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Item 7. Management’s Discussion and Analysis

2026-02-26 compared with 2025-02-27 · 223 added, 183 removed, 564 unchanged (42% of the section changed)

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Such forward-looking statements may include, without limitation, statements about the goals or outlooks with respect to the Company’s strategic initiatives and priorities, including but not limited to divestitures, acquisitions, strategic alliances, collaborations, or other potential transactions;

the benefits and synergies of such divestitures, acquisitions, strategic alliances, collaborations, or other transactions, or restructuring programs;

the anticipated benefits of such strategic initiatives or priorities or restructuring activities;

future opportunities for the Company and its products;

and any other statements regarding the Company’s future operations, financial or operating results, capital allocation, dividend policy and payments, share repurchases, debt ratio and covenants, anticipated business levels, future earnings, planned activities, anticipated growth, market opportunities, strategies, competitions, commitments, confidence in future results, efforts to create, enhance or otherwise unlock value, and other expectations and targets for future periods.

the outcomes of clinical trials and research studies;

R&D and new product development;

and any other statements regarding the Company’s future operations, financial or operating results, capital allocation, dividend policy and payments, share repurchases, debt ratio and covenants, anticipated business levels, future earnings, planned activities, anticipated growth, market opportunities, strategies, imperatives, competitions, commitments, confidence in future results, efforts to create, enhance or otherwise unlock value, and other expectations and targets for future periods.

Forward-looking statements may often be identified by the use of words such as “will”, “may”, “could”, “should”, “would”, “project”, “believe”, “anticipate”, “expect”, “plan”, “estimate”, “forecast”, “potential”, “pipeline”, “intend”, “continue”, “target”, “seek” and variations of these words or comparable words.

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Factors that could cause or contribute to such differences include, but are not limited to:

• the possibility that the Company may not realize the intended benefits of, or achieve the intended goals or outlooks with respect to, its strategic initiatives and priorities (including divestitures, acquisitions, strategic alliances, collaborations, or other potential transactions) or accelerate its growth by building on the strength of its base business with an expanding portfolio of innovative, best-in-class, patent-protected assets;

• the possibility that the Company may be unable to achieve intended or expected benefits, goals, outlooks, synergies, growth opportunities and operating efficiencies in connection with divestitures, acquisitions, strategic alliances, collaborations, or other transactions, or restructuring programs, within the expected timeframes or at all;

• the ongoing risks and uncertainties associated with our recent divestitures;

• the possibility that the Company may not realize the intended benefits of, or achieve the intended goals or outlooks with respect to, its strategic initiatives and priorities;

• the possibility that the Company may be unable to achieve the intended or expected benefits of its enterprise-wide strategic review and related cost-saving and restructuring activities within the expected timeframe or at all;

• the possibility that the Company may be unable to achieve intended or expected benefits in connection with divestitures, acquisitions, strategic alliances, collaborations, or other transactions, or restructuring programs, within the expected timeframes or at all;

• goodwill or impairment charges or other losses;

• success of clinical trials and the Company’s or its partners’ ability to execute on new product opportunities and develop, manufacture and commercialize products;

• any changes in or difficulties with the Company’s manufacturing facilities, including with respect to short- or long-term shutdowns, inspections, remediation and restructuring activities, supply chain continuity, inventory management, or the ability to meet anticipated demand;

• the Company’s failure to achieve expected or targeted future financial and operating performance and results;

• the potential impact of natural or man-made disasters, public health outbreaks, epidemics, pandemics, or social disruption in regions where we or our partners or suppliers operate;

• the potential impact of natural or man-made disasters, public health outbreaks, fires, accidents, weather, unrest or other emergencies in regions where we or our partners or suppliers operate;

• actions and decisions of healthcare and pharmaceutical regulators;

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• the Company’s liquidity, capital resources and ability to obtain financing;

• any regulatory, legal or other impediments to the Company’s ability to bring new products to market, including but not limited to “at-risk launches”;

• success of clinical trials and the Company’s or its partners’ ability to execute on new product opportunities and develop, manufacture and commercialize products;

• any changes in or difficulties with the Company’s manufacturing facilities, including with respect to inspections, remediation and restructuring activities, supply chain or inventory or the ability to meet anticipated demand;

• any regulatory, legal or other impediments to the Company’s ability to bring new products to market;

