post-MI patients are very, very expensive for the healthcare system. They're very difficult to manage over time. And so being able to improve any particular outcome for a patient has not only tremendous benefits to that patient, but also on the healthcare system overall. So that's why, you know, part of the excitement that we feel about salatagrel being a unique drug in this space.

Our next question comes from Glenn Santangelo from Barclays. Please go ahead with your question.

Good morning and thanks for taking my question. Hey Scott, I just had a couple of follow-up questions. I wanted to talk about this China dynamic. It seems like you're describing a situation that maybe has some durability in those commercial efforts beyond just 2026 because it seems like it's that market that gave you the ability to sort of raise guidance despite the fire-related disruptions you're sort of calling out in the back half of the year. I know it's a little bit too early to comment on 27, but I was kind of curious if you could comment on the durability of the strength there and then, you know, should these fire-related disruptions be contained to just 2026? And then, you know, my follow-up was on meloxicam. You know, it seems like, you know, meloxicam and the presbyopia solution are the two meaningful approvals you have left this year. At your analyst day, you sort of highlighted that value-added medicines pipeline. would add about 1% to the growth algorithm. And in a previous question, you just sort of highlighted that you think it can be a meaningful contributor. And I'm just kind of curious, when I think about that value-added pipeline, are you still thinking about it as a 1% contributor to the growth algorithm, or do you have maybe greater expectations at this point? Thanks so much.

Thank you very much for the question. Yeah, we're really pleased with the performance in China. There seems to be some good durability. We had good performance last year. We see good performance this year. I think we see some of the investments that we've made in China in terms of the channels that we're going to, reaching to the patients, trying to restructure our business there, trying to make sure that we're over-investing in some of the demand for some of these iconic brands. There seems to be good durability there. The only thing you worry about in China is there's policy changes at times, and sometimes you see them coming and sometimes not. Sometimes they're inconsistently applied across provinces and things. We try and, you know, obviously work with the government in China to deliver the best healthcare we can. But China seems to me to be a good engine for us moving forward. And I think it's not only China that allowed us to sort of, you know, beat and raise, you know, to have a good outlook for this particular year. You know, there was some good strength in a number of other businesses as well. We see good strength in the and the value-added medicines that we're bringing in the United States and other places. So we're very pleased with the business overall. You raised NASHIC and just to put that in perspective for you, we currently operate 26 manufacturing facilities around the world. We have inspections and observations and things all the time. Specific to NASHIC, as I said in my prepared remarks, we're communicating with the FDA, we're working closely with the external experts and initiated Thank you. Thank you. We don't expect this to be long term affecting the business now.

Yeah, maybe if I could just add one thing, too, from a expectation perspective, you know, we do see the impact being larger in Q3 and moderating a bit in Q4. So I think as Scott has made, we expect this, you know, supply disruption to be shorter term in nature and, you know, hopefully by exiting the end of the year into the beginning of next year, we will have gotten ourselves past it. That's our expectation.

And, Nash, just to characterize it, it's a lot of smaller products. It's mainly emerging markets, jams. There's no one product there that's more than $20 million in revenue. So it's a lot of little pieces. And, again, as we remediate and get things online, we expect to see relatively short-term and intermittent products. I think you had a question around Meloxicam as well.

Yeah, maybe I can address this again, Glenn. Hi. Good morning. Just to say that, again, we remain very optimistic about Meloxicam. We're expecting the date at the end of the year, so of course we'll Wait for the label to be available to finalize our pricing strategy and value proposition. But everything we are seeing so far and the feedback that we get from the market is very positive. So we believe that there is room for another asset that is fast acting, that will have a meaningful role in acute pain. and really expand the utilization of NSAIDs that are, you know, with PESA cumulopsic and having a very well-characterized reliability and safety profile. So we're looking forward to launching this product. It will be a branded asset. We will deploy a specialty cell source and I'm looking forward to, you know, talking about our launch at the next call.

And I think one of the reasons we're so excited is not only the strength of the data relative to competitive set out there, but also the real market need. And I think Corinne hit on that earlier. The need for non-opioid solutions for patients with acute pain is really, really, really large, particularly in the US. And so we're excited about the profile. We're excited about the product. But we're also excited that it's going to fill a really significant need in the US.

