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10-Q – 2025-08-07 – vtrs-20250630.htm

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 Litigation”). ADIA seeks monetary damages as well as fees and costs. Mylan has filed a motion for summary judgment to dismiss ADIA’s case in its entirety, which is pending. As previously disclosed, the allegations in ADIA’s complaint were the subject of a class action lawsuit filed in the same court in the SDNY against Mylan and certain individuals. In March 2023, the SDNY dismissed the class action lawsuit in its entirety on summary judgment, which was affirmed on appeal and concluded the class action lawsuit.

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/current 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.

On February 15, 2021, a complaint was filed in the SDNY by Skandia Mutual Life Ins. Co., Lansforsakringar AB, KBC Asset Management N.V., and GIC Private Limited, against the Company, certain of Mylan N.V.’s former directors and officers, a former officer/current director of the Company, and certain former and current employees of the Company (“Skandia Litigation”). The Complaint filed in the Skandia Litigation asserted claims which were based on allegations that were similar to
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those in the ADIA Litigation and WDPA Mylan N.V. Class Action Litigation. Plaintiffs sought compensatory damages, costs and expenses and attorneys’ fees. The parties reached an agreement that resolves this matter and it is now closed.

Beginning in May 2023, putative class action complaints were filed against the Company and certain of the Company’s current and former officers, directors, and employees in the WDPA on behalf of certain purchasers of securities of the Company. These actions have been consolidated and, on October 23, 2023, a consolidated amended putative class action complaint was filed in the WDPA against the Company, a director, and a former officer and director (“WDPA Viatris Class Action Litigation”). The operative complaint alleges 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 seek certification of a class of purchasers of Company securities between March 1, 2021 and February 25, 2022. Plaintiffs seek 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 have filed an appeal to the United States Court of Appeals for the Third Circuit, which remains pending.

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 is named as a nominal defendant in these derivative actions. Certain of the complaints also assert claims for corporate waste and unjust enrichment. Plaintiffs seek various forms of relief, including damages, disgorgement, restitution, costs and fees.

In April 2025, a putative class action complaint was filed against the Company and certain of the Company’s officers, one of whom is also a director, in the WDPA on behalf of certain purchasers of the Company’s securities. The 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 August 8, 2024 and February 26, 2025. Plaintiffs seek various forms of relief, including damages, costs and fees.

Opioids
The Company, along with other manufacturers, distributors, pharmacies, pharmacy benefit managers, and individual healthcare providers, is a defendant in more than 1,000 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. In addition, lawsuits have been filed as putative class actions including on behalf of children with Neonatal Abstinence Syndrome due to alleged exposure to opioids.
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 have been consolidated in an MDL in the U.S. District Court for the Northern District Court of Ohio.
In April 2025, the Company has 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, which has been initiated by a process to determine the level of participation in the settlement, 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 and $ 40 million each, to help support state and local efforts to address opioid-related issues. The settlement framework is not an admission of wrongdoing or liability.
On January 13, 2023, the Company received a civil subpoena from the Attorney General of the State of New York seeking information relating to opioids manufactured, marketed, or sold by the Company and related subject matter. Beginning in January 2024, the Company received similar subpoenas from the Attorneys General of Alaska, Oregon, Utah, Maryland, and Louisiana. The Company is fully cooperating with these subpoena requests. Each of these States will have the option to participate in the settlement framework identified above.

The Company has accrued approximately $ 335 million in connection with the possible resolution of certain of these matters at June 30, 2025, 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
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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 € 12.2 million as of June 30, 2025 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.

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.
The Company has accrued approximately $ 66.8 million as of June 30, 2025 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
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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 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. State court proceedings remain pending in Missouri and New York.

Depo-Provera
Beginning in October 2024, the Company (including Greenstone LLC), Pfizer and certain entities related to Pfizer, and Prasco Labs have been 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, have also been filed. In February 2025, the federal lawsuits were transferred for co nsolidated 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 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 Greens tone LLC.

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
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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.
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. The companies assert the invalidity and/or non-infringement of polymorph patents expiring in 2030 and 2031, and method of use patents expiring in 2039. The companies have not filed Paragraph IV certifications to our compound patents, one of which is subject to a patent term extension to October 2028. Beginning in February 2023, we brought patent infringement actions against the generic filers in federal district courts, including the U.S. District Court for the District of New Jersey, the U.S. District Court for the District of Delaware, the U.S. District Court for the Middle District of North Carolina, and the U.S. District Court for the Eastern District of Pennsylvania asserting infringement of the patents by the generic companies. The actions filed in Delaware, North Carolina and Pennsylvania have been dismissed and the remaining actions will proceed in New Jersey. The Company has entered into settlement agreements with Teva, Accord, Orbicular, Lupin, Qilu, and Eugia granting licenses to commercialize their generic versions of Yupelri® in April 2039 or earlier depending on certain circumstances. Two ANDA filers remain in the litigation.

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. The generic company asserts the invalidity and/or non-infringement of six Orange Book listed patents that all have expiration dates in October 2035. In July 2023, Oyster Point brought a patent infringement action against the generic filer in the U.S. District Court of the District of New Jersey. In March 2024, Oyster Point filed an amended complaint asserting infringement with respect to four additional patents that were recently listed in the Orange Book for Tyrvaya® and also have expiration dates in October 2035. This lawsuit automatically stays FDA approval of the generic company’s ANDA until December 6, 2025, or until an adverse court decision, if any, whichever may occur earlier. Oyster Point has selected claims from five of the asserted Orange Book-listed patents for trial, which is scheduled to begin in September 2025.

Amitiza
In September 2023, Sawai Pharmaceutical Co. (“Sawai”) filed challenges with the Japanese Patent Office (“JPO”) asserting invalidity of patent term extensions for the JPP ‘4332353 patent (the ‘353 patent) relevant to Amitiza®, which the Company commercializes in Japan as a licensee of the relevant patents, including the ‘353 patent. Towa Pharmaceutical Co. Ltd. also filed a challenge to the ‘353 patent term extension in January 2024. Separately, in December 2023, Sawai filed an invalidity action with the JPO against the ‘353 patent itself. With the granted extensions, the ‘353 patent has expiration dates for the Company’s 24µg and 12µg strengths of April 2025 and April 2027, respectively. In April 2025 and June 2025, the JPO upheld the validity of the ‘353 patent and the ‘353 patent term extensions, respectively. Sawai has filed appeals against these JPO decisions with the Intellectual Property High Court, which are pending.

