Viatris (NASDAQ: VTRS) returns to profit as sales rise in Q1 2026
Filing Impact
Filing Sentiment
Form Type
10-Q
Viatris Inc. reported a return to profitability for the quarter ended March 31, 2026. Total revenues rose to $3.52 billion from $3.25 billion a year earlier, driven by higher net sales across Developed Markets and Greater China. Net earnings reached $176.4 million, compared with a prior-year net loss of $3.04 billion that was heavily affected by goodwill impairment.
Basic and diluted earnings per share were $0.15 versus a loss of $2.55 per share in the prior-year period. Operating cash flow was $388.3 million, and cash and cash equivalents increased to $1.80 billion while long-term debt remained around $12.4 billion. The company maintained a quarterly dividend of $0.12 per share.
Viatris launched a major restructuring program following its enterprise-wide strategic review, targeting a workforce reduction of up to 10% and expecting total pre-tax charges of $700–$850 million over roughly three years; it recorded $77.9 million of related charges this quarter. A fire at its Nashik, India facility led to $71.9 million in charges and a temporary production halt, with full operations expected to resume in July 2026. The company also closed the sale of its Biocon Biologics convertible preferred stake for $400 million in cash plus $415 million in Biocon equity shares.
Positive
- None.
Negative
- None.
Insights
Viatris returns to profit, restructures operations, and absorbs a plant fire hit.
Viatris delivered Q1 2026 revenues of $3.52 billion, up from $3.25 billion, with net earnings of $176.4 million versus a large prior-year loss largely driven by a $2.94 billion goodwill impairment in Q1 2025. Underlying gross profit was essentially flat, reflecting ongoing cost pressures and heavy amortization.
The company is executing an enterprise-wide restructuring aimed at a workforce reduction of up to 10%, with expected total pre-tax charges of $700–$850 million over about three years. In Q1, it booked $77.9 million of restructuring charges and ended with $69.8 million accrued, signaling that most financial impact is still ahead while targeted savings are not quantified here.
A fire at the Nashik, India facility resulted in $71.9 million in inventory and asset write-offs and manufacturing variances recorded in cost of sales. The company expects full operations to resume by July 2026 and notes potential insurance recoveries, but the net economic impact will depend on actual reimbursements and operational ramp-up. The sale of its $815.0 million Biocon Biologics CCPS position for $400.0 million in cash plus $415.0 million in Biocon equity shares simplified the balance sheet and shifted exposure into liquid listed shares, while contingent consideration tied to the Idorsia transaction increased to $392.0 million, underscoring ongoing pipeline-related obligations.
Key Figures
Total revenues: $3,517.0 million
Net earnings: $176.4 million
Diluted EPS: $0.15 per share
+5 more
8 metrics
Total revenues
$3,517.0 million
Three months ended March 31, 2026
Net earnings
$176.4 million
Three months ended March 31, 2026
Diluted EPS
$0.15 per share
Three months ended March 31, 2026
Net cash from operating activities
$388.3 million
Three months ended March 31, 2026
Cash and cash equivalents
$1,804.2 million
Balance at March 31, 2026
Long-term debt
$12,413.5 million
Balance at March 31, 2026
Expected restructuring charges
$700–$850 million
Total pre-tax charges for 2026 restructuring program
Nashik fire charges
$71.9 million
Costs recorded in cost of sales in Q1 2026
Key Terms
Adjusted EBITDA, Receivables Facility, Net investment hedges, Contingent consideration, +1 more
5 terms
Adjusted EBITDA financial
"Adjusted EBITDA | Non-GAAP financial measure that the Company believes is appropriate"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
Receivables Facility financial
"Receivables Facility | The accounts receivable facility for up to an aggregate amount of $600 million"
Net investment hedges financial
"The Company may hedge the foreign currency risk associated with certain net investment positions"
A net investment hedge is a financial step a company takes to protect the reported value of its ownership in foreign subsidiaries from swings in exchange rates. By using derivatives or foreign‑currency borrowings to offset translation gains or losses, the company reduces how much its balance sheet and reported equity jump around when currencies move — like locking a price tag on a foreign store so its value in the home currency stays steadier for investors.
Contingent consideration financial
"As of March 31, 2026 the Company had a contingent consideration liability of $392.0 million"
Contingent consideration is an additional payment agreed when one company buys another that will be paid later only if specific future targets are met, such as revenue, profit, or regulatory milestones. It matters to investors because it shifts risk between buyer and seller and affects the acquiring company's future cash flow and reported value — like promising a bonus after results are proven.
Enterprise-wide strategic review financial
"initiated an EWSR to enable the Company to build a more focused, efficient and future-ready organization"
An enterprise-wide strategic review is a comprehensive assessment of a whole organization's goals, operations, assets and markets to decide what to keep, change, invest in or divest. For investors it matters because the review can lead to major decisions—like cutting costs, selling units, refocusing products or shifting capital—that directly affect future earnings, risk and the company’s long-term value; think of it as a full house audit and roadmap for where management will steer the business.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended March 31, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from _____________to___________
Commission file number 001-39695
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices)
(724 ) 514-1800
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class: | Trading Symbol(s) | Name of Each Exchange on Which Registered: | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☑ | Accelerated filer | ☐ | ||||||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
| Emerging growth company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ | ||||||||||||||||||||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
The number of shares of common stock outstanding, par value $0.01 1,164,552,654 .
Table of Contents
VIATRIS INC. AND SUBSIDIARIES
INDEX TO FORM 10-Q
For the Quarterly Period Ended
March 31, 2026
| Page | ||||||||
| PART I — FINANCIAL INFORMATION | ||||||||
| ITEM 1. | Condensed Consolidated Financial Statements (unaudited) | |||||||
Condensed Consolidated Statements of Operations — Three Months Ended March 31, 2026 and 2025 | 6 | |||||||
Condensed Consolidated Statements of Comprehensive Earnings (Loss) — Three Months Ended March 31, 2026 and 2025 | 7 | |||||||
Condensed Consolidated Balance Sheets — March 31, 2026 and December 31, 2025 | 8 | |||||||
Condensed Consolidated Statements of Equity — Three Months Ended March 31, 2026 and 2025 | 9 | |||||||
Condensed Consolidated Statements of Cash Flows — Three Months Ended March 31, 2026 and 2025 | 10 | |||||||
Notes to Condensed Consolidated Financial Statements | 11 | |||||||
| ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 43 | ||||||
| ITEM 3. | Quantitative and Qualitative Disclosures About Market Risk | 58 | ||||||
| ITEM 4. | Controls and Procedures | 59 | ||||||
| PART II — OTHER INFORMATION | ||||||||
| ITEM 1. | Legal Proceedings | 59 | ||||||
| ITEM 1A. | Risk Factors | 59 | ||||||
| ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 59 | ||||||
| ITEM 5. | Other Information | 59 | ||||||
| ITEM 6. | Exhibits | 60 | ||||||
SIGNATURES | 61 | |||||||
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Glossary of Defined Terms
Unless the context requires otherwise, references to “Viatris,” “the Company,” “we,” “us” or “our” in this Form 10-Q (defined below) refer to Viatris Inc. and its subsidiaries. We also have used several other terms in this Form 10-Q, most of which are explained or defined below. Some amounts in this Form 10-Q may not add due to rounding.
| 2003 LTIP | Mylan N.V. Amended and Restated 2003 Long-Term Incentive Plan | ||||
| 2020 Incentive Plan | Viatris Inc. 2020 Stock Incentive Plan | ||||
2025 Form 10-K | Viatris’ annual report on Form 10-K for the fiscal year ended December 31, 2025 | ||||
2024 Revolving Facility | The $3.5 billion revolving facility dated as of September 27, 2024, by and among Viatris, certain lenders and issuing banks from time to time party thereto and Bank of America, N.A., as administrative agent | ||||
| Adjusted EBITDA | Non-GAAP financial measure that the Company believes is appropriate to provide information to investors - EBITDA (defined below) is further adjusted for share-based compensation expense, litigation settlements, and other contingencies, net, gain (loss) on divestitures of businesses, impairment of long-lived assets and goodwill, restructuring, acquisition and divestitures-related and other special items | ||||
Adjusted EPS | Adjusted net earnings per diluted share | ||||
| ANDA | Abbreviated New Drug Application | ||||
| AOCE | Accumulated other comprehensive earnings | ||||
| API | Active pharmaceutical ingredients | ||||
| ARV | Antiretroviral medicines | ||||
| ASC | Accounting Standards Codification | ||||
| ASU | Accounting Standards Update | ||||
| Biocon | Biocon Limited | ||||
| Biocon Biologics | Biocon Biologics Limited, a majority owned subsidiary of Biocon | ||||
| Business Combination Agreement | Business Combination Agreement, dated as of July 29, 2019, as amended from time to time, among Viatris, Mylan, Pfizer and certain of their affiliates | ||||
CAMT | U.S. corporate alternative minimum tax | ||||
| CCPS | Compulsory convertible preferred shares | ||||
| Code | The U.S. Internal Revenue Code of 1986, as amended | ||||
CODM | Chief operating decision maker | ||||
| Combination | Refers to Mylan combining with Pfizer's Upjohn Business in a Reverse Morris Trust transaction to form Viatris on November 16, 2020 | ||||
| Commercial Paper Program | The $1.65 billion unsecured commercial paper program entered into as of November 16, 2020 by Viatris, as issuer, Mylan Inc., Utah Acquisition Sub Inc. and Mylan II B.V., as guarantors, and certain dealers from time to time | ||||
| Developed Markets segment | Viatris’ business segment that includes our operations primarily in the following markets: North America and Europe | ||||
| Distribution | Pfizer's distribution to Pfizer stockholders of all the issued and outstanding shares of Upjohn Inc. | ||||
| EBITDA | Non-GAAP financial measure that the Company believes is appropriate to provide information to investors - U.S. GAAP net earnings (loss) adjusted for income tax provision (benefit), interest expense and depreciation and amortization | ||||
| EDPA | U.S. District Court for the Eastern District of Pennsylvania | ||||
| Emerging Markets segment | Viatris’ business segment that includes, but is not limited to, our operations primarily in the following markets: Parts of Asia, the Middle East, South and Central America, Africa, and Eastern Europe | ||||
EPS | Earnings per share | ||||
| EU | European Union | ||||
EWSR | Enterprise-wide strategic review | ||||
| Exchange Act | Securities Exchange Act of 1934, as amended | ||||
| FASB | Financial Accounting Standards Board | ||||
| FDA | U.S. Food and Drug Administration | ||||
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| Form 10-Q | This quarterly report on Form 10-Q for the quarterly period ended March 31, 2026 | ||||
| GA Depot | Long-acting glatiramer acetate depot product | ||||
| Global Systemically Important Banks | Financial institutions that are considered systemically important by the Financial Stability Board | ||||
| Greater China segment | Viatris’ business segment that includes our operations primarily in the following markets: mainland China, Taiwan and Hong Kong | ||||
| Idorsia | Idorsia Pharmaceuticals Ltd. | ||||
Idorsia Transaction | The transaction between Viatris and Idorsia pursuant to which Viatris acquired the development programs and certain personnel related to selatogrel and cenerimod from Idorsia in exchange for an upfront payment to Idorsia of $350 million, potential development and regulatory milestone payments, certain contingent payments of tiered sales milestones, as well as potential contingent tiered sales royalties | ||||
| IPR&D | In-process research and development | ||||
| IRS | U.S. Internal Revenue Service | ||||
| IT | Information technology | ||||
| JANZ segment | Viatris’ business segment that includes our operations in the following markets: Japan, Australia and New Zealand | ||||
| Mapi | Mapi Pharma Ltd. | ||||
| Maximum Leverage Ratio | The maximum consolidated leverage ratio financial covenant requiring maintenance of a maximum ratio of consolidated total indebtedness as of the end of any quarter to consolidated EBITDA for the trailing four quarters as defined in the related credit agreements from time to time | ||||
| MDL | Multidistrict litigation | ||||
| Mylan | Mylan N.V. and its subsidiaries | ||||
| Mylan Inc. U.S. Dollar Notes | The 4.550% Senior Notes due 2028, 5.400% Senior Notes due 2043 and 5.200% Senior Notes due 2048 issued by Mylan Inc., which are fully and unconditionally guaranteed on a senior unsecured basis by Mylan II B.V., Viatris Inc. and Utah Acquisition Sub Inc. | ||||
| NASDAQ | The NASDAQ Stock Market | ||||
| NDA | New Drug Application | ||||
| OTC | Over-the-counter | ||||
OTC Business | Viatris’ OTC business that the Company divested to Cooper Consumer Health SAS in July 2024, including two manufacturing sites located in Merignac, France, and Confienza, Italy, and an R&D site in Monza, Italy. This excludes the Company’s rights for Viagra®, Dymista® (which, in certain limited markets, are sold as OTC products), and select OTC products in certain markets. | ||||
| Oyster Point | Oyster Point Pharma, Inc. | ||||
| Pfizer | Pfizer Inc. | ||||
| PSUs | Performance awards | ||||
| R&D | Research and development | ||||
| Receivables Facility | The accounts receivable facility for up to an aggregate amount of $600 million entered into in May 2025 and expiring in April 2028 | ||||
| Registered Upjohn Notes | The 2.300% Senior Notes due 2027, 2.700% Senior Notes due 2030, 3.850% Senior Notes due 2040 and 4.000% Senior Notes due 2050 originally issued on October 29, 2021 registered with the SEC in exchange for the corresponding Unregistered Upjohn U.S. Dollar Notes in a similar aggregate principal amount and with terms substantially identical to the corresponding Unregistered Upjohn U.S. Dollar Notes and fully and unconditionally guaranteed by Mylan Inc., Mylan II B.V. and Utah Acquisition Sub Inc. | ||||
| Respiratory Delivery Platform | Pfizer’s proprietary dry powder inhaler delivery platform | ||||
| Restricted Stock Awards | The Company’s nonvested restricted stock and restricted stock unit awards, including PSUs | ||||
| RICO | Racketeer Influenced and Corrupt Organizations Act | ||||
| SDNY | U.S. District Court for the Southern District of New York | ||||
| SEC | U.S. Securities and Exchange Commission | ||||
| Securities Act | Securities Act of 1933, as amended | ||||
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| Senior U.S. Dollar Notes | The Upjohn U.S. Dollar Notes, the Utah U.S. Dollar Notes and the Mylan Inc. U.S. Dollar Notes, collectively | ||||
| Separation and Distribution Agreement | Separation and Distribution Agreement between Viatris and Pfizer, dated as of July 29, 2019, as amended from time to time | ||||
| SG&A | Selling, general and administrative expenses | ||||
| Teva | Teva Pharmaceutical Industries Ltd. | ||||
| TSA | Transition services agreements, including related distribution services | ||||
| U.K. | United Kingdom | ||||
| U.S. | United States | ||||
| U.S. GAAP | Accounting principles generally accepted in the U.S. | ||||
| Unregistered Upjohn U.S. Dollar Notes | The 2.300% Senior Notes due 2027, 2.700% Senior Notes due 2030, 3.850% Senior Notes due 2040 and 4.000% Senior Notes due 2050 originally issued on June 22, 2020 by Upjohn Inc. (now Viatris Inc.) in a private offering exempt from the registration requirements of the Securities Act and fully and unconditionally guaranteed by Mylan Inc., Mylan II B.V. and Utah Acquisition Sub Inc. | ||||
| Upjohn | Upjohn Inc., a wholly owned subsidiary of Pfizer prior to the Distribution, that combined with Mylan and was renamed Viatris Inc. | ||||
| Upjohn Business | Pfizer’s off-patent branded and generic established medicines business that, in connection with the Combination, was separated from Pfizer and combined with Mylan to form Viatris | ||||
| Upjohn Distributor Markets | Select geographic markets that were part of the Combination that are smaller in nature and in which we had no established infrastructure prior to or following the Combination and that the Company has divested or intends to divest | ||||
| Upjohn U.S. Dollar Notes | Senior unsecured notes denominated in U.S. dollars and originally issued by Upjohn Inc. or Viatris Inc. pursuant to an indenture dated June 22, 2020 and fully and unconditionally guaranteed by Mylan Inc., Mylan II B.V. and Utah Acquisition Sub Inc. | ||||
| Utah Acquisition Sub | Utah Acquisition Sub Inc., a Delaware corporation and an indirect wholly owned subsidiary of Viatris | ||||
| Utah U.S. Dollar Notes | The 3.950% Senior Notes due 2026 and 5.250% Senior Notes due 2046 issued by Utah Acquisition Sub Inc., which are fully and unconditionally guaranteed on a senior unsecured basis by Mylan Inc., Viatris Inc. and Mylan II B.V. | ||||
| Viatris | Viatris Inc., formerly known as Upjohn Inc. prior to the completion of the Combination | ||||
| YEN Term Loan Facility | The ¥40 billion term loan agreement dated as of July 1, 2021, among Viatris, the guarantors from time to time party thereto, the lenders from time to time party thereto and Mizuho Bank, Ltd., as administrative agent | ||||
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Table of Contents
PART I — FINANCIAL INFORMATION
VIATRIS INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited; in millions, except per share amounts)
| Three Months Ended | |||||||||||||||||||||||
| March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Net sales | $ | $ | |||||||||||||||||||||
| Other revenues | |||||||||||||||||||||||
| Total revenues | |||||||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| Acquired IPR&D | |||||||||||||||||||||||
| Selling, general and administrative | |||||||||||||||||||||||
Impairment of goodwill | |||||||||||||||||||||||
| Litigation settlements and other contingencies, net | ( | ||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
Loss from operations | ( | ( | |||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||
Other expense, net | |||||||||||||||||||||||
Loss before income taxes | ( | ( | |||||||||||||||||||||
Income tax benefit | ( | ( | |||||||||||||||||||||
| Net earnings (loss) | $ | $ | ( | ||||||||||||||||||||
| Earnings (loss) per share attributable to Viatris Inc. shareholders | |||||||||||||||||||||||
| Basic | $ | $ | ( | ||||||||||||||||||||
| Diluted | $ | $ | ( | ||||||||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
See Notes to Condensed Consolidated Financial Statements
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Table of Contents
VIATRIS INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Earnings (Loss)
(Unaudited; in millions)
| Three Months Ended | |||||||||||||||||||||||
| March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Net earnings (loss) | $ | $ | ( | ||||||||||||||||||||
| Other comprehensive earnings (loss), before tax: | |||||||||||||||||||||||
| Foreign currency translation adjustment | ( | ||||||||||||||||||||||
| Change in unrecognized loss and prior service cost related to defined benefit plans | ( | ( | |||||||||||||||||||||
Net unrecognized gain (loss) on derivatives in cash flow hedging relationships | ( | ||||||||||||||||||||||
| Net unrecognized gain (loss) on derivatives in net investment hedging relationships | ( | ||||||||||||||||||||||
Net unrealized (loss) gain on available-for-sale fixed income securities | ( | ||||||||||||||||||||||
| Other comprehensive (loss) earnings, before tax | ( | ||||||||||||||||||||||
| Income tax provision (benefit) | ( | ||||||||||||||||||||||
| Other comprehensive (loss) earnings, net of tax | ( | ||||||||||||||||||||||
| Comprehensive earnings (loss) | $ | $ | ( | ||||||||||||||||||||
See Notes to Condensed Consolidated Financial Statements
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Table of Contents
VIATRIS INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited in millions, except share and per share amounts)
| March 31, 2026 | December 31, 2025 | ||||||||||
| ASSETS | |||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Accounts receivable, net | |||||||||||
| Inventories | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Intangible assets, net | |||||||||||
| Goodwill | |||||||||||
| Deferred income tax benefit | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND EQUITY | |||||||||||
| Liabilities | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Income taxes payable | |||||||||||
| Current portion of long-term debt and other long-term obligations | |||||||||||
| Other current liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Deferred income tax liability | |||||||||||
| Other long-term obligations | |||||||||||
| Total liabilities | |||||||||||
| Equity | |||||||||||
| Viatris Inc. shareholders’ equity | |||||||||||
Common stock: $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Retained deficit | ( | ( | |||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Less: Treasury stock — at cost | |||||||||||
Common stock shares: | |||||||||||
| Total equity | |||||||||||
| Total liabilities and equity | $ | $ | |||||||||
See Notes to Condensed Consolidated Financial Statements
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VIATRIS INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Equity
(Unaudited; in millions, except share and per share amounts)
| Additional Paid-In Capital | Retained Deficit | Accumulated Other Comprehensive Loss | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Treasury Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Cost | Shares | Cost | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Net earnings | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Issuance of restricted stock and stock options exercised, net | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Taxes related to the net share settlement of equity awards | — | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Common stock repurchase | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared, $ | — | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Treasury Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Cost | Shares | Cost | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive earnings, net of tax | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of restricted stock and stock options exercised, net | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Taxes related to the net share settlement of equity awards | — | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Common stock repurchase | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared, $ | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||
See Notes to Condensed Consolidated Financial Statements
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Condensed Consolidated Statements of Cash Flows
(Unaudited; in millions)
| Three Months Ended | |||||||||||
| March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net earnings (loss) | $ | $ | ( | ||||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Share-based compensation expense | |||||||||||
| Deferred income tax benefit | ( | ( | |||||||||
Loss on disposal of business | |||||||||||
Acquired IPR&D | |||||||||||
Impairment of goodwill | |||||||||||
| Other non-cash items | |||||||||||
| Litigation settlements and other contingencies, net | ( | ||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | ( | ||||||||||
| Inventories | ( | ( | |||||||||
| Accounts payable | |||||||||||
| Income taxes | ( | ( | |||||||||
| Other operating assets and liabilities, net | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities: | |||||||||||
Proceeds from the sale of investments | |||||||||||
| Capital expenditures | ( | ( | |||||||||
| Purchase of marketable securities | ( | ( | |||||||||
| Proceeds from the sale of marketable securities | |||||||||||
| Payments for product rights and other, net | ( | ( | |||||||||
| Purchases of IPR&D | ( | ( | |||||||||
Proceeds from the sale of property, plant and equipment | |||||||||||
| Net cash provided by (used in) investing activities | ( | ||||||||||
| Cash flows from financing activities: | |||||||||||
| Purchase of common stock | ( | ||||||||||
| Change in short-term borrowings, net | |||||||||||
| Taxes paid related to net share settlement of equity awards | ( | ( | |||||||||
| Contingent consideration payments | ( | ( | |||||||||
| Cash dividends paid | ( | ( | |||||||||
| Issuance of common stock | |||||||||||
| Other items, net | ( | ( | |||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Effect on cash of changes in exchange rates | ( | ||||||||||
| Net increase in cash, cash equivalents and restricted cash | |||||||||||
| Cash, cash equivalents and restricted cash — beginning of period | |||||||||||
| Cash, cash equivalents and restricted cash — end of period | $ | $ | |||||||||
See Notes to Condensed Consolidated Financial Statements
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Notes to Condensed Consolidated Financial Statements (Unaudited)
1.General
The accompanying unaudited condensed consolidated financial statements (“interim financial statements”) of Viatris Inc. and subsidiaries were prepared in accordance with U.S. GAAP and the rules and regulations of the SEC for reporting on Form 10-Q; therefore, as permitted under these rules, certain footnotes and other financial information included in audited financial statements were condensed or omitted. The interim financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the interim results of operations, comprehensive earnings (loss), financial position, equity and cash flows for the periods presented.
These interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto in Viatris’ 2025 Form 10-K. The December 31, 2025 condensed consolidated balance sheet was derived from audited financial statements.
The interim results of operations, comprehensive earnings (loss), and cash flows for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the full fiscal year or any other future period.
2.Revenue Recognition and Accounts Receivable
The Company recognizes revenues in accordance with ASC 606, Revenue from Contracts with Customers. Under ASC 606, the Company recognizes net revenue for product sales when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Revenues are recorded net of provisions for variable consideration, including discounts, rebates, governmental rebate programs, price adjustments, returns, chargebacks, promotional programs and other sales allowances. Accruals for these provisions are presented in the condensed consolidated financial statements as reductions in determining net sales and as a contra asset in accounts receivable, net (if settled via credit) and other current liabilities (if paid in cash).
Our net sales may be impacted by wholesaler and distributor inventory levels of our products, which can fluctuate throughout the year due to the seasonality of certain products, pricing, the timing of product demand, purchasing decisions and other factors. Such fluctuations may impact the comparability of our net sales between periods.
Consideration received from licenses of intellectual property is recorded as other revenues. Royalty or profit share amounts, which are based on sales of licensed products or technology, are recorded when the customer’s subsequent sales or usages occur. Such consideration is included in other revenues in the condensed consolidated statements of operations.
The following table presents the Company’s net sales by product category for each of our reportable segments for the three months ended March 31, 2026 and 2025, respectively:
| (In millions) | Three Months Ended March 31, 2026 | ||||||||||||||||||||||||||||
| Product Category | Developed Markets | Greater China | JANZ | Emerging Markets | Total | ||||||||||||||||||||||||
| Brands | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Generics | |||||||||||||||||||||||||||||
| Total Viatris | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| (In millions) | Three Months Ended March 31, 2025 | ||||||||||||||||||||||||||||
| Product Category | Developed Markets | Greater China | JANZ | Emerging Markets | Total | ||||||||||||||||||||||||
| Brands | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Generics | |||||||||||||||||||||||||||||
| Total Viatris | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
___________
(a)Amounts include the impact of foreign currency fluctuations.
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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
The following table presents net sales on a consolidated basis for select key products for the three months ended March 31, 2026 and 2025, respectively:
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||||||||||||||
| Select Key Global Products | ||||||||||||||||||||||||||
Lipitor ® | $ | $ | ||||||||||||||||||||||||
| Norvasc ® | ||||||||||||||||||||||||||
| Lyrica ® | ||||||||||||||||||||||||||
| EpiPen® Auto-Injectors | ||||||||||||||||||||||||||
| Creon ® | ||||||||||||||||||||||||||
| Viagra ® | ||||||||||||||||||||||||||
Zoloft ® | ||||||||||||||||||||||||||
Celebrex ® | ||||||||||||||||||||||||||
Effexor ® | ||||||||||||||||||||||||||
| Xalabrands | ||||||||||||||||||||||||||
| Select Key Segment Products | ||||||||||||||||||||||||||
| Yupelri ® | $ | $ | ||||||||||||||||||||||||
| Dymista ® | ||||||||||||||||||||||||||
| Xanax ® | ||||||||||||||||||||||||||
| Amitiza ® | ||||||||||||||||||||||||||
____________
(a)The Company does not disclose net sales for any products considered competitively sensitive.
(b)Products disclosed may change in future periods, including as a result of seasonality, competition or new product launches.
(c)Amounts include the impact of foreign currency fluctuations compared to the prior year period.
(d)Refer to intellectual property matters included in Note 17 Litigation for additional information regarding Amitiza®.
Variable Consideration and Accounts Receivable
The following table presents a reconciliation of gross sales to net sales by each significant category of variable consideration during the three months ended March 31, 2026 and 2025, respectively:
| Three Months Ended | |||||||||||||||||||||||
| March 31, | |||||||||||||||||||||||
| (In millions) | 2026 | 2025 | |||||||||||||||||||||
| Gross sales | $ | $ | |||||||||||||||||||||
| Gross to net adjustments: | |||||||||||||||||||||||
| Chargebacks | ( | ( | |||||||||||||||||||||
| Rebates, promotional programs and other sales allowances | ( | ( | |||||||||||||||||||||
| Returns | ( | ( | |||||||||||||||||||||
| Governmental rebate programs | ( | ( | |||||||||||||||||||||
| Total gross to net adjustments | $ | ( | $ | ( | |||||||||||||||||||
| Net sales | $ | $ | |||||||||||||||||||||
___________
(a)Amounts include the impact of foreign currency fluctuations.
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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
No significant revisions were made to the methodology used in determining these provisions or the nature of the provisions during the three months ended March 31, 2026. Such allowances were comprised of the following at March 31, 2026 and December 31, 2025, respectively:
| (In millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Accounts receivable, net | $ | $ | |||||||||
| Other current liabilities | |||||||||||
| Total | $ | $ | |||||||||
Accounts receivable, net was comprised of the following at March 31, 2026 and December 31, 2025, respectively:
| (In millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Trade receivables, net | $ | $ | |||||||||
| Other receivables | |||||||||||
| Accounts receivable, net | $ | $ | |||||||||
Accounts Receivable Factoring Arrangements
We have entered into accounts receivable factoring agreements with financial institutions to sell certain of our non-U.S. accounts receivable. These transactions are accounted for as sales and result in a reduction in accounts receivable because the agreements transfer effective control over and risk related to the receivables to the buyers. Our factoring agreements do not allow for recourse in the event of uncollectibility, and we do not retain any interest in the underlying accounts receivable once sold. We derecognized $295.8 million and $301.9 million of accounts receivable as of March 31, 2026 and December 31, 2025, respectively, under these factoring arrangements. Additionally, we have a similar arrangement for certain European countries. As of March 31, 2026, we assigned and derecognized approximately $14.7 million of Trade Receivables, Net, which were included in Other Receivables. As of December 31, 2025, no amounts were assigned and derecognized.
3.Recent Accounting Pronouncements
Adoption of New Accounting Standards
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient permitting an entity to assume that conditions as of the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current accounts receivable and current contract assets. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. Entities should apply the new guidance prospectively. We adopted this guidance beginning January 1, 2026. The adoption of this ASU did not have a material impact on the Company’s condensed consolidated financial statements and disclosures.
There were no other significant changes in new accounting standards from those disclosed in Viatris’ 2025 Form 10-K. Refer to Viatris’ 2025 Form 10-K for additional information.
4.Divestitures
By the end of 2024, the Company had substantially completed the previously announced divestitures of its OTC Business, its women’s healthcare business primarily related to oral and injectable contraceptives, its API business in India, its rights to two women’s healthcare products in certain countries, and commercialization rights in the majority of the Upjohn Distributor Markets.
During the three months ended March 31, 2026 and 2025, the Company recorded additional pre-tax charges of approximately $13.9 million and $36.9 million, respectively, primarily related to the divestitures of the OTC and API businesses. The additional charges were recorded as a component of Other Expense, Net in the condensed consolidated
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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
statements of operations, and were primarily due to an increase in estimated transaction related costs, including the assumption of additional contractual obligations, as well as the impact of working capital and other transaction-related adjustments.
In conjunction with these transactions, Viatris and the respective buyers entered into various agreements to provide a framework for our relationship with the respective buyers after the closing of the divestitures, including transition services agreements, manufacturing and supply agreements, and distribution agreements, some of which include various on-going financial obligations. The transition services and distribution agreements were substantially concluded as of December 31, 2025.
5.Share-Based Incentive Plan
Prior to the Distribution, Viatris adopted and Pfizer, in the capacity as Viatris’ sole stockholder at such time, approved the 2020 Incentive Plan (the Viatris Inc. 2020 Stock Incentive Plan) which became effective as of the Distribution. In connection with the Combination, as of November 16, 2020, the Company assumed the 2003 LTIP (Mylan N.V. Amended and Restated 2003 Long-Term Incentive Plan), which had previously been approved by Mylan shareholders. The 2020 Incentive Plan includes 72,500,000 shares of Viatris’ common stock authorized for grant pursuant to the 2020 Incentive Plan, which may include dividend payments payable in common stock on unvested shares granted under awards. No shares remain available for issuance under the 2003 LTIP, however, certain awards remain outstanding under the plan.
The Board approved an amendment to the 2020 Incentive Plan, which was approved by Viatris shareholders on December 6, 2024, to increase the maximum aggregate number of shares of Viatris common stock available for issuance under the 2020 Incentive Plan by 49,000,000 .
Under the 2020 Incentive Plan, shares are reserved for issuance to key employees, consultants, independent contractors and non-employee directors of the Company through a variety of incentive awards, including: stock options, stock appreciation rights, restricted stock and units, PSUs, other stock-based awards and short-term cash awards. Stock option awards are granted with an exercise price equal to the fair market value of the shares underlying the stock options at the date of the grant, generally become exercisable over periods ranging from three to four years , and generally expire in ten years .
The following table summarizes stock options activity:
Number of Stock Options | Weighted Average Exercise Price per Share | ||||||||||
| Outstanding at December 31, 2025 | $ | ||||||||||
| Exercised | ( | ||||||||||
| Forfeited | ( | ||||||||||
| Outstanding at March 31, 2026 | $ | ||||||||||
| Vested and expected to vest at March 31, 2026 | $ | ||||||||||
| Exercisable at March 31, 2026 | $ | ||||||||||
As of March 31, 2026, stock options outstanding, stock options vested and expected to vest, and stock options exercisable each had average remaining contractual terms of 2.5 years, and each had aggregate intrinsic values of approximately $0.2 million.
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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
A rollforward of the changes in the Company’s nonvested Restricted Stock Awards (restricted stock and restricted stock unit awards, including PSUs) from December 31, 2025 to March 31, 2026 is presented below:
| Number of Restricted Stock Awards | Weighted Average Grant-Date Fair Value Per Share | ||||||||||
| Nonvested at December 31, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Released | ( | ||||||||||
| Forfeited | ( | ||||||||||
| Nonvested at March 31, 2026 | $ | ||||||||||
As of March 31, 2026, the Company had $284.7 million of total unrecognized compensation expense, net of estimated forfeitures, related to all of its stock-based awards, which we expect to recognize over the remaining weighted average vesting period of 1.9 years. The total intrinsic value of Restricted Stock Awards released and stock options exercised during the three months ended March 31, 2026 and 2025 was $218.9 million and $118.2 million, respectively.
6.Pensions and Other Postretirement Benefits
Defined Benefit Plans
The Company sponsors various defined benefit pension plans in several countries. Benefits provided generally depend on length of service, pay grade and remuneration levels. Employees in the U.S., Puerto Rico and certain international locations are also provided retirement benefits through defined contribution plans.
The Company also sponsors other postretirement benefit plans including plans that provide for postretirement supplemental medical coverage. Benefits from these plans are provided to employees and their spouses and dependents who meet various minimum age and service requirements. In addition, the Company sponsors other plans that provide for life insurance benefits and postretirement medical coverage for certain officers and management employees.
Net Periodic Benefit Cost
Components of net periodic benefit cost for the three months ended March 31, 2026 and 2025 were as follows:
| Pension and Other Postretirement Benefits | |||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||
| March 31, | |||||||||||||||||||||||
| (In millions) | 2026 | 2025 | |||||||||||||||||||||
| Service cost | $ | $ | |||||||||||||||||||||
| Interest cost | |||||||||||||||||||||||
| Expected return on plan assets | ( | ( | |||||||||||||||||||||
| Amortization of prior service costs | |||||||||||||||||||||||
| Recognized net actuarial gains | ( | ( | |||||||||||||||||||||
| Net periodic benefit cost | $ | $ | |||||||||||||||||||||
The Company is making the minimum mandatory contributions to its defined benefit pension plans in the U.S. and Puerto Rico for the 2026 plan year. The Company expects to make total benefit payments of approximately $170.0 million from pension and other postretirement benefit plans in 2026. The Company anticipates making contributions to pension and other postretirement benefit plans of approximately $60.9 million in 2026.
On July 17, 2025, the Company approved an amendment to terminate one of its defined benefit plans in the United States (the “U.S. Plan”). The distribution of the U.S. Plan assets pursuant to the termination will not be made until the plan termination satisfies all regulatory requirements, which is expected to be completed by the end of 2026. U.S. Plan participants
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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
will receive their full accrued benefits from plan assets by electing either lump sum distributions or annuity contracts with a qualifying third-party annuity provider. The resulting settlement effect of the U.S. Plan termination will be determined based on prevailing market conditions, the lump sum offer participation rate of eligible participants, the actual lump sum distributions, and annuity purchase rates at the date of distribution. As a result, the Company is currently unable to reasonably estimate either the timing or the final amount of such settlement charges. Based on the valuation performed as of January 1, 2026, the U.S. Plan had an overfunded status of approximately $0.2 million.
7.Balance Sheet Components
Selected balance sheet components consist of the following:
Cash and restricted cash
| (In millions) | March 31, 2026 | December 31, 2025 | March 31, 2025 | ||||||||||||||
| Cash and cash equivalents | $ | $ | $ | ||||||||||||||
| Restricted cash, included in prepaid expenses and other current assets | |||||||||||||||||
| Cash, cash equivalents and restricted cash | $ | $ | $ | ||||||||||||||
Inventories
| (In millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Raw materials | $ | $ | |||||||||
| Work in process | |||||||||||
| Finished goods | |||||||||||
| Inventories | $ | $ | |||||||||
Prepaid expenses and other current assets
| (In millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Prepaid expenses | $ | $ | |||||||||
| Available-for-sale fixed income securities | |||||||||||
| Fair value of financial instruments | |||||||||||
Equity securities (1) | |||||||||||
Deferred charge for taxes on intercompany profit | |||||||||||
Income tax receivable | |||||||||||
| Other current assets | |||||||||||
| Prepaid expenses and other current assets | $ | $ | |||||||||
Prepaid expenses consist primarily of prepaid rent, insurance and other individually insignificant items.
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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
Property, plant and equipment, net
| (In millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Machinery and equipment | $ | $ | |||||||||
| Buildings and improvements | |||||||||||
| Construction in progress | |||||||||||
| Land and improvements | |||||||||||
| Gross property, plant and equipment | |||||||||||
| Accumulated depreciation | |||||||||||
| Property, plant and equipment, net | $ | $ | |||||||||
Other assets
| (In millions) | March 31, 2026 | December 31, 2025 | |||||||||
CCPS in Biocon Biologics (1) | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Other long-term assets | |||||||||||
| Other assets | $ | $ | |||||||||
Accounts payable
| (In millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Trade accounts payable | $ | $ | |||||||||
| Other payables | |||||||||||
| Accounts payable | $ | $ | |||||||||
Other current liabilities
| (In millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Accrued sales allowances | $ | $ | |||||||||
| Payroll and employee benefit liabilities | |||||||||||
| Legal and professional accruals, including litigation accruals | |||||||||||
Contingent consideration | |||||||||||
| Accrued restructuring | |||||||||||
| Accrued interest | |||||||||||
| Fair value of financial instruments | |||||||||||
| Operating lease liability | |||||||||||
| Other | |||||||||||
| Other current liabilities | $ | $ | |||||||||
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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
Other long-term obligations
| (In millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Employee benefit liabilities | $ | $ | |||||||||
| Contingent consideration | |||||||||||
| Tax related items, including contingencies | |||||||||||
| Operating lease liability | |||||||||||
| Accrued restructuring | |||||||||||
| Other | |||||||||||
| Other long-term obligations | $ | $ | |||||||||
8.Earnings (Loss) per Share
Basic and diluted earnings (loss) per share attributable to Viatris Inc. are calculated as follows:
| Three Months Ended | |||||||||||||||||||||||
| March 31, | |||||||||||||||||||||||
| (In millions, except per share amounts) | 2026 | 2025 | |||||||||||||||||||||
Basic earnings (loss) attributable to Viatris Inc. common shareholders (numerator): | |||||||||||||||||||||||
Net earnings (loss) attributable to Viatris Inc. common shareholders | $ | $ | ( | ||||||||||||||||||||
| Shares (denominator): | |||||||||||||||||||||||
| Weighted average shares outstanding | |||||||||||||||||||||||
Basic earnings (loss) per share attributable to Viatris Inc. shareholders | $ | $ | ( | ||||||||||||||||||||
Diluted earnings (loss) attributable to Viatris Inc. common shareholders (numerator): | |||||||||||||||||||||||
Net earnings (loss) attributable to Viatris Inc. common shareholders | $ | $ | ( | ||||||||||||||||||||
| Shares (denominator): | |||||||||||||||||||||||
| Weighted average shares outstanding | |||||||||||||||||||||||
| Share-based awards | |||||||||||||||||||||||
| Total dilutive shares outstanding | |||||||||||||||||||||||
Diluted earnings (loss) per share attributable to Viatris Inc. shareholders | $ | $ | ( | ||||||||||||||||||||
Additional stock options and Restricted Stock Awards were outstanding during the three months ended March 31, 2026 and 2025, but were not included in the computation of diluted earnings (loss) per share for each respective period because the effect would be anti-dilutive. Excluded shares also include certain PSUs whose performance conditions had not been fully met. Such excluded shares and anti-dilutive awards represented 11.2 million shares and 27.3 million shares for the three months ended March 31, 2026 and 2025, respectively.
The Company paid a quarterly cash dividend of $0.12 per share on the Company’s issued and outstanding common stock in March 2026. On May 4, 2026, the Company’s Board of Directors declared a quarterly cash dividend of $0.12 per share on the Company’s issued and outstanding common stock, which will be payable on June 17, 2026 to shareholders of record as of the close of business on May 22, 2026. The declaration and payment of future dividends to holders of the Company’s common stock will be at the discretion of the Board of Directors, and will depend upon factors, including but not limited to, the Company’s financial condition, earnings, capital requirements of its businesses, legal requirements, regulatory constraints,
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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
industry practice, and other factors that the Board of Directors deems relevant. The Company also paid quarterly cash dividends of $0.12
On February 28, 2022, the Company announced that its Board of Directors had authorized a share repurchase program for the repurchase of up to $1.0 billion of the Company’s shares of common stock. The Company subsequently announced that on February 26, 2024, its Board of Directors authorized a $1.0 billion increase to the Company’s previously announced $1.0 billion share repurchase program. As a result, the Company’s share repurchase program now authorizes the repurchase of up to $2.0 billion of the Company’s shares of common stock. Such repurchases may be made from time-to-time at the Company’s discretion and effected by any means, including but not limited to, open market repurchases, pursuant to plans in accordance with Rules 10b5-1 or 10b-18 under the Exchange Act, privately negotiated transactions (including accelerated stock repurchase programs) or any combination of such methods as the Company deems appropriate. The program does not have an expiration date. The share repurchase program does not obligate the Company to acquire any particular amount of common stock.
