Viatris CEO on post-merger roadmap

Pharma News: Following Mylan and Pfizer’s Upjohn established medicine business merger to become Viatris, CEO Michael Goettler presented a growth roadmap, including workforce reduction, for the new company at the recent J.P. Morgan Healthcare Conference.

Michael Goettler praised Viatris’ commercial presence, manufacturing strength and global supply network, as well as its medical, regulatory and development capabilities, which are now offered to potential partners as a platform.

Viatris’ short-term plan covering the next four years is focused on stabilising the business and investing in its own pipeline.

That means minimising costs – an effort that will involve reducing 20% of the combined businesses’ 45,000 workforce. The aim is to save $1 billion annually by laying off workers and closing, downsizing or selling up to 15 manufacturing facilities.

Viatris top-selling pain drug Lyrica is facing early generic competition in Japan despite an ongoing patent dispute. China’s growing volume-based procurement (VBP) scheme, which is designed to further lower the price of off-patent drugs, is also hitting the Upjohn business hard.

China is a key growth opportunity for Viatris over the long term, but it’s still only 10% of its business right now, Michael Goettler pointed out, adding that it can absorb the initial VBP-caused decline. Part of that will come from introducing legacy Mylan’s portfolio to the Chinese market.

“We have adapted very quickly and very well to the volume-based procurement impact, we … rightsized hospital business but invested in the retail space,” Michael Goettler said.

The retail space which is shielded from VBP and is more self-pay now represents more than one-third of Viatris’ China business and is growing at over 20%.

Goettler painted Viatris as a partner of choice in China. “We have an absolute premium infrastructure in China that can promote in multiple channels – hospital, retail and digital,” he said.

M&A is potentially the way forward for Viatris to achieve further growth. The company has a natural erosion phase that needs to be compensated by not just internal R&D but deal-making. A lot of that will come in the second phase of the post-merger plans in which the company will have more financial flexibility to strike business deals.