Beginning in April 2024, Sawai filed challenges with the JPO with respect to the 12µg strength, asserting invalidity of patent term extensions of five additional 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 April 2025, Sawai filed an action before the Tokyo District Court alleging unfair competition and seeking to restrain the Company from communicating with the public and the Japan Ministry of Health Labor and Welfare about the patent coverage for Amitiza.

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.
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The Company has approximately $ 5.3 million accrued related to its intellectual property matters at June 30, 2025. 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 $ 8 million accrued related to these various other legal proceedings at June 30, 2025.
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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’ 2024 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 and six months ended June 30, 2025, and cash flows for the six months ended June 30, 2025 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 benefits and synergies of such divestitures, acquisitions, strategic alliances, collaborations, or other transactions, or restructuring programs; future opportunities for the Company and its products; 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, 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 (including divestitures, acquisitions, strategic alliances, collaborations, or other potential transactions) or accelerate its growth by building on the strength of its base business with an expanding portfolio of innovative, best-in-class, patent-protected assets;
• the possibility that the Company may be unable to achieve intended or expected benefits, goals, outlooks, synergies, growth opportunities and operating efficiencies in connection with divestitures, acquisitions, strategic alliances, collaborations, or other transactions, or restructuring programs, within the expected timeframes or at all;
• the ongoing risks and uncertainties associated with our recent divestitures;
• goodwill or impairment charges or other losses;
• 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, epidemics, pandemics or social disruption 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, including but not limited to “at-risk launches”;
• 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;
• 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 inspections, remediation and restructuring activities, supply chain or inventory or the ability to meet anticipated demand;
• 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;
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• changes in third-party relationships;
• 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, 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 2024 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 32,000 employees. The Company has 26 manufacturing and packaging sites worldwide, more than 1,400 approved molecules, and 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 products are more difficult, costly and time-consuming to receive regulatory approval for and bring to market. Any delay in regulatory approval could impact the
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commercial or financial success of a product. 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 2025 upon expiration of certain patent exclusivity.
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 low 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
Goodwill Impairment
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.

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economic environments in which the Company operates increased the Company’s business risks, including, but not limited to, the potential for continued or additional drug pricing reduction pressures, general uncertainty related to timing of responses and approvals from the FDA resulting from evolving regulatory priorities and associated changes to the operations of the agency, and the potential for adverse impacts from future tariffs and trade restrictions. The negative impact of any or all of these factors could be material. The significant increase in business risks and uncertainty led to an increase in discount rate assumptions impacting all reporting units as compared to the April 1, 2024 annual goodwill impairment test. In the first quarter of 2025, the Company recorded a non-cash goodwill impairment charge of $2.9 billion as a result of the interim goodwill impairment test performed as of March 31, 2025.

Indore Manufacturing Facility
Following an inspection by the FDA at our oral finished dose manufacturing facility in Indore, India in 2024, the FDA has issued a warning letter, and an import alert related to this facility. The import alert affects 11 actively distributed products that will no longer be accepted into the U.S. until the warning letter is lifted. It makes exceptions, subject to certain conditions, for four products based on shortage concerns. Following discussions with the FDA, the Company does not expect additional product exceptions to be granted by the FDA.

Following the substance of FDA’s original inspection observations, the Company immediately implemented a comprehensive remediation plan at the site. The necessary corrective and preventive actions are well underway, including but not limited to related personnel actions. Additionally, we have engaged independent third-party subject matter experts to support the remediation plan.

We have been in regular communication with 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.

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 in the three and six months ended June 30, 2025, including the ARV business in Emerging Markets and select generic products in Europe.

We continue to anticipate negative impacts for the remainder of the year. The estimated negative impact to second quarter 2025 total revenues was approximately $160 million versus the second quarter of 2024 and the estimated negative impact to total revenues for the six months ended June 30, 2025 versus the six months ended June 30, 2024 was approximately $300 million. We currently estimate the negative impact to 2025 total revenues to be approximately $500 million and to 2025 earnings from operations to be approximately $385 million.

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.

Acquisition of Idorsia Products
On March 15, 2024, the Company acquired exclusive global development and commercialization rights to two Phase 3 assets from Idorsia, as well as the potential to add additional innovative assets in the future. Under the terms of the original agreements, the development programs and certain personnel for selatogrel and cenerimod were transferred to Viatris from Idorsia in exchange for an upfront payment to Idorsia of $350 million, potential contingent milestone payments (including $300 million payable upon the achievement of certain development and regulatory milestones, and $2.1 billion payable upon the achievement of certain tiered sales milestones), as well as potential contingent tiered sales royalties. Viatris has worldwide commercialization rights for both selatogrel and cenerimod (which excluded, for cenerimod only, Japan, South Korea and certain countries in the Asia-Pacific region). A joint development committee was formed to oversee the development of the ongoing Phase 3 programs through regulatory approval. The agreements also provided Viatris a right of first refusal and a right of first negotiation for certain other assets in Idorsia’s pipeline. Viatris and Idorsia are both contractually obligated to contribute to the development costs for both programs, which are expected to be incurred through 2026.

On February 25, 2025, in order to preserve the ongoing continuity of the development programs for selatogrel and cenerimod considering certain capital structuring steps announced by Idorsia to secure its ongoing operations, Viatris and Idorsia entered into a letter agreement to amend certain terms of the original agreements described above. Under the terms of
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the letter agreement, Viatris received additional territory rights in Japan, South Korea and certain other countries in the Asia-Pacific region for cenerimod, a $250 million reduction in contingent milestone payments, including $200 million of development milestones, and additional personnel to expedite transitioning the development programs to Viatris in exchange for Viatris assuming $100 million of Idorsia’s obligation to contribute to development costs. In addition, the joint development committee has been replaced with a transition committee to oversee the transition of both development programs to Viatris.

