Viatris

Ticker
$VTRS
Industry
Pharma
Type
Merger
Rating
Covered
Category
General
Target Price
$16.50
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This is the merged version of Mylan ($MYL) and Upjohn from Pfizer.

Notes

  • Stats on the Biosimilar market... Viatris estimates $17bn global market as of 2020... Pfizer with $1.5bn biosimilar sales (per 4Q20 presentation), Viatris had 1Q21 annual run-rate of $1.3bn, and Organon had $330m in 2020. So those 3 players are ~18% of market sales. (Don't have figures for Teva.)
Analyst day — Feb 2022 — announced some asset sales including the exit of the high-growth biosimilar business
2022 Guidance — disappointing; limited FCF growth and EBITDA down from FY21
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Key product sales
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Financials & Valuation

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FY21 Valuation — 2022 guidance calls for $2.7bn ($2.22 per share) in FCF. My $16.50 price target = ~7.5x multiple; slightly higher than 5yr median valuation of 5.5x. Viatris expects to repay $2bn in debt from FCF in 2022 and an incremental $2bn from Biocon asset sale. Beyond that, there are $4-5bn in asset sales on the table. The deleveraging outlook is good.

Resources

Viatris ($VTRS) — FY21 Update
Mylan (MYL) — Viatris Estimates (9/28/2020)
Mylan (MYL) — 2Q20 Update (8/9/2020)
VTRS Broker Reports

April 2021 — VIC write-up: long at $13.30/share