During the three months ended March 31, 2025, the Company repurchased approximately 18.6 million shares of common stock at a cost of approximately $175.4 million under the program. The Company did not repurchase any shares during the three months ended March 31, 2026. As of March 31, 2026, the Company had repurchased a total of approximately 94.2 million shares of common stock at a cost of approximately $1.0 billion under the program.
9.Goodwill and Intangible Assets
Goodwill
The changes in the carrying amount of goodwill for the three months ended March 31, 2026 are as follows:
| (In millions) | Developed Markets (1) | Greater China | JANZ (2) | Emerging Markets (3) | Total | ||||||||||||||||||||||||
| Balance at December 31, 2025: | |||||||||||||||||||||||||||||
| Foreign currency translation | ( | ( | ( | ||||||||||||||||||||||||||
| Balance at March 31, 2026: | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
____________
(1)Balances as of March 31, 2026 and December 31, 2025 include an accumulated impairment loss of $3.19
(2)Balances as of March 31, 2026 and December 31, 2025 include an accumulated impairment loss of $651.8
(3)Balances as of March 31, 2026 and December 31, 2025 include an accumulated impairment loss of $499.0
The Company reviews goodwill for impairment annually on April 1st or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. During the first quarter of 2025, the Company experienced a sharp and sustained decline in its share price and significantly increased uncertainty and volatility in the geopolitical and economic environments in which the Company operates. As a result of these factors, the Company determined that a triggering event had occurred for each of its reporting units and performed an interim goodwill impairment test as of March 31, 2025 and recorded a non-cash goodwill impairment charge of $2.94 billion as a result of the interim goodwill impairment test performed.
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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
Intangible Assets, Net
Intangible assets consist of the following components at March 31, 2026 and December 31, 2025:
| (In millions) | Weighted Average Life (Years) | Original Cost | Accumulated Amortization | Net Book Value | |||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||
Product rights, licenses and other (1) | $ | $ | $ | ||||||||||||||||||||
| In-process research and development | — | ||||||||||||||||||||||
| $ | $ | $ | |||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
Product rights, licenses and other (1) | $ | $ | $ | ||||||||||||||||||||
| In-process research and development | — | ||||||||||||||||||||||
| $ | $ | $ | |||||||||||||||||||||
____________
Amortization expense, intangible asset disposal & impairment charges and IPR&D intangible asset impairment charges (which are included as a component of amortization expense) are classified primarily within Cost of Sales in the condensed consolidated statements of operations and were as follows for the three months ended March 31, 2026 and 2025:
| Three Months Ended | |||||||||||||||||||||||
| March 31, | |||||||||||||||||||||||
| (In millions) | 2026 | 2025 | |||||||||||||||||||||
| Intangible asset amortization expense | $ | $ | |||||||||||||||||||||
| Total intangible asset amortization expense (including disposal & impairment charges) | $ | $ | |||||||||||||||||||||
Intangible asset amortization expense over the remainder of 2026 and for the years ending December 31, 2027 through 2030 is estimated to be as follows:
| (In millions) | |||||
| 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
10.Financial Instruments and Risk Management
The Company is exposed to certain financial risks relating to its ongoing business operations. The primary financial risks that are managed by using derivative instruments are foreign currency risk and interest rate risk.
Foreign Currency Risk Management
In order to manage certain foreign currency risks, the Company enters into foreign exchange forward contracts to mitigate risk associated with changes in spot exchange rates of mainly non-functional currency denominated assets or liabilities. The foreign exchange forward contracts are measured at fair value and reported as current assets or current liabilities in the condensed consolidated balance sheets. Any gains or losses on the foreign exchange forward contracts are recognized in earnings in the period incurred in the condensed consolidated statements of operations.
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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
The Company has also entered into forward contracts to hedge forecasted foreign currency denominated sales from certain international subsidiaries and a portion of forecasted intercompany inventory sales denominated in Euro, Japanese Yen, and Chinese Renminbi for up to eighteen months . These contracts are designated as cash flow hedges to manage foreign currency transaction risk and are measured at fair value and reported as current assets or current liabilities in the condensed consolidated balance sheets. Any changes in the fair value of designated cash flow hedges are deferred in AOCE and are reclassified into earnings when the hedged item impacts earnings.
Net Investment Hedges
The Company may hedge the foreign currency risk associated with certain net investment positions in foreign subsidiaries by either borrowing directly in foreign currencies and designating all or a portion of the foreign currency debt as a hedge of the applicable net investment position or entering into foreign currency swaps that are designated as hedges of net investments.
The Company has designated certain Euro and Yen borrowings as a hedge of its investment in certain Euro-functional and Yen-functional currency subsidiaries in order to manage foreign currency translation risk. Borrowings designated as net investment hedges are marked-to-market using the current spot exchange rate as of the end of the period, with gains and losses included in the foreign currency translation component of AOCE until the sale or substantial liquidation of the underlying net investments. In addition, the Company manages the related foreign exchange risk of the Euro and Yen borrowings not designated as net investment hedges through certain Euro and Yen denominated financial assets and forward currency swaps.
The following table summarizes the principal amounts of the Company’s outstanding Euro and Yen borrowings and the notional amounts of the Euro and Yen borrowings designated as net investment hedges:
| Notional Amount Designated as a Net Investment Hedge | ||||||||||||||||||||
| (In millions) | Principal Amount | March 31, 2026 | December 31, 2025 | |||||||||||||||||
| € | € | € | ||||||||||||||||||
| Euro Total | € | € | € | |||||||||||||||||
| Yen | ||||||||||||||||||||
| YEN Term Loan | ¥ | ¥ | ¥ | |||||||||||||||||
| Yen Total | ¥ | ¥ | ¥ | |||||||||||||||||
____________
At March 31, 2026, the principal amount of the Company’s outstanding Yen borrowings and the notional amount of the Yen borrowings designated as net investment hedges was $252.0 million.
During the third quarter of 2023, the Company executed fixed-rate cross-currency interest rate swaps with notional amounts totaling Japanese Yen 14.6 billion with settlement dates through 2026. During the third quarter of 2025, the Company terminated its Yen fixed-rate cross-currency interest rate swaps in exchange for $3.4 million in cash proceeds, net of fees. During the second quarter of 2024, the Company executed fixed-rate cross-currency interest rate swaps with notional amounts totaling €500 million with settlement dates through 2026. In March 2026, the Company made payments totaling $37.7 million in conjunction with the termination of its Euro fixed-rate cross-currency interest rate swaps. The transactions hedged a portion of the Company’s net investment in certain Yen- and Euro-functional currency subsidiaries. All changes in the fair value of these derivative instruments, which are designated as net investment hedges, were marked-to-market using the current spot exchange rate as of the end of the period. The portion of these changes related to the excluded component were amortized in interest expense over the life of the derivative while the remainder was recorded in AOCE until the sale or substantial liquidation of the underlying net investments. The semiannual net interest payment received related to the fixed-rate component of the cross-currency interest rate swaps were reflected in operating cash flows.
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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
During the second quarter of 2025, the Company executed foreign currency forward contracts with notional amounts totaling Chinese Renminbi 1.42 billion (approximately $200 million) maturing in December 2026 and Chinese Renminbi 695 million (approximately $100 million) maturing in December 2027. In April 2026, the Company settled certain of these foreign currency forward contracts with notional amounts totaling $100 million that were maturing in December 2026 and entered into new contracts with notional amounts totaling $50 million maturing in December 2027 and $25 million maturing in December 2028. The transactions hedge a portion of the Company’s net investment in certain Chinese Renminbi functional currency subsidiaries. The contracts are designated as net investment hedges.
Interest Rate Risk Management
The Company enters into interest rate swaps from time to time in order to manage interest rate risk associated with the Company’s fixed-rate and floating-rate debt. Interest rate swaps that meet specific accounting criteria are accounted for as fair value or cash flow hedges. All derivative instruments used to manage interest rate risk are measured at fair value and reported as current assets or current liabilities in the condensed consolidated balance sheets. For fair value hedges, the changes in the fair value of both the hedging instrument and the underlying debt obligations are included in interest expense. For cash flow hedges, the change in fair value of the hedging instrument is deferred through AOCE and is reclassified into earnings when the hedged item impacts earnings.
Cash Flow Hedging Relationships
The Company’s interest rate swaps designated as cash flow hedges fix the interest rate on a portion of the Company’s variable-rate debt or hedge part of the Company’s interest rate exposure associated with the variability in the future cash flows attributable to changes in interest rates. Any changes in fair value are included in earnings or deferred through AOCE, depending on the nature and effectiveness of the offset. Any ineffectiveness in a cash flow hedging relationship is recognized immediately in earnings in the condensed consolidated statements of operations.
Credit Risk Management
The Company regularly reviews the creditworthiness of its financial counterparties and does not expect to incur a significant loss from the failure of any counterparties to perform under any agreements. The Company is not subject to any obligations to post collateral under derivative instrument contracts. Certain derivative instrument contracts entered into by the Company are governed by master agreements, which contain credit-risk-related contingent features that would allow the counterparties to terminate the contracts early and request immediate payment should the Company trigger an event of default on other specified borrowings. The Company records all derivative instruments on a gross basis in the condensed consolidated balance sheets. Accordingly, there are no offsetting amounts that net assets against liabilities.
The following table summarizes the classification and fair values of derivative instruments in our condensed consolidated balance sheets:
| Asset Derivatives | Liability Derivatives | ||||||||||||||||||||||
| (In millions) | Balance Sheet Location | March 31, 2026 Fair Value | December 31, 2025 Fair Value | Balance Sheet Location | March 31, 2026 Fair Value | December 31, 2025 Fair Value | |||||||||||||||||
| Derivatives designated as hedges: | |||||||||||||||||||||||
| Cross-currency interest rate swaps | Prepaid expenses & other current assets | $ | — | $ | — | Other current liabilities | $ | — | |||||||||||||||
| Foreign currency forward contracts | Prepaid expenses & other current assets | Other current liabilities | |||||||||||||||||||||
| Foreign currency forward contracts | — | — | Other long-term obligations | ||||||||||||||||||||
| Total derivatives designated as hedges | |||||||||||||||||||||||
| Derivatives not designated as hedges: | |||||||||||||||||||||||
| Foreign currency forward contracts | Prepaid expenses & other current assets | Other current liabilities | |||||||||||||||||||||
| Total derivatives not designated as hedges | |||||||||||||||||||||||
| Total derivatives | $ | $ | $ | $ | |||||||||||||||||||
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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
The following table summarizes information about the gains/(losses) incurred to hedge or offset operational foreign exchange or interest rate risk:
| Amount of Gains/(Losses) Recognized in Earnings | Amount of Gains/(Losses) Recognized in AOCE (Net of Tax) on Derivatives | Amount of Gains/(Losses) Reclassified from AOCE into Earnings | |||||||||||||||||||||||||||
| Three months ended March 31, | |||||||||||||||||||||||||||||
| (In millions) | Location of Gain/(Loss) | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
Derivative Financial Instruments in Cash Flow Hedging Relationships (1) : | |||||||||||||||||||||||||||||
| Foreign currency forward contracts | Net sales (3) | $ | — | $ | — | $ | $ | ( | $ | ( | $ | ||||||||||||||||||
| Interest rate swaps | Interest expense (3) | — | — | ( | ( | ( | ( | ||||||||||||||||||||||
| Derivative Financial Instruments in Net Investment Hedging Relationships: | |||||||||||||||||||||||||||||
Cross-currency interest rate swaps | Interest expense (2) | ( | — | — | |||||||||||||||||||||||||
Foreign currency forward contracts | Other expense, net (3) | — | — | ( | — | — | |||||||||||||||||||||||
| Non-derivative Financial Instruments in Net Investment Hedging Relationships: | |||||||||||||||||||||||||||||
| Foreign currency borrowings | — | — | ( | — | — | ||||||||||||||||||||||||
| Derivative Financial Instruments Not Designated as Hedging Instruments: | |||||||||||||||||||||||||||||
| Foreign currency option and forward contracts | Other expense, net (2) | ( | — | — | — | — | |||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||
____________
(1)At March 31, 2026, the Company expects that approximately $13.0 million of pre-tax net losses on cash flow hedges will be reclassified from AOCE into earnings during the next twelve months.
(2)Represents the location of the gain/(loss) recognized in earnings on derivatives.
(3)Represents the location of the gain/(loss) reclassified from AOCE into earnings.
Fair Value Measurement
Fair value is based on the price that would be received from the sale of an identical asset or paid to transfer an identical liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, a fair value hierarchy has been established that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:
•Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
•Level 2: Observable market-based inputs other than quoted prices in active markets for identical assets or liabilities.
•Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considers counterparty credit risk in its assessment of fair value.
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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
Financial assets and liabilities carried at fair value are classified in the tables below in one of the three categories described above:
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| (In millions) | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||
| Recurring fair value measurements | |||||||||||||||||||||||||||||||||||
| Financial Assets | |||||||||||||||||||||||||||||||||||
| Cash equivalents: | |||||||||||||||||||||||||||||||||||
| Money market funds | $ | $ | — | $ | — | $ | $ | — | $ | — | |||||||||||||||||||||||||
| Total cash equivalents | — | — | — | — | |||||||||||||||||||||||||||||||
| Equity securities: | |||||||||||||||||||||||||||||||||||
| Biocon equity shares | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Exchange traded funds | — | — | — | — | |||||||||||||||||||||||||||||||
| Marketable securities | — | — | — | — | |||||||||||||||||||||||||||||||
| Total equity securities | — | — | — | — | |||||||||||||||||||||||||||||||
| CCPS in Biocon Biologics | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Available-for-sale fixed income investments: | |||||||||||||||||||||||||||||||||||
| Corporate bonds | — | — | — | — | |||||||||||||||||||||||||||||||
| U.S. Treasuries | — | — | — | — | |||||||||||||||||||||||||||||||
| Agency mortgage-backed securities | — | — | — | — | |||||||||||||||||||||||||||||||
| Asset backed securities | — | — | — | — | |||||||||||||||||||||||||||||||
| Other | — | — | — | — | |||||||||||||||||||||||||||||||
| Total available-for-sale fixed income investments | — | — | — | — | |||||||||||||||||||||||||||||||
| Foreign exchange derivative assets | — | — | — | — | |||||||||||||||||||||||||||||||
| Total assets at recurring fair value measurement | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Financial Liabilities | |||||||||||||||||||||||||||||||||||
| Foreign exchange derivative liabilities | $ | — | $ | $ | — | $ | — | $ | $ | — | |||||||||||||||||||||||||
| Interest rate swap derivative liabilities | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Contingent consideration | — | — | — | — | |||||||||||||||||||||||||||||||
| Total liabilities at recurring fair value measurement | $ | — | $ | $ | $ | — | $ | $ | |||||||||||||||||||||||||||
For financial assets and liabilities that utilize Level 2 inputs, the Company utilizes both direct and indirect observable price quotes, including interest rate yield curves, foreign exchange forward prices and bank price quotes. Below is a summary of valuation techniques for the Company’s financial assets and liabilities:
•Cash equivalents — valued at observable net asset value prices.
•Equity securities, exchange traded funds — valued at the active quoted market prices from broker or dealer quotations or transparent pricing sources at the reporting date. Unrealized gains and losses attributable to changes in fair value are included in Other Expense, Net in the condensed consolidated statements of operations.
•Equity securities, marketable securities — valued using quoted stock prices from public exchanges at the reporting date. Unrealized gains and losses attributable to changes in fair value are included in Other Expense, Net in the condensed consolidated statements of operations.
•CCPS in Biocon Biologics — In December 2025, the Company entered into definitive agreements with Biocon for the sale of the Company’s equity stake in Biocon Biologics. Under the terms of the definitive agreements, Biocon acquired all of Viatris’ CCPS in Biocon Biologics for total consideration of $815.0 million, consisting of $400.0 million in cash and $415.0 million in newly issued equity shares of Biocon, which are listed and traded on the National Stock Exchange of India. The transaction closed during the first quarter of 2026 and the shares are subject to a six-month lock up period. In addition, the terms of the definitive agreements accelerate the expiration of biosimilars non-compete restrictions previously placed on Viatris in 2022 in connection with Viatris’ sale of its biosimilars portfolio and related commercial and other capabilities to Biocon Biologics. These restrictions expired immediately at the time of close for all ex-U.S. markets and will expire in November 2026 for U.S. markets.
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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
During the three months ended March 31, 2025, the Company recorded a loss of $115.8 million as a result of remeasuring the CCPS in Biocon Biologics to fair value. The Company’s CCPS in Biocon Biologics were classified as equity securities and are included in Other Assets in the condensed consolidated balance sheets. The Biocon equity shares are included in Prepaid Expenses and Other Current Assets in the condensed consolidated balance sheets.
•Available-for-sale fixed income investments — valued at the quoted market prices from broker or dealer quotations or transparent pricing sources at the reporting date. Unrealized gains and losses attributable to changes in fair value, net of income taxes, are included in accumulated other comprehensive loss as a component of shareholders’ equity.
•Interest rate swaps and foreign exchange derivative assets and liabilities — valued using interest yield curves, quoted forward foreign exchange prices and spot rates at the reporting date. Counterparties to these contracts are highly rated financial institutions.
Contingent Consideration
As of March 31, 2026 and December 31, 2025, the Company had a contingent consideration liability of $392.0 million and $307.0 million, respectively, related to the Idorsia Transaction. For the three months ended March 31, 2026, the change in fair value was primarily driven by a change in probabilities on both development programs as a result of the progress of the clinical trials. As of March 31, 2026 and December 31, 2025, the Company had a contingent consideration liability of $57.2 million and $64.6 million, respectively, related to the Respiratory Delivery Platform.
The measurement of these contingent consideration liabilities is calculated using unobservable Level 3 inputs based on the Company’s own assumptions primarily related to the probability and timing of future events, including the timing of additional potential competition, and payments which are discounted using a market rate of return. At March 31, 2026, discount rates ranging from 8.5 % to 17.0 %, and at December 31, 2025, discount rates ranging from 8.5 % and 19.0 % were utilized in the valuations. Significant changes in unobservable inputs could result in material changes to the contingent consideration liabilities.
A rollforward of the activity in the Company’s fair value of contingent consideration from December 31, 2025 to March 31, 2026 is as follows:
| (In millions) | Current Portion (1) | Long-Term Portion (2) | Total Contingent Consideration | ||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | ||||||||||||||
| Payments | ( | ( | |||||||||||||||
| Reclassifications | ( | ||||||||||||||||
| Accretion | |||||||||||||||||
Fair value loss (3) | |||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | ||||||||||||||
____________
(1)Included in other current liabilities in the condensed consolidated balance sheets.
(2)Included in other long-term obligations in the condensed consolidated balance sheets.
(3)Included in litigation settlements and other contingencies, net in the condensed consolidated statements of operations.
Although the Company has not elected the fair value option for financial assets and liabilities, any future transacted financial asset or liability will be evaluated for the fair value election.
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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
11.Debt
For additional information, see Note 10 Debt in Viatris’ 2025 Form 10-K.
Receivables Facility
The Company has a Receivables Facility for up to an aggregate amount of $600 million which expires in April 2028. Under the terms of the Receivables Facility, certain of our accounts receivable secure the amounts borrowed and cannot be used to pay our other debts or liabilities. The amount that we may borrow at a given point in time is determined based on the amount of qualifying accounts receivable that are present at such point in time. Borrowings outstanding under the Receivables Facility are included as a component of short-term borrowings, while the accounts receivable securing these obligations remain as a component of accounts receivable, net, in our condensed consolidated balance sheets.
Long-Term Debt
A summary of long-term debt is as follows:
| ($ in millions) | Interest Rate as of March 31, 2026 | March 31, 2026 | December 31, 2025 | ||||||||||||||
| Current portion of long-term debt: | |||||||||||||||||
2026 Senior Notes ** | % | $ | $ | ||||||||||||||
| YEN Term Loan Facility | Variable | ||||||||||||||||
| Other | |||||||||||||||||
| Deferred financing fees | ( | ( | |||||||||||||||
| Current portion of long-term debt | $ | $ | |||||||||||||||
| Non-current portion of long-term debt: | |||||||||||||||||
2027 Euro Senior Notes **** | % | ||||||||||||||||
2027 Senior Notes *** | % | ||||||||||||||||
2028 Euro Senior Notes ** | % | ||||||||||||||||
2028 Senior Notes * | % | ||||||||||||||||
2030 Senior Notes *** | % | ||||||||||||||||
2032 Euro Senior Notes **** | % | ||||||||||||||||
2040 Senior Notes *** | % | ||||||||||||||||
2043 Senior Notes * | % | ||||||||||||||||
2046 Senior Notes ** | % | ||||||||||||||||
2048 Senior Notes * | % | ||||||||||||||||
2050 Senior Notes *** | % | ||||||||||||||||
| Other | |||||||||||||||||
| Deferred financing fees | ( | ( | |||||||||||||||
| Long-term debt | $ | $ | |||||||||||||||
____________
* Instrument was issued by Mylan Inc.