There are risks and uncertainties associated with the timely and successful completion of these programs, including but not limited to the high cost and uncertainty of conducting clinical trials (particularly with respect to new and/or complex or innovative drugs), obtaining approval by relevant regulatory bodies and our partner’s financial condition. Refer to Note 4 Acquisitions and Other Transactions included in Part I, Item 1 of this Form 10-Q for more information.
Share Repurchase Program
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. During the three months ended June 30, 2025, the Company repurchased approximately 20.2 million shares of common stock at a cost of approximately $175.0 million. During the six months ended June 30, 2025 and 2024, the Company repurchased approximately 38.9 million shares of common stock at a cost of approximately $350.4 million, and approximately 19.2 million shares of common stock at a cost of approximately $250 million, respectively, under the program. As of June 30, 2025, the Company had repurchased a total of approximately 79.3 million shares of common stock at a cost of approximately $850.4 million under the program. The share repurchase program does not obligate the Company to acquire any particular amount of common stock.

Financial Summary
The table below is a summary of the Company’s financial results for the three and six months ended June 30, 2025 compared to the prior year period:

Three Months Ended
June 30,
(In millions, except per share amounts) 2025 2024 Change
Total revenues $ 3,582.1 $ 3,796.6 $ (214.5)
Gross profit 1,332.9 1,445.4 (112.5)
Earnings (loss) from operations
233.0 (239.9) 472.9
Net loss
(4.6) (326.4) 321.8
Diluted loss per share
$ — $ (0.27) $ 0.27

Six Months Ended
June 30,
(In millions, except per share amounts) 2025 2024 Change
Total revenues $ 6,836.4 $ 7,460.0 $ (623.6)
Gross profit 2,494.1 2,949.4 (455.3)
Loss from operations
(2,649.2) (36.0) (2,613.2)
Net loss
(3,046.6) (212.5) (2,834.1)
Diluted loss per share
$ (2.58) $ (0.18) $ (2.40)

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
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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 sales 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. ”

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Results of Operations

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

Three Months Ended
June 30,
(In millions, except %s) 2025 2024 % Change 2025 Currency Impact (1)
2025 Constant Currency Revenues
Constant Currency % Change (2)

Net sales
Developed Markets (3)
$ 2,119.3 $ 2,319.2 (9) % $ (60.8) $ 2,058.5 (11) %
Greater China 588.9 539.0 9 % (0.3) 588.6 9 %
JANZ 305.7 349.6 (13) % (4.7) 301.0 (14) %
Emerging Markets (3)
555.1 578.1 (4) % 4.3 559.4 (3) %
Total net sales $ 3,569.0 $ 3,785.9 (6) % $ (61.5) $ 3,507.5 (7) %

Other revenues (4)
13.1 10.7 NM (0.3) 12.8 NM
Consolidated total revenues (3)(5)
$ 3,582.1 $ 3,796.6 (6) % $ (61.8) $ 3,520.3 (7) %

____________
(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 2025 constant currency net sales or revenues to the corresponding amount in the prior year.
(3) Reductions were driven primarily by the inclusion of net sales in the prior year period related to divestitures that closed during 2024 and the Indore Impact.
(4) For the three months ended June 30, 2025, other revenues in Developed Markets, JANZ, and Emerging Markets were approximately $10.3 million, $1.0 million, and $1.8 million, respectively.
(5) Amounts exclude intersegment revenue which eliminates on a consolidated basis.

Total Revenues
For the three months ended June 30, 2025, Viatris reported total revenues of $3.58 billion, compared to $3.80 billion for the comparable prior year period, representing a decrease of $214.5 million, or 6%. Total revenues include both net sales and other revenues from third parties. Net sales for the current quarter were $3.57 billion, compared to $3.79 billion for the comparable prior year period, representing a decrease of $216.9 million, or 6%. Other revenues for the current quarter were $13.1 million, compared to $10.7 million for the comparable prior year period.
Net sales decreased by approximately $212.2 million or 6% due to the inclusion of net sales in the prior year period related to divestitures that closed during 2024. The favorable impact of foreign currency translation was approximately $61.5 million, or 2%, primarily reflecting changes in the U.S. Dollar as compared to the currencies of subsidiaries in the EU. On a constant currency basis, net sales from the remaining business decreased by approximately $66.2 million, or 2%, for the three months ended June 30, 2025 compared to the prior year period. The decrease was the result of net base business erosion of approximately $145.6 million, of which approximately $160 million related to the Indore Impact. This decrease was partially offset by new product sales, primarily in Developed Markets, of approximately $79.4 million. New product sales include new products launched in 2025 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 37% and 33% for the three months ended June 30, 2025 and 2024, respectively.

Net sales are derived from our four reporting segments: Developed Markets, Greater China, JANZ, and Emerging Markets.

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Developed Markets Segment

Net sales from Developed Markets decreased by $199.9 million or 9% for the three months ended June 30, 2025 when compared to the prior year period. Net sales decreased by approximately $174.8 million or 8% due to the inclusion of net sales in the prior year period related to divestitures that closed during 2024. The favorable impact of foreign currency translation was approximately $60.8 million, or 3%. Constant currency net sales from the remaining business decreased by approximately $85.9 million or 4% when compared to the prior year period, driven primarily by lower net sales of certain existing products, including lenalidomide and everolimus in the U.S., as a result of the Indore Impact of approximately $110 million, partially offset by new product sales. Net sales within North America totaled approximately $870.1 million and net sales within Europe totaled approximately $1.25 billion.