• products in development that receive regulatory approval may not achieve expected levels of market acceptance, efficacy or safety;

• longer review, response and approval times as a result of evolving regulatory priorities and reductions in personnel at health agencies;

• the scope, timing and outcome of any ongoing legal proceedings, including government inquiries or investigations, and the impact of any such proceedings on the Company;

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• uncertainties regarding future demand, pricing and reimbursement for the Company’s products;

• uncertainties and matters beyond the control of management, including but not limited to general political and economic conditions, tariffs and trade policies, inflation rates and global exchange rates;

• uncertainties and matters beyond the control of management, including but not limited to general political and economic conditions, potential for adverse impacts from future tariffs and trade restrictions, inflation rates and global exchange rates;

• 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 U.S.

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For more detailed information on the risks and uncertainties associated with Viatris, see the risks described in Part I, Item 1A in this Form 10-K, and our other filings with the SEC.

You can access Viatris’ filings with the SEC through the SEC website at www.sec.gov or through our website, and Viatris strongly encourages you to do so.

You can access Viatris’ filings with the SEC through the SEC

website at www.sec.gov or through our website, and Viatris strongly encourages you to do so.

Viatris routinely posts information that may be important to investors on our website at investor.viatris.com, and we use this website address 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).

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Viatris’ executive management team is focused on ensuring that the Company is optimally structured and efficiently resourced to deliver sustainable value to patients, shareholders, customers and other key stakeholders.

The Company operates in more than 165 countries and territories with approximately 32,000 employees.

The Company has 26 manufacturing and packaging sites worldwide, more than 1,400 approved molecules, and industry leading commercial, R&D, regulatory, manufacturing, legal and medical expertise.

The Company operates in more than 165 countries and territories with more than 30,000 employees.

The Company has 27 manufacturing, packaging, and distribution sites worldwide, more than 1,400 approved molecules, and what we believe is industry leading commercial, R&D, regulatory, manufacturing, legal and medical expertise.

Viatris’ portfolio consists of generics (including complex products), globally recognized iconic brands, and an expanding portfolio of innovative medicines.

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The process of obtaining regulatory approval to manufacture and market new branded and generic pharmaceutical products is rigorous, time consuming, costly, and inherently unpredictable.

Complex products are more difficult, costly and time-consuming to receive regulatory approval for and bring to market.

Complex generic products are often more difficult, costly and time-consuming to receive regulatory approval and bring to market compared with commodity generic pharmaceutical products.

Any delay in regulatory approval could impact the commercial or financial success of a product.

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Additionally, pricing is often affected by factors outside of the Company’s control.

Conversely, generic products generally experience less volatility over a longer period of time in Europe as compared to the U.S., primarily due to the role of

government oversight of healthcare systems in the region.

Conversely, generic products generally experience less volatility over a longer period of time in Europe as compared to the U.S., primarily due to the role of government oversight of healthcare systems in the region.

In addition, U.S.

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For branded products, the majority of the product’s commercial value is usually realized during the period in which the product has market exclusivity.

and some other countries, when market exclusivity expires and generic versions of a product are approved and marketed, there can often be very substantial and rapid declines in the branded product’s sales.

For example, generic entry may occur for Amitiza® 24 μg in Japan in December 2025 upon expiration of patent exclusivity.

and some other countries, when market exclusivity expires and generic versions of a

product are approved and marketed, there can often be very substantial and rapid declines in the branded product’s sales.

For example, generic entry for Amitiza® 24 μg may occur in Japan in June 2026 depending on the outcome of patent litigation.

Certain markets in which we do business outside of the U.S.

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Upon winning the tender, the winning company will receive priority placement for a period of time.

The tender system often results in companies underbidding one another by proposing low pricing in order to win the tender.

The tender system often results in companies underbidding one another by proposing lower pricing in order to win the tender.

Sales continue to be negatively affected by the impact of tender systems in certain countries.

In addition to the impact of competition, government pricing actions and other measures designed to reduce healthcare costs, our results of operations, cash flows and financial condition could also be affected by other risks of doing business internationally, including the impact of inflation, elections, geopolitical events, including the ongoing conflicts in the Middle East and between Russia and Ukraine and related trade controls, sanctions, supply chain and staffing challenges and other economic considerations, supply chain disruptions, foreign currency exchange fluctuations, public health epidemics, changes in intellectual property legal protections and other regulatory changes.

