The market has yet to give this drugmaker credit for its move beyond generics
HS 04/06/2026
Viatris’ improving sales trends and margins combined with meaningful development opportunities could help boost its valuation multiple. Viatris combines stable cash flow from established drugs with a lower-risk development strategy to provide steadier earnings growth with less downside for investors. The company’s pipeline is anchored by three major opportunities in diverse therapeutic areas, all of which could meaningfully accelerate long-term revenue growth. Viatris stock is already gaining momentum as it makes progress in developing a drug pipeline capable of accelerating sales growth, improving margins and creating shareholder value in the years ahead. The key pillars of its growth strategy are a non-opioid pain reliever, a potential blockbuster lupus treatment and a drug that has been dubbed an “EpiPen for heart attacks.” Several near-term catalysts are ahead that could help drive further multiple expansion as the company becomes recognized as more than just a generic drugmaker. At the same time, Viatris is seeing improving trends for its existing products. After several years of declining revenue growth, Viatris has finally turned the corner. On an operational basis, first-quarter revenue rose 3% year over year, while adjusted earnings per share grew 14%. Cost cuts implemented after a strategic review helped earnings outpace estimates and could save the company $400 million by the end of 2028. Better execution at its Greater China business also helped its latest results. Shares have advanced more than 16% in the first week of May in anticipation of and following the earnings release . Viatris traces its roots to Mylan, founded in 1961 in White Sulphur Springs, West Virginia, as a company focused on generic and specialty pharmaceuticals. Mylan merged with Pfizer’s Upjohn business in 2020, bringing together Upjohn’s iconic brands, commercial and medical expertise and strong global presence, particularly in China, with Mylan’s broad portfolio, pipeline capabilities, and supply chain expertise to form a leading global medicines company. While the deal offered significant strategic advantages, Mylan also acquired Upjohn’s mature branded portfolio, including drugs such as Lyrica for nerve pain treatment, many of which were facing deteriorating sales. The decline has finally stopped. Lipitor, Norvasc, Lyrica, EpiPen auto-injectors and Creon grew sales year over year in the first quarter. While North America is its biggest market, sales in the Greater China region rose a better-than-expected 18% due to an aging population and increased demand for cardiovascular drugs. Limiting risks Viatris is building its business with a focus on mitigating risk. For instance, in China, where policy change is a threat, it’s switching its sales channel’s focus from hospitals that are more susceptible to policy changes to retail and e-commerce. On the company’s first-quarter earnings call, Chief Research and Development Officer Philippe Martin said sales in the e-commerce channel doubled in the latest three-month period. At its investor day on March 19, Viatris said it is targeting a base case compound annual growth through 2030 of 3% to 4% for total revenue, 4% to 5% for adjusted EBITDA and 6% to 7% for adjusted EPS. It also expects to have greater than $2.7 billion in annual free cash flow by 2030. Its generics and established brands support its solid free cash flow and fund shareholder returns including a dividend that currently yields 3.08%. It also allows Viatris to invest in its pipeline. Viatris also takes a low-risk approach to its pipeline development. The company has either focused on developing known active ingredients, which they modify or improve upon, or innovating drugs the company has purchased in mid-stage development. In the second scenario, Viatris leverages its vast experience in late-stage development and commercialization to see a drug through Food and Drug Administration approval and a quick sales ramp. The company expects new products will add $450 million to $550 million of revenue annually over the long term. Fast-acting pain relief In the near term, the focus is on fast-acting meloxicam, which was accepted for review by the FDA on May 18. A regulatory decision is expected by the year’s end. The drug’s annual revenue is expected to peak at $500 million, William Szablewski, head of investor relations and capital markets, said at the Bank of America Annual Healthcare Conference on May 14. At the same conference, Martin said he expects a “meaningful” contribution to revenue from fast-acting meloxicam next year. It’s a reformulated version of an old medication, meloxicam, that has been designed to provide quick relief to patients with moderate-to-severe acute pain. Mylan purchased the rights to develop and market the drug from Prayog Labs in 2018. Doctors have been seeking a non-opioid drug as a less addictive alternative to narcotics. However, to date, many non-opioid drugs haven’t been as effective as opioids. Last year, hopes had been high for Vertex’s Journavx, the first new class of pain medicine approved in over two decades, but the rival pain drug has underperformed analysts’ estimates. UBS analyst Ashwani Verma sees fast-acting meloxicam as having a “superior efficacy profile” to Journavx due to it having a faster time to “perceptible pain relief,” a greater effect on reducing pain and more treated patients remained opioid-free based on data from two phase 3 trials. Truist analyst Les Sulewski said the drug “is highly likely to secure ‘opioid-sparing’ language in its label,” which may help it “capture the ‘premium-outpatient’ segment that older generics simply cannot reach.” Fast-acting meloxicam “is an oral outpatient therapy that leverages the 2026 NOPAIN Act expansion for separate Medicare reimbursement. We think this creates a pricing ‘Goldilocks zone’ (est. $15–$31 per course) that is premium enough to avoid the ‘generic anchor’ of 20-cent pills, yet affordable enough to secure Tier 2/3 payer access,” Sulewski wrote in a recent note. A potential breakthrough for lupus Longer term, Viatris has two big opportunities with cenerimod and selatogrel, which were acquired from Swiss-based Idorsia in early 2024. Viatris expects the two drugs will add 1% to the top-line revenue CAGR above its long-term base-case. “Both are high-risk, high-reward programs, but we think only one needs to be (+) for the stock to gap up,”Jefferies analyst Dennis Ding said in a recent note. VTRS YTD mountain Viatris shares year to date Cenerimod is a new oral medicine being studied to treat lupus, an autoimmune disease that causes a patient’s immune system to mistakenly attack healthy tissues and organs. Cenerimod works by keeping many of those immune cells trapped inside lymph nodes instead of letting them travel through the bloodstream so fewer of them can circulate through the body and drive inflammation. Viatris has two ongoing trials to study the effectiveness and safety of cenerimod. The first focuses on the treatment of systemic lupus erythematosus, the most common type of lupus. A readout of data from the fully enrolled phase 3 trial is expected in the first half of 2027. A second is for the treatment of lupus nephritis, a type of kidney disease caused by SLE. Viatris expects to complete enrollment of the phase 3 study sometime in the first half of 2028. Lupus is considered a “heterogeneous disease,” which means its symptoms, severity and response to treatment may vary widely from person to person. At BofA Annual Healthcare Conference, Martin said Viatris expects that there will be multiple treatments used to manage the disease, which lessens the competitive impact of any new drugs that enter the category. “I believe that this is how drugs will continue to be used in this disease because of the heterogeneity of the disease. And therefore, having other assets coming in is not necessarily detrimental to cenerimod,” he said. “Cenerimod has the opportunity to be the first treatment prior to biologic treatment based on the benefit risk that we’ve observed in phase 2.” Biologic treatments, which are derived from living cells, differ from traditional medications like cenerimod, which are chemically synthesized. Argus analyst Jasper Hellweg wrote in a recent note that “the global lupus therapeutics market is estimated at $5-$7 billion today and is projected to grow at a high-single-digit rate, driven by improved diagnosis and demand for oral alternatives to injectable biologics.” He sees peak annual revenue of $500 million to $1 billion for cenerimod. The ‘Epi-pen’ for heart attacks Selatogrel is an auto-injector that patients can administer at the first signs of a potential heart attack. The drug is designed to rapidly block platelets from clumping and restricting blood flow, lessening the adverse outcomes of a heart attack. Each year more than 800,000 Americans have a heart attack and there are currently about 5.6 million survivors, which could serve as the target market for selatogrel. The drug is being positioned as a first-line treatment option. There are currently no treatment options between the onset of a heart attack and the first contact with a medical provider. Once patients treated with selatogrel reach a hospital, they can be evaluated to see if they need angioplasty with a stent. If they do, they can still receive cangrelor, an intravenous platelet inhibitor. “Our data shows that … when you combine selatogrel and IV cangrelor, you still see a synergistic effect, you still see an increase in inhibition of platelet aggregation. So, they can be given together,” Martin said. Viatris estimates selatogrel will deliver about a 20% risk reduction in more severe heart attacks. “What we’ve also seen is that just carrying the pen itself makes the quality of life of the patients a lot better. Just knowing that they have this rescue medication helps them from a quality of life [standpoint],” Martin said. Stock trails most peers If Viatris can deliver on its targets, its valuation has room to rise. The stock trades at 6.1x next-twelve months earnings. In a note following first-quarter earnings, UBS’ Verma said “we see meaningful room for stock multiple to re-rate from these levels,” to “reflect further confidence in top/bottom-growth profile.” UBS raised its price target to a then-Steet-high $23 a share from $20, using a multiple of 7.5x compared with 6.5x previously. Viatris has eight buy, four hold and one underperform ratings, with an average analyst price target of $19.68, according to LSEG. At current multiples, Viatris looks attractive compared with both its generic- and branded-focused competitors given its expected growth rate. Its stock could prove to be an attractive investment as the company leverages its diversified portfolio, global scale, and disciplined development strategy to advance promising pipeline assets, which have the potential to drive meaningful long-term growth. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