Greater China Segment
Net sales from Greater China increased by $49.9 million or 9% for the three months ended June 30, 2025 when compared to the prior year period. The favorable impact of foreign currency translation was approximately $0.3 million. Constant currency net sales increased by approximately $49.6 million or 9% when compared to the prior year period, primarily driven by strong growth across multiple channels, including e-commerce, retail, and private hospitals, as well as customer purchasing patterns. Divestitures did not have a significant impact on the net sales in either period.
JANZ Segment
Net sales from JANZ decreased by $43.9 million or 13% for the three months ended June 30, 2025 when compared to the prior year period. Net sales decreased by approximately $11.0 million, or 3%, due to the inclusion of net sales in the prior year period related to divestitures that closed during 2024. The favorable impact of foreign currency translation was approximately $4.7 million, or 1%. Constant currency net sales from the remaining business decreased by approximately $37.6 million, or 11%, when compared to the prior year period, driven primarily by lower volumes of existing products in Japan and Australia due to government price reductions and additional competition, and by the Indore Impact of approximately $3 million.
Emerging Markets Segment
Net sales from Emerging Markets decreased by $23.0 million or 4% for the three months ended June 30, 2025 when compared to the prior year period. Net sales decreased by approximately $26.4 million, or 5%, due to the inclusion of net sales in the prior year period related to divestitures that closed during 2024. The decrease in net sales was also partially driven by the unfavorable impact of foreign currency translation of approximately $4.3 million, or 1%. Constant currency net sales from the remaining business increased by $7.7 million, or 1% when compared to the prior year period, primarily driven by higher volumes and pricing of existing products in certain Middle Eastern and Asian countries. These increases were partially offset by lower volumes in our ARV business, mainly as a result of the Indore Impact of approximately $45 million.

Cost of Sales and Gross Profit
Cost of sales decreased from $2.35 billion for the three months ended June 30, 2024 to $2.25 billion for the three months ended June 30, 2025. The decrease in cost of sales was largely driven by the impact of the decrease in net sales, primarily as a result of the divestitures that closed during 2024 and the Indore Impact .
Gross profit for the three months ended June 30, 2025 was $1.33 billion and gross margins were 37%. For the three months ended June 30, 2024, gross profit was $1.45 billion and gross margins were 38%. The changes in gross profit and gross margins are primarily related to the impact of the divestitures and the Indore Impact. Adjusted gross margins were approximately 57% for the three months ended June 30, 2025, compared to approximately 58% for the three months ended June 30, 2024.

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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 June 30, 2025 compared to the three months ended June 30, 2024 is as follows:

Three Months Ended
June 30,
(In millions, except %s) 2025 2024
U.S. GAAP cost of sales $ 2,249.2 $ 2,351.2
Deduct:
Purchase accounting amortization and other related items (597.8) (709.9)
Acquisition and divestiture-related costs (26.4) (17.0)
Restructuring costs (11.3) (11.6)
Share-based compensation expense (0.9) (0.9)
Other special items, including restructuring related costs (59.1) (19.1)
Adjusted cost of sales $ 1,553.7 $ 1,592.7

Adjusted gross profit (a)
$ 2,028.4 $ 2,203.9

Adjusted gross margin (a)
57 % 58 %

Impairment of Goodwill
During the prior year period, the Company recorded a goodwill impairment charge of $321.0 million related to its JANZ reporting unit in conjunction with its annual goodwill impairment test performed as of April 1, 2024.

Litigation Settlements and Other Contingencies, Net
The following table includes the (gains)/losses recognized in litigation settlements and other contingencies, net during the three months ended June 30, 2025 and 2024, respectively:

Three Months Ended
June 30,
(In millions) 2025 2024
Contingent consideration adjustment
$ (37.7) $ (3.2)
Litigation settlements, net (9.9) 134.2
Total litigation settlements and other contingencies, net $ (47.6) $ 131.0

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Refer to Note 4 Acquisitions and Other Transactions and Note 11 Financial Instruments and Risk Management included in Part I, Item 1 of this Form 10-Q for more information with respect to the contingent consideration adjustment.

Also refer to Note 17 Litigation included in Part I, Item 1 of this Form 10-Q for more information on litigation settlements, net.

Interest Expense
Interest expense for the three months ended June 30, 2025 totaled $116.6 million, compared to $145.8 million for the three months ended June 30, 2024, a decrease of $29.2 million. The decrease was primarily due to the impact of 2024 debt repayments.
Other Expense (Income), Net
Other expense (income), net includes gains and losses from divestitures of businesses, changes in the fair value of equity securities, extinguishment of debt, 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 June 30, 2025 totaled $333.5 million, compared to $6.1 million for the three months ended June 30, 2024.

The increase in other expense, net was primarily driven by a loss of $284.0 million recorded in the current year period as a result of changes in the fair value of the CCPS in Biocon Biologics, compared to a net gain in the prior year period of $248.7 million related to our non-marketable equity investments, including the CCPS in Biocon Biologics, and lower interest income of $11.1 million. This was partially offset by a decrease in loss on divestitures of $215.0 million compared to the prior year period. Refer to Note 11 Financial Instruments and Risk Management include d in Part I, Item 1 of this Form 10-Q for more information with respect to the change in the fair value of the CCPS in Biocon Biologics.

Income Tax Benefit
For the three months ended June 30, 2025, the Company recognized an income tax benefit of $212.5 million, compared to an income tax benefit of $65.4 million for the comparable prior year period, an increase of $147.1 million. The benefit in the current year period is primarily driven by the loss before income taxes. The current year and prior year provisions were also impacted by the levels of income and the changing mix at which it is earned in jurisdictions with differing tax rates.

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Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Six Months Ended
June 30,

(In millions, except %s)
2025 2024 % Change 2025 Currency Impact (1)
2025 Constant Currency Revenues
Constant Currency % Change (2)

Net sales
Developed Markets (3)
$ 4,011.0 $ 4,484.6 (11) % $ (27.5) $ 3,983.5 (11) %
Greater China 1,144.4 1,082.9 6 % 11.6 1,156.0 7 %
JANZ 581.8 667.4 (13) % 7.5 589.3 (12) %
Emerging Markets (3)
1,075.0 1,204.5 (11) % 32.0 1,107.0 (8) %
Total net sales $ 6,812.2 $ 7,439.4 (8) % $ 23.6 $ 6,835.8 (8) %

Other revenues (4)
24.2 20.6 NM (0.2) 24.0 NM
Consolidated total revenues (3)(5)
$ 6,836.4 $ 7,460.0 (8) % $ 23.4 $ 6,859.8 (8) %

____________
(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 2025 constant currency net sales or revenues to the corresponding amount in the prior year.
(3) Reductions were driven primarily by the inclusion of net sales in the prior year period related to divestitures that closed during 2024 and the Indore Impact.
(4) For the six months ended June 30, 2025, other revenues in Developed Markets, JANZ, and Emerging Markets were approximately $17.2 million, $2.0 million, and $5.0 million, respectively.
(5) Amounts exclude intersegment revenue which eliminates on a consolidated basis.

