Viatris Inc. (NASDAQ:VTRS) delivered solid financial results in its third quarter of 2024, with total revenues reaching $3.8 billion, a 3% increase in operational revenue growth. The company's adjusted EBITDA rose by 4% to $1.3 billion, and adjusted earnings per share (EPS) improved by 6% to $0.75. Viatris' strong performance is further underscored by the generation of $866 million in free cash flow and significant debt repayment, positioning the pharmaceutical giant to meet its long-term gross leverage target.
Key Takeaways
- Viatris reported a 3% increase in operational revenue growth, with total revenues of $3.8 billion.
- Adjusted EBITDA and EPS grew to $1.3 billion (up 4%) and $0.75 (up 6%), respectively.
- The company repaid approximately $1.9 billion in debt, reducing total debt to below $15 billion.
- Viatris entered a licensing agreement with Lexicon Pharmaceuticals (NASDAQ:LXRX) for sotagliflozin, aiming to enhance its cardiovascular portfolio.
- The company reaffirmed its 2024 outlook, expecting approximately 2% revenue growth and flat adjusted EBITDA and EPS.
Company Outlook
- Viatris expects a 2% operational revenue growth for the full year of 2024.
- The company anticipates flat adjusted EBITDA and EPS for 2024, adjusted for IP R&D costs from the sotagliflozin licensing agreement.
- In 2024, Viatris plans to allocate $2.3 billion in free cash flow equally between shareholder returns and business development.
Bearish Highlights
- The fourth quarter is projected to have lower total revenue due to product seasonality, phasing of generic products, and increased competition.
- Adjusted EBITDA and EPS are expected to decline in Q4 due to changes in product mix and increased SG&A expenses.
- Free cash flow is likely to decrease in Q4 because of divestiture costs, higher capital expenditures, and interest payments.
Bullish Highlights
- Viatris has seen strong performance in the MENA and Emerging Asia regions, driving growth.
- The company's cardiovascular offerings are expected to be bolstered by the new sotagliflozin agreement.
- Viatris' pipeline remains robust, with promising developments for EFFEXOR in Japan and ongoing trials for selatogrel and Cenerimod.
Misses
- The company is facing supply chain challenges, particularly impacting its ARV generics business.
Q&A Highlights
- CEO Scott Smith discussed the launch plans for sotagliflozin, expected to contribute to revenue growth around 2027.
- Smith also addressed the uncertainty regarding the impact of the new U.S. administration on the healthcare industry.
- Philippe Martin expressed confidence in new product launches, anticipating $450 million to $550 million in revenue for 2025.
- Corinne Le Goff celebrated the success of the complex generic Breyna, capturing a 15% TRx market share.
In conclusion, Viatris' Q3 earnings call highlighted the company's strong financial performance, strategic focus on shareholder returns, and proactive management of supply chain issues. With disciplined investments and an eye on future product launches, Viatris remains committed to sustaining growth and delivering value to its shareholders.
InvestingPro Insights
Viatris Inc. (VTRS) continues to demonstrate financial resilience and strategic growth, as evidenced by its recent Q3 2024 earnings report. To complement the company's reported results, InvestingPro data reveals that Viatris has a market capitalization of $15.96 billion, reflecting its significant presence in the pharmaceutical industry.
One of the key InvestingPro Tips highlights that management has been aggressively buying back shares, which aligns with the company's commitment to shareholder returns mentioned in the earnings call. This strategy, coupled with Viatris' high shareholder yield, underscores the company's focus on creating value for investors.
The P/E ratio (adjusted) for the last twelve months as of Q2 2024 stands at 15.43, suggesting a reasonable valuation relative to earnings. This is particularly noteworthy given that InvestingPro Tips indicate that net income is expected to grow this year, potentially improving the company's profitability metrics.
Viatris' revenue for the last twelve months as of Q2 2024 was $15.24 billion, with a gross profit margin of 42.32%. While the revenue growth was slightly negative at -2.32%, the company's Q3 results showing a 3% operational revenue growth indicate a potential turnaround in this trend.
The dividend yield of 4.13% as of the last reported date adds to the attractiveness of Viatris for income-focused investors, complementing the company's strategy of balancing shareholder returns with business development investments.