In addition to the impact of competition, government pricing actions and other measures designed to reduce healthcare costs, our results of operations, cash flows and financial condition could also be affected by other risks of doing business internationally, including the impact of inflation, elections, geopolitical events, including the ongoing conflicts in the Middle East and between Russia and Ukraine and related trade controls, sanctions, supply chain disruptions and staffing challenges and other economic considerations, longer review, response and approval times as a result of evolving regulatory priorities and reductions in personnel at health agencies, the potential for adverse impacts from future tariffs and trade restrictions, foreign currency exchange fluctuations, public health epidemics, changes in intellectual property legal protections and other regulatory changes.

Recent Developments

Lexicon Licensing Agreement

In October 2024, the Company entered into an exclusive licensing agreement with Lexicon for sotagliflozin in all markets outside of the U.S.

and Europe in exchange for an upfront payment of $25.0 million, and additional potential contingent payments, including regulatory milestones, sales milestones and tiered royalties ranging from low-double-digit to upper-teens on annual net sales.

Viatris will be responsible for all regulatory and commercialization activities for sotagliflozin in the licensed territories.

Lexicon will be responsible for providing clinical and commercial supply of sotagliflozin to Viatris.

The Company accounted for the transaction as an asset acquisition, with the upfront payment expensed as Acquired IPR&D in the fourth quarter of 2024.

Indore Manufacturing Facility

Following an inspection by the FDA at our oral finished dose manufacturing facility in Indore, India in 2024, the FDA has issued a warning letter, and an import alert related to this facility.

The import alert affects 11 actively distributed products that will no longer be accepted into the U.S.

2026 Restructuring Program

In 2025, the Company initiated an EWSR to enable the Company to build a more focused, efficient and future-ready organization and position the Company for sustained growth beginning in 2026.

On February 26, 2026, the Company announced the results of its EWSR, and as a part of the review, committed to and began implementation of certain restructuring activities.

These restructuring activities are expected to optimize the Company’s commercial capabilities, enabling functions, R&D, medical affairs and regulatory activities, and sourcing, manufacturing and supply chain activities, including inventory optimization.

As a result, the Company expects a global workforce reduction of up to approximately 10%.

The Company anticipates that these restructuring activities, as well as associated costs and savings, will be completed primarily over the next three years.

The Company expects to record charges for costs associated with the restructuring activities of the EWSR.

For the committed restructuring activities, the Company expects to incur total pre-tax charges ranging between $700 million and $850 million.

Such charges are expected to include between $50 million and $100 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 $650 million and $750 million are expected to be primarily related to severance and employee benefits expense, as well as other costs, including those related to contract terminations, vendor consolidations, product transfer costs and network related simplification and modernization costs.

In addition, management believes the potential savings related to these committed restructuring activities will be between $600 million and $700 million once fully implemented, with most of these savings expected to improve operating cash flow.

Acquisition of Aculys Pharma

On October 15, 2025, the Company acquired Aculys Pharma, a clinical stage biopharmaceutical company focused on commercializing innovative treatments for neurological conditions.

Viatris received rights to develop and commercialize pitolisant and Spydia®, two assets in the CNS therapy area, further expanding Viatris' portfolio of innovative products in Japan.

As part of the transaction, Viatris acquired exclusive development and commercialization rights in Japan for pitolisant, a selective/inverse agonist of the histamine H3 receptor.

One indication is for the treatment of excessive daytime sleepiness or

cataplexy in adult patients with narcolepsy and the second is for the treatment of excessive daytime sleepiness

associated with obstructive sleep apnea syndrome.

The Japanese NDAs for both indications have been submitted to the Japan Pharmaceuticals and Medical Devices Agency and are under review by the agency.

The transaction also includes exclusive rights in Japan and certain other markets in the Asia-Pacific region for Spydia® Nasal Spray, which was approved in Japan in

June 2025 for the treatment of status epilepticus and launched in December 2025.

Under the terms of the acquisition agreement, the Company made a $35.0 million upfront payment to Aculys Pharma shareholders as consideration for the acquisition, with additional consideration contingent upon the achievement of specified regulatory and commercial milestones, and royalties on net sales.

