US-based generics giant Viatris Inc. (NASDAQ: VTRS) has released its Q4 2022 financial report. The firm reported a 2% year-on-year (YOY) fall in net sales to USD 16.2 billion. The decrease was partly attributed to the USD 3 billion sale of Viatris’ biosimilars business to India-based Biocon Biologics Ltd, a deal that closed in November 2022. During the earnings conference call, Viatris’ president Rajiv Malik described the performance as “strong,” in line with previous guidance, and establishing a strong base for “a period of renewed growth” starting from 2024.
Regional Performance
China is a crucial market for Viatris, and the Greater China region was the only geographic territory to experience growth in constant currency terms during 2022, with net sales up 3% YOY to USD 2.201 billion over the 12 months. In contrast, Developed Markets were flat at USD 9.77 billion, while Japan, Australia, and New Zealand (JANZ) sales dipped by 8% to USD 1.63 billion, and Emerging Markets also fell 8% to USD 2.61 billion.
China Market Insights
During the earnings conference call, Malik provided insights into the China performance, stating that “the business is hitting on all cylinders.” Despite the challenges of COVID lockdown conditions, “Our hospital business performed relatively better than retail,” he noted. Malik expressed confidence that the China team can now “capture the patient when they move from the public reimbursement channel to the private pay channel.” Key products such as Lipitor (atorvastatin), Norvasc (amlodipine), and Xanax (alprazolam) have all maintained a strong performance, even with the first two products included in the volume-based procurement (VBP) program.
Impact of China’s Policies
Malik underscored the impact of China’s various cost control measures, stating: “China has significantly improved the cost efficiency of the medical reimbursement funds, while achieving their goals of providing broader coverage of health care to its population through the successful implementation of VBP and other policies.” Under these policy conditions, the forecast for 2023 is for the China business to see a “flattish small decline” during the year.
Strategic Implications
Despite the global sales dip, Viatris’ performance in China highlights the resilience and growth potential of the market. The company’s strategy to navigate China’s policy environment and maintain strong product performance positions it well for future opportunities, even as it looks forward to a period of renewed growth starting from 2024.-Fineline Info & Tech