Total Revenues
For the six months ended June 30, 2025, Viatris reported total revenues of $6.84 billion, compared to $7.46 billion for the comparable prior year period, representing a decrease of $623.6 million, or 8%. Total revenues include both net sales and other revenues from third parties. Net sales for the six months ended June 30, 2025 were $6.81 billion, compared to $7.44 billion for the comparable prior year period, representing a decrease of $627.2 million, or 8%. Other revenues for the six months ended June 30, 2025 were $24.2 million, compared to $20.6 million for the comparable prior year period.
Net sales decreased by approximately $449.6 million or 6% due to the inclusion of net sales in the prior year period related to divestitures that closed during 2024. The decrease in net sales was also partially driven by the unfavorable impact of foreign currency translation of approximately $23.6 million, or less than 1%, primarily reflecting changes in the U.S. Dollar as compared to the currencies of subsidiaries in Japan, China, and countries in Emerging Markets. On a constant currency basis, net sales from the remaining business decreased by approximately $154.0 million, or 2%, for the six months ended June 30, 2025 compared to the prior year period. The decrease was the result of net base business erosion of approximately $300.4 million, of which approximately $300 million related to the Indore Impact. This decrease was partially offset by new product sales, primarily in Developed Markets, of approximately $146.4 million. New product sales include new products launched in 2025 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 37% and 33% for the six months ended June 30, 2025 and 2024, respectively.
Net sales are derived from our four reporting segments: Developed Markets, Greater China, JANZ, and Emerging Markets.

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Developed Markets Segment
Net sales from Developed Markets decreased by $473.6 million or 11% for the six months ended June 30, 2025 when compared to the prior year period. Net sales decreased by approximately $354.5 million or 8% due to the inclusion of net sales in the prior year period related to divestitures that closed during 2024. The favorable impact of foreign currency translation was approximately $27.5 million, or 1%. Constant currency net sales from the remaining business decreased by approximately $146.6 million or 3% when compared to the prior year period, driven primarily by lower net sales of certain existing products, including lenalidomide and everolimus in the U.S., as a result of the Indore Impact of approximately $190 million, partially offset by new product sales. Net sales within North America totaled approximately $1.67 billion and net sales within Europe totaled approximately $2.34 billion.

Greater China Segment
Net sales from Greater China increased by $61.5 million or 6% for the six months ended June 30, 2025 when compared to the prior year period. The unfavorable impact of foreign currency translation was approximately $11.6 million, or 1%. Constant currency net sales increased by approximately $73.6 million or 7% when compared to the prior year period, primarily driven by strong growth across multiple channels, including e-commerce, retail, and private hospitals, as well as customer purchasing patterns. Divestitures did not have a significant impact on the net sales in either period.
JANZ Segment
Net sales from JANZ decreased by $85.6 million or 13% for the six months ended June 30, 2025 when compared to the prior year period. Net sales decreased by approximately $20.8 million, or 3%, due to the inclusion of net sales in the prior year period related to divestitures that closed during 2024. This decrease was also partially driven by the unfavorable impact of foreign currency translation of approximately $7.5 million, or 1%. Constant currency net sales from the remaining business decreased by approximately $57.3 million, or 9%, 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, and by the Indore Impact of approximately $6 million.
Emerging Markets Segment
Net sales from Emerging Markets decreased by $129.5 million or 11% for the six months ended June 30, 2025 when compared to the prior year period. Net sales decreased by approximately $73.8 million, or 6%, due to the inclusion of net sales in the prior year period related to divestitures that closed during 2024. The decrease in net sales was also partially driven by the unfavorable impact of foreign currency translation of approximately $32.0 million, or 3%. Constant currency net sales from the remaining business decreased by $23.7 million, or 2% when compared to the prior year period, primarily driven by lower volumes in our ARV business, mainly as a result of the Indore Impact of approximately $103 million. These decreases were partially offset by new product sales in certain Latin American countries and higher volumes and pricing of existing products in certain Middle Eastern and Asian countries.

Cost of Sales and Gross Profit
Cost of sales decreased from $4.51 billion for the six months ended June 30, 2024 to $4.34 billion for the six months ended June 30, 2025. The decrease in cost of sales was largely driven by the impact of the decrease in net sales, primarily as a result of the divestitures that closed during 2024 and the Indore Impact .
Gross profit for the six months ended June 30, 2025 was $2.49 billion and gross margins were 36%. For the six months ended June 30, 2024, gross profit was $2.95 billion and gross margins were 40%. The changes in gross profit and gross margins are primarily related to the impact of the divestitures and the Indore Impact. Adjusted gross margins were approximately 56% for the six months ended June 30, 2025, compared to approximately 58% for the six months ended June 30, 2024.
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A reconciliation between cost of sales, as reported under U.S. GAAP, and adjusted cost of sales and adjusted gross margin for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 is as follows:

Six Months Ended
June 30,
(In millions, except %s)
2025 2024
U.S. GAAP cost of sales $ 4,342.3 $ 4,510.6
Deduct:
Purchase accounting amortization and other related items (1,181.3) (1,321.4)
Acquisition and divestiture-related costs (38.6) (23.3)
Restructuring costs (31.1) (15.6)
Share-based compensation expense (2.2) (1.7)
Other special items, including restructuring related costs (100.7) (47.3)
Adjusted cost of sales $ 2,988.4 $ 3,101.3

Adjusted gross profit (a)
$ 3,848.0 $ 4,358.7

Adjusted gross margin (a)
56 % 58 %

____________
(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 six months ended June 30, 2025 was $440.8 million, compared to $403.8 million for the comparable prior year period, an increase of $37.0 million. This increase was primarily the result of higher expenses for the selatogrel and cenerimod development programs.
Acquired IPR&D
Acquired IPR&D expense for the six months ended June 30, 2025 was $10.0 million, compared to $(1.7) million for the comparable prior year period, an increase of $11.7 million. The current period expense is 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 six months ended June 30, 2025 was $1.88 billion, compared to $2.05 billion for the comparable prior year period, a decrease of $177.7 million. The decrease was primarily due to the impact of the divestitures, and lower acquisition and divestiture-related costs of approximately $108.9 million. These decreases were partially offset by higher restructuring costs of approximately $62.2 million.
Impairment of Goodwill
The Company performed an interim goodwill impairment test as of March 31, 2025, and in conjunction with the interim goodwill impairment test, the Company recorded a goodwill impairment charge of $2.94 billion in the first quarter of 2025. Refer to Note 10 Goodwill and Intangible Assets in Part I, Item 1 of this Form 10-Q for more information. During the prior year period, the Company recorded a goodwill impairment charge of $321.0 million related to its JANZ reporting unit in conjunction with its annual goodwill impairment test performed as of April 1, 2024.