It's worth noting that Viatris is trading near its 52-week high, with a price that is 98.24% of its 52-week peak. This performance is reflected in the impressive 32.89% one-year price total return, showcasing strong market confidence in the company's direction.
For investors seeking more comprehensive insights, InvestingPro offers additional tips and metrics that could provide a deeper understanding of Viatris' financial health and market position. With 8 more tips available on the platform, subscribers can gain a more nuanced view of the company's prospects and challenges in the evolving pharmaceutical landscape.
Full transcript - Viatris Inc (VTRS) Q3 2024:
Operator: Good morning, everyone, and welcome to the Viatris Q3 2024 Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Bill Szablewski, Head of Capital Markets. Please go ahead.
Bill Szablewski: Good morning, everyone. Welcome to our Q3 2024 earnings call. With us today is our CEO, Scott Smith; CFO, Doretta Mistras; Chief R&D Officer, Philippe Martin; and Chief Commercial Officer, Corinne Le Goff. During today's call, we'll be making forward-looking statements on a number of matters, including our financial guidance for 2024 and various strategic initiatives. These statements are subject to risks and uncertainties. We will also be referring to certain actual and projected non-GAAP financial measures. Please refer to today's slide presentation and our SEC filings for more information, including reconciliations of those non-GAAP measures to most directly comparable GAAP measures. When discussing 2024 actual or reported results, we'll be making certain comparisons to 2023 actual reported results on a divestiture adjusted operational basis, which excludes the impact of foreign currency rates and also excludes the proportionate results from the divestitures that closed in 2024 and 2023 from the 2023 period. When discussing our expectations for 2024, we'll be making certain comparisons to 2024 actual or reported results on a divestiture adjusted operational basis, which excludes the impact of foreign currency rates. We may refer to those as changes on an operational basis. With that, I'll hand the call over to our CEO, Scott Smith.
Scott Smith: Good morning, everyone, and welcome to our third quarter earnings call. I'm very pleased to report that we had an outstanding quarter, continuing the strong momentum we've seen all year. We've achieved our sixth consecutive quarter of operational revenue growth and have delivered growth across adjusted EBITDA and adjusted earnings per share. In addition, we made significant strides in all three of our strategic pillars we laid out earlier this year, our diversified and growing base business, our financial strength and significant cash flow, and our expanding innovative portfolio. Viatris is not only stronger and more streamlined, but more importantly, our future direction is now clear and more focused. We are in a period of consistent base business growth and we expect this momentum to continue into next year. I'm happy to report that in the third quarter, we delivered total revenues of $3.8 billion, which represents operational revenue growth of approximately 3%, adjusted EBITDA of $1.3 billion, growing approximately 4% from a year ago, and adjusted EPS of $0.75 per share, growing approximately 6%. We had a very strong quarter of free cash flow generating $866 million, excluding the impact of transaction costs and taxes. New product revenues were also strong at $133 million in the quarter. We delivered on our commitment to use the proceeds from our divestitures to pay down debt, repaying approximately $1.9 billion in debt and putting us firmly on track to achieve our long-term gross leverage target. With this milestone, the company is operating from a position of strength and has a clear and focused outlook that centers on capital allocation. We believe that how we prioritize capital allocation going forward will be the single most critical factor in optimizing and maximizing shareholder value and in driving future growth. Returning value to shareholders through dividends and share repurchases will remain a central element of our plan. In 2025, we expect to be more aggressive on share buybacks, given our current valuation level. This will be balanced with making disciplined investments in commercialized or late stage assets through regional and global business development that leverage our unique commercial and R&D infrastructure to drive our future growth. We expanded our innovative portfolio of patent protected assets by entering into an exclusive licensing agreement with Lexicon Pharmaceuticals for sotagliflozin in all markets outside of the U.S. and Europe. With this licensing agreement, we are continuing to build on our strong presence in cardiovascular disease, which already includes approximately $2.5 billion in annual revenue as well as selatogrel, which we licensed earlier this year. This agreement leverages our global health care gateway, which provides partners with access to our unique global infrastructure. We believe we will be able to leverage our experience in cardiovascular disease and our infrastructure to execute on the potential of sota (ph). This quarter is a great demonstration of the power of a stronger, more streamlined Viatris. We are seeing good performance from our base business, as demonstrated by our strong track record of delivering new product revenues and by our operational revenue growth over the past few quarters. We expect this momentum to continue into 2025. Now I'd like to turn the call over to Philippe to share an update on our pipeline. Philippe?