Our next question comes from Chris Schott from JP Morgan. Please go ahead with your question.

Hi, this is Ethan on for Chris. Thanks for taking our questions. Just starting off, what are your latest thoughts on the M&A environment? Are you still seeing a good amount of assets in the marketplace or has that changed at all over the past couple of months? And then secondly, just thoughts on the latest headlines for potential U.S. generic tariffs and maybe how you're thinking about the potential impact to Vietris specifically. Thank you.

I think the M&A environment is obviously pretty active right now. It's a good environment. There's a lot of things going on. Certainly, there's a lot of assets still out there. Certainly, I still get a lot of inbound. I talk about getting inbound virtually every day, sometimes multiple times a day. We're looking hard at business development, adding things in market, accretive things to the portfolio. We're going to be disciplined, though. We're going to try and find the right assets, the ones that we can be good owners of at the right price to bring them in. We're looking at a lot of things. We're excited about our ability to use our capital not only to pay back to shareholders, dividends, share buybacks, but also really build a portfolio of assets. And again, we're sort of focused on in-market accretive assets right now. And there's a lot of things out there that we're looking at for sure. The second part was tariffs. Yes, I mean, it's difficult for me to comment. We're still gathering information. The administration has not released Any official policy details at all here? It's important to note that I think we're in a pretty good position regardless of how this goes, if it goes, relative to tariffs. We currently have eight manufacturing R&D distribution sites in the United States. Over half our U.S. revenues are from products that are manifested in the U.S. We're planning as we move forward to manufacture higher margin products like complex generics, transdermal products, value-added products and such in the United States. We'll always work to partner with the administration as we understand the details of what they're trying to do here from a policy perspective and work with them to help better health care for Americans.

Our next question comes from Dennis Ding from Jeffries. Please go ahead with your question.

Hey, good morning. Thanks for taking my questions. I have two pipeline questions. So one on lupus and one on salinogrel. So first, in Naramide, you know, I appreciate that the Phase III is enriching for high IFN1. And we've seen with other lupus programs like Iberamide and Safnello that, you know, SRI4 is consistently higher in this population versus low interferon1. but when I look at your phase two, this relationship breaks apart. It seems like the four milligram dose was a clear outlier on both SRI-4 and also SLID-I. So what is it about the prior data that really gives you confidence going into that readout outside of this high, you know, this high interferon one relationship? And then question number two on salatogrel, You know, I believe the CBO2 was initially 14,000 patients, but then you upside the trial by almost 50% to 25,000. So I want to understand what went into that decision to add 11,000 patients and, you know, what are you seeing on blinded event rates? Is it tracking with what you initially planned or are they lower than expected? Thanks so much.

Please. Thank you for the question. So with regard to Cenarimod and the Interferon-1 signature, in phase two, we saw that the four milligram dose, which was the highest dose tested, was the dose that showed clinically meaningful improvement and a nominally statistically significant p-value. that was in the total population. And then in that four milligram arm dose, we had approximately 50%, actually 45% of patients that were interferon one high. These interferon one high patients responded better than the interferon one low with a delta versus placebo of about 24%, which is one of the highest delta reported for this population. So, and we also saw, which is what is so much expected, that the interferon 1 high patients were the patients that were the most active in terms of their disease. And this is the kind of patients we are actively enrolling in phase three. We are ensuring that we're getting patients with higher disease activity and higher interferon 1 high expression. Our goal was to get to approximately 70% of patients that were interferon were high in phase three and we have exceeded that goal in both studies. So that's the data from our phase two. And then we've also, just to finish on this, implemented a number of things in phase three that were different than phase two, obviously, that we believe will lead to Better outcomes. First of all, the primary endpoint is at one year and not at six months, which will lead to, I believe, continued and better strength of the data as we've seen continued improvement in patients exposed to one-year scenario mode. And then another important part I would mention is the fact that because the endpoint is at one year, we're able to implement storage sparing Mandatory steroid sparing for patients that will lead to further differentiation versus placebo. So that's our strategy. We feel good about the data that we've generated so far, and we're actively cleaning that data so that we can report our top-line results in 2027, early 2027. And then there's another question on...

It's a lot about power. patient enrollment.