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Litigation Settlements and Other Contingencies, Net
The following table includes the (gains)/losses recognized in litigation settlements and other contingencies, net during the six months ended June 30, 2025 and 2024, respectively:

Six Months Ended
June 30,
(In millions) 2025 2024
Contingent consideration adjustment
$ (171.4) $ 1.6
Litigation settlements, net 50.3 206.2
Total litigation settlements and other contingencies, net $ (121.1) $ 207.8

Also refer to Note 17 Litigation included in Part I, Item 1 of this Form 10-Q for more information on litigation settlements, net.

Interest Expense
Interest expense for the six months ended June 30, 2025 totaled $232.1 million, compared to $284.2 million for the six months ended June 30, 2024, a decrease of $52.1 million. The decrease was primarily due to the impact of 2024 debt repayments.
Other Expense (Income), Net
Other expense (income), net includes gains and losses from divestitures of businesses, changes in the fair value of equity securities, extinguishment of debt, foreign exchange, expense (income) related to post-employment benefit plans, TSA income, and interest and dividend income. Other expense (income), net for the six months ended June 30, 2025 totaled $432.8 million of expense, compared to $133.0 million of income for the six months ended June 30, 2024, a decrease of $565.8 million.

The decrease was primarily driven by a loss of $399.8 million recorded in the current year period as a result of changes in the fair value of the CCPS in Biocon Biologics, compared to a net gain in the prior year period of $295.5 million related to our non-marketable equity investments, including the CCPS in Biocon Biologics, and lower interest income of $22.8 million. This was partially offset by a decrease in loss on divestitures of $107.7 million compared to the prior year period. Refer to Note 11 Financial Instruments and Risk Management included in Part I, Item 1 of this Form 10-Q for more information with respect to the change in the fair value of the CCPS in Biocon Biologics.

Income Tax (Benefit) Provision
For the six months ended June 30, 2025, the Company recognized an income tax benefit of $267.5 million, compared to an income tax provision of $25.3 million for the comparable prior year period, a change of $292.8 million. The benefit in the current 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 year and prior year provisions were also impacted by the levels of income and the changing mix at which it is earned in jurisdictions with differing tax rates.

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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.
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:
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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, 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;
• 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, 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.
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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 Loss to Adjusted Net Earnings and U.S. GAAP Loss Per Share to Adjusted EPS
A reconciliation between net loss and diluted loss per share as reported under U.S. GAAP, and adjusted net earnings and adjusted EPS for the periods shown follows:

Three Months Ended June 30, Six Months Ended June 30,
(In millions, except per share amounts)
2025 2024 2025 2024
U.S. GAAP net loss and U.S. GAAP diluted loss per share $ (4.6) $ — $ (326.4) $ (0.27) $ (3,046.6) $ (2.58) $ (212.5) $ (0.18)
Purchase accounting amortization (primarily included in cost of sales) 597.8 709.9 1,181.3 1,321.6
Impairment of goodwill (a)
— 321.0 2,936.8 321.0
Litigation settlements and other contingencies, net (47.6) 131.0 (121.1) 207.8
Interest expense (primarily amortization of premiums and discounts on long term debt) (9.5) (3.2) (18.7) (14.4)

Loss on divestitures of businesses (included in other expense (income), net) (b)
43.8 258.8 80.7 188.4
Acquisition and divestiture-related costs (primarily included in SG&A) (c)
53.7 105.1 94.4 192.6

Restructuring costs (d)
26.6 21.1 119.5 40.7
Share-based compensation expense 37.1 34.7 92.3 81.4
Other special items included in:
Cost of sales (e)
59.1 19.1 100.7 47.3
Research and development expense 1.4 0.4 2.1 2.8
Selling, general and administrative expense 30.1 11.5 47.7 27.6
Other expense (income), net (f)
304.6 (233.7) 406.0 (278.2)
Tax effect of the above items and other income tax related items (g)
(366.5) (222.8) (548.8) (286.9)
Adjusted net earnings and adjusted EPS $ 726.0 $ 0.62 $ 826.5 $ 0.69 $ 1,326.3 $ 1.11 $ 1,639.2 $ 1.36
Weighted average diluted shares outstanding 1,176.8 1,197.7 1,189.9 1,203.6
Significant items include the following:
(a) For the six months ended June 30, 2025, includes a goodwill impairment charge of $2.94 billion as a result of the interim goodwill impairment test performed as of March 31, 2025.
(b) For the three and six months ended June 30, 2025, consists of pre-tax charges related to the divestitures 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.
(c) Acquisition and divestiture-related costs consist primarily of transaction costs including legal and consulting fees and integration activities.
(d) For the three and six months ended June 30, 2025, charges include approximately $11.3 million and $31.1 million, respectively, in cost of sales, approximately $1.4 million and $2.2 million, respectively, in R&D, and approximately $14.0 million and $86.3 million, respectively, in SG&A.
(e) For the three and six months ended June 30, 2025, charges include incremental manufacturing variances at plants slated for sale or closure or undergoing remediation activities of approximately $36.7 million and $68.4 million, respectively.
(f) For the three and six months ended June 30, 2025, includes a loss of approximately $284.0 million and $399.8 million, respectively, as a result of remeasuring the CCPS in Biocon Biologics to fair value.
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(g) Adjusted for changes for uncertain tax positions.
Reconciliation of U.S. GAAP Net Loss to EBITDA and Adjusted EBITDA
Below is a reconciliation of U.S. GAAP net loss to EBITDA and adjusted EBITDA for the three and six months ended June 30, 2025 compared to the prior year period:

Three Months Ended June 30, Six Months Ended June 30,
(In millions) 2025 2024 2025 2024
U.S. GAAP net loss $ (4.6) $ (326.4) $ (3,046.6) $ (212.5)
Add / (deduct) adjustments:

Income tax (benefit) provision (212.5) (65.4) (267.5) 25.3
Interest expense (a)
116.6 145.8 232.1 284.2
Depreciation and amortization (b)
678.3 786.3 1,343.0 1,477.3
EBITDA $ 577.8 $ 540.3 $ (1,739.0) $ 1,574.3
Add / (deduct) adjustments:
Share-based compensation expense 37.1 34.7 92.3 81.4
Litigation settlements and other contingencies, net (47.6) 131.0 (121.1) 207.8
Loss on divestitures of businesses 43.8 258.8 80.7 188.4
Impairment of goodwill — 321.0 2,936.8 321.0
Restructuring, acquisition and divestiture-related and other special items (c)
467.7 (77.9) 752.6 28.4
Adjusted EBITDA $ 1,078.8 $ 1,207.9 $ 2,002.3 $ 2,401.3

____________
(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 Loss to Adjusted Net Earnings.

Liquidity and Capital Resources
Our primary source of liquidity is net cash provided by operating activities, which was $755.2 million for the six months ended June 30, 2025. 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.

Operating Activities
Net cash provided by operating activities decreased by $238.5 million to $755.2 million for the six months ended June 30, 2025, as compared to net cash provided by operating activities of $993.7 million for the six months ended June 30, 2024. Net cash provided by operating activities is derived from net loss adjusted for non-cash operating items, including fair value adjustments related to the Biocon Biologics CCPS investment, 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 lower operating earnings, including as a result of divestitures that closed in 2024, and the timing of cash payments and collections.
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Investing Activities
Net cash used in investing activities was $117.6 million for the six months ended June 30, 2025, as compared to net cash from investing activities of $221.5 million for the six months ended June 30, 2024, a decrease of $339.1 million.
In 2025, significant items in investing activities included the following:
• capital expenditures, primarily for equipment and facilities, totaling approximately $95.5 million. While there can be no assurance that current expectations will be realized, capital expenditures for the 2025 calendar year are expected to be approximately $300 million to $400 million.
In 2024, significant items in investing activities included the following:
• proceeds from the sale of assets and businesses of $677.7 million related to the divestitures of the API business in India and the women’s healthcare business;
• cash paid for acquisitions, net of cash acquired, of $350.0 million; and
• capital expenditures, primarily for equipment and facilities, totaling approximately $108.6 million.
Financing Activities
Net cash used in financing activities was $829.4 million for the six months ended June 30, 2025, as compared to $1.27 billion for the six months ended June 30, 2024, a decrease of $444.1 million.
In 2025, significant items in financing activities included the following:
• share repurchases of $350.4 million;
• cash dividends paid of $283.1 million; and
• net cash of $153.7 million paid on behalf of other partners, which is included in Other items, net.
In 2024, significant items in financing activities included the following:
• repayment of the 1.023% Euro Senior Notes at maturity of approximately $801.7 million;
• share repurchases of $250.0 million;
• cash dividends paid of $288.3 million; and
• receipt of $100.0 million in deferred consideration from the Biocon Biologics Transaction, and net cash of $28.8 million collected on behalf of other partners, including Biocon Biologics, which is included in Other items, net.
Capital Resources
Our cash and cash equivalents totaled $566.4 million at June 30, 2025. 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 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.

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 June 30, 2025, the Company did not have any borrowings outstanding under the Commercial Paper Program or the 2024 Revolving Facility.
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The Company has a Receivables Facility for up to an aggregate amount of $600 million which expires in April 2028. As of June 30, 2025, 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 $123.0 million and $68.5 million of accounts receivable as of June 30, 2025 and December 31, 2024, respectively, under these factoring arrangements. Additionally, we have a similar arrangement for certain European countries. As of June 30, 2025 and December 31, 2024, we assigned and derecognized approximately $15.4 million and $29.9 million, respectively, of Trade Receivables, Net , which were included in Other Receivables .
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 9 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 June 30, 2025, refer to Note 12 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 June 30, 2025 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.
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.
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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 six months ended June 30, 2025 and as of and for the year ended December 31, 2024. 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) June 30, 2025 December 31, 2024
ASSETS
Current assets $ 484.9 $ 786.7
Non-current assets 59,025.5 61,424.7

LIABILITIES AND EQUITY
Current liabilities 32,812.0 30,796.9
Non-current liabilities 11,127.9 12,779.0

Combined Summarized Income Statement Information of Viatris Inc., Mylan Inc., Utah Acquisition Sub Inc. and Mylan II B.V.

(In millions) Six Months Ended June 30, 2025
Year Ended December 31, 2024

Revenues $ — $ —
Gross profit — —
Loss from operations (498.4) (1,206.6)
Net loss (3,046.6) (634.2)

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 $454.4 million accrued for legal contingencies at June 30, 2025.
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 entered into transition services and/or 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 a period of up to 12 months for transition services and for periods between one to 10 years for manufacturing and supply agreements, depending on the geographic market and the products subject to such agreement, subject to potential extensions in certain circumstances. In addition, in connection with the OTC Transaction and the divestiture of our women’s healthcare business, we entered into distribution agreements for certain markets for a limited period of time. In connection with the API business divestiture, we entered into 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.

Application of Critical Accounting Policies
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.
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The Company also performed the annual goodwill impairment test as of April 1, 2025. There were no significant changes from the interim goodwill test performed at March 31, 2025 and the results were consistent with the interim goodwill impairment test. Also, no triggering events have been identified since the April 1, 2025 impairment test date.
The Company performed both its interim and annual goodwill impairment tests on a quantitative basis for its five reporting units, North America, Europe, Emerging Markets, JANZ, and Greater China. In estimating each reporting unit’s fair value, the Company performed an extensive valuation analysis, utilizing a discounted cash flow approach. The determination of the fair value of the reporting units requires the Company to make significant estimates and assumptions that affect the reporting unit’s expected future cash flows. These estimates and assumptions, utilizing Level 3 inputs, primarily include, but are not limited to, the discount rate, terminal growth rates, operating income before depreciation and amortization, capital expenditures forecasts and control premiums.