The transaction was accounted for as an asset acquisition, with the upfront payment expensed as Acquired IPR&D in the fourth quarter of 2025 .

CCPS in Biocon Biologics

In December 2025, the Company entered into definitive agreements with Biocon for the sale of the Company’s equity stake in Biocon Biologics.

Under the terms of the definitive agreements, Biocon acquired all of Viatris’ CCPS in Biocon Biologics for total consideration of $815.0 million, consisting of $400.0 million in cash and $415.0 million in newly issued equity shares of Biocon, which are listed and traded on the National Stock Exchange of India.

The transaction closed during the first quarter of 2026 and the shares are subject to a six-month lock up period.

In addition, the terms of the definitive agreements accelerate the expiration of biosimilars non-compete restrictions previously placed on Viatris in 2022 in connection with Viatris’ sale of its biosimilars portfolio and related commercial and other capabilities to Biocon Biologics.

These restrictions expired immediately at the time of close for all ex-U.S.

markets and will expire in November 2026 for U.S.

Manufacturing Facilities

Following an inspection by the FDA at our oral finished dose manufacturing facility in Indore, India in 2024, the FDA issued a warning letter and an import alert related to this facility.

The import alert affects 11 products that will no longer be accepted into the U.S.

until the warning letter is lifted.

It makes exceptions, subject to certain conditions, for four products based on shortage concerns.

Following recently concluded discussions with the FDA, the Company does not expect additional product exceptions to be granted by the FDA.

Following the substance of FDA’s original inspection observations, the Company immediately implemented a comprehensive remediation plan at the site.

The necessary corrective and preventive actions are well underway, including but not limited to related personnel actions.

During 2025, we made substantial progress on our remediation activities at the facility, including but not limited to related personnel actions.

Additionally, we have engaged independent third-party subject matter experts to support the remediation plan.

We have been in regular communication with FDA during this process and will continue to work to ensure that the FDA is satisfied with the steps we have taken to resolve all the points raised.

We have been in regular communication with the FDA during this process and will continue to work to ensure that the FDA is satisfied with the steps we have taken to resolve all the points raised.

Our responses to the warning letter and import alert were submitted within the required time periods.

While product continues to be shipped from the Indore facility to markets outside the U.S., some impact in other markets, including the ARV business in Emerging Markets and select generic products in Europe, is anticipated.

The Company currently estimates the negative impact to 2025 total revenues to be approximately $500 million and to 2025 earnings from operations to be approximately $385 million.

The facility will be subject to a reinspection by the FDA.

The timing of the reinspection will be determined by the FDA;

however, we anticipate that the facility will be ready for reinspection in 2026.

While product continues to be shipped from the Indore facility to markets outside the U.S., as expected, we have also experienced a negative impact in other markets during 2025, including the ARV business in Emerging Markets and select generic products in Europe.

The estimated negative impact to total revenues for the year ended December 31, 2025 versus the year ended December 31, 2024 was approximately $370 million.

In mid-February 2026, a fire occurred in a service area at the Company's oral solid dose manufacturing facility in Nashik, India.

Manufacturing at the facility has been temporarily suspended and the Company currently expects to resume operations beginning in April 2026.

The Company believes it has certain insurance coverages for losses, including for assets and business interruption.

In the event the plant cannot be returned to normal operations or the Company’s insurance coverage is unavailable or inadequate, this event could have a negative impact on our financial position, results of operations and cash flows.

We take very seriously our continued and comprehensive oversight of our entire manufacturing network.

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Under the terms of the original agreements, the development programs and certain personnel for selatogrel and cenerimod were transferred to Viatris from Idorsia in exchange for an upfront payment to Idorsia of $350 million, potential contingent milestone payments (including $300 million payable upon the achievement of certain development and regulatory milestones, and $2.1 billion payable upon the achievement of certain tiered sales milestones), as well as potential contingent tiered sales royalties.

Viatris has worldwide commercialization rights for both selatogrel and cenerimod (excluding, for cenerimod only, Japan, South Korea and certain countries in the Asia-Pacific region).

A joint development committee was formed to oversee the development of the ongoing Phase 3 programs through regulatory approval.

The agreements also provide Viatris a right of first refusal and a right of first negotiation for certain other assets in Idorsia’s pipeline.