** Instrument was originally issued by Mylan N.V.; now held by Utah Acquisition Sub Inc.
*** Instrument was issued by Viatris Inc.
**** Instrument was issued by Upjohn Finance B.V.
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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
Fair Value
At March 31, 2026 and December 31, 2025, the aggregate fair value of the Company’s outstanding notes was approximately $11.81 billion and $11.99 billion, respectively. The fair values of the outstanding notes were valued at quoted market prices from broker or dealer quotations and were classified as Level 2 in the fair value hierarchy.
Mandatory minimum repayments remaining on the notional amount of outstanding long-term debt at March 31, 2026 were as follows for each of the years ending December 31:
| (In millions) | Total | ||||
| 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total | $ | ||||
12.Comprehensive Earnings (Loss)
Accumulated other comprehensive loss, as reflected in the condensed consolidated balance sheets, is comprised of the following:
| (In millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Accumulated other comprehensive loss: | |||||||||||
| Net unrealized loss on available-for-sale fixed income securities, net of tax | $ | ( | $ | ( | |||||||
| Net unrecognized gain and prior service cost related to defined benefit plans, net of tax | |||||||||||
Net unrecognized gain (loss) on derivatives in cash flow hedging relationships, net of tax | ( | ||||||||||
| Net unrecognized gain on derivatives in net investment hedging relationships, net of tax | |||||||||||
| Foreign currency translation adjustment | ( | ( | |||||||||
| $ | ( | $ | ( | ||||||||
Components of accumulated other comprehensive loss, before tax, consist of the following, for the three months ended March 31, 2026 and 2025:
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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||
| Gains and Losses on Derivatives in Cash Flow Hedging Relationships | Gains and Losses on Net Investment Hedges | Gains and Losses on Available-For-Sale Fixed Income Securities | Defined Pension Plan Items | Foreign Currency Translation Adjustment | Totals | ||||||||||||||||||||||||||||||||||||||||||
| (In millions) | Foreign Currency Forward Contracts | Interest Rate Swaps | Total | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025, net of tax | $ | ( | $ | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||
Other comprehensive earnings (loss) before reclassifications, before tax | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive earnings (loss), before tax: | |||||||||||||||||||||||||||||||||||||||||||||||
Loss on foreign exchange forward contracts classified as cash flow hedges, included in net sales | |||||||||||||||||||||||||||||||||||||||||||||||
| Loss on interest rate swaps classified as cash flow hedges, included in interest expense | |||||||||||||||||||||||||||||||||||||||||||||||
Amortization of prior service costs included in other expense, net | |||||||||||||||||||||||||||||||||||||||||||||||
Amortization of actuarial gain included in SG&A | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Net other comprehensive earnings (loss), before tax | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Income tax provision (benefit) | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026, net of tax | $ | $ | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||
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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
| Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| Gains and Losses on Derivatives in Cash Flow Hedging Relationships | Gains and Losses on Net Investment Hedges | Gains and Losses on Available-For-Sale Fixed Income Securities | Defined Pension Plan Items | Foreign Currency Translation Adjustment | Totals | ||||||||||||||||||||||||||||||||||||||||||
| (In millions) | Foreign Currency Forward Contracts | Interest Rate Swaps | Total | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024, net of tax | $ | $ | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||
Other comprehensive (loss) earnings before reclassifications, before tax | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive (loss) earnings, before tax: | |||||||||||||||||||||||||||||||||||||||||||||||
| Gain on foreign exchange forward contracts classified as cash flow hedges, included in net sales | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Loss on interest rate swaps classified as cash flow hedges, included in interest expense | |||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of actuarial gain included in SG&A | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Net other comprehensive (loss) earnings, before tax | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Income tax (benefit) provision | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025, net of tax | $ | $ | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||
13.Segment Information
Viatris has four reportable segments: Developed Markets, Greater China, JANZ, and Emerging Markets. The Company reports segment information on the basis of markets and geography, which reflects its focus on bringing its large and diversified portfolio of branded and generic products, including complex products, to people in markets everywhere. Our Developed Markets segment comprises our operations primarily in North America and Europe. Our Greater China segment includes our operations in mainland China, Taiwan and Hong Kong. Our JANZ segment consists of our operations in Japan, Australia and New Zealand. Our Emerging Markets segment encompasses our presence in more than 125 countries with developing markets and emerging economies including in Asia, Africa, Eastern Europe, Latin America and the Middle East as well as the Company’s ARV franchise.
The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer, who evaluates the performance of its segments and allocates resources based on total revenues and our measure of segment profit or loss, segment profitability. These financial metrics are used to review operating trends, perform comparisons between periods, and monitor budget and forecast-to-actual variances on a regular basis. Net sales of our business segments exclude intersegment sales as these activities are not regularly reviewed by the CODM and are eliminated in consolidation.
Certain costs and gains are not included in the measurement of segment profitability, or in segment cost of sales, and segment SG&A, as management excludes these costs in assessing segment financial performance. Such costs and gains include:
◦Intangible asset amortization expense;
◦Asset impairments (including of goodwill, intangible assets (including IPR&D), and long-lived assets);
◦R&D and Acquired IPR&D expense;
◦Net charges or net gains for litigation settlements and other contingencies;
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◦Certain costs related to transactions and events such as: (i) purchase accounting adjustments, where we incur expenses associated with the amortization of fair value adjustments to inventory and property, plant and equipment; (ii) share-based compensation expense; (iii) acquisition-related costs, where we incur costs for executing the transaction, integrating the acquired operations and restructuring the combined company; and (iv) other significant items, which are substantive and/or unusual, and in some cases recurring, items (such as restructuring, including costs associated with facilities to be closed or divested, employee separation costs, impairment charges, accelerated depreciation, incremental manufacturing variances, equipment relocation costs, decommissioning and other restructuring related costs, and certain remediation costs) that are evaluated on an individual basis by management and that either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis. Such special items can include, but are not limited to, non-acquisition-related restructuring costs, as well as costs incurred for asset impairments and costs, as well as gains and losses, related to disposals of assets or businesses, including those related to divestitures, and, as applicable, any associated transition activities;
◦Corporate and other unallocated costs associated with global functions (such as IT, facilities, legal, finance, human resources, insurance, public affairs, compliance, and procurement), patient advocacy activities and certain compensation and other corporate costs (such as certain expenses associated with our manufacturing, including manufacturing variances associated with production) and operations that are not directly assessed to an operating segment as business unit (segment) management does not manage these costs;
◦Other Expense, Net (including interest and dividend income, gains and losses from investments, business divestitures, and foreign exchange); and
◦Interest expense.
The Company does not report depreciation expense, total assets and capital expenditures by segment, as such information is not used by the CODM.
The accounting policies of the segments are the same as those described in Note 2 Summary of Significant Accounting Policies included in the 2025 Form 10-K.
Presented in the table below is segment information for the periods identified and a reconciliation of segment information to total consolidated information.
| Three Months Ended March 31, 2026 | ||||||||||||||||||||||||||||||||
| (In millions) | Developed Markets | Greater China | JANZ | Emerging Markets | Total Reportable Segments | |||||||||||||||||||||||||||
Net sales | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Other revenues | ||||||||||||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||
Cost of sales | ||||||||||||||||||||||||||||||||
Selling, general and administration | ||||||||||||||||||||||||||||||||
| Segment profit | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Reconciliation of segment profit: | ||||||||||||||||||||||||||||||||
Intangible asset amortization expense | ( | |||||||||||||||||||||||||||||||
Research and development | ( | |||||||||||||||||||||||||||||||
Acquired IPR&D | ( | |||||||||||||||||||||||||||||||
Litigation settlements and other contingencies, net | ( | |||||||||||||||||||||||||||||||
Transaction related and other special items | ( | |||||||||||||||||||||||||||||||
Corporate and other unallocated | ( | |||||||||||||||||||||||||||||||
Loss from operations | $ | ( | ||||||||||||||||||||||||||||||
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| Three Months Ended March 31, 2025 | ||||||||||||||||||||||||||||||||
| (In millions) | Developed Markets | Greater China | JANZ | Emerging Markets | Total Reportable Segments | |||||||||||||||||||||||||||
Net sales | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Other revenues | ||||||||||||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||
Cost of sales | ||||||||||||||||||||||||||||||||
Selling, general and administration | ||||||||||||||||||||||||||||||||
| Segment profit | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Reconciliation of segment profit: | ||||||||||||||||||||||||||||||||
Intangible asset amortization expense | ( | |||||||||||||||||||||||||||||||
Impairment of goodwill | ( | |||||||||||||||||||||||||||||||
Research and development | ( | |||||||||||||||||||||||||||||||
Acquired IPR&D | ( | |||||||||||||||||||||||||||||||
Litigation settlements and other contingencies, net | ||||||||||||||||||||||||||||||||
Transaction related and other special items | ( | |||||||||||||||||||||||||||||||
Corporate and other unallocated | ( | |||||||||||||||||||||||||||||||
Loss from operations | $ | ( | ||||||||||||||||||||||||||||||
14.Restructuring and Other
2026 Restructuring Program
In 2025, the Company initiated an EWSR to enable the Company to build a more focused, efficient and future-ready organization and position the Company for sustained growth beginning in 2026. On February 26, 2026, the Company announced the results of its EWSR, and as a part of the review, committed to and began implementation of certain restructuring activities. These restructuring activities are expected to optimize the Company’s commercial capabilities, enabling functions, R&D, medical affairs and regulatory activities, and sourcing, manufacturing and supply chain activities, including inventory optimization. As a result, the Company expects a global workforce reduction of up to approximately 10 %. The Company anticipates that these restructuring activities, as well as associated costs and savings, will be completed primarily over the next three years.
The Company expects to record charges for costs associated with the restructuring activities of the EWSR. For the committed restructuring activities, the Company expects to incur total pre-tax charges ranging between $700 million and $850 million.
Charges for restructuring and ongoing cost reduction initiatives are recorded in the period the Company commits to a restructuring or cost reduction plan, or executes specific actions contemplated by the plan and all criteria for liability recognition have been met. These charges are recognized in Cost of Sales, R&D and SG&A in the condensed consolidated statements of operations based on the classification of the affected employees or the related operations.
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The following table summarizes the restructuring charges and the reserve activity for the 2026 restructuring program from December 31, 2025 to March 31, 2026:
| (In millions) | Employee Related Costs | Other Exit Costs | Total | ||||||||||||||
| Balance at December 31, 2025: | $ | $ | $ | ||||||||||||||
Charges (1) | |||||||||||||||||
| Cash payment | ( | ( | |||||||||||||||
| Utilization | ( | ( | |||||||||||||||
| Foreign currency translation | ( | ( | |||||||||||||||
| Balance at March 31, 2026: | $ | $ | $ | ||||||||||||||
____________
(1) For the three months ended March 31, 2026, total restructuring charges in Developed Markets, Emerging Markets, Greater China, and Corporate/Other were approximately $67.5 million, $5.7 million, $0.5 million, and $4.2 million, respectively.
At March 31, 2026 and December 31, 2025, accrued liabilities for restructuring and other cost reduction programs were primarily included in other current liabilities and other long-term obligations in the condensed consolidated balance sheets.
Nashik Manufacturing Facility
In mid-February 2026, a fire occurred in a service area at the Company's oral solid dose manufacturing facility in Nashik, India. Manufacturing at the facility was temporarily suspended. Recently, we have restarted certain manufacturing activities and currently expect to resume full operations in July 2026.
During the three months ended March 31, 2026, the Company recognized total charges of $71.9 million within Cost of Sales in the condensed consolidated statements of operations related to the write off inventory and fixed assets damaged in the fire and incremental manufacturing variances. The Company believes it has certain insurance coverages for losses, including for assets and business interruption. In the event the plant cannot be returned to normal operations or the Company’s insurance coverage is unavailable or inadequate, this event could have a negative impact on our financial position, results of operations and cash flows.
15.Licensing and Other Partner Agreements
We periodically enter into licensing and other partner agreements with other pharmaceutical companies for the development, manufacture, marketing and/or sale of pharmaceutical products. Our significant licensing and other partner agreements are primarily focused on the development, manufacturing, supply and commercialization of multiple complex products. Under these agreements, we have future potential milestone payments and co-development expenses payable to third parties as part of our licensing, development and co-development programs. Payments under these agreements generally become due and are payable upon the satisfaction or achievement of certain developmental, regulatory or commercial milestones or as development expenses are incurred on defined projects. Milestone payment obligations are uncertain, including the prediction of timing and the occurrence of events triggering a future obligation and are not reflected as liabilities in the condensed consolidated balance sheets, except for obligations reflected as acquisition-related contingent consideration, including those related to the Idorsia Transaction. Refer to Note 10 Financial Instruments and Risk Management for further discussion of contingent consideration.
Our potential maximum development milestones not accrued for at March 31, 2026 totaled approximately $430 million. We estimate that the amounts that may be paid through the end of 2026 to be approximately $144 million. These agreements may also include potential sales-based milestones and call for us to pay a percentage of amounts earned from the sale of the product as a royalty or a profit share. The amounts disclosed do not include sales-based milestones or royalty or profit share obligations on future sales of product as the timing and amount of future sales levels and costs to produce products subject to these obligations is not reasonably estimable. These sales-based milestones or royalty or profit share obligations may be significant depending upon the level of commercial sales for each product.
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Mapi
In 2018, the Company entered into an exclusive license and commercialization agreement with Mapi for the development and commercialization on a world-wide basis of GA Depot. In 2024, the Company was informed that Mapi received a Complete Response Letter regarding the NDA for GA Depot 40 mg from the FDA.
In December 2023, the Company entered into a letter agreement, as amended, with Mapi for the development and commercialization of certain additional products. The Company made an initial upfront payment of $75.0 million during the year ended December 31, 2023 as part of the letter agreement.
In April 2026, the Company and Mapi agreed to immediately terminate the license and commercialization agreement for GA Depot and the December 2023 letter agreement.
The Company holds an investment in preferred shares of Mapi that are accounted for at cost, less impairment, adjusted for observable price changes, in accordance with ASC 321, Investments – Equity Securities. In 2024, the Company fully impaired its investment in the Mapi preferred shares.
There have been no other significant changes to our licensing and other partner agreements as disclosed in our 2025 Form 10-K.
16.Income Taxes
Tax Examinations
The Company is subject to income taxes and tax audits in many jurisdictions. A certain degree of estimation is thus required in recording the assets and liabilities related to income taxes. Tax audits and examinations can involve complex issues, interpretations, and judgments and the resolution of matters that may span multiple years, particularly if subject to litigation or negotiation.
Although the Company believes that adequate provisions have been made for these uncertain tax positions, the Company’s assessment of uncertain tax positions, including those arising from legal entity restructuring transactions in connection with the Combination, is based on estimates and assumptions that the Company believes are reasonable but the estimates for unrecognized tax benefits and potential tax benefits may not be representative of actual outcomes, and variations from such estimates could materially affect the Company’s financial condition, results of operations or cash flows in the period of resolution, settlement or when the statutes of limitations expire.
The Company is subject to ongoing IRS examinations. The years 2020 through 2024 are open years, with 2020 and 2021 under examination. For 2020, there is one open item for which the Company disagrees with the IRS’ conclusion and is initiating a mediation process with the IRS through its Fast Track appeal process.
Several international audits are currently in progress. In some cases, the tax auditors have proposed adjustments or issued assessments to our tax positions, including with respect to intercompany transactions, and we are in ongoing discussions with some of the auditors regarding the validity of their tax positions.
In instances where assessments have been issued, we disagree with these assessments and believe they are without merit and incorrect as a matter of law. As a result, we anticipate that certain of these matters may become the subject of litigation before tax courts where we intend to vigorously defend our position.
In France, the tax authorities issued notices of assessments to the Company for the years ended December 2013 to December 2015 concerning our tax position with respect to whether income earned by a Company entity not domiciled in France should be subject to French tax. We commenced litigation before the French tax courts where the tax authorities are seeking unpaid taxes, penalties, and interest. In February 2026, the first instance tax court upheld the Company’s tax position and fully cancelled the notices of assessment.
In India, the tax authorities have issued notices of assessments to the Company seeking unpaid taxes and interest for the financial years covering 2013 to 2018 concerning our tax position with respect to certain corporate tax deductions and
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certain intercompany transactions. Some of these issues were resolved through the Company entering into an agreement with the tax authorities in March 2023 in respect of the pricing of its international transactions. The Company recorded tax expense of approximately $22.3 million during the year ended December 31, 2023 due to the terms of this agreement. The remaining issues are in the audit phase or are being challenged in the Indian tax courts.
In Italy, the tax authorities have issued notices of assessments to the Company for the years ended December 2016 to December 2018, seeking unpaid taxes, penalties, and interest, concerning our tax position with respect to certain intercompany transactions. We have commenced litigation before the Italian tax courts challenging those assessments and, to date, the Company’s position has been upheld, subject to further appeal by the tax authorities.
The Company has recorded a net reserve for uncertain tax positions of $299.0 million and $293.6 million, including interest and penalties, in connection with its international audits at March 31, 2026 and December 31, 2025, respectively. In connection with our international tax audits, it is possible that we will incur material losses above the amounts reserved.
The Company’s major U.S. state taxing jurisdictions remain open from fiscal year 2015 through 2024, with several state audits currently in progress. The Company’s major international taxing jurisdictions remain open from 2013 through 2025.
Accounting for Uncertainty in Income Taxes
The impact of an uncertain tax position that is more likely than not of being sustained upon audit by the relevant taxing authority must be recognized at the largest amount that is more likely than not to be sustained. No portion of an uncertain tax position will be recognized if the position has less than a 50% likelihood of being sustained.
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17.Litigation
The Company is involved in various disputes, governmental and/or regulatory inquiries, investigations and proceedings, and litigation matters, both in the U.S. and abroad, that arise from time to time, some of which could result in losses, including damages, fines and/or civil penalties, and/or criminal charges against the Company. These matters are often complex and have outcomes that are difficult to predict.
In addition, in connection with the Combination, the Company has generally assumed liability for, and control of, pending and threatened legal matters relating to the Upjohn Business – including certain matters initiated against Pfizer described below – and has agreed to indemnify Pfizer for liabilities arising out of such assumed legal matters. Pfizer, however, has agreed to retain various matters – including certain specified competition law matters – to the extent they arise from conduct during the pre-Distribution period and has agreed to indemnify the Company for liabilities arising out of such matters.
While the Company believes that it has meritorious defenses with respect to the claims asserted against it and the assumed legal matters referenced above, and intends to vigorously defend its position, the process of resolving these matters is inherently uncertain and may develop over a long period of time, and so it is not possible to predict the ultimate resolution of any such matter. It is possible that an unfavorable resolution of any of the ongoing matters could have a material effect on the Company’s business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares and/or stock price.
Some of these governmental inquiries, investigations, proceedings and litigation matters with which the Company is involved are described below, and unless otherwise disclosed, the Company is unable to predict the outcome of the matter or to provide an estimate of the range of reasonably possible material losses. The Company records accruals for loss contingencies to the extent we conclude it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company is also involved in other pending proceedings for which, in the opinion of the Company based upon facts and circumstances known at the time, either the likelihood of loss is remote or any reasonably possible loss associated with the resolution of such proceedings is not expected to be material to the Company’s business, financial position, results of operations, cash flows, ability to pay dividends or repurchase shares and/or stock price. If and when any reasonably possible losses associated with the resolution of such other pending proceedings, in the opinion of the Company, become material, the Company will disclose such matters.
Legal costs are recorded as incurred and are classified in SG&A in the Company’s condensed consolidated statements of operations.
EpiPen® Auto-Injector
In June 2024, the Company received a civil subpoena from the Attorney General of the State of Mississippi seeking information relating to the sales and/or marketing of EpiPen® Auto-Injector. The Company was subsequently contacted by certain other State Attorneys General regarding similar issues, including those that generally relate to issues from EpiPen litigations and/or investigations that have been previously resolved and disclosed. The Company has reached settlements with Mississippi and all of those certain other State Attorneys General. These matters are now closed.
The Company has a total accrual of approximately $45.8 million related to these matters at March 31, 2026, which is included in Other Current Liabilities in the condensed consolidated balance sheets.
Drug Pricing Matters
Civil Litigation
Beginning in 2016, the Company, along with other manufacturers, has been named as a defendant in lawsuits filed in the United States and Canada generally alleging anticompetitive conduct with respect to generic drugs. The lawsuits have been filed by plaintiffs that include putative classes of direct purchasers, indirect purchasers, and indirect resellers, as well as individual direct and indirect purchasers and certain cities and counties. The lawsuits allege harm under federal laws and the United States lawsuits also allege harm under state laws, including antitrust laws, state consumer protection laws and unjust enrichment claims. Plaintiffs assert that the Company engaged in individual drug conspiracies with respect to certain products sold by the Company, and in certain lawsuits, plaintiffs assert that the Company engaged in an “overarching conspiracy” with numerous other defendants and seek to impose liability on the Company and the other defendants with respect to all of the
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alleged products, including products that the individual defendants did not sell. Some of the United States lawsuits also name as defendants the Company’s former President, including allegations against him with respect to a single drug product, and one of the Company’s former sales employees, including allegations against him with respect to certain generic drugs. The vast majority of the United States lawsuits have been consolidated in an MDL proceeding in the Eastern District of Pennsylvania (“EDPA”). Plaintiffs generally seek monetary damages, restitution, declaratory and injunctive relief, attorneys’ fees and costs.
The EDPA Court ordered the Clomipramine and Clobetasol direct and indirect purchaser cases to proceed as bellwethers. The Company is named only in the Clomipramine bellwether cases, wherein the EDPA Court certified both direct and indirect purchaser classes. Defendants filed petitions for permission to appeal those class certification decisions, which were granted by the U.S. Court of Appeals for the Third Circuit. These cases have been stayed pending a decision on the defendants’ class certification appeals. Defendants’ summary judgment motions in the direct purchaser case was denied and was largely denied with some narrowing of claims, and potentially reducing claimed damages, in the indirect purchaser case. Plaintiffs are asserting damages of approximately $350 million in each of the Clomipramine bellwether cases, which are subject to trebling under federal law in the direct purchaser case or multipliers under certain state laws in the indirect purchaser case.
The EDPA Court has selected additional cases to proceed as bellwethers. The Company is named in three of the cases scheduled for trial, which consist of non-class cases filed by direct and indirect purchasers against the Company and other defendants. The first trial is scheduled to begin in September 2026, with subsequent trials scheduled to begin in August 2027 and January 2028. In the case scheduled for trial in September 2026, defendants’ motions for summary judgment are pending. Plaintiff is asserting damages of approximately $1 billion in that case against defendants, which is subject to trebling under federal law with respect to Plaintiff’s direct purchases and multipliers under certain state laws in connection with its indirect purchases. Plaintiff’s asserted damages, which includes those based on an “overarching conspiracy” claim, are being challenged as part of defendants’ motions for summary judgment.
With respect to the Canadian lawsuit, in February 2026, the Federal Court in Canada denied Plaintiff’s motion for class certification.
The Company believes that it acted lawfully, is continuing to defend itself vigorously, and intends to vigorously contest all aspects of the cases, including the asserted damages.
Attorneys General Litigation
On December 21, 2015, the Company received a subpoena and interrogatories from the Connecticut Office of the Attorney General seeking information relating to the marketing, pricing and sale of certain of the Company’s generic products and communications with competitors about such products. On December 14, 2016, attorneys general of certain states filed a complaint in the United States District Court for the District of Connecticut against several generic pharmaceutical drug manufacturers, including the Company, alleging anticompetitive conduct with respect to, among other things, a single drug product. The complaint has subsequently been amended, including on June 18, 2018, to add attorneys general alleging violations of federal and state antitrust laws, as well as violations of various states’ consumer protection laws. This lawsuit was transferred to the aforementioned MDL proceeding in the EDPA. The operative complaint includes attorneys general of forty-two states, the District of Columbia and the Commonwealth of Puerto Rico. The Company is alleged to have engaged in anticompetitive conduct with respect to four generic drug products sold by the Company as well as an “overarching conspiracy” with respect to the various products asserted in the operative complaint against the Defendants. The amended complaint also includes claims asserted by attorneys general of thirty-two states and the Commonwealth of Puerto Rico against certain individuals, including the Company’s former President, with respect to a single drug product. The operative complaint seeks declaratory and injunctive relief, disgorgement, attorneys’ fees and costs, and certain states seek monetary damages, civil penalties, restitution, and other equitable monetary relief. The states’ claim for disgorgement and restitution under federal law, and certain state law claims brought by certain states, have been dismissed.
On May 10, 2019, certain attorneys general filed a new complaint in the United States District Court for the District of Connecticut against various drug manufacturers and individuals, including the Company and one of its former sales employees, alleging anticompetitive conduct with respect to additional generic drugs sold by the Company as well as an “overarching conspiracy” with respect to the various products asserted in the operative complaint against the Defendants. The complaint was subsequently amended, including on November 22, 2024, to add states as plaintiffs. The operative complaint is brought by attorneys general of forty-four states, certain territories and the District of Columbia. The amended complaint also includes claims asserted by attorneys general of forty states and certain territories against several individuals, including a former Company sales employee. The operative complaint seeks declaratory and injunctive relief, disgorgement, attorneys’ fees and
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costs, and certain states seek monetary damages, civil penalties, restitution, and other equitable monetary relief. This lawsuit was transferred to the aforementioned MDL proceeding in the EDPA.
On June 10, 2020, certain attorneys general filed a new complaint in the United States District Court for the District of Connecticut against drug manufacturers, including the Company, and individual defendants (none from the Company), alleging anticompetitive conduct with respect to additional generic drugs sold by the Company as well as an “overarching conspiracy” with respect to the various products asserted in the operative complaint against the Defendants. On September 9, 2021, the complaint was amended, adding an additional state as a plaintiff. The operative complaint is brought by attorneys general of forty-two states, certain territories and the District of Columbia. The operative complaint seeks declaratory and injunctive relief, disgorgement, attorneys’ fees and costs, and certain states seek monetary damages, civil penalties, restitution, and other equitable monetary relief. The states’ claim for disgorgement and restitution under federal law, and certain state law claims brought by certain states, have been dismissed. This lawsuit was transferred to the aforementioned MDL proceeding in the EDPA and was ordered to proceed as a bellwether. The Company’s motions for summary judgment were largely denied with some of the States’ claims for monetary relief being reduced.
The aforementioned complaints have been transferred back to the U.S. District Court for the District of Connecticut.
Securities Related Litigation
On February 14, 2020, the Abu Dhabi Investment Authority (“ADIA”) filed a complaint against Mylan N.V. and Mylan Inc. (collectively for purposes of this paragraph, “Mylan”) in the United States District Court for the Southern District of New York (“SDNY”) alleging that Mylan made false or misleading statements and omissions of purportedly material fact, in violation of federal securities laws, in connection with disclosures relating to the classification of their EpiPen® Auto-Injector as a non-innovator drug for purposes of the Medicaid Drug Rebate Program and allegedly anticompetitive conduct with respect to EpiPen® Auto-Injector and certain generic drugs. ADIA sought monetary damages as well as fees and costs. The Company has resolved this matter and the case has been dismissed.
On June 26, 2020, a putative class action complaint was filed by the Public Employees Retirement System of Mississippi, which was subsequently amended on November 13, 2020, against Mylan N.V., certain of Mylan N.V.’s former directors and officers, and a former officer/director of the Company (collectively for the purposes of this paragraph, the “defendants”) in the U.S. District Court for the Western District of Pennsylvania (“WDPA”) on behalf of certain purchasers of securities of Mylan N.V. (“WDPA Mylan N.V. Class Action Litigation”). The amended complaint includes allegations that defendants engaged in a scheme and made false or misleading statements and omissions of purportedly material fact, in violation of federal securities laws, in connection with disclosures relating to the Nashik and Morgantown manufacturing plants and inspections at the plants by the FDA. Plaintiff seeks certification of a class of purchasers of Mylan N.V. securities between February 16, 2016 and May 7, 2019. In July 2025, the Court held that Plaintiffs’ misstatements claim as to 1 of the 46 challenged statements, and their scheme claim, may proceed to discovery. The complaint seeks monetary damages, as well as the plaintiff’s fees and costs. In February 2026, the Company reached an agreement to pay $60 million to fully resolve this matter, which is subject to court approval.
Beginning in May 2023, putative class action complaints were filed against the Company and certain of the Company’s former officers, directors, and employees in the WDPA on behalf of certain purchasers of securities of the Company. These actions were consolidated and, on October 23, 2023, a consolidated amended putative class action complaint was filed in the WDPA against the Company, and former officers and directors (“WDPA Viatris Class Action Litigation”). The operative complaint alleged that defendants made false or misleading statements and omissions of material fact, in violation of federal securities laws, in connection with disclosures relating to the Company’s projected financial performance and biosimilars business. Plaintiffs sought certification of a class of purchasers of Company securities between March 1, 2021 and February 25, 2022. Plaintiffs sought monetary damages, reasonable costs and expenses, and certain other relief. On September 20, 2024, the Court granted Defendants’ motion to dismiss all of Plaintiffs’ claims. Plaintiffs’ appeals were denied and this case is now closed.
Beginning in August 2023, stockholder derivative actions purportedly on behalf of Viatris were filed in the WDPA against certain of the Company’s current and former officers, directors, and employees alleging that defendants failed to ensure that the Company was making truthful and accurate statements in connection with the disclosures alleged in the WDPA Viatris Class Action Litigation. Viatris was named as a nominal defendant in these derivative actions. Certain of the complaints also asserted claims for corporate waste and unjust enrichment. Plaintiffs sought various forms of relief, including damages,
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disgorgement, restitution, costs and fees. Following the consolidation of their complaints, in April 2026, Plaintiffs dismissed their complaint.
In April 2025, a putative class action complaint, which was subsequently amended in September 2025 and March 2026, was filed against the Company and certain of the Company’s officers, in the WDPA on behalf of certain purchasers of the Company’s securities (“WDPA Indore Class Action Litigation”). The amended complaint alleges that defendants made false or misleading statements or omissions of material fact, in violation of federal securities laws, in connection with disclosures relating to regulatory issues and actions concerning the Company’s Indore manufacturing facility. Plaintiffs seek certification of a class of purchasers of Company securities between February 28, 2024 and February 26, 2025. Plaintiffs seek various forms of relief, including damages, costs and fees.
Beginning in November 2025, stockholder derivative actions purportedly on behalf of Viatris have been filed in the WDPA against certain of the Company’s current and former officers and directors alleging that the defendants failed to ensure that the Company was making truthful and accurate statements in connection with the disclosures alleged in the WDPA Indore Class Action Litigation. Viatris is also named as a nominal defendant in these derivative actions. The complaints assert various claims, including, violations of federal securities laws, as well as claims for breach of fiduciary duty, waste of corporate assets, and unjust enrichment. Plaintiff seeks various forms of relief, including damages, disgorgement, restitution, equitable relief, and costs and fees.
The Company has a total accrual of approximately $60.8 million related to these matters at March 31, 2026, which is included in Other Current Liabilities in the condensed consolidated balance sheets. Although it is reasonably possible that the Company may incur additional losses from these matters, any amount cannot be reasonably estimated at this time. In addition, the Company expects to incur additional legal and other professional service expenses associated with such matters in future periods and will recognize these expenses as services are received. The Company believes that the ultimate amount paid for these services and claims could have a material effect on the Company's business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares and/or stock price in future periods.
The Company maintains insurance coverage with respect to these matters. Management has determined that the majority of the losses associated with the WDPA Mylan N.V. Class Action Litigation are covered under existing insurance policies. Accordingly, the Company has recognized an insurance receivable of $58.0 million within Accounts Receivable, Net in the condensed consolidated balance sheets. The recognition of this receivable is based on management’s assessment that recovery of these costs is probable.
Opioids
The Company, along with other manufacturers, distributors, pharmacies, pharmacy benefit managers, and individual healthcare providers, is a defendant in cases in the United States and Canada filed by various plaintiffs, including counties, cities and other local governmental entities, asserting civil claims related to sales, marketing and/or distribution practices with respect to prescription opioid products.
The lawsuits generally seek equitable relief and monetary damages (including punitive and/or exemplary damages) based on a variety of legal theories, including various statutory and/or common law claims, such as negligence, public nuisance and unjust enrichment. The vast majority of these lawsuits were consolidated in an MDL in the U.S. District Court for the Northern District Court of Ohio.
In April 2025, the Company reached a nationwide settlement framework to resolve opioid-related claims by States, local governments, and Native American tribes against the Company and certain of its subsidiaries. Under the agreed upon framework, the Company would pay up to a maximum of $335 million, consisting of annual payments over a nine-year period of between approximately $27.5 million and $40 million each, to help support state and local efforts to address opioid-related issues. Following a sign-on period, the settlement framework achieved high levels of participation, including all States and Territories, all litigating Native American Tribes, and the vast majority of litigating local governments. Accordingly, the settlement was finalized, and the cases covered by the settlement have either been dismissed, including the vast majority of cases in the MDL, or are in the process of being dismissed. The settlement contains no admission of wrongdoing or liability.
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Certain cases not covered by the settlement remain pending, including a small number of actions brought by local governments, actions brought by private hospitals, third party payors, personal injury plaintiffs, and actions brought on behalf of children with Neonatal Abstinence Syndrome due to alleged exposure to opioids. Some of the pending actions are putative class action lawsuits.
The Company has accrued approximately $281.3 million in connection with these matters at March 31, 2026, which is included in Other Current Liabilities and Other Long-term Obligations in the condensed consolidated balance sheets. Although it is reasonably possible that the Company may incur additional losses from these matters, any amount cannot be reasonably estimated at this time. In addition, the Company expects to incur additional legal and other professional service expenses associated with such matters in future periods and will recognize these expenses as services are received. The Company believes that the ultimate amount paid for these services and claims could have a material effect on the Company's business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares and/or stock price in future periods.
Citalopram
In 2013, the European Commission issued a decision finding that Lundbeck and several generic companies, including Generics [U.K.] Limited (“GUK”), had violated EU competition rules relating to various settlement agreements entered into in 2002 for citalopram. After various appeals, the European Commission’s decision was upheld in March 2021. On March 28, 2023, bodies of the national health authorities in England & Wales filed a case in the U.K. Competition Appeals Tribunal against parties to the citalopram investigation, including GUK, seeking monetary damages, plus interest, purportedly arising from the settlement agreements. GUK, beginning in approximately 2018, has received notices from other health service authorities and insurers asserting an intention to file similar claims. Pursuant to an indemnification agreement, Merck KGaA and GUK have agreed to equally share any damages claimed against Merck KGaA and/or GUK alleged to have been caused by the conduct which is the subject of the European Commission decision.
The Company has accrued approximately €11.9 million as of March 31, 2026 related to this matter. It is reasonably possible that we will incur additional losses above the amount accrued but we cannot estimate a range of such reasonably possible losses at this time. There are no assurances, however, that settlements reached and/or adverse judgments received, if any, will not exceed amounts accrued.
Perindopril
In 2014, the European Commission issued a decision finding that Servier SAS, and certain of its subsidiaries (“Servier”), along with several generic companies, including the Company, had violated EU competition rules relating to various settlement agreements for perindopril. The settlement agreement involving the Company is a 2005 agreement entered into between Servier and Matrix Laboratories Ltd., which the Company acquired in 2007. After various appeals, the European Commission’s decision was upheld in June 2024. The Company satisfied its monetary obligation in 2014.
Bodies of national health authorities in England, Wales, Scotland, and Northern Ireland filed a case in the English High Court against Servier, seeking monetary damages, plus interest, purportedly arising from the settlement agreements. Servier has joined the generic companies, including the Company, as defendants in this litigation. The case has been transferred to the U.K. Competition Appeals Tribunal.
In December 2024, health insurance funds located in the EU filed a case in the Amsterdam District Court against Servier and the generic companies, including the Company, seeking monetary damages, plus interest, purportedly arising from the settlement agreements. In April 2026, the Court dismissed the case against the Company for lack of jurisdiction.
Product Liability
Like other pharmaceutical companies, the Company is involved in a number of product liability lawsuits related to alleged personal injuries arising out of certain products manufactured/or distributed by the Company, including but not limited to those discussed below. Plaintiffs in these cases generally seek damages and other relief on various grounds for alleged personal injury and economic loss.
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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
The Company has accrued approximately $35.5 million as of March 31, 2026 for its product liability matters. It is reasonably possible that we will incur additional losses and fees above the amount accrued but we cannot estimate a range of such reasonably possible losses or legal fees related to these claims at this time. There are no assurances, however, that settlements reached and/or adverse judgments received, if any, will not exceed amounts accrued.
Nitrosamines
The Company, along with numerous other manufacturers, retailers, and others, are parties to litigation relating to alleged trace amounts of nitrosamine impurities in certain products, including valsartan and ranitidine. The vast majority of these lawsuits naming the Company in the United States are pending in two MDLs, namely an MDL pending in the United States District Court for the District of New Jersey concerning valsartan and an MDL pending in the United States District Court for the Southern District of Florida concerning ranitidine. The lawsuits against the Company in the MDLs include putative and certified classes seeking the refund of the purchase price and other economic and punitive damages allegedly sustained by consumers and end payors as well as individuals seeking compensatory and punitive damages for personal injuries allegedly caused by ingestion of the medications. A similar lawsuit pertaining to valsartan is pending in Israel. Third party payor, consumer and medical monitoring classes were certified in the valsartan MDL. The Company has also received requests to indemnify purchasers of the Company’s API and/or finished dose forms of these products. The Company has reached an agreement in principle to resolve the valsartan personal injury lawsuits in the U.S.
The original master complaints concerning ranitidine were dismissed on December 31, 2020. The end-payor plaintiff immediately appealed to the U.S. Court of Appeals for the Eleventh Circuit, which affirmed the dismissal. The personal injury and consumer putative class plaintiffs filed amended master complaints. The Company was not named as a defendant in the amended master complaints, though it was still named in certain short form complaints filed by personal injury plaintiffs. The trial court has dismissed all remaining claims against the generic defendants. Certain of the personal injury plaintiffs appealed this dismissal, which remains pending.
Lipitor
A number of individual and multi-plaintiff lawsuits have been filed against Pfizer in various federal and state courts alleging that the plaintiffs developed type 2 diabetes purportedly as a result of the ingestion of Lipitor. Plaintiffs seek compensatory and punitive damages. In February 2014, the federal actions were transferred for consolidated pre-trial proceedings to an MDL in the U.S. District Court for the District of South Carolina. The District Court granted Pfizer’s motion for summary judgment and dismissed all of the federal cases in 2017, which was subsequently affirmed on appeal. Since 2016, certain cases in the MDL were remanded to certain state courts. While state court cases remain pending in Missouri and New York, those cases are inactive.
Depo-Provera
Beginning in October 2024, the Company (including Greenstone LLC), Pfizer and certain entities related to Pfizer, and Prasco Labs were named in a number of lawsuits filed in federal and state courts related to claims pertaining to Depo-Provera. Certain of these lawsuits include allegations that individual plaintiffs developed meningiomas purportedly as a result of the ingestion of Depo-Provera or its authorized generic equivalent and seek compensatory and punitive damages. Putative class complaints seeking relief in the form of medical monitoring for individuals from certain states who have taken Depo-Provera or its authorized generic equivalent, but have not developed meningiomas, were also filed. In February 2025, the federal lawsuits were transferred for consolidated pre-trial proceedings to an MDL in the U.S. District Court for the Northern District of Florida. Pfizer is the new drug application holder of Depo-Provera and markets and sells the branded version of the product. Greenstone LLC was a subsidiary of Pfizer until the closing of the Combination and sold the authorized generic of Depo-Provera until the closing of the Combination. Concurrently with the closing of the Combination, Pfizer divested the authorized generic of Depo-Provera to Prasco Labs. In June 2025, the MDL court implemented a process whereby, with respect to current and future cases filed against the Company in this MDL, Plaintiffs must show why claims against the Company are appropriate. As a result of this process, the Company has been dismissed without prejudice from all cases originally pending in this MDL. The Company has also been dismissed without prejudice in certain state court cases. The Company has sought to tender its defense and is seeking indemnification for these claims from Pfizer pursuant to the Separation and Distribution Agreement and Pfizer is seeking cross-indemnification from the Company pursuant to the Separation and Distribution Agreement with respect to the authorized generic product previously sold by Greenstone LLC.
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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
Intellectual Property
The Company is involved in a number of patent litigation lawsuits involving the validity and/or infringement of patents held by branded pharmaceutical manufacturers. The Company uses its business judgment to decide to market and sell certain products, in each case based on its belief that the applicable patents are invalid and/or that its products do not infringe, notwithstanding the fact that allegations of patent infringement(s) or other potential third party rights have not been finally resolved by the courts. The risk involved in doing so can be substantial because the remedies available to the owner of a patent for infringement may include a reasonable royalty on sales or damages measured by the profits lost by the patent owner. If there is a finding of willful infringement, damages may be increased up to three times. Moreover, because of the discount pricing typically involved with bioequivalent products, patented branded products generally realize a substantially higher profit margin than generic and biosimilar products. The Company also faces challenges to its patents, including suits in various jurisdictions pursuant to which generic drug manufacturers, payers, governments, or other parties are seeking damages for allegedly causing delay of generic entry. An adverse decision in any of these matters could have an adverse effect that is material to our business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares and/or stock price.
Dimethyl Fumarate
The Company launched its generic dimethyl fumarate (“DMF”) product in Europe starting in July 2022 after the European Commission concluded that Biogen Netherlands B.V. (“Biogen”) was not entitled to regulatory data exclusivity for Tecfidera®. In December 2023, based on its interpretation of an intervening ruling from the Court of Justice of the European Union (“CJEU”), the European Commission revoked certain generic marketing authorizations for DMF, including the Company’s. The Company challenged the European Commission’s revocation decision before the General Court of the European Union (“GCEU”) and, in February 2026, the GCEU denied the Company’s challenge. The Company has filed an appeal to the CJEU.