The protocol always contemplated enrolling up to 21,000 patients. That's where we were. It was anywhere between 14,000 to 21,000. We are seeing an event rate that is what we expected. That being said, what we're trying to do is to enroll patients all the way to the end. By that I mean all the way to the time point where we get all the needed events that we need. We're not gonna stop and wait for the events to happen. We will continue to enroll through that. And we may need a little bit more than 21,000 patients. That remains to be determined. But we will continue to enroll through that. What's important is that we believe we'll get the events we need by the end of the year so that we can early next year so that we can get data in the first half of 2027.

Our next question comes from Jason Gerberry from Bank of America. Please go ahead with your question.

Hey, guys. Thanks for taking my questions. Just two for me. Just wanted to follow up on the China policy question because I didn't quite understand. So it sounds like Despite the policy change, you're still bullish on the market overall. Perhaps there might be a little bit of fluidity with the situation with the comment about the variability at the province levels. But I guess I'm just wondering, you know, I look at the back half of the year, sort of an implied low single-digit growth. Is that sort of what we should think about, you know, first half, the carryover into next year? Does that create tough comps for 2027 is ultimately what I'm trying to get at. And then on Saladagrel, just curious, Once you complete enrollment towards the end of the year, you know, for the primary endpoint, I think, you know, you only need to assess the patient for like two to seven days to determine the impact on mortality or the other measures. And so, can you just remind me the different lag factors that go into once you complete enrollment to actually, you know, the time to which you can generate top line data? Thanks.

So just on China first, again, we're very, very pleased with the business. It's running very strong. We think it's going to – obviously, we're going to have strong results in 26, and we believe 27 and beyond as well. There's good momentum there. It's a very important part of our company going forward. Good growth. In terms of policy, it's not finalized at this point in time. There's discussions with the government around different policy executions. You know, so we're being a little bit careful to try and understand that policy. We will be in a position, I think, in November to really talk about the policy, what it looks like, what any changes, if we think it's going to impact our business or not, what that's going to look like. And so it's just an active discussion right now with the government. We're not exactly sure how that policy is going to be executed. And again, policy in China tends to get executed in kind of a spotty way and, you know, different execution in different provinces and things. So We're taking a look at it. We're in active discussions. We think it could have some effect in the second half of the year, and we'll have a much better view on the policy execution when we get to November.

Yeah, and let me just add, you know, we've built all that into the forecast, right? So, I would say, from my perspective, we are hopeful we'll continue to see momentum and grow and so on, beyond 26. But as of right now, you know, we don't see the 16, 17% continued growth, right? And so we do expect growth, but it will moderate back down. That's our current expectation based on everything we know.

Right. And I have nothing to add to this, just to say that, you know, and you mentioned it, the implementation of this new policy, which is a new program, that concerns only public hospitals will be done at the provincial level. So there are 31 provinces in China, and some of our products that have high volume visualization may be impacted, but who will know more as those 31 provinces adopt this policy, and definitely by the end of the year we'll have a much better picture of the impact. But again, we are confident, as Paul said, that we're going to go through this policy implementation.

And then regarding your questions on your question on ciladabrel. So yes, you are correct that the primary endpoint is at seven days for this and within two days of injections for the other types of MIs. That being said, the secondary endpoint are at 30 days. So we need to get that data at 30 days. And then remember, this is a very sizable study with 45 countries involved and close to 900 sites. So we need to make sure that we gather all that data and clean all that data, which is why we're talking about the first half data. We take some time to clean all that and bring that back, right?

Very large study, right? Large global study. So it takes some time to clean and prepare the data properly.

Our next question comes from David Amselum from Piper Sandler. Please go ahead with your question.

Thanks. So two for me. First on Cenarimod, my understanding is that background Ben-Lista is allowed in the trial. So wondering about the thought process there, and is it stratified or the patient stratified for background Benlista? So that's number one. And then switching gears to complex generics, wanted to ask about the hormonal patch business with the acceleration following the removal of the box warnings. Wanted to get your thoughts on How long you think that could be a relatively limited competition market for you and how big of a growth driver for generics and developed markets, namely the U.S., that could be in 27? Thank you.