For the March 31, 2025 interim goodwill impairment test, when compared to the prior year annual goodwill impairment test completed on April 1, 2024, the significantly increased uncertainty and volatility in the geopolitical and economic environments in which the Company operates increased the Company’s business risks, including, but not limited to, the potential for continued or additional drug pricing reduction pressures, general uncertainty related to timing of responses and approvals from the FDA resulting from evolving regulatory priorities and associated changes to the operations of the agency, and the potential for adverse impacts from future tariffs and trade restrictions. The negative impact of any or all of these factors could be material. The significant increase in business risks and uncertainty led to an increase in discount rate assumptions impacting all reporting units as compared to the April 1, 2024 annual goodwill impairment test.

As of March 31, 2025 (prior to the impairment charges noted below), the allocation of the Company’s total goodwill was as follows: North America $3.09 billion, Europe $3.92 billion, Emerging Markets $1.17 billion, JANZ $0.30 billion and Greater China $0.92 billion.
In conjunction with its March 31, 2025 interim goodwill impairment test, the Company recorded the following impairment charges in the first quarter of 2025:

(In millions) North America
Europe
JANZ
Emerging Markets
Total
Impairment charge
$ 707.0 $ 1,554.0 $ 300.8 $ 375.0 $ 2,936.8

For the North America reporting unit at March 31, 2025 and April 1, 2025, the Company forecasted cash flows for the next 10 years. During the forecast period, the revenue compound annual growth rate was approximately 3.1%. A terminal year value was calculated with a negative 3.0% revenue growth rate applied. The discount rate utilized was 12.5% and the estimated tax rate was 24.8%.
For the Europe reporting unit at March 31, 2025 and April 1, 2025, the Company forecasted cash flows for the next 10 years. During the forecast period, the revenue compound annual growth rate was approximately 3.3%. A terminal year value was calculated with a 2.0% revenue growth rate applied. The discount rate utilized was 12.0% and the estimated tax rate was 15.8%.
For the Emerging Markets reporting unit at March 31, 2025 and April 1, 2025, the Company forecasted cash flows for the next 10 years. During the forecast period, the revenue compound annual growth rate was approximately 3.5%. A terminal year value was calculated with a 2.0% revenue growth rate applied. The discount rate utilized was 14.5% and the estimated tax rate was 16.7%.
For the JANZ reporting unit at March 31, 2025 and April 1, 2025, the Company forecasted cash flows for the next 10 years. During the forecast period, the revenue compound annual growth rate was approximately negative 0.9%. A terminal year value was calculated with a 1.0% revenue growth rate applied. The discount rate utilized was 8.5% and the estimated tax rate was 30.2%. After the goodwill impairment charge recorded during the first quarter of 2025, there is no remaining goodwill allocated to the JANZ reporting unit.

Following the goodwill impairment charges recorded in these reporting units, since the carrying value of the reporting units is equal to their estimated fair value as of March 31, 2025 and April 1, 2025, if market conditions or the projected results were to negatively change, it may be necessary to record further impairment charges to one or more of these reporting units in future periods. Any such future charges could be material.
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For the Greater China reporting unit, the estimated fair value exceeded its carrying value by approximately $322.0 million or 5.8% for both the March 31, 2025 and April 1, 2025 goodwill impairment tests. As it relates to the discounted cash flow approach for the Greater China reporting unit at March 31, 2025 and April 1, 2025, the Company forecasted cash flows for the next 10 years. During the forecast period, the revenue compound annual growth rate was approximately 1.6%. A terminal year value was calculated with a negative 1.5% revenue growth rate applied. The discount rate utilized was 15.0% and the estimated tax rate was 24.7%. If all other assumptions are held constant, a reduction in the terminal value growth rate by 3.5% or an increase in discount rate by 1.0% would result in an impairment charge for the Greater China reporting unit.
Due to the inherent uncertainty involved in making these estimates, actual results could differ from those estimates. In addition, changes in underlying assumptions, especially as they relate to the key assumptions detailed, could have a significant impact on the fair value of the reporting units.

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’ 2024 Form 10-K.

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 June 30, 2025. 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 second quarter of 2025 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
Except for the risk factor disclosed in Part II, Item 1A of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, which is hereby incorporated by reference into this Part II, Item 1A of this Form 10-Q, there have been no material changes in the Company’s risk factors from those disclosed in Viatris’ 2024 Form 10-K.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Viatris Inc.
Issuer purchases of equity securities

Period Total Number of Shares Purchased (a) (b)
Average Price Paid per Share (c)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (a) (b)
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (a)

April 1 - April 30, 2025
6,346,050 $ 8.33 6,346,050 $ 1,271,743,899
May 1 - May 31, 2025
13,897,492 8.79 13,897,492 1,149,630,459
June 1 - June 30, 2025
— — — —
Total 20,243,542 $ 8.64 20,243,542 $ 1,149,630,459

____________
(a) Refer to Part I, Item 2. Management’s Discussion and Analysis of Financial Condition - Results of Operations – Recent Developments of this Form 10-Q for additional information regarding the Company’s authorized share repurchase program. During the three months ended June 30, 2025, the Company repurchased approximately 20.2 million shares of common stock at a cost of approximately $175.0 million under this program.
(b) The number of shares purchased is based on the purchase date and not the settlement date.
(c) Average price per share includes commissions.

ITEM 5. OTHER INFORMATION
Trading Arrangements
On June 12, 2025 , Corinne Le Goff , Chief Commercial Officer 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 7,032 shares of the Company’s common stock until all such shares are sold or July 31, 2026 , whichever comes first.
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ITEM 6. EXHIBITS

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, 2024, 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).

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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)

August 7, 2025

/s/ THEODORA MISTRAS

Theodora Mistras

Chief Financial Officer
(Principal Financial Officer)

August 7, 2025
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