PITTSBURGH, Dec. 11, 2020 /PRNewswire/
-- Viatris Inc. (NASDAQ: VTRS) today
announced additional details of its previously disclosed
multi-year global restructuring initiative. The restructuring
initiative is part of the company's previously announced roadmap to
maximize long-term value creation and is intended to ensure the new
company is optimally structured to sustainably achieve its bold
mission while also delivering on its financial commitments.
Viatris' restructuring initiative incorporates and expands on
the restructuring program announced by Mylan earlier this year as
part of its business transformation efforts. Viatris' initiative is
intended to reduce the company's cost base by at least $1 billion by the end of 2024 or sooner, with a
significant portion of the reduction expected to be achieved within
the first two years.
The company expects to optimize its commercial capabilities and
enabling functions, and close, downsize or divest up to 15
manufacturing facilities globally that are deemed to be no longer
viable either due to surplus capacity, challenging market dynamics
or a shift in its product portfolio toward more complex products.
As a result, Viatris expects that up to 20% of its global workforce
of approximately 45,000 may be impacted upon completion of the
restructuring initiative. The company will maintain an extensive
overall employee base and global manufacturing network that aligns
with its go-forward operations.
Initial Facility Impacts
Viatris is also announcing today five of the sites that will be
impacted:
- Its oral solid dose manufacturing facilities in Morgantown, West Virginia; Baldoyle,
Ireland and Caguas, Puerto Rico; and
- Its Unit 11 and Unit 12 active pharmaceutical ingredient (API)
manufacturing facilities in India.
In addition, the divestiture of the company's injectables
manufacturing site in Poland was
recently completed.
The workforce reductions at the impacted manufacturing sites
announced today are expected to occur in phases over the next few
years.
Wherever feasible, Viatris will seek to find potential buyers
for its facilities in order to preserve as many jobs as possible
and will work with impacted communities to identify appropriate
potential alternatives.
Any workforce actions the company takes as part of this
restructuring initiative will be implemented in a way that is
consistent with its long-standing commitment to treating employees
fairly and with respect. Viatris is exceptionally grateful for the
consistent dedication of its employees around the globe.
The company is also committed to ensuring supply continuity so
that patients' needs for critical medicines are met. Supply
continuity will be achieved, in some cases, within the company's
network.
Viatris CEO Michael Goettler said, "Viatris has a
tremendous opportunity to impact healthcare in a sustainable way
through a focus on access and empowering patients worldwide to live
healthier at every stage of life. The actions we are announcing
today are consistent with our commitment to optimally design our
new company to operate efficiently. This initiative is part of
Viatris' roadmap to ensure we can maximize long-term value creation
for shareholders and for all stakeholders, including the patients
and customers we serve."
Viatris president Rajiv
Malik said, "After more than a decade of building a robust
global platform, today we are taking the natural next step as we
shape a new company that we believe can meet the needs of patients
and customers in this evolving healthcare landscape. As we do so,
we are intently focused on ensuring supply continuity within the
markets we serve, which includes continuing our ongoing engagement
with health authorities and customers to ensure patients' needs are
met."
Viatris chief financial officer Sanjeev
Narula said, "Today's announcement is a significant next
step in ensuring Viatris meets the financial commitments it has
made to shareholders and other key stakeholders. The company
is currently in the process of defining the remaining
parameters of this global restructuring initiative. We expect to
continue to provide further details as they are finalized. At our
Investor Day on March 1, 2021, we
will review our roadmap on how we intend to deliver on our
stated commitments, maximize value creation, and generate strong
and accelerating free cash flows while
positioning Viatris for a sustainable future."
For the committed restructuring actions related to the five
impacted sites announced today, the company expects to incur total
pre-tax charges ranging between $500
million and $600 million. Such
charges are expected to include between $225
million and $275 million of
non-cash charges mainly related to accelerated depreciation and
asset impairment charges, including inventory write-offs. The
remaining estimated cash costs of between $275 million and $325
million are expected to be primarily related to severance
and employee benefits expense, as well as other costs,
including those related to contract terminations and
decommissioning costs. In addition, management believes the
potential annual savings related to these committed restructuring
activities to be between $250 million
and $300 million once fully
implemented, with most of these savings expected to improve
operating cash flow.
About Viatris
Viatris Inc. (NASDAQ: VTRS) is a new kind of healthcare
company, empowering people worldwide to live healthier at every
stage of life. We provide access to medicines, advance
sustainable operations, develop
innovative solutions and leverage our
collective expertise to connect more people to more
products and services through our one-of-a-kind Global
Healthcare GatewayTM. Formed in November 2020 through the combination of Mylan
and Pfizer's Upjohn business, Viatris brings together
scientific, manufacturing and distribution expertise with
proven regulatory, medical and commercial capabilities to
deliver high-quality medicines to patients in more than 165
countries and territories. Viatris' portfolio comprises more
than 1,400 approved molecules across a wide range of therapeutic
areas, spanning both non-communicable and infectious diseases,
including globally recognized brands, complex generic and branded
medicines, a growing portfolio of biosimilars and a variety of
over-the-counter consumer products. With a global workforce
of approximately 45,000, Viatris is headquartered in
the U.S., with global centers in Pittsburgh, Shanghai and Hyderabad, India. Learn more at
viatris.com and investor.viatris.com, and connect with us on
Twitter
at @ViatrisInc, LinkedIn and YouTube.