Philippe Martin: Thanks, Scott. Our strong track record in delivering on our new product revenue is driven by the reliability of our base business pipeline. This divest growth engine generates a steady flow of core generics, complex generics and novel products. Our focused execution on this robust pipeline gives us confidence in our ability to continue to grow our base business and address unmet medical needs. EFFEXOR is a great example. Last month, we announced positive top line results that demonstrated the efficacy and safety of EFFEXOR for the treatment of generalized anxiety disorder or GAD, in Japanese patients with moderate to severe disease. We believe this significant life cycle opportunity has the potential to be a meaningful treatment option for patients with GAD, a condition which currently does not have any approved treatment available in Japan. We are targeting to submit our application to the Japanese health authorities in 2025. The growth of our base business is critical for us to be able to reinvest in our innovative pipeline as we look for opportunities which can make a meaningful difference in patients' lives. We also have the unique opportunity to leverage our global development expertise and broad commercial infrastructure. PETs (ph) like Sotagliflozin and INPEFA represented a good strategy fit for us. INPEFA was previously approved by FDA to reduce the risk of cardiovascular death, hospitalization for heart failure and urgent part failure visits in adults with heart failure or type 2 diabetes, connective disease and other cardiovascular risk factors. We believe that INPEFA is a differentiated asset that offers a broader label compared to SGLT2 inhibitors and a unique mechanism of action with dual SGLT inhibition potentially contributing to the unique safety and efficacy profile of the drug. Our plan is to leverage the FDA approval as a reference in certain ex-U.S. markets, and conduct clinical studies were needed to expand patients reach. We also believe there is a potential for expansion into further indications, which could include hypertrophic cardiac myopathy. Further, Viatris has a strong legacy in cardiovascular diseases to our portfolio that expands across the overall cardiovascular continuum from reducing risk factors to improving patient outcomes with well-known products like Lipitor, Norvasc and Caduet, in addition to our expertise in the area of thrombosis with products like Arixtra and Fraxiparine. With this legacy and broad portfolio also comes very strong relationship with the medical community, which we're tapping into as we progress our selatogrel program. I've provided details about Selatogrel and Cenerimod on our last call, but let me share a brief status update. Our recruitment effort for both are SOS-AMI clinical trials and our OPUS clinical trial are progressing well. The development for each asset is on track and aligned to our previous communicated time lines. In addition, we are working on expanding Cenerimod indications by initiating a registration program in lupus nephritis. And finally, as part of our innovative pipeline, we are continuing to advance our ophthalmology program with three key registrational readouts expected in 2025. I'm proud of the work to date across our entire R&D platform and believe we'll continue to make an impact for many years to come by harnessing the combination of both our base business and innovative pipeline. And with that, I'll turn it over to Doretta.