Viatris has worldwide commercialization rights for both selatogrel and cenerimod (which excluded, for cenerimod only, Japan, South Korea and certain countries in the Asia-Pacific region).

A joint development committee was formed to oversee the development of the

ongoing Phase 3 programs through regulatory approval.

The agreements also provided Viatris a right of first refusal and a right of first negotiation for certain other assets in Idorsia’s pipeline.

Viatris and Idorsia are both contractually obligated to contribute to the development costs for both programs, which are expected to be incurred through 2027.

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On February 25, 2025, in order to preserve the ongoing continuity of the development programs for selatogrel and cenerimod considering certain capital structuring steps announced by Idorsia to secure its ongoing operations, Viatris and Idorsia entered into a letter agreement to amend certain terms of the original agreements described above.

Under the terms of the letter agreement, Viatris will receive additional territory rights in Japan, South Korea and certain other countries in the Asia-Pacific region for cenerimod, a $250 million reduction in contingent milestone payments, including $200 million of development milestones, and additional personnel to expedite transitioning the development programs to Viatris in exchange for Viatris assuming $100 million of Idorsia’s obligation to contribute to development costs.

In addition, the letter agreement provides for the replacement of the joint development committee with a transition committee to oversee the transition of both development programs to Viatris.

In October 2023, the Company announced it had received an offer for the divestiture of its OTC Business and had entered into definitive agreements to divest its women’s healthcare business, its API business in India, its rights to two women’s healthcare products in certain countries, and commercialization rights in the Upjohn Distributor Markets.

The divestiture of the women’s healthcare business was primarily related to our oral and injectable contraceptives and did not include all of our women’s healthcare related products.

The transaction to divest the Company’s rights to two women’s healthcare products in certain countries closed in December 2023 (other than in the U.K.), and the divestiture of the women’s healthcare business closed in March 2024.

In the third quarter of 2024, the Company closed the divestiture of the product rights in the U.K.

The divestitures of the commercialization rights in the majority of the Upjohn Distributor Markets closed during 2023 and 2024, the divestiture of our API business in India closed in June 2024, and the OTC Transaction closed in July 2024.

Refer to Note 5 Divestitures included in Part II, Item 8 of this Form 10-K for more information.

Under the terms of the letter agreement, Viatris received additional territory rights in Japan, South Korea and certain other countries in the Asia-Pacific region for cenerimod, a $250 million reduction in contingent milestone payments, including $200 million of development milestones, and additional personnel to expedite transitioning the development programs to Viatris in exchange for Viatris assuming $100 million of Idorsia’s obligation to contribute to development costs.

In addition, the joint development committee has been replaced with a transition committee to oversee the transition of both development programs to Viatris.

Goodwill Impairment

The Company reviews goodwill for impairment annually on April 1st or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable.

During the first quarter of 2025, the Company experienced a sharp and sustained decline in its share price and significantly increased uncertainty and volatility in the geopolitical and economic environments in which the Company operates.

As a result of these factors, the Company determined that a triggering event had occurred for each of its reporting units and performed an interim goodwill impairment test as of March 31, 2025 and recorded a non-cash goodwill impairment charge of $2.94 billion as a result of the interim goodwill impairment test performed.

Financial Summary

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Gross profit 5,013.5 5,623.6 (610.1)

Earnings from operations 10.1 766.2 (756.1)

Net (loss) earnings (634.2) 54.7 (688.9)

Diluted (loss) earnings per share $ (0.53) $ 0.05 $ (0.58)

(Loss) earnings from operations (2,663.1) 10.1 (2,673.2)

Net loss (3,514.9) (634.2) (2,880.7)

Diluted loss per share $ (3.00) $ (0.53) $ (2.47)

A detailed discussion of the Company’s financial results can be found below in the section titled “Results of Operations.” As part of this discussion, we also report sales performance using the non-GAAP financial measures of “constant currency” net sales and total revenues.

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The comparisons presented at constant currency rates reflect comparative local currency sales at the prior year’s foreign exchange rates.

We routinely evaluate our net sales and total revenues performance at constant currency so that sales results can be viewed without the impact of foreign currency exchange rates, thereby facilitating a period-to-period comparison of our operational activities, and believe that this presentation also provides useful information to investors for the same reason.