Forward-Looking Statements
This press release includes
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
that the restructuring initiative is intended to ensure the new
company is optimally structured to sustainably achieve its bold
mission while also delivering on its financial commitments; Viatris
Inc.'s ("Viatris") initiative is intended to reduce the company's
cost base by at least $1 billion by
the end of 2024 or sooner, with a significant portion of the
reduction expected to be achieved within the first two years; the
company expects to optimize its commercial capabilities and
enabling functions, and close, downsize or divest up to 15
manufacturing facilities globally that are deemed to be no longer
viable either due to surplus capacity, challenging market dynamics
or a shift in its product portfolio toward more complex products
and that as a result, Viatris expects that up to 20% of its global
workforce of approximately 45,000 may be impacted upon completion
of the restructuring initiative; the company will maintain an
extensive overall employee base and global manufacturing network
that aligns with its go-forward operations; the workforce
reductions at the impacted manufacturing sites announced today will
occur in phases over the next few years; wherever feasible, Viatris
will seek to find potential buyers for its facilities in order to
preserve as many jobs as possible and will work with impacted
communities to identify appropriate potential alternatives; any
workforce actions the company takes as part of this restructuring
initiative will be implemented in a way that is consistent with its
long-standing commitment to treating employees fairly and with
respect; the company is also committed to ensuring supply
continuity so that patients' needs for critical medicines are met;
supply continuity will be achieved, in some cases, within the
company's network; this initiative is part of Viatris' roadmap to
ensure we can maximize long-term value creation for shareholders
and for all stakeholders, including the patients and customers we
serve; Viatris is taking the natural next step as it shapes a new
company that it believes can meet the needs of patients and
customers in this evolving healthcare landscape and that as it does
so, it is intently focused on ensuring supply continuity within the
markets it serves, which includes continuing its ongoing engagement
with health authorities and customers to ensure patients' needs are
met; Viatris expects to continue to provide further details as they
are finalized; at its Investor Day on March
1, 2021, Viatris will review its roadmap on how it intends
to deliver on its stated commitments, maximize value creation, and
generate strong and accelerating free cash flows while positioning
Viatris for a sustainable future; for the committed
restructuring actions related to the five impacted sites announced
today, the company expects to incur total pre-tax charges ranging
between $500 million and $600 million; such charges are expected to
include between $225 million and
$275 million of non-cash charges
mainly related to accelerated depreciation and asset impairment
charges, including inventory write-offs; the remaining estimated
cash costs of between $275 million
and $325 million are expected to be
primarily related to severance and employee benefits expense, as
well as other costs, including those related to contract
terminations and decommissioning costs; and management believes the
potential annual savings related to these committed restructuring
activities to be between $250 million
and $300 million once fully
implemented, with most of these savings expected to improve
operating cash flow. Because forward-looking statements
inherently involve risks and uncertainties, actual future results
may differ materially from those expressed or implied by such
statements. Factors that could cause or contribute to such
differences include, but are not limited to: the potential impact
of public health outbreaks, epidemics and pandemics, including the
ongoing challenges and uncertainties posed by the COVID-19
pandemic; the integration of Mylan N.V. ("Mylan") and Pfizer Inc.'s
Upjohn business (the "Upjohn Business") being more difficult, time
consuming or costly than expected; the possibility that Viatris may
be unable to achieve expected benefits, synergies and operating
efficiencies in connection with the transaction pursuant to which
Mylan combined with the Upjohn Business in a Reverse Morris Trust
transaction (the "Combination") and Upjohn Inc. ("Upjohn") became
the parent entity of the combined Upjohn Business and Mylan
business and was renamed Viatris effective as of the closing of the
Combination within the expected timeframe or at all or to
successfully integrate Mylan and the Upjohn Business; uncertainties
and matters beyond the control of management; 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 accounting principles
generally accepted in the United States
of America ("U.S. GAAP") and related standards or on an
adjusted basis; and the other risks described in the Registration
Statement on Form S-4, as amended, which includes a proxy
statement/prospectus, which was filed by Upjohn with the Securities
and Exchange Commission ("SEC") on October
25, 2019 and declared effective by the SEC on February 13, 2020, the Registration Statement on
Form 10, which includes an information statement, which was filed
by Upjohn with the SEC on June 12,
2020 and declared effective by the SEC on June 30, 2020 and the final information
statement, dated August 6, 2020,
which is attached as Exhibit 99.1 to Upjohn's Current Report on
Form 8-K filed on August 6, 2020.
Viatris routinely posts information that may be important to
investors on its website at investor.viatris.com and uses that
website 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). Viatris undertakes no
obligation to update these statements for revisions or changes
after the date of this release other than as required by law.
Non-GAAP Financial Measures
This press release
includes the presentation and discussion of certain financial
information that differs from what is reported under U.S. GAAP.
These non-GAAP financial measures, including, but not limited to,
free cash flows are presented in order to supplement investors' and
other readers' understanding and assessment of the financial
performance of Viatris. Viatris is not providing forward looking
information for U.S. GAAP reported financial measures or
quantitative reconciliations of forward-looking non-GAAP financial
measures to the most directly comparable U.S. GAAP measure because
it is unable to predict with reasonable certainty the ultimate
outcome of certain significant items without unreasonable effort.
These items include, but are not limited to, acquisition-related
expenses, including integration, restructuring expenses, asset
impairments, litigation settlements and other contingencies,
including changes to contingent consideration and certain other
gains or losses. These items are uncertain, depend on various
factors, and could have a material impact on U.S. GAAP reported
results for the relevant period. References to Viatris free cash
flows are to U.S. GAAP net cash provided by operating activities
minus capital expenditures.
See Viatris' website at investor.viatris.com for more
information about Non-GAAP financial measures.
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SOURCE Viatris Inc.