Doretta Mistras: Thank you, Philippe, and good morning, everyone. Building on Scott's earlier comments, this has been an exceptionally strong quarter and our first full quarter on an ex-divestiture basis, the results of which are highly encouraging and indicative of the strong momentum we anticipate carrying into the new year. We're pleased to report our diversified base business grew 3% year-over-year, marking our sixth consecutive quarter of operational revenue growth. This performance also carried through to adjusted EBITDA and adjusted earnings per share, which grew approximately 4% and 6%, respectively. We generated significant free cash flow of $866 million, excluding the impact of transaction costs and taxes, which enabled us to continue strengthening the balance sheet by paying down debt. Going forward, we have a strong foundation to execute on our three strategic pillars. As I review the highlights for the quarter, to note, my commentary on segment performance will be on a divestiture adjusted operational basis. Growth of our base business revenue was up 3% year-over-year. And once again, all of our segments grew versus the prior year. We had strong performance from brands, up 2% and from Generics, up 4%. Brand performance included expansion of our cardiovascular portfolio in certain Latin American countries and strong growth in Europe and Greater China. Generics growth was attributable to strength in our broader European portfolio, complex products in North America and strong volume performance across the JANZ region. New product revenue was $133 million for the quarter, bringing the total to $497 million year-to-date. We remain confident we will be at the higher end of our range of $500 million to $600 million for the year. In developed markets, net sales grew by approximately 3% driven by robust strength in our generics business. In Europe, we saw another quarter of durable growth across our diversified business, up 6%, driven by contributions from new products and strong generics performance in key countries, including France. In North America, we saw another quarter of growth in generics, up 5%, benefiting from complex products such as Breyna and Wixela as well as from Lisdexamfetamine. Within our brands business, net sales declined from the continued impact of Medicaid utilization in certain non-promoted brands and lower EpiPen volumes resulting from the formulary changes which occurred earlier in the year. In Greater China, net sales grew approximately 3% over the prior year. This was as a result of continued strong volume growth across multiple channels, including e-commerce, retail and hospitals. In emerging markets, net sales grew 2%, driven by the expansion of our branded cardiovascular portfolio in certain Latin American countries and strength in our MENA and Emerging Asia regions. These benefits helped to absorb supply chain impacts affecting our ARV generics business. And lastly, JANZ grew approximately 8% benefiting from new products in Australia and volume growth from our promoted brands in Japan. Turning to the P&L and cash flow. Adjusted gross margin was stable at approximately 58.5%, and operating expenses were roughly flat over the prior year, both in line with our expectations. Free cash flow for the quarter, excluding transaction costs and taxes grew 10%, driven by higher adjusted EBITDA and lower working capital. This significant free cash flow and cash from divestitures enabled us to continue executing on our debt repayment plan. We repaid $1.9 billion of debt including the $325 million that was repaid in October, bringing our notional debt outstanding below $15 billion and line of sight to below $14 billion by year-end. Following the upcoming repayment of approximately EUR1 billion at maturity in November, we expect to exit the year at approximately 3 times gross leverage. And we will have successfully completed our deleverage and achieved meeting our long-term gross leverage target at year-end. Going forward, we plan to operate within our long range target of 2.8 times to 3.2 times. This positions the company with a meaningfully stronger balance sheet and a continuing investment grade rating, all of which will serve as the foundation of our capital allocation decisions going into next year and beyond. Turning to the remainder of the year. We are reaffirming our outlook with full year 2024 base business operational revenue growth of approximately 2% and flat adjusted EBITDA and adjusted earnings per share versus last year. We have revised these earnings ranges solely to reflect the impact of IP R&D related to the sotagliflozin licensing agreement incurred in October. A few comments on sequential phasing for the fourth quarter. Total (EPA:TTEF) revenue is expected to be lower for the following reasons: normal product seasonality in developed markets and Greater China region, phasing of certain generic products in North America and generic entrants in our cardiovascular products in JANZ. Adjusted EBITDA and adjusted earnings per share will be impacted by a step down in adjusted gross margin due to normal product and segment mix and an increase in adjusted SG&A due to timing and normal cadence of investment. And lastly, free cash flow in the fourth quarter is also expected to be lower due to the impact from divestiture costs and taxes, higher CapEx and semiannual interest payments. I would note that these trends are all consistent with our expectations and prior periods. In summary, we believe these results demonstrate our encouraging fundamentals from our diversified and growing base business which continues to produce significant free cash flow. The prudent work we have done on strengthening the balance sheet provides us with a strong foundation as we pivot to a more balanced capital allocation strategy of funding our vision and returning capital to shareholders. But before I conclude, given the level of investor interest in modeling our selatogrel and cenerimod assets, we are providing a workbook as part of our Q3 earnings package that can be found on our investor website. And with that, I'll hand it back to the operator to begin the Q&A.
Operator: Ladies and gentlemen, at this time, we will begin the question-and-answer session. [Operator Instructions] Our first question today comes from Glen Santangelo from Jefferies. Please go ahead with your question.