So on your question about belimumab, yes, belimumab is considered a standard of care and therefore is included in the medications that can be given in combination with Sinerimod as part of this trial. That being said, we don't expect a significant number of patients that will be on Belibumab as part of the study. We expect it to be closer to 5% of the patients, so this will have limited potential impact on the data. The randomization ensures balance and mitigation bias. It is the effect that you could see with Belimimab, feeling both placebo and the treatment off. And then, it's important to generate this data just from a pure safety and clinical value to show that the efficacy of sinamoids is seen on top of Belimumab or Benlista, and that it is safe to co-administer these two drugs. So that's part of the reason why we also included it in the clinical trial. And then should we see an effect? I mean, we have sensitivity analysis that we would be looking at. Remember, we have two identical studies This allows us to pull data across both studies to determine whether an effect that we would see is real or not. So that gives us more robustness behind that data. But overall, I would say that we do not expect this to affect the study in any way.

And so regarding your question on Estradale's patch, we have seen over the last year, over the past year, a strong increase in demand. for estradiol patch for hormone replacement therapy. And you're right, the first reason for this is the market extension, which is due to the FDA removing a black box warning at the end of last year. And we believe that this market expansion is here to stay. Now there is a secondary factor, a bit less important, but worth mentioning as well, which is the increased use of GLP-1s. that has an impact on the utilization of patches because it's been demonstrated that there is a contraindication with the use of not only oral contraceptive but oral HLT products as well. So we benefit from those two factors. Now we have a leading position in the manufacturing of patches. We have our facility which is based out of Vermont that produces high-tech, next-generation transdermal systems. And we continue to increase capacity there. We continue to drive efficiencies. So we will continue to be a major leader in this market as we see the extension forward.

Yeah, and just to finalize the thought around Estradiol, we do see it as an opportunity. Again, less about additional competition from my perspective. It is that demand has blown up. We're currently, as a data point, being able to fulfill about 70% of orders. So just as the demand is there, we're trying to ramp up production to meet that demand. And I think there's opportunity there. And as Corinne said, we are looking at our own plant, we're looking externally to see what's available to meet that demand in the future.

And certainly this is a place that we're willing to invest to go forward to meet what we see as sort of unprecedented increases in demand for the reasons that Corinne was saying. So I think a real nice area of opportunity for us and one that we're going to invest in and likely to be a good driver of our revenues at least through now to 2030.

And our next question is a follow-up question from Umar Rafat from Evercore. Please go ahead with your question.

Hi, guys. Thanks for taking my follow-up. I wanted to touch up on something I meant to ask early on as well. I think it kind of came up on a question a few moments ago as well. So, Philippe, I think you mentioned the original sample size was 14,000 to 21,000. and I think Clint Trials has it having gone from 14 to 25K, even though in practice what's happened is it's gone from 14 to 21K to 25 to 35K. Could you just speak to that, if that was informed more by powering or more by sort of you're just letting it continue to enroll so you just keep getting the events faster?

That's exactly what the latter, right, which is that we are letting it enroll This is a sizable study. We spent quite a bit of time and energy and money, quite frankly, in this study, so we want to leverage it as best we can. Getting that data will be important for positioning of the drug and therefore we believe it is important to let it run as close to the time point where we're going to blocked the data, which will mean that we'll have more events that we need eventually, right? But for the timing of the primary endpoint, that allows us to get there faster than if we were to stop now and wait for the events to occur, right? So that's that strategy that you see in play. These numbers that we put on clinicaltrials.gov are to give us flexibility in how many patients we wanna enroll. I don't wanna have to change it 15 times So we change it once, leave a window, and then we'll end up somewhere there.

And with that, we'll be concluding today's question and answer session. I'd like to turn the floor back over to Scott Smith, CEO, for closing remarks.

Thank you very much. And let me close with just three thoughts here. First, our second quarter performance and indeed sort of the strong first half results reinforce that the strategy we outlined earlier in the year is working. Second, we're entering an important time period for our company. Over the coming quarters, we expect multiple regulatory milestones, important product launches, and continued progress across our pipeline. Finally, we're building a stronger company. We're improving the quality of our earnings, strengthening our operating model, sharpening our portfolio, and investing behind the opportunities we believe will drive sustainable long-term growth. We're excited about the opportunities ahead, confident in our ability to execute, and believe Viatris is well positioned to deliver sustainable long-term value to shareholders. Thank you very much for your attention this morning.

And with that, we'll be concluding today's conference call and presentation. We thank you for joining. You may now disconnect your lines.