We routinely evaluate our net sales and total revenues performance at constant currency so that these results can be viewed without the impact of foreign currency exchange rates, thereby facilitating a period-to-period comparison of our operational activities, and believe that this presentation also provides useful information to investors for the same reason.

More information about non-GAAP measures used by the Company as part of this discussion, including adjusted cost of sales, adjusted gross margins, adjusted EBITDA, adjusted net earnings, and adjusted EPS (all of which are defined below) can be found in Part II, Item 7 under Results of Operations and Results of Operations — Use of Non-GAAP Financial Measures .

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(2) The constant currency percentage change is derived by translating net sales or revenues for the current period at prior year comparative period exchange rates, and in doing so shows the percentage change from 2025 constant currency net sales or revenues to the corresponding amount in the prior year.

(3) Reductions were driven primarily by the inclusion of net sales in the prior year period related to divestitures that have closed during 2023 and 2024.

(4) For the year ended December 31, 2024, other revenues in Developed Markets, Greater China, JANZ, and Emerging Markets were approximately $32.0 million, $1.3 million, $3.5 million, and $9.7 million, respectively.

(3) Reductions were driven primarily by the inclusion of net sales in the prior year period related to divestitures that have closed during 2024 and the Indore Impact.

(4) For the year ended December 31, 2025, other revenues in Developed Markets, JANZ, and Emerging Markets were approximately $38.1 million, $3.9 million, and $7.5 million, respectively.

(5) Amounts exclude intersegment revenue which eliminates on a consolidated basis.

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Other revenues for the year ended December 31, 2025 were $49.5 million, compared to $46.5 million for the comparable prior year period.

Net sales decreased by approximately $732.2 million, or 5%, due to the inclusion of net sales in the prior year period related to divestitures that have closed during 2023 and 2024.

The decrease in net sales was also partially driven by the unfavorable impact of foreign currency translation of approximately $239.5 million, or 2%, primarily reflecting changes in the U.S.

Dollar as compared to the currencies of subsidiaries in Japan, China, and countries in Emerging Markets.

On a constant currency basis, net sales from the remaining business increased by approximately $276.1 million, or 2%, for the year ended December 31, 2024 compared to the prior year period, driven by new product sales, primarily in Developed Markets, of approximately $582.4 million.

Net sales decreased by approximately $478.0 million, or 3%, due to the inclusion of net sales in the prior year period related to divestitures that closed during 2024.

The favorable impact of foreign currency translation was approximately $177.7 million, or 1%, primarily reflecting changes in the U.S.

Dollar as compared to the currencies of subsidiaries in the EU.

On a constant currency basis, net sales from the remaining business decreased by approximately $142.1 million, or 1%, for the year ended December 31, 2025 compared to the prior year period, driven by net base business erosion of approximately $465.8 million, of which approximately $370 million related to the Indore Impact.

This decrease was partially offset by new product sales, primarily in Developed Markets, of approximately $323.7 million.

New product sales include new products launched in 2025 and the carryover impact of new products, including business development, launched within the last twelve months.

The increase was partially offset by base business erosion of approximately $306.3 million.

From time to time, a limited number of our products may represent a significant portion of our net sales, gross profit and net earnings.

Generally, this is due to the timing of new product introductions, seasonality, and the amount, if any, of additional competition in the market.

Our top ten products in terms of net sales, in the aggregate, represented approximately 33% for each of the years ended December 31, 2024 and 2023.

Our top ten products in terms of net sales, in the aggregate, represented approximately 36% and 33% for the years ended December 31, 2025 and 2024, respectively.

Net sales are derived from our four reporting segments:

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Net sales from Developed Markets decreased by $415.4 million, or 5%, for the year ended December 31, 2025 when compared to the prior year.

Net sales decreased by approximately $421.1 million, or 5%, due to the inclusion of net sales in the prior year period related to divestitures that have closed during 2023 and 2024.

The favorable impact of foreign currency translation was approximately $5.3 million, or less than 1%.

Constant currency net sales from the remaining business increased by approximately $93.3 million, or 1%, driven primarily by new product sales throughout Developed Markets, including Breyna™ and lisdexamfetamine in the U.S.

This increase was partially offset by anticipated lower net sales of certain existing products within the U.S., including EpiPen® Auto-Injector and Perforomist®, as a result of lower pricing and volumes due to additional competition and increased utilization within government channels.