Glen Santangelo: Yeah. Good morning. Thanks for taking my question. Hey, Scott. I have just two quick questions for you. The first one is, a lot of comments around the base business continuing to have strong momentum in that sort of continuing into '25. And I appreciate you don't want to give any forward guidance, but when we look out over the next couple of years, is that sort of $500 million contribution from new product revenues. You're obviously generating a little more than that this year. But is that sort of the right ZIP code for us to think about as a starting point for the next couple of years? And then secondly, on the capital allocation, the company said repeatedly that you want to use half the free cash flow for business development and the other half, you want to return to shareholders through repurchases and dividends. Is sort of getting the leverage down to 3 times by the end of the year? Is that the trigger to start that? And based on what you see in the market with respect to business development versus Viatris trading at only 6 times EBITDA, does that push you one way or another as you move into '25? Thanks.
Scott Smith: Thank you very much for the questions, Glenn. So for the first one, yeah, with the base business, we're not guiding it to '25, but we see the base business continuing to generate and continuing to have momentum similar to what we have this year. We think we can generate, and we have historically, since 2020, generated $450 million to $550 million in new product revenue every year, and we expect that to continue. And yeah, to your second question on capital allocation, I think getting to 3 times is very, very important for us, that will allow us to be able to use $2.3 billion in free cash flow at minimum to give half back to shareholders through dividends and share buybacks. We're trying to be more aggressive on share buybacks as we move into '25 and beyond because we'll be at that desired leverage ratio. And we want to also be doing some disciplined business development focusing on -- in market or near market assets. So yeah, getting into ‘25, getting that leverage ratio right really is a springboard for us to be able to execute on our capital allocation strategy in ‘25 and beyond.
Operator: Our next question comes from Jason Gerberry from Bank of America (NYSE:BAC). Please go ahead with your question.
Jason Gerberry: Hey, guys. Thanks for taking my questions. Couple for me. We saw one multinational company operating in China recently get investigated regarding some reimbursement matters. I'm just trying to get a sense from your perspective, that's an isolated incident or if this is part of some broader effort around cracking down on different reimbursement practices. Just it would be helpful if you can just offer any color around that? And then, I didn't -- apologies if I didn't hear this, but were there any updates just thinking about Sandostatin LAR and a potential to get that approved in the near term and status of the GA Depot resubmission. Thanks.
Scott Smith: Thank you, Jason. I'll take the first question on China, and then Philippe can fill you in on your new product question. So we don't have any direct comment on any investigation that's going on in another country. We as a leadership team were just in China last week and meeting with the affiliate there. As an organization, we hold ourselves to the highest standards possible. We've got a strong compliance organization in China. We've got strong overall structure in China and a very strong affiliate. We've developed deep and strong partnerships within the healthcare community there. And we feel very, very strongly about our business in China overall.
Philippe Martin: And this is Philippe regarding your second question. GA Depot, we have a meeting scheduled with the agency in mid-December. And so we'll be in a better place to give you an update next year once we hear from [indiscernible] and have this meeting with the FDA. And then regarding -- I think your question was about Sandostatin, yeah, we are still going through FDA review for this product, and we expect we'll be in a position to launch the product next year.
Operator: Our next question comes from Chris Schott (ETR:1SXP) from JPMorgan (NYSE:JPM). Please go ahead with your question.
Ethan Brown: Hi. This is Ethan on for Chris. Thanks for taking our questions. First off, just -- if we look at the deals that you've done this year between the Idorsia (SIX:IDIA) and SGLT2 transactions, is this the type of deals that we should expect going forward in terms of size and scale? And then secondly, just looking to 2025, any initial color on your 2025 expectations for EBITDA and how we should be thinking about the pushes and pulls there? Thank you.
Scott Smith: Yeah. Thank you, Ethan for the question. Good morning. And I'll take the first one and then I'll push to Doretta to talk to you about EBITDA going forward. The Idorsia transaction was a little bit of a transaction of opportunity. It's a little bit of an earlier deal than I think it will be normal for us going forward. These are our products that were in Phase III development, I think, very, very good positive assets. We felt like we contribute to the continued development of them. We think they've got the potential to be blockbusters of the data comes in positive globally. So that was a deal of opportunity for us. I think we're really focused right now on doing disciplined business development. We want to really focus on end market or near-market assets, things which we can leverage our global health care gateway. We've got a very strong global infrastructure. We want to be able to deliver assets that can drive some revenue in the '25, '26, '27 time frame. So -- and in terms of size of the deal, yes, I think we're -- that's the type of deal we're looking. We're -- I think we're hoping to add multiple different assets over the next couple of years to the pipeline. And again, we're focusing on very disciplined business development with end market or near market assets.