Beginning in October 2023, Biogen and certain Biogen affiliated entities filed damages actions in commercial courts of Spain, Belgium, France, Netherlands, Portugal, Germany, Italy, Estonia, Finland and Croatia claiming that the Company’s sales of generic DMF violated Tecfidera’s purportedly restored regulatory exclusivity and these actions are in various stages. Biogen’s purported regulatory exclusivity for Tecfidera expired in February 2024, its patent covering DMF has been revoked, and the Company has secured a new marketing authorization for DMF. Thus, the Company has resumed commercializing DMF in Europe.
Yupelri
Beginning in January 2023, certain generic companies notified us that they had filed ANDAs with the FDA seeking approval to market generic versions of Yupelri® with associated Paragraph IV certifications. Beginning in February 2023, we brought patent infringement actions against the generic filers. The Company has entered into settlement agreements with all of the generic filers, granting them licenses to commercialize their generic versions of Yupelri® in April 2039 or earlier depending on certain circumstances. This matter is now closed.
Tyrvaya
In June 2023, a generic company notified Oyster Point that it had filed an ANDA with the FDA seeking approval to market a generic version of Tyrvaya® with associated Paragraph IV certifications. In July 2023, Oyster Point brought a patent infringement action against the generic filer in the U.S. District Court for the District of New Jersey. The Company has entered into a settlement agreement with the generic company resolving the litigation and granting licenses to commercialize its generic version of Tyrvaya® in October 2034, or earlier depending on certain circumstances.
In January 2026, Oyster Point brought a patent infringement action against a second generic filer in the U.S. District Court for the District of New Jersey. The Company is asserting infringement of patents that expire on October 19, 2035. This lawsuit automatically stays FDA approval of the generic company’s ANDA until June 2028, or until an adverse court decision, if any, whichever may occur earlier.
Amitiza
Beginning in September 2023, Sawai Pharmaceutical Co. (“Sawai”) and Towa Pharmaceutical Co. Ltd. (“Towa”) filed challenges with the Japanese Patent Office (“JPO”) asserting invalidity of JP ’4332353 (“the ’353 patent”) and its patent term
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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
extensions (“PTE”) relevant to Amitiza®, which the Company commercializes in Japan in 24µg and 12µg dosages as a licensee of the relevant patents. The remaining PTE for the ‘353 patent, which was granted based on the approval of the 12µg product, expires in April 2027. In April 2025 and June 2025, the JPO upheld the validity of the ‘353 patent and its PTE. Sawai filed appeals against these JPO decisions with the Intellectual Property High Court. In April 2026, the Intellectual Property High Court dismissed Sawai’s appeal challenging the validity of the ‘353 patent’s PTE. Sawai’s appeal challenging the validity of the ‘353 patent itself remains pending.
Beginning in April 2024, Sawai filed challenges with the JPO with respect to the 12µg strength, asserting invalidity of PTE of five patents expiring in October 2025, September 2026, August 2027, November 2027, and December 2028, and challenged the validity of the August 2027 patent itself. In January 2026, the JPO upheld the validity of the August 2027 patent and the remaining challenges are pending.
In February 2026, Sawai and Towa received regulatory approval for their proposed 24µg products. The Company, beginning in October 2025, commenced actions asserting that Sawai and Towa’s proposed 24ug generic products would infringe the PTEs of four patents. The PTEs, which were granted in connection with the approval of the 12 µg product, expire in September 2026, April 2027, August 2027, and December 2028. Two of the four patents have been asserted against Sawai in Osaka District Court while the remaining two patents have been asserted against Sawai in Tokyo District Court. All four patents have been asserted against Towa in Tokyo District Court. The Company is seeking a finding of infringement and an order prohibiting Sawai and Towa from commercializing their proposed 24µg products until PTE expiration.
In February 2026, the Osaka District Court denied the Company’s request for a preliminary injunction against Sawai and, in March 2026, denied the Company’s infringement action against Sawai relating to the two asserted patents. The Company has appealed the infringement decision to the Intellectual Property High Court. The infringement cases against Sawai and Towa at the Tokyo District Court are pending.
In April 2026, following hearings before the Intellectual Property High Court in the Sawai infringement appeal proceedings, both Sawai and Towa agreed to suspend certain steps required to commercialize their 24 µg products, pending further developments in the legal proceedings. In the event the Company’s infringement position is ultimately unsuccessful, Sawai and Towa maintained their rights to seek to recover damages against the Company.
Ryzumvi
In February 2025, a generic company notified the Company that it had filed an ANDA with the FDA seeking approval to market a generic version of Ryzumvi® with associated Paragraph IV certifications. The generic company asserts the invalidity and/or non-infringement of Orange Book listed patents that have an expiration date of January 31, 2034, and October 25, 2039. In March 2025, the Company brought a patent infringement action against the generic filer in the U.S. District Court for the District of New Jersey. This lawsuit automatically stays FDA approval of the generic company’s ANDA until August 3, 2027, or until an adverse court decision, if any, whichever may occur earlier.
The Company has approximately $6.2 million accrued related to its intellectual property matters at March 31, 2026. It is reasonably possible that we may incur additional losses and fees but we cannot estimate a range of such reasonably possible losses or legal fees related to these claims at this time.
Other Litigation
The Company is involved in various other legal proceedings including commercial, contractual, employment, or other similar matters that are considered normal to its business. The Company has approximately $7 million accrued related to these various other legal proceedings at March 31, 2026.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis addresses material changes in the financial condition and results of operations of Viatris Inc. and subsidiaries for the periods presented. Unless context requires otherwise, the “Company,” “Viatris,” “our” or “we” refer to Viatris Inc. and its subsidiaries.
This discussion and analysis should be read in conjunction with the Consolidated Financial Statements, the related Notes to Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Viatris’ 2025 Form 10-K, the unaudited interim financial statements and related Notes included in Part I — Item 1 of this Form 10-Q and our other SEC filings and public disclosures. The interim results of operations and comprehensive earnings (loss) for the three months ended March 31, 2026, and cash flows for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the full fiscal year or any other future period.
This Form 10-Q contains “forward-looking statements”. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may include, without limitation, statements about the goals or outlooks with respect to the Company’s strategic initiatives and priorities, including but not limited to divestitures, acquisitions, strategic alliances, collaborations, or other potential transactions; the anticipated benefits of such strategic initiatives or priorities or restructuring activities; future opportunities for the Company and its products; the outcomes of clinical trials and research studies; R&D and new product development; and any other statements regarding the Company’s future operations, financial or operating results, capital allocation, dividend policy and payments, share repurchases, debt ratio and covenants, anticipated business levels, future earnings, planned activities, anticipated growth, market opportunities, strategies, imperatives, competitions, commitments, confidence in future results, efforts to create, enhance or otherwise unlock value, and other expectations and targets for future periods. Forward-looking statements may often be identified by the use of words such as “will”, “may”, “could”, “should”, “would”, “project”, “believe”, “anticipate”, “expect”, “plan”, “estimate”, “forecast”, “potential”, “pipeline”, “intend”, “continue”, “target”, “seek” and variations of these words or comparable words. Because forward-looking statements inherently involve risks and uncertainties, actual future results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to:
•the possibility that the Company may not realize the intended benefits of, or achieve the intended goals or outlooks with respect to, its strategic initiatives and priorities;
•the possibility that the Company may be unable to achieve the intended or expected benefits of its enterprise-wide strategic review and related cost-saving and restructuring activities within the expected timeframe or at all;
•the possibility that the Company may be unable to achieve intended or expected benefits in connection with divestitures, acquisitions, strategic alliances, collaborations, or other transactions, or restructuring programs, within the expected timeframes or at all;
•goodwill or impairment charges or other losses;
•success of clinical trials and the Company’s or its partners’ ability to execute on new product opportunities and develop, manufacture and commercialize products;
•any changes in or difficulties with the Company’s manufacturing facilities, including with respect to short- or long-term shutdowns, inspections, remediation and restructuring activities, supply chain continuity, inventory management, or the ability to meet anticipated demand;
•the Company’s failure to achieve expected or targeted future financial and operating performance and results;
•the potential impact of natural or man-made disasters, public health outbreaks, fires, accidents, weather, unrest or other emergencies in regions where we or our partners or suppliers operate;
•actions and decisions of healthcare and pharmaceutical regulators;
•changes in relevant laws, regulations and policies and/or the application or implementation thereof, including but not limited to tax, healthcare and pharmaceutical laws, regulations and policies globally;
•the ability to attract, motivate and retain key personnel;
•the Company’s liquidity, capital resources and ability to obtain financing;
•any regulatory, legal or other impediments to the Company’s ability to bring new products to market;
•products in development that receive regulatory approval may not achieve expected levels of market acceptance, efficacy or safety;
•longer review, response and approval times as a result of evolving regulatory priorities and reductions in personnel at health agencies;
•the scope, timing and outcome of any ongoing legal proceedings, including government inquiries or investigations, and the impact of any such proceedings on the Company;
•any significant breach of data security or data privacy or disruptions to our IT systems;
•risks associated with having significant operations globally;
•the ability to protect intellectual property and preserve intellectual property rights;
•changes in third-party relationships;
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•the effect of any changes in the Company’s or its partners’ customer and supplier relationships and customer purchasing patterns, including customer loss and business disruption being greater than expected following an adverse regulatory action, acquisition or divestiture;
•the impacts of competition, including decreases in sales or revenues as a result of the loss of market exclusivity for certain products;
•changes in the economic and financial conditions of the Company or its partners;
•uncertainties regarding future demand, pricing and reimbursement for the Company’s products;
•uncertainties and matters beyond the control of management, including but not limited to general political and economic conditions, wars or other conflicts, potential for adverse impacts from future tariffs and trade restrictions, inflation rates and global exchange rates; and
•inherent uncertainties involved in the estimates and judgments used in the preparation of financial statements, and the providing of estimates of financial measures, in accordance with U.S. GAAP and related standards or on an adjusted basis.
For more detailed information on the risks and uncertainties associated with Viatris, see the risks described in Part I, Item 1A in the 2025 Form 10-K, and our other filings with the SEC. You can access Viatris’ filings with the SEC through the SEC website at www.sec.gov or through our website, and Viatris strongly encourages you to do so. Viatris routinely posts information that may be important to investors on our website at investor.viatris.com, and we use this website address as a means of disclosing material information to the public in a broad, non-exclusionary manner for purposes of the SEC’s Regulation Fair Disclosure (Reg FD). The contents of our website are not incorporated by reference in this Form 10-Q and shall not be deemed “filed” under the Securities Exchange Act of 1934, as amended. Viatris undertakes no obligation to update any statements herein for revisions or changes after the filing date of this Form 10-Q other than as required by law.
Company Overview
Viatris is a global healthcare company whose breadth and scale we believe make it uniquely positioned to address healthcare needs globally. With a mission to empower people worldwide to live healthier at every stage of life, Viatris supplies high-quality medicines to approximately 1 billion patients around the world each year. The Company has a global footprint, an extensive portfolio of medicines that is well-diversified across therapeutic areas, a one-of-a-kind global supply chain designed to reach more people when and where they need them, and the scientific expertise to address some of the world's most enduring health challenges.
Viatris’ executive management team is focused on ensuring that the Company is optimally structured and efficiently resourced to deliver sustainable value to patients, shareholders, customers and other key stakeholders. The Company operates in more than 165 countries and territories with approximately 30,000 employees. The Company has 27 manufacturing, packaging, and distribution sites worldwide, approximately 1,300 approved molecules, and what we believe is industry leading commercial, R&D, regulatory, manufacturing, legal and medical expertise. Viatris’ portfolio consists of generics (including complex products), globally recognized iconic brands, and an expanding portfolio of innovative medicines. Viatris is headquartered in the U.S., with global centers in Pittsburgh, Pennsylvania, Shanghai, China and Hyderabad, India.
Viatris has four reportable segments: Developed Markets, Greater China, JANZ, and Emerging Markets. The Company reports segment information on the basis of markets and geography, which reflects its focus on bringing its large and diversified portfolio of branded and generic products, including complex products, to people in markets everywhere. Our Developed Markets segment comprises our operations primarily in North America and Europe. Our Greater China segment includes our operations in mainland China, Taiwan and Hong Kong. Our JANZ segment consists of our operations in Japan, Australia and New Zealand. Our Emerging Markets segment encompasses our presence in more than 125 countries with developing markets and emerging economies including in Asia, Africa, Eastern Europe, Latin America and the Middle East as well as the Company’s ARV franchise.
Certain Market and Industry Factors
The global pharmaceutical industry is a highly competitive and highly regulated industry. As a result, we face a number of industry-specific factors and challenges, which can significantly impact our results. The following discussion highlights some of these key factors and market conditions.
The process of obtaining regulatory approval to manufacture and market new branded and generic pharmaceutical products is rigorous, time consuming, costly, and inherently unpredictable. Complex generic products are often more difficult, costly and time-consuming to receive regulatory approval and bring to market compared with commodity generic pharmaceutical products. Any delay in regulatory approval could impact the commercial or financial success of a product.
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Regulatory approval, if and when obtained, may be limited in scope. Even if regulatory approvals for new products are obtained, the success of those products is dependent upon market acceptance.
Generic products, particularly in the U.S., generally contribute most significantly to revenues and gross margins at the time of their launch, and even more so in periods of market exclusivity, or in periods of limited generic competition. As such, the timing of new product introductions can have a significant impact on the Company’s financial results. The entrance into the market of additional competition generally has a negative impact on the volume and pricing of the affected products. Additionally, pricing is often affected by factors outside of the Company’s control. Conversely, generic products generally experience less volatility over a longer period of time in Europe as compared to the U.S., primarily due to the role of government oversight of healthcare systems in the region. In addition, U.S. governmental agencies provide funding for certain products in our Emerging Markets region. We expect that any reduction in that funding will have a negative impact on our financial condition, results of operations or cash flows.
For branded products, the majority of the product’s commercial value is usually realized during the period in which the product has market exclusivity. In the U.S. and some other countries, when market exclusivity expires and generic versions of a product are approved and marketed, there can often be very substantial and rapid declines in the branded product’s sales. For example, generic entry for Amitiza® 24 μg may occur in Japan in December 2026 depending on the outcome of patent litigation.
Certain markets in which we do business outside of the U.S. have undergone government-imposed price reductions, and further government-imposed price reductions are expected in the future. Such measures, along with the tender systems discussed below, are likely to have a negative impact on sales and gross profit in these markets. However, government initiatives in certain markets that appear to favor generic products could help to mitigate this unfavorable effect by increasing rates of generic substitution and penetration.
Additionally, a number of markets in which we operate outside of the U.S. have implemented, or may implement, tender systems for generic pharmaceuticals in an effort to lower prices. Generally speaking, tender systems can have an unfavorable impact on sales and profitability. Under such tender systems, manufacturers submit bids that establish prices for generic pharmaceutical products. Upon winning the tender, the winning company will receive priority placement for a period of time. The tender system often results in companies underbidding one another by proposing lower pricing in order to win the tender. Sales continue to be negatively affected by the impact of tender systems in certain countries.
In addition to the impact of competition, government pricing actions and other measures designed to reduce healthcare costs, our results of operations, cash flows and financial condition could also be affected by other risks of doing business internationally, including the impact of inflation, elections, geopolitical events, including the ongoing conflicts in the Middle East and between Russia and Ukraine and related trade controls, sanctions, supply chain disruptions and staffing challenges and other economic considerations, longer review, response and approval times as a result of evolving regulatory priorities and reductions in personnel at health agencies, the potential for adverse impacts from future tariffs and trade restrictions, foreign currency exchange fluctuations, public health epidemics, changes in intellectual property legal protections and other regulatory changes.
Recent Developments
2026 Restructuring Program
In 2025, the Company initiated an EWSR to enable the Company to build a more focused, efficient and future-ready organization and position the Company for sustained growth beginning in 2026. On February 26, 2026, the Company announced the results of its EWSR, and as a part of the review, committed to and began implementation of certain restructuring activities. These restructuring activities are expected to optimize the Company’s commercial capabilities, enabling functions, R&D, medical affairs and regulatory activities, and sourcing, manufacturing and supply chain activities, including inventory optimization. As a result, the Company expects a global workforce reduction of up to approximately 10%. The Company anticipates that these restructuring activities, as well as associated costs and savings, will be completed primarily over the next three years.
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The Company expects to record charges for costs associated with the restructuring activities of the EWSR. For the committed restructuring activities, the Company expects to incur total pre-tax charges ranging between $700 million and $850 million. Such charges are expected to include between $50 million and $100 million of non-cash charges mainly related to accelerated depreciation and asset impairment charges, including inventory write-offs. The remaining estimated cash costs of between $650 million and $750 million are expected to be primarily related to severance and employee benefits expense, as well as other costs, including those related to contract terminations, vendor consolidations, product transfer costs and network related simplification and modernization costs. In addition, management believes the potential savings related to these committed restructuring activities will be between $600 million and $700 million once fully implemented, with most of these savings expected to improve operating cash flow. During the three months ended March 31, 2026, the Company recognized total charges of $77.9 million in the condensed consolidated statements of operations related to this restructuring program.
CCPS in Biocon Biologics
In December 2025, the Company entered into definitive agreements with Biocon for the sale of the Company’s equity stake in Biocon Biologics. Under the terms of the definitive agreements, Biocon acquired all of Viatris’ CCPS in Biocon Biologics for total consideration of $815.0 million, consisting of $400.0 million in cash and $415.0 million in newly issued equity shares of Biocon, which are listed and traded on the National Stock Exchange of India. The transaction closed during the first quarter of 2026 and the equity shares of Biocon are subject to a six-month lock up period. In addition, the terms of the definitive agreements accelerate the expiration of biosimilars non-compete restrictions previously placed on Viatris in 2022 in connection with Viatris’ sale of its biosimilars portfolio and related commercial and other capabilities to Biocon Biologics. These restrictions expired immediately at the time of close for all ex-U.S. markets and will expire in November 2026 for the U.S. market.
Manufacturing Facilities
Following an inspection by the FDA at our oral finished dose manufacturing facility in Indore, India in 2024, the FDA issued a warning letter and an import alert related to this facility. The import alert affects 11 products that will no longer be accepted into the U.S. until the warning letter is lifted.
Following the substance of FDA’s original inspection observations, the Company immediately implemented a comprehensive remediation plan at the site. During 2025, we made substantial progress on our remediation activities at the facility, including but not limited to related personnel actions. Additionally, we have engaged independent third-party subject matter experts to support the remediation plan.
While product continues to be shipped from the Indore facility to markets outside the U.S., as expected, we have also experienced a negative impact in other markets, including the ARV business in Emerging Markets and select generic products in Europe.
We have been in regular communication with the FDA during this process and will continue to work to ensure that the FDA is satisfied with the steps we have taken to resolve all the points raised. Our responses to the warning letter and import alert were submitted within the required time periods. The facility will be subject to a reinspection by the FDA. The timing of the reinspection will be determined by the FDA; however, we anticipate that the facility will be ready for reinspection in 2026.
In mid-February 2026, a fire occurred in a service area at the Company's oral solid dose manufacturing facility in Nashik, India. Manufacturing at the facility was temporarily suspended. Recently, we have restarted certain manufacturing activities and currently expect to resume full operations in July 2026.
During the three months ended March 31, 2026, the Company recognized total charges of $71.9 million within Cost of Sales in the condensed consolidated statements of operations related to the write off inventory and fixed assets damaged in the fire and incremental manufacturing variances. The Company believes it has certain insurance coverages for losses, including for assets and business interruption. In the event the plant cannot be returned to normal operations or the Company’s insurance coverage is unavailable or inadequate, this event could have a negative impact on our financial position, results of operations and cash flows.
We take very seriously our continued and comprehensive oversight of our entire manufacturing network. Patient safety remains our primary and unwavering focus. We will work closely with our customers to mitigate any possible supply disruptions and meet the needs of the patients we serve.
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Financial Summary
The table below is a summary of the Company’s financial results for the three months ended March 31, 2026 compared to the prior year period:
| Three Months Ended | |||||||||||||||||||||||
| March 31, | |||||||||||||||||||||||
| (In millions, except per share amounts) | 2026 | 2025 | Change | ||||||||||||||||||||
| Total revenues | $ | 3,517.0 | $ | 3,254.3 | $ | 262.7 | |||||||||||||||||
| Gross profit | 1,157.2 | 1,161.2 | (4.0) | ||||||||||||||||||||
Loss from operations | (79.7) | (2,882.2) | 2,802.5 | ||||||||||||||||||||
Net earnings (loss) | 176.4 | (3,042.0) | 3,218.4 | ||||||||||||||||||||
Diluted earnings (loss) per share | $ | 0.15 | $ | (2.55) | $ | 2.70 | |||||||||||||||||
A detailed discussion of the Company’s financial results can be found below in the section titled “Results of Operations.” As part of this discussion, we also report sales performance using the non-GAAP financial measures of “constant currency” net sales and total revenues. These measures provide information on the change in net sales and total revenues assuming that foreign currency exchange rates had not changed between the prior and current period. The comparisons presented at constant currency rates reflect comparative local currency sales at the prior year’s foreign exchange rates. We routinely evaluate our net sales and total revenues performance at constant currency so that these results can be viewed without the impact of foreign currency exchange rates, thereby facilitating a period-to-period comparison of our operational activities, and believe that this presentation also provides useful information to investors for the same reason.
More information about non-GAAP measures used by the Company as part of this discussion, including adjusted cost of sales, adjusted gross margins, adjusted EBITDA, adjusted net earnings, and adjusted EPS (all of which are defined below) can be found in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Use of Non-GAAP Financial Measures.”
Results of Operations
Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| March 31, | |||||||||||||||||||||||||||||||||||
(In millions, except %s) | 2026 | 2025 | % Change | 2026 Currency Impact (1) | 2026 Constant Currency Revenues | Constant Currency % Change (2) | |||||||||||||||||||||||||||||
| Net sales | |||||||||||||||||||||||||||||||||||
Developed Markets | $ | 2,020.8 | $ | 1,891.7 | 7 | % | $ | (117.7) | $ | 1,903.1 | 1 | % | |||||||||||||||||||||||
| Greater China | 680.1 | 555.5 | 22 | % | (25.6) | 654.5 | 18 | % | |||||||||||||||||||||||||||
| JANZ | 273.4 | 276.1 | (1) | % | (3.9) | 269.5 | (2) | % | |||||||||||||||||||||||||||
Emerging Markets | 535.4 | 519.9 | 3 | % | (14.6) | 520.8 | — | % | |||||||||||||||||||||||||||
| Total net sales | $ | 3,509.7 | $ | 3,243.2 | 8 | % | $ | (161.8) | $ | 3,347.9 | 3 | % | |||||||||||||||||||||||
Other revenues (3) | 7.3 | 11.1 | NM | (0.2) | 7.1 | NM | |||||||||||||||||||||||||||||
Consolidated total revenues (3)(4) | $ | 3,517.0 | $ | 3,254.3 | 8 | % | $ | (162.0) | $ | 3,355.0 | 3 | % | |||||||||||||||||||||||
____________
(1)Currency impact is shown as unfavorable (favorable).
(2)The constant currency percentage change is derived by translating net sales or revenues for the current period at prior year comparative period exchange rates, and in doing so shows the percentage change from 2026 constant currency net sales or revenues to the corresponding amount in the prior year.
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(3)For the three months ended March 31, 2026, other revenues in Developed Markets, JANZ, and Emerging Markets were approximately $5.2 million, $0.1 million, and $2.0 million, respectively.
(4)Amounts exclude intersegment revenue which eliminates on a consolidated basis.
Total Revenues
For the three months ended March 31, 2026, Viatris reported total revenues of $3.52 billion, compared to $3.25 billion for the comparable prior year period, representing an increase of $262.7 million, or 8%. Total revenues include both net sales and other revenues from third parties. Net sales for the three months ended March 31, 2026 were $3.51 billion, compared to $3.24 billion for the comparable prior year period, representing an increase of $266.5 million, or 8%. Other revenues for the three months ended March 31, 2026 were $7.3 million, compared to $11.1 million for the comparable prior year period.
The favorable impact of foreign currency translation was approximately $161.8 million, or 5%, primarily reflecting changes in the U.S. Dollar as compared to the currencies of subsidiaries in the EU and China. On a constant currency basis, net sales increased by approximately $104.7 million, or 3%, for the three months ended March 31, 2026 compared to the prior year period. The increase was the result of new product sales, primarily in Developed Markets, of approximately $70.7 million, and net base business growth, primarily in Greater China, of approximately $34.0 million. New product sales include new products launched in 2026 and the carryover impact of new products, including business development, launched within the last twelve months.
From time to time, a limited number of our products may represent a significant portion of our net sales, gross profit and net earnings. Generally, this is due to the timing of new product introductions, seasonality, and the amount, if any, of additional competition in the market. Our top ten products in terms of net sales, in the aggregate, represented approximately 40% and 38% for the three months ended March 31, 2026 and 2025, respectively.
Net sales are derived from our four reporting segments: Developed Markets, Greater China, JANZ, and Emerging Markets.
Developed Markets Segment
Net sales from Developed Markets increased by $129.1 million, or 7%, for the three months ended March 31, 2026 when compared to the prior year period. The favorable impact of foreign currency translation was approximately $117.7 million, or 6%. Constant currency net sales increased by approximately $11.4 million, or 1%, when compared to the prior year period driven by new product sales. This was partially offset by lower net sales of certain existing products, primarily as a result of supply constraints and additional competition. Net sales within North America totaled approximately $828.1 million and net sales within Europe totaled approximately $1.19 billion.
Greater China Segment
Net sales from Greater China increased by $124.6 million, or 22%, for the three months ended March 31, 2026 when compared to the prior year period. The favorable impact of foreign currency translation was approximately $25.6 million, or 5%. Constant currency net sales increased by approximately $99.0 million, or 18%, when compared to the prior year period, primarily the result of strong growth across multiple channels, including e-commerce, retail, and private hospitals, driven by increased marketing and selling efforts.
JANZ Segment
Net sales from JANZ decreased by $2.7 million, or 1%, for the three months ended March 31, 2026 when compared to the prior year period. The favorable impact of foreign currency translation was approximately $3.9 million, or 1%. Constant currency net sales decreased by approximately $6.6 million, or 2%, when compared to the prior year period, driven primarily by lower net sales of existing products in Japan and Australia due to government price reductions and additional competition.
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Emerging Markets Segment
Net sales from Emerging Markets increased by $15.5 million, or 3%, for the three months ended March 31, 2026 when compared to the prior year period. This increase in net sales was primarily driven by the favorable impact of foreign currency translation of approximately $14.6 million, or 3%. Constant currency net sales were essentially flat when compared to the prior year period.
Cost of Sales and Gross Profit
Cost of sales increased from $2.09 billion for the three months ended March 31, 2025 to $2.36 billion for the three months ended March 31, 2026. The increase in cost of sales was largely driven by the increase in net sales, higher restructuring costs, and higher costs associated with other special items, which include certain costs for plants slated for sale or closure or undergoing remediation activities, including $71.9 million related to the write off inventory and fixed assets damaged in the fire at the Nashik manufacturing facility and incremental manufacturing variances.
Gross profit for the three months ended March 31, 2026 was $1.16 billion and gross margins were 33%. For the three months ended March 31, 2025, gross profit was $1.16 billion and gross margins were 36%. The changes in gross profit and gross margins are primarily related to the increase in cost of sales. Adjusted gross margins were approximately 56% for the three months ended March 31, 2026, compared to approximately 56% for the three months ended March 31, 2025.
A reconciliation between cost of sales, as reported under U.S. GAAP, and adjusted cost of sales and adjusted gross margin for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 is as follows:
| Three Months Ended | |||||||||||
| March 31, | |||||||||||
(In millions, except %s) | 2026 | 2025 | |||||||||
| U.S. GAAP cost of sales | $ | 2,359.8 | $ | 2,093.1 | |||||||
| Deduct: | |||||||||||
| Purchase accounting amortization and other related items | (591.5) | (583.5) | |||||||||
| Acquisition and divestiture-related costs | (28.4) | (12.2) | |||||||||
| Restructuring costs | (49.8) | (19.8) | |||||||||
| Share-based compensation expense | (1.0) | (1.3) | |||||||||
| Other special items, including restructuring related costs | (142.4) | (41.6) | |||||||||
| Adjusted cost of sales | $ | 1,546.7 | $ | 1,434.7 | |||||||
Adjusted gross profit (a) | $ | 1,970.3 | $ | 1,819.6 | |||||||
Adjusted gross margin (a) | 56 | % | 56 | % | |||||||
____________
(a)Adjusted gross profit is calculated as total revenues less adjusted cost of sales. Adjusted gross margin is calculated as adjusted gross profit divided by total revenues.
Operating Expenses
Research and Development Expense
R&D expense for the three months ended March 31, 2026 was $248.6 million, compared to $222.0 million for the comparable prior year period, an increase of $26.6 million. This increase was primarily the result of higher expenses for the selatogrel and cenerimod development programs.
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Acquired IPR&D
Acquired IPR&D expense for the three months ended March 31, 2026 was $6.0 million, compared to $10.0 million for the comparable prior year period, a decrease of $4.0 million. The current period expense was related to an upfront payment for a licensing deal, and the prior period expense was related to an upfront licensing payment for rights to cenerimod in Japan, South Korea and certain countries in the Asia-Pacific region.
Selling, General and Administrative Expense
SG&A expense for the three months ended March 31, 2026 was $928.8 million, compared to $948.1 million for the comparable prior year period, a decrease of $19.3 million. The decrease was primarily due to lower restructuring costs of approximately $30.3 million.
Impairment of Goodwill
During the prior year period, the Company recorded a goodwill impairment charge of $2.94 billion in conjunction with its interim goodwill impairment test performed as of March 31, 2025.
Litigation Settlements and Other Contingencies, Net
The following table includes the losses/(gains) recognized in litigation settlements and other contingencies, net during the three months ended March 31, 2026 and 2025, respectively:
| Three Months Ended | |||||||||||
| March 31, | |||||||||||
| (In millions) | 2026 | 2025 | |||||||||
Contingent consideration adjustment | $ | 84.5 | $ | (133.7) | |||||||
| Litigation settlements, net | (31.0) | 60.2 | |||||||||
| Total litigation settlements and other contingencies, net | $ | 53.5 | $ | (73.5) | |||||||
Refer to Note 10 Financial Instruments and Risk Management and Note 17 Litigation included in Part I, Item 1 of this Form 10-Q for more information with respect to the contingent consideration adjustment and litigation settlements, net, respectively.
Interest Expense
Interest expense for the three months ended March 31, 2026 totaled $120.1 million, compared to $115.5 million for the three months ended March 31, 2025.
Other Expense, Net
Other expense, net includes gains and losses from divestitures of businesses, changes in the fair value of equity securities, foreign exchange, expense (income) related to post-employment benefit plans, TSA income, and interest and dividend income. Other expense, net for the three months ended March 31, 2026 totaled $47.5 million, compared to $99.3 million for the three months ended March 31, 2025, a decrease of $51.8 million.
The decrease was primarily driven by a loss in the prior year period of $115.8 million as a result of changes in the fair value of the CCPS in Biocon Biologics, and a decrease in the loss on divestitures of $23.0 million. This was partially offset by a loss of $64.9 million recorded in the current year period as a result of changes in the fair value of equity shares of Biocon. Refer to Note 10 Financial Instruments and Risk Management included in Part I, Item 1 of this Form 10-Q for more information with respect to the Biocon equity shares.
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Income Tax Benefit
For the three months ended March 31, 2026, the Company recognized an income tax benefit of $423.7 million, compared to an income tax benefit of $55.0 million for the comparable prior year period, a change of $368.7 million. The benefit in the current year period is primarily driven by the loss before income taxes and the tax benefit of certain internal restructurings undertaken, partially offset by losses in jurisdictions for which minimal benefit can be recognized. The benefit in the prior year period is primarily driven by the loss before income taxes, partially offset by the negative impact of the goodwill impairment charge, for which minimal tax benefit was realized, and a $17.7 million accrual related to the resolution of the previously disclosed Swedish tax matter. The current quarter and prior quarter provisions were impacted by the levels of income and the changing mix at which it is earned in jurisdictions with differing tax rates.
Use of Non-GAAP Financial Measures
Whenever the Company uses non-GAAP financial measures, we provide a reconciliation of the non-GAAP financial measures to their most directly comparable U.S. GAAP financial measure. Investors and other readers are encouraged to review the related U.S. GAAP financial measures and the reconciliation of non-GAAP measures to their most directly comparable U.S. GAAP measure and should consider non-GAAP measures only as a supplement to, not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with U.S. GAAP. Additionally, since these are not measures determined in accordance with U.S. GAAP, non-GAAP financial measures have no standardized meaning across companies, or as prescribed by U.S. GAAP and, therefore, may not be comparable to the calculation of similar measures or measures with the same title used by other companies.
Management uses these measures internally for forecasting, budgeting, measuring its operating performance, and incentive-based awards. Primarily due to acquisitions, divestitures and other significant events which may impact comparability of our periodic operating results, we believe that an evaluation of our ongoing operations (and comparisons of our current operations with historical and future operations) would be difficult if the disclosure of our financial results was limited to financial measures prepared only in accordance with U.S. GAAP. We believe that non-GAAP financial measures are useful supplemental information for our investors and when considered together with our U.S. GAAP financial measures and the reconciliation to the most directly comparable U.S. GAAP financial measure, provide a more complete understanding of the factors and trends affecting our operations. The financial performance of the Company is measured by senior management, in part, using adjusted metrics as described below, along with other performance metrics. The Company’s use of such non-GAAP measures is governed by an adjusted reporting policy maintained by the Company and such non-GAAP measures are reviewed in detail with the Audit Committee of the Board of Directors.
Adjusted Cost of Sales and Adjusted Gross Margin
We use the non-GAAP financial measure “adjusted cost of sales” and the corresponding non-GAAP financial measure “adjusted gross margin.” The principal items excluded from adjusted cost of sales include restructuring, acquisition and divestiture-related costs, and other special items, purchase accounting amortization and other related items, and share-based compensation expense, which are described in greater detail below.
Adjusted Net Earnings and Adjusted EPS
Adjusted net earnings and adjusted net earnings per diluted share (“adjusted EPS”) are non-GAAP financial measures and provide an alternative view of performance used by management. Management believes that, primarily due to acquisitions, divestitures and other significant events, an evaluation of the Company’s ongoing operations (and comparisons of its current operations with historical and future operations) would be difficult if the disclosure of its financial results were limited to financial measures prepared only in accordance with U.S. GAAP. Management believes that adjusted net earnings and adjusted EPS are important internal financial metrics related to the ongoing operating performance of the Company, and are therefore useful to investors and that their understanding of our performance is enhanced by these measures. Actual internal and forecasted operating results and annual budgets used by management include adjusted net earnings and adjusted EPS.
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EBITDA and Adjusted EBITDA
EBITDA and adjusted EBITDA are non-GAAP financial measures that the Company believes are appropriate to provide additional information to investors to demonstrate the Company’s ability to comply with financial debt covenants and assess the Company’s ability to incur additional indebtedness. The Company also believes that adjusted EBITDA better focuses management on the Company’s underlying operational results and true business performance and is used, in part, for management’s incentive compensation. We calculate EBITDA as U.S. GAAP net earnings (loss) adjusted for income tax provision (benefit), interest expense and depreciation and amortization. EBITDA is further adjusted for share-based compensation expense, litigation settlements and other contingencies, net, gain (loss) on divestitures of businesses, impairment of long-lived assets and goodwill, restructuring, acquisition and divestiture-related and other special items to determine adjusted EBITDA. These adjustments are generally permitted under our credit agreement in calculating adjusted EBITDA for determining compliance with our debt covenants.
The significant items excluded from adjusted cost of sales, adjusted EBITDA, adjusted net earnings, and adjusted EPS include:
Purchase Accounting Amortization and Other Related Items
The ongoing impact of certain amounts recorded in connection with acquisitions of both businesses and assets is excluded from adjusted cost of sales, adjusted EBITDA, adjusted net earnings, and adjusted EPS. These amounts include the amortization of intangible assets, inventory step-up, property, plant and equipment step-up, intangible asset impairment charges, including for IPR&D, and impairment of goodwill. For the acquisition of businesses accounted for under the provisions of ASC 805, Business Combinations, these purchase accounting impacts are excluded regardless of the financing method used for the acquisitions, including the use of cash, long-term debt, the issuance of common stock, contingent consideration or any combination thereof.
Fair Value Adjustments, Including Contingent Consideration
The impact of changes to the fair value of assets and liabilities, including contingent and deferred consideration and non-marketable equity investments, and the related accretion income or expense are excluded from adjusted EBITDA, adjusted net earnings, and adjusted EPS because they are not indicative of the Company’s ongoing operations due to the variability of the amounts and the lack of predictability as to the occurrence and/or timing and management believes their exclusion is helpful to understanding the underlying, ongoing operational performance of the business.
Share-based Compensation Expense
Share-based compensation expense is excluded from adjusted cost of sales, adjusted EBITDA, adjusted net earnings, and adjusted EPS. Our share-based compensation programs have become increasingly weighted toward performance-based compensation, which leads to variability and to a lack of predictability as to the occurrence and/or timing of amounts incurred. As such, management believes the exclusion of such amounts on an ongoing basis is helpful to understanding the underlying operational performance of the business.
Restructuring, Acquisition and Divestiture-Related Costs and Other Special Items
Costs related to restructuring, acquisition and divestiture-related activities and other actions are excluded from adjusted cost of sales, adjusted EBITDA, adjusted net earnings, and adjusted EPS, as applicable. These amounts include items such as:
•Costs related to formal restructuring programs and actions, including costs associated with facilities to be closed or divested, employee separation costs, impairment charges, accelerated depreciation, incremental manufacturing variances, equipment relocation costs, decommissioning and other restructuring related costs;
•Certain acquisition and divestiture costs, including costs relating to integration and planning, contractual obligations, including under supply agreements, advisory and legal fees, certain financing related costs, certain reimbursements related to the Company’s obligation to reimburse Pfizer for certain financing and transaction related costs under the Business Combination Agreement and Separation and Distribution Agreement, certain other TSA related set-up and exit costs, and other business transformation and/or optimization initiatives, which are not part of a formal restructuring program, including employee separation and post-employment costs;
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•Other costs, incurred from time to time, related to certain special events or activities that lead to gains or losses, including, but not limited to, incremental manufacturing variances, contractual termination costs, certain remediation activities, asset write-downs, including other-than-temporary impairments of investments in equity or debt instruments, or liability adjustments;
•Certain costs to further develop and optimize our global enterprise resource planning systems, operations and supply chain;
•Gains or losses from divestitures, including impairments of held for sale assets; and
•The impact of changes related to uncertain tax positions are excluded from adjusted net earnings and adjusted EPS. In addition, tax adjustments to adjusted earnings are recorded to present items on an after-tax basis consistent with the presentation of adjusted net earnings and adjusted EPS.
The Company has undertaken restructurings and other optimization initiatives of differing types, scope and amount during the covered periods and, therefore, these charges should not be considered non-recurring; however, management excludes these amounts from adjusted cost of sales, adjusted EBITDA, adjusted net earnings, and adjusted EPS because it believes it is helpful to understanding the underlying, ongoing operational performance of the business.
Litigation Settlements, Net
Charges and gains related to legal matters, such as those discussed in Note 17 Litigation included in Part I, Item 1 of this Form 10-Q are generally excluded from adjusted EBITDA, adjusted net earnings, and adjusted EPS. Normal, ongoing defense costs of the Company made in the normal course of our business are not excluded.
Reconciliation of U.S. GAAP Net Earnings (Loss) to Adjusted Net Earnings and U.S. GAAP Earnings (Loss) Per Share to Adjusted EPS
A reconciliation between net earnings (loss) and diluted earnings (loss) per share as reported under U.S. GAAP, and adjusted net earnings and adjusted EPS for the periods shown follows:
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||
(In millions, except per share amounts) | 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||||
| U.S. GAAP net earnings (loss) and U.S. GAAP diluted earnings (loss) per share | $ | 176.4 | $ | 0.15 | $ | (3,042.0) | $ | (2.55) | |||||||||||||||||||||||||||||||||||||||
| Purchase accounting amortization (primarily included in cost of sales) | 591.5 | 583.5 | |||||||||||||||||||||||||||||||||||||||||||||
| Impairment of goodwill | — | 2,936.8 | |||||||||||||||||||||||||||||||||||||||||||||
| Litigation settlements and other contingencies, net | 53.5 | (73.5) | |||||||||||||||||||||||||||||||||||||||||||||
| Interest expense (primarily amortization of premiums and discounts on long term debt) | (10.1) | (9.2) | |||||||||||||||||||||||||||||||||||||||||||||
| Loss on divestitures of businesses (included in other expense, net) | 13.9 | 36.9 | |||||||||||||||||||||||||||||||||||||||||||||
Acquisition and divestiture-related costs (primarily included in cost of sales and SG&A) (a) | 62.3 | 40.7 | |||||||||||||||||||||||||||||||||||||||||||||
Restructuring costs (b) | 92.5 | 92.9 | |||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | 48.2 | 55.2 | |||||||||||||||||||||||||||||||||||||||||||||
| Other special items included in: | |||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales (c) | 142.4 | 41.6 | |||||||||||||||||||||||||||||||||||||||||||||
| Research and development expense | 2.8 | 0.7 | |||||||||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative expense | 35.4 | 17.6 | |||||||||||||||||||||||||||||||||||||||||||||
Other expense, net (d) | 61.3 | 101.4 | |||||||||||||||||||||||||||||||||||||||||||||
Tax effect of the above items and other income tax related items (e) | (576.0) | (182.3) | |||||||||||||||||||||||||||||||||||||||||||||
| Adjusted net earnings and adjusted EPS | $ | 694.1 | $ | 0.59 | $ | 600.3 | $ | 0.50 | |||||||||||||||||||||||||||||||||||||||
| Weighted average diluted shares outstanding | 1,175.3 | 1,203.0 | |||||||||||||||||||||||||||||||||||||||||||||
Significant items include the following:
(a)Acquisition and divestiture-related costs consist primarily of contractual obligations related to divestitures, transaction costs including legal and consulting fees, and integration activities.
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(b)For the three months ended March 31, 2026, charges include approximately $49.8 million in cost of sales, approximately $0.6 million in R&D, and approximately $42.0 million in SG&A, primarily relating to the 2026 restructuring program.
(c)For the three months ended March 31, 2026, includes certain asset impairments, contractual termination costs, and incremental manufacturing variances and certain remediation costs at plants slated for sale or closure or undergoing remediation activities of approximately $130.7 million, including $71.9 million related to the write off inventory and fixed assets damaged in the fire at the Nashik manufacturing facility and incremental manufacturing variances.
(d)For the three months ended March 31, 2026, charges include a loss of approximately $64.9 million as a result of changes in the fair value of the Biocon equity shares.
(e)Adjusted for changes for uncertain tax positions.
Reconciliation of U.S. GAAP Net Earnings (Loss) to EBITDA and Adjusted EBITDA
Below is a reconciliation of U.S. GAAP net earnings (loss) to EBITDA and adjusted EBITDA for the three months ended March 31, 2026 compared to the prior year period:
| Three Months Ended March 31, | |||||||||||||||||||||||
| (In millions) | 2026 | 2025 | |||||||||||||||||||||
| U.S. GAAP net earnings (loss) | $ | 176.4 | $ | (3,042.0) | |||||||||||||||||||
| Add / (deduct) adjustments: | |||||||||||||||||||||||
Income tax benefit | (423.7) | (55.0) | |||||||||||||||||||||
Interest expense (a) | 120.1 | 115.5 | |||||||||||||||||||||
Depreciation and amortization (b) | 676.1 | 664.7 | |||||||||||||||||||||
| EBITDA | $ | 548.9 | $ | (2,316.8) | |||||||||||||||||||
| Add / (deduct) adjustments: | |||||||||||||||||||||||
| Share-based compensation expense | 48.2 | 55.2 | |||||||||||||||||||||
| Litigation settlements and other contingencies, net | 53.5 | (73.5) | |||||||||||||||||||||
| Loss on divestitures of businesses | 13.9 | 36.9 | |||||||||||||||||||||
| Impairment of goodwill | — | 2,936.8 | |||||||||||||||||||||
Restructuring, acquisition and divestiture-related and other special items (c) | 385.0 | 284.9 | |||||||||||||||||||||
| Adjusted EBITDA | $ | 1,049.5 | $ | 923.5 | |||||||||||||||||||
____________
(a) Includes amortization of premiums and discounts on long-term debt.
(b) Includes purchase accounting related amortization.
(c) See items detailed in the Reconciliation of U.S. GAAP Net Earnings (Loss) to Adjusted Net Earnings.
Liquidity and Capital Resources
Our primary source of liquidity is net cash provided by operating activities, which was $388.3 million for the three months ended March 31, 2026. We believe that net cash provided by operating activities and available liquidity will continue to allow us to meet our needs for working capital, capital expenditures, interest and principal payments on debt obligations, dividend payments, and share repurchases. Nevertheless, our ability to satisfy our working capital requirements and debt service obligations, and fund planned capital expenditures, share repurchases, or dividend payments, will substantially depend upon our future operating performance (which will be affected by prevailing economic conditions), and financial, business and other factors, some of which are beyond our control.
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Operating Activities
Net cash provided by operating activities decreased by $147.2 million to $388.3 million for the three months ended March 31, 2026, as compared to net cash provided by operating activities of $535.5 million for the three months ended March 31, 2025. Net cash provided by operating activities is derived from net earnings (loss) adjusted for non-cash operating items, including changes in the fair value of the Biocon equity shares, gains and losses attributed to investing and financing activities and changes in operating assets and liabilities resulting from timing differences between the receipts and payments of cash, including changes in cash primarily reflecting the timing of cash collections from customers, payments to vendors and employees and tax payments in the ordinary course of business.
The decrease in net cash provided by operating activities was principally due to the timing of cash payments and collections, and lower operating earnings.
Investing Activities
Net cash from investing activities was $277.4 million for the three months ended March 31, 2026, as compared to net cash used in investing activities of $65.1 million for the three months ended March 31, 2025, an increase of $342.5 million.
In 2026, significant items in investing activities included the following:
•cash proceeds from the CCPS settlement of $400.0 million; and
•capital expenditures, primarily for equipment and facilities, totaling approximately $39.9 million. While there can be no assurance that current expectations will be realized, capital expenditures for the 2026 calendar year are expected to be approximately $350 million to $450 million.
In 2025, significant items in investing activities included the following:
•capital expenditures, primarily for equipment and facilities, totaling approximately $42.6 million.
Financing Activities
Net cash used in financing activities was $203.8 million for the three months ended March 31, 2026, as compared to $467.0 million for the three months ended March 31, 2025, a decrease of $263.2 million.
In 2026, significant items in financing activities included the following:
•cash dividends paid of $139.6 million.
In 2025, significant items in financing activities included the following:
•share repurchases of $175.4 million;
•cash dividends paid of $143.3 million; and
•net cash of $108.7 million paid on behalf of other partners, which is included in Other items, net.
Capital Resources
Our cash and cash equivalents totaled $1.80 billion at March 31, 2026. The majority of our cash is invested in U.S. government money market funds and in bank deposits. In order to support our global operations, we maintain significant cash and cash equivalents within the global banking system with the majority of this at Global Systemically Important Banks. We monitor the third-party depository institutions that hold our cash and cash equivalents on a regular basis. Our primary emphasis is on the safety of the principal. Where possible, we diversify our cash and cash equivalents among counterparties to minimize exposure to any one counterparty. The Company anticipates having sufficient liquidity, including existing borrowing capacity under the 2024 Revolving Facility, Commercial Paper Program, and Receivables Facility combined with cash to be generated from operations, to fund foreseeable cash needs without requiring the repatriation of non-U.S. cash. Should we determine the need to repatriate or convert cash held in countries that have significant restrictions or controls in place, including in China, we may be unable to repatriate or convert such cash, or be unable to do so without incurring substantial costs.
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The Company has access to $3.5 billion under the 2024 Revolving Facility which matures in September 2029. Up to $1.65 billion of the 2024 Revolving Facility may be used to support borrowings under our Commercial Paper Program. As of March 31, 2026, the Company did not have any borrowings outstanding under the Commercial Paper Program or the 2024 Revolving Facility.
The Company has a Receivables Facility for up to an aggregate amount of $600 million which expires in April 2028. As of March 31, 2026, the Company did not have any borrowings outstanding under the Receivables Facility.
Under the terms of the Receivables Facility, certain of our accounts receivable secure the amounts borrowed and cannot be used to pay our other debts or liabilities. The amount that we may borrow at a given point in time is determined based on the amount of qualifying accounts receivable that are present at such point in time. Borrowings outstanding under the Receivables Facility bear interest at the applicable base rates plus applicable margins and are included as a component of short-term borrowings, while the accounts receivable securing these obligations remain as a component of accounts receivable, net, in our condensed consolidated balance sheets. In addition, the agreement governing the Receivables Facility contains various customary affirmative and negative covenants, and customary default and termination provisions.
We have entered into accounts receivable factoring agreements with financial institutions to sell certain of our non-U.S. accounts receivable. These transactions are accounted for as sales and result in a reduction in accounts receivable because the agreements transfer effective control over and risk related to the receivables to the buyers. Our factoring agreements do not allow for recourse in the event of uncollectibility, and we do not retain any interest in the underlying accounts receivable once sold. We derecognized $295.8 million and $301.9 million of accounts receivable as of March 31, 2026 and December 31, 2025, respectively, under these factoring arrangements. Additionally, we have a similar arrangement for certain European countries. As of March 31, 2026, we assigned and derecognized approximately $14.7 million of Trade Receivables, Net, which were included in Other Receivables. As of December 31, 2025, no amounts were assigned and derecognized.
We are continuously evaluating the potential acquisition of products, as well as companies, as a strategic part of our future growth. Consequently, we may utilize current cash reserves or incur additional indebtedness to finance any such acquisitions, which could impact future liquidity. Also, on an ongoing basis, we review our operations, including the evaluation of potential divestitures of products and businesses, as part of our future strategy. Any divestitures could impact future liquidity. In addition, we plan to continue to explore various other ways to unlock the value of the Company’s unique global platform in order to create shareholder value.
For information regarding our dividends paid and declared and share repurchase program, refer to Note 8 Earnings (Loss) per Share included in Part I, Item 1 of this Form 10-Q.
Long-term Debt Maturity
For information regarding our debt agreements and mandatory minimum repayments remaining on the outstanding notional amount of long-term debt at March 31, 2026, refer to Note 11 Debt included in Part I, Item 1 of this Form 10-Q.
The YEN Term Loan Facility and the 2024 Revolving Facility contain customary affirmative covenants for facilities of this type, including among others, covenants pertaining to the delivery of financial statements, notices of default and certain material events, maintenance of corporate existence and rights, property, and insurance and compliance with laws, as well as customary negative covenants for facilities of this type, including a financial covenant, which set the Maximum Leverage Ratio as of the end of any quarter at 3.75 to 1.00, except in circumstances as defined in the related credit agreement, and other limitations on the incurrence of subsidiary indebtedness, liens, mergers and certain other fundamental changes, investments and loans, acquisitions, transactions with affiliates, payments of dividends and other restricted payments and changes in our lines of business.
The Company is in compliance with its covenants at March 31, 2026 and expects to remain in compliance for the next twelve months.
We and our subsidiaries and affiliates may from time to time, in our sole discretion, purchase, repay, redeem or retire any of our outstanding debt securities (including any publicly-issued debt securities) in privately negotiated or open market transactions, by tender offer or otherwise, or extend or refinance any of our outstanding indebtedness.
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Supplemental Guarantor Financial Information
Viatris Inc. is the issuer of the Registered Upjohn Notes, which are fully and unconditionally guaranteed on a senior unsecured basis by Mylan Inc., Mylan II B.V. and Utah Acquisition Sub Inc.
Following the Combination, Utah Acquisition Sub Inc. is the issuer of the Utah U.S. Dollar Notes, which are fully and unconditionally guaranteed on a senior unsecured basis by Mylan Inc., Viatris Inc. and Mylan II B.V.
Mylan Inc. is the issuer of the Mylan Inc. U.S. Dollar Notes, which are fully and unconditionally guaranteed on a senior unsecured basis by Mylan II B.V., Viatris Inc. and Utah Acquisition Sub Inc.
The respective obligations of Viatris Inc., Mylan Inc., Utah Acquisition Sub Inc., and Mylan II B.V. as guarantors of the applicable series of Senior U.S. Dollar Notes are senior unsecured obligations of the applicable guarantor and rank pari passu in right of payment with all of such guarantor’s existing and future senior unsecured obligations that are not expressly subordinated to such guarantor’s guarantee of the applicable series of Senior U.S. Dollar Notes, rank senior in right of payment to any future obligations of such guarantor that are expressly subordinated to such guarantor’s guarantee of the applicable series of Senior U.S. Dollar Notes, and are effectively subordinated to such guarantor’s existing and future secured obligations to the extent of the value of the collateral securing such obligations. Such obligations are structurally subordinated to all of the existing and future liabilities, including trade payables, of the existing and future subsidiaries of such guarantor that do not guarantee the applicable series of Senior U.S. Dollar Notes.
The guarantees by Mylan Inc., Mylan II B.V. and Utah Acquisition Sub Inc. under the applicable series of Senior U.S. Dollar Notes will terminate under certain customary circumstances, each as described in the applicable indenture, including: (1) a sale or disposition of the applicable guarantor in a transaction that complies with the applicable indenture such that such guarantor ceases to be a subsidiary of the issuer of the applicable series of Senior U.S. Dollar Notes; (2) legal defeasance or covenant defeasance or if the issuer’s obligations under the applicable indenture are discharged; (3) with respect to the Utah U.S. Dollar Notes, the earlier to occur of (i) with respect to the guarantee provided by Mylan Inc., (x) the release of Utah Acquisition Sub Inc.’s guarantee under all applicable Mylan Inc. Debt (as defined in the applicable indenture) and (y) Mylan Inc. no longer having any obligations in respect of any Mylan Inc. Debt and (ii) with respect to the guarantee provided by Mylan II B.V., (x) the release of Mylan II B.V.’s guarantee under all applicable Triggering Indebtedness (as defined in the applicable indenture) and (y) the issuer and/or borrower of the applicable Triggering Indebtedness no longer having any obligations with respect to such Triggering Indebtedness; (4) with respect to the guarantees provided by Utah Acquisition Sub Inc. and Mylan II B.V. of the Mylan Inc. U.S. Dollar Notes, subject to certain exceptions set forth in the applicable indenture, such guarantor ceasing to be a guarantor or obligor in respect of any Triggering Indebtedness; and (5) with respect to the Registered Upjohn Notes, (a) upon the applicable guarantor no longer being an issuer or guarantor in respect of (i) Mylan Notes (as defined in the indenture governing the Registered Upjohn Notes) that have an aggregate principal amount in excess of $500.0 million or (ii) any Triggering Indebtedness; in each case, other than in respect of indebtedness or guarantees, as applicable, that are being concurrently released; or (b) upon receipt of the consent of holders of a majority of the aggregate principal amount of the outstanding notes of such series in accordance with the indenture governing the Registered Upjohn Notes.
The guarantee obligations of Viatris Inc., Mylan Inc., Utah Acquisition Sub Inc., and Mylan II B.V. under the Senior U.S. Dollar Notes are subject to certain limitations and terms similar to those applicable to other guarantees of similar instruments, including that (i) the guarantees are subject to fraudulent transfer and conveyance laws and (ii) each guarantee is limited to an amount not to exceed the maximum amount that can be guaranteed by the applicable guarantor without rendering the guarantee, as it relates to such guarantor, voidable under applicable fraudulent transfer and conveyance laws or similar laws affecting the rights of creditors generally.
The following table presents unaudited summarized financial information of Viatris Inc., Mylan Inc., Utah Acquisition Sub Inc., and Mylan II B.V. on a combined basis as of and for the three months ended March 31, 2026 and as of and for the year ended December 31, 2025. All intercompany balances have been eliminated in consolidation. This unaudited combined summarized financial information is presented utilizing the equity method of accounting.
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Combined Summarized Balance Sheet Information of Viatris Inc., Mylan Inc., Utah Acquisition Sub Inc. and Mylan II B.V. | |||||||||||
| (In millions) | March 31, 2026 | December 31, 2025 | |||||||||
| ASSETS | |||||||||||
| Current assets | $ | 2,176.1 | $ | 1,457.2 | |||||||
| Non-current assets | 57,186.3 | 59,413.4 | |||||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current liabilities | 33,617.7 | 35,024.2 | |||||||||
| Non-current liabilities | 11,087.0 | 11,135.0 | |||||||||
Combined Summarized Income Statement Information of Viatris Inc., Mylan Inc., Utah Acquisition Sub Inc. and Mylan II B.V. | |||||||||||
| (In millions) | Three Months Ended March 31, 2026 | Year Ended December 31, 2025 | |||||||||
| Revenues | $ | — | $ | — | |||||||
| Gross profit | — | — | |||||||||
| Loss from operations | (265.2) | (1,008.2) | |||||||||
Net earnings (loss) | 176.4 | (3,514.9) | |||||||||
Other Commitments
The Company is involved in various disputes, governmental and/or regulatory inquiries, investigations and proceedings, tax proceedings and litigation matters, both in the U.S. and abroad, that arise from time to time, some of which could result in losses, including damages, fines and/or civil penalties, and/or criminal charges against the Company. These matters are often complex and have outcomes that are difficult to predict. We have approximately $450.8 million accrued for legal contingencies at March 31, 2026.
While the Company believes that it has meritorious defenses with respect to the claims asserted against it and the assumed legal matters referenced above, and intends to vigorously defend its position, the process of resolving these matters is inherently uncertain and may develop over a long period of time, and so it is not possible to predict the ultimate resolution of any such matter. It is possible that an unfavorable resolution of any of the ongoing matters could have a material effect on the Company’s business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.
In connection with the divestitures, Viatris and the respective buyers currently have manufacturing and supply agreements pursuant to which the Company is providing services to the respective purchasers, substantially the same as we previously provided to the related businesses, generally for periods between one to 10 years depending on the geographic market and the products subject to such agreement, subject to potential extensions in certain circumstances. In connection with the API business divestiture, we currently have a manufacturing and supply agreement pursuant to which we are purchasing a significant amount of API from the purchaser in that transaction. Some of these agreements include various ongoing financial obligations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
For a discussion of the Company’s market risk, see “Item 7A. Quantitative and Qualitative Disclosures about Market Risk” in Viatris’ 2025 Form 10-K.
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ITEM 4. CONTROLS AND PROCEDURES
An evaluation was performed under the supervision and with the participation of the Company’s management, including the Principal Executive Officer and the Principal Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of March 31, 2026. Based upon that evaluation, the Principal Executive Officer and the Principal Financial Officer concluded that the Company’s disclosure controls and procedures were effective.
Management has not identified any changes in the Company’s internal control over financial reporting (“ICFR”) that occurred during the first quarter of 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s ICFR.
PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
For information regarding legal proceedings, refer to Note 17 Litigation, in the accompanying Notes to interim financial statements in this Form 10-Q.
ITEM 1A. RISK FACTORS
There have been no material changes in the Company’s risk factors from those disclosed in Viatris’ 2025 Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There were no repurchases of the Company’s common stock during the three months ended March 31, 2026. Refer to Note 8 Earnings (Loss) per Share included in Part I, Item 1 of this Form 10-Q of this Form 10-Q for additional information regarding the Company’s authorized share repurchase program.
ITEM 5. OTHER INFORMATION
On March 24, 2026 , Paul Campbell , Chief Accounting Officer and Corporate Controller of the Company, adopted a written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act. The plan provides for the sale of up to 50,076 shares of the Company’s common stock until all such shares are sold or February 26, 2027, whichever comes first.
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ITEM 6. EXHIBITS | |||||
10.1 | Separation Agreement and Release with Brian Roman, dated February 6, 2026.* | ||||
22 | List of subsidiary guarantors and issuers of guaranteed securities, filed by Viatris Inc. as Exhibit 22 to Form 10-K for the fiscal year ended December 31, 2025, and incorporated herein by reference. | ||||
31.1 | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||
31.2 | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||
32 | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||
| 101.INS | Inline XBRL Instance Document | ||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema | ||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase | ||||
| 101.DEF | Inline XBRL Taxonomy Definition Linkbase | ||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase | ||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase | ||||
| 104 | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document (included in Exhibit 101). | ||||
* | Denotes management contract or compensatory plan or arrangement. | ||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Viatris Inc. | ||||||||
| By: | /s/ SCOTT A. SMITH | |||||||
| Scott A. Smith | ||||||||
| Chief Executive Officer | ||||||||
| (Principal Executive Officer) | ||||||||
May 7, 2026
/s/ THEODORA MISTRAS | ||||||||
Theodora Mistras | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer) | ||||||||
May 7, 2026
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FAQ
How did Viatris (VTRS) perform financially in Q1 2026?
Viatris posted net earnings of $176.4 million in Q1 2026, compared with a net loss of $3.04 billion a year earlier. Revenue rose to $3.52 billion from $3.25 billion, reflecting stronger net sales across several geographic segments.
What were Viatris’ Q1 2026 earnings per share?
Viatris reported basic and diluted earnings per share of $0.15 for Q1 2026, versus a basic and diluted loss per share of $2.55 in Q1 2025. The swing mainly reflects the absence of last year’s large goodwill impairment charge.
How strong was Viatris’ cash flow and liquidity in Q1 2026?
Viatris generated $388.3 million in net cash from operating activities in Q1 2026. Cash, cash equivalents and restricted cash increased to $1.81 billion at March 31, 2026, compared with $1.35 billion at year-end 2025, while long-term debt remained above $12.4 billion.
What restructuring actions is Viatris taking after its enterprise-wide review?
Following its enterprise-wide strategic review, Viatris began a 2026 restructuring program targeting a global workforce reduction of up to 10%. It expects total pre-tax charges of $700–$850 million over roughly three years and recorded $77.9 million of restructuring charges in Q1 2026.
How did the Nashik, India plant fire affect Viatris’ results?
A fire at Viatris’ Nashik oral solid dose facility led to $71.9 million in charges in Q1 2026, mainly inventory and asset write-offs and manufacturing variances. Manufacturing was temporarily suspended, though some activities have restarted and full operations are currently expected by July 2026.
What did Viatris receive from selling its Biocon Biologics CCPS stake?
Viatris sold its CCPS in Biocon Biologics for total consideration of $815.0 million, comprising $400.0 million in cash and $415.0 million in newly issued Biocon equity shares. The equity shares are listed in India and are subject to a six-month lock-up.
Is Viatris still paying dividends and repurchasing shares in 2026?
Viatris paid a quarterly cash dividend of $0.12 per share in March 2026, and its board declared another $0.12 dividend payable in June 2026. The company did not repurchase shares in Q1 2026 but has cumulatively bought back about 94.2 million shares under its program.