Net sales decreased by approximately $372.7 million, or 4%, due to the inclusion of net sales in the prior year period related to divestitures that closed during 2024.

The favorable impact of foreign currency translation was

approximately $213.2 million, or 2%.

Constant currency net sales from the remaining business decreased by approximately $255.9 million, or 3%, driven primarily by lower net sales of certain existing products, including lenalidomide and everolimus in the U.S., as a result of the Indore Impact of approximately $283 million, partially offset by new product sales.

Net sales within North America totaled approximately $3.39 billion and net sales within Europe totaled approximately $5.12 billion.

Greater China Segment

Net sales from Greater China were essentially flat for the year ended December 31, 2024 when compared to the prior year.

The unfavorable impact of foreign currency translation was approximately $47.2 million, or 2%.

Constant currency net sales increased by approximately $53.4 million, or 2%, when compared to the prior year, driven primarily by increased volumes of existing products.

Divestitures did not have a significant impact on the net sales during the years ended December 31, 2024 and 2023.

Net sales from Greater China increased by $166.0 million, or 8%, for the year ended December 31, 2025 when compared to the prior year.

The unfavorable impact of foreign currency translation was approximately $1.5 million.

Constant currency net sales increased by approximately $168.2 million, or 8%, when compared to the prior year, driven primarily by strong growth across multiple channels, including e-commerce, retail, and private hospitals, as well as benefits of timing of customer purchasing patterns.

Divestitures did not have a significant impact on net sales in either period and the Indore Impact during the year ended December 31, 2025 was not significant.

Net sales from JANZ decreased by $152.4 million, or 11%, for the year ended December 31, 2025 when compared to the prior year.

This decrease was the result of the unfavorable impact of foreign currency translation of approximately $81.4 million, or 6%.

Net sales also decreased by approximately $16.4 million, or 1%, due to the inclusion of net sales in the prior year period related to divestitures that have closed during 2023 and 2024.

Constant currency net sales from the remaining business increased by approximately $19.5 million, or 1%, when compared to the prior year, driven primarily by new product sales in Australia.

This increase was partially offset by lower net sales of existing products mainly driven by lower pricing in Japan as a result of government price reductions and additional competition.

Net sales decreased by approximately $24.0 million, or 2%, due to the inclusion of net sales in the prior year period related to divestitures that closed during 2024.

The decrease was also partially driven by the unfavorable impact of foreign currency translation of approximately $15.5 million, or 1%.

Constant currency net sales from the remaining business decreased by approximately $112.9 million, or 8%, when compared to the prior year, driven primarily by lower net sales of existing products in Japan and Australia due to government price reductions and additional competition, and by the Indore Impact of approximately $9 million.

Emerging Markets Segment

Net sales from Emerging Markets decreased by $40.6 million, or 2%, for the year ended December 31, 2025 when compared to the prior year.

Net sales decreased by approximately $294.6 million, or 12%, due to the inclusion of net sales in the prior year period related to divestitures that have closed during 2023 and 2024.

Net sales decreased by approximately $80.6 million, or 4%, due to the inclusion of net sales in the prior year period related to divestitures that closed during 2024.

The decrease in net sales was also partially driven by the unfavorable impact of foreign currency translation of approximately $18.5 million, or 1%.

Constant currency net sales from the remaining business increased by approximately $109.9 million, or 4%, when compared to the prior year, primarily driven by new products and higher net sales of existing products in certain Latin American, Middle Eastern and Asian countries.

Constant currency net sales from the remaining business increased by approximately $58.5 million, or 3%, when compared to the prior year, primarily driven by new products in certain Latin American countries and higher volumes and pricing of existing products in certain Middle Eastern and Asian countries.

These increases were partially offset by lower volumes in our ARV business, mainly as a result of the Indore Impact of approximately $77 million.

Cost of Sales and Gross Profit

Cost of sales increased from $9.12 billion for the year ended December 31, 2024 to $9.29 billion for the year ended December 31, 2025.

The increase in cost of sales was largely driven by IPR&D intangible asset impairment charges of $177.1 million.

The increase in cost of sales was largely driven by higher costs associated with other special items, which are described further in the section titled Use of Non-GAAP Financial Measures , and by product mix as a result of the Indore Impact.