Doretta Mistras: And thanks on 2025 questions. Yeah. We're not going to be providing forward-looking revenue and EBITDA guidance. But just to your point, just to give you a sense of some of the pushes and pulls. As Scott commented earlier on the momentum that we're continuing to see from the base business on the revenue perspective and how we expect that to continue at the top line. From an EBITDA and EPS perspective, we are currently working through the adjustments post the divestitures from a stranded cost TSA perspective. But going into next year, we are focused on really prioritizing adjusted EBITDA stability. And so we're really balancing the growth of the business but making the necessary investments in R&D and commercial that can drive our future growth. And I would say, we’ll continue to work and provide clarity and provide really an apples-to-apples comparison when we provide our ‘25 guidance. But we do see things reasonably calibrated in the models, and we also feel confident in our cash flow of $2.3 billion, and we’ll provide more color as we get into next year.
Operator: And our next question comes from Ash Verma from UBS. Please go ahead with your question.
Ashwani Verma: Yeah. Thanks for taking my questions. Good to see some steady progress here. Just a capital allocation question. So with bulk of the debt paydown that you were sort of driving towards behind you and the stock trading at like sub-4x run rate EPS? Like, how do you think about balancing business development -- investment and share repurchases? And then secondly, for emerging markets, yeah, I saw this like ARV supply chain impact. I think you have talked about this for a little bit of time. Just curious, like, when does this start to lap that we don't see this as a drag on the business going forward. Thanks.
Scott Smith: Thanks, Ash and good morning. And I'll take your first question and again, Doretta can pick up your second question. Yeah. We've got line of sight on getting our debt repayment right to the right spot of the target that we have talked about at a leverage ratio of approximately 3 and 3.0. We see that very, very closely to us, and we've got great line of sight on that. That definitely then allows us to move into our capital allocation us implementing the full capital allocation strategy, minimum of $2.3 billion in free cash flow, half of that to shareholders in terms of dividend and share buyback. The other half in terms of business development and building the pipeline, doing that in a disciplined way. I think given the share price and the valuation of the company right now, we might be a little more aggressive on the share buyback side than on the BD side going into '25. But we're looking at a three, four, five year period where approximately half going to return to shareholders and half to BD. But I think implicit in your point is this idea of the valuation of the company and given that I think we see a nice opportunity as we move into '25 to be more aggressive in terms of share buybacks.
Doretta Mistras: And so, with respect to the ARV business, historically, we have made comments around just therapy shifts that have been ongoing in the business. However, my comments this quarter were really specific to some delays that we saw in the supply of ARV products. And we are currently working to catch up on those backlogs across ARV -- and across our ARB portfolio, and that's what we're working through, that's -- those are what my comments were referring to.
Operator: [Operator Instructions] Our next question comes from David Amsellem from Piper Sandler. Please go ahead with your question.
David Amsellem: Thanks. Well, I don't want to belabor the topic of new launch contribution for '25. And I know that you've sounded a note of confidence regarding impact from new launches. I did want to drill down a little more because it does feel to me that there is less in the way of transparency regarding new products going forward than there has been historically. So one question I had is you've talked historically about products like Sandostatin LAR. You talked about Victoza as contributors. Can you talk to how much products like that are going to be contributors for next year. Other products like iron sucrose, Venofer, is that going to be a contributor? You talked about glucagon, injectable glucagon in the past. Is that going to be a contributor And then also, one of your competitors, Teva's talked about potentially entering the Symbicort market next year. I'm wondering if you can talk to potential competitive dynamics regarding Symbicort. So I know there's a lot there on specific products, but hoping to get granularity. Thank you.
Scott Smith: Thank you, David. Thank you for the question and good morning. Just from a macro level, we feel very good about the new product numbers. Traditionally, we have -- if you take a look over the last four or five years, we've delivered $450 million to $550 million in new product revenue every year. This year, we're at the high end of it. We believe we're doing very, very well in terms of the number of submissions and the number of products approved overall. And we feel very confident in those numbers going forward to get to your sort of specifics around individual products. I'll ask Philippe to comment.
Philippe Martin: Yeah. Thank you, Scott. So I think, as Scott said, we are very confident about $450 million to $550 million next year, and this includes carryover from 2024, generic launches in North America and Europe. And to your question specifically, it includes complex products such as glucagon, iron sucrose and liraglutide. So these three products are clearly in the mix for next year. And we are continuing to work on that broad portfolio and bring over a significant number of submissions every year. So again, we can only reiterate the fact that we are very confident about that $450 million to $550 million next year.
Corinne Le Goff: And David, on your comment on additional generic competition on Symbicort in this area, what I can say is that, first, as you know, we are very pleased with the execution and the performance of Breyna, which is our complex generic that plays in this market. We have currently about 15% TRx market share and we expect that Breyna will continue to deliver growth for us going into 2025. So again, a good example of having had the possibility to launch early as a complex generic in this market and to be able to deliver more durable and sustainable value.
David Amsellem: Thank you, Corinne.
Operator: And we do have an additional question and this comes from Balaji Prasad from Barclays (LON:BARC). Please go ahead with your question.
Balaji Prasad: Hi. Good morning. Just two sets of questions from me, and apologies if one of them are -- both have been asked earlier. Firstly, could you comment about sotagliflozin in terms of the contributions and the number of markets that you plan to launch in the next one to two years and how should we think about modeling this into our thoughts? Secondly, a big picture thematic question. With the new administration, it's likely that we could see a pushback towards making America. I want to understand how could that change your priorities towards the U.S. generics market? Is this something that you will want to refocus or increase in terms of focus and future revenue contributions from this region? Thanks.
Scott Smith: Yeah. Thank you, Balaji. And I'll take the macro question and then Philippe and Corinne can talk a little bit more about Sotagliflozin. From a macro perspective, far too early for us to be able to fully understand healthcare implications. We're here. We will work positively and productively with the Trump administration as we would with any administration going forward, but it's far too early to understand healthcare implications at this point in time, but we're interested to understand what's ahead and very optimistic about what the years look like for us in '25 and beyond.
Philippe Martin: Regarding sota, I think we are -- what we're going to do is leverage the U.S. approval and get the drug registered in several large emerging markets, Canada, Australia, New Zealand, for which there's a very clear straightforward path to approval. In Asian markets like Japan and China, it might require another clinical study. And so we'll be discussing with the health authorities over the next few months and put a development plan together for this. So we expect that Sota will start contributing to our revenue growth in around 2027, but I'll turn it over to Corrine for more color.
Corinne Le Goff: Yeah. Thank you. So I'm not going to comment on the overall size of the opportunity. But what I can say is that Sotagliflozin fits perfectly with our cardiovascular infrastructure in the regions where we'll be launching this product. I mean you should know like we have about $2.5 billion of annual revenues in cardiovascular diseases. So we have in place the appropriate infrastructure to be able to promote these assets across the regions. And we look at the – so that it was it as a franchise that will -- as Philippe said, we know starting revenue in the year 2027, but will generate growth through the end of the decade.
Operator: And with that, ladies and gentlemen, we'll conclude today's question-and-answer session. I'd like to turn the floor back over to Scott Smith for closing remarks.
Scott Smith: Thank you very much, and thank you for everybody on the call. In closing, it was another great quarter. I’m proud of our team of our continued strong performance. We have great momentum, and I’m looking forward to the future. With our leverage target insight and the strength of our balance sheet, our company is operating from a position of financial strength, and we have a clear and focused outlook that centers on capital allocation. Returning value to shareholders through dividends and share repurchase will remain a central element of optimizing and maximizing shareholder value. We will balance this with making disciplined investments in regional and global business development to drive our future growth. Thank you all.
Operator: And ladies and gentlemen, with that, we'll conclude today's conference call. We thank you for joining. You may now disconnect your lines.
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