These increases were partially offset by the impact of the decrease in net sales, and lower IPR&D intangible asset impairment charges.

Refer to Note 8 Goodwill and Intangible Assets included in Part II, Item 8 of this Form 10-K for more information.

This increase was partially offset by the impact of the decrease in net sales, including as a result of the divestitures that have closed in 2023 and 2024.

Gross profit for the year ended December 31, 2025 was $5.01 billion and gross margins were 35%.

For the year ended December 31, 2024, gross profit was $5.62 billion and gross margins were 38%.

The changes in gross profit and gross margins are primarily related to the impact of the divestitures and the IPR&D intangible asset impairment charges.

Adjusted gross margins were approximately 58% for the year ended December 31, 2024, essentially flat when compared to the year ended December 31, 2023.

The changes in gross profit and gross margins are primarily related to the increase in cost of sales.

Adjusted gross margins were approximately 56% for the year ended December 31, 2025, compared to 58% for the year ended December 31, 2024.

A reconciliation between cost of sales, as reported under U.S.

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Acquisition and divestiture-related costs (116.8) (71.5)

Restructuring-related costs (115.7) (101.8)

Restructuring costs (67.8) (115.7)

Share-based compensation expense (4.0) (3.7)

Other special items (143.0) (119.2)

Other special items, including restructuring related costs (383.2) (143.0)

Adjusted cost of sales $ 6,244.3 $ 6,200.7

6 unchanged sentences

Research and Development Expense

R&D expense for the year ended December 31, 2024 was $808.7 million, essentially flat compared to R&D expense of $805.2 million for the prior year.

An increase in spend on the selatogrel and cenerimod programs was partially offset by lower spending on base business programs.

We expect R&D expense to increase in excess of $100 million in 2025 as compared to 2024 primarily as a result of increased expenses for the selatogrel and cenerimod development programs.

R&D expense for the year ended December 31, 2025 was $965.9 million, compared to $808.7 million for the prior year, an increase of $157.2 million.

This increase was primarily the result of higher expenses for the selatogrel and cenerimod development programs.

Acquired IPR&D

Acquired IPR&D expense for the year ended December 31, 2024 was $28.3 million, compared to $105.5 million for the prior year, a decrease of $77.2 million.

The decrease was primarily due to upfront licensing payments to Mapi of $75.0 million related to additional products under development recorded during the prior year.

Acquired IPR&D expense for the year ended December 31, 2025 was $48.3 million, compared to $28.3 million for the prior year, an increase of $20.0 million.

The increase was primarily due to an upfront payment related to the acquisition of Aculys Pharma of $35.0 million recorded during the fourth quarter of 2025, and an upfront licensing payment for rights to cenerimod in Japan, South Korea and certain countries in the Asia-Pacific region during the first quarter of 2025.

This was partially offset by an upfront licensing payment of $25.0 million to Lexicon related to sotagliflozin recorded during the fourth quarter of 2024.

1 unchanged sentence

SG&A expense for the year ended December 31, 2025 was $3.79 billion, compared to $4.10 billion for the prior year, a decrease of $310.5 million.

The decrease was primarily due to lower goodwill impairment charges of approximately $259.1 million (refer to Note 8 Goodwill and Intangible Assets included in Part II, Item 8 of this Form 10-K for more information on the goodwill impairment charges recorded in 2023 and 2024), and the impact of the divestitures.

Partially offsetting these decreases was a gain recorded in 2023 of approximately $156.2 million on the transaction to divest the Company’s rights to two women’s healthcare products in certain countries.

The decrease was primarily due to the impact of the divestitures, and lower acquisition and divestiture-related costs of approximately $205.7 million.

Impairment of Goodwill

In conjunction with an interim goodwill impairment test performed as of March 31, 2025, the Company recorded a goodwill impairment charge of $2.94 billion in the first quarter of 2025, allocated across the North America, Europe, JANZ, and Emerging Markets reporting units.

Following that impairment, there was no remaining goodwill in the JANZ reporting unit.

The Company also performed its annual goodwill impairment test on April 1, 2025, which resulted in no further impairment charges being recorded.

Refer to Note 8 Goodwill and Intangible Assets in Part II, Item 8 of this Form 10-K for more information.

During the prior year, the Company recorded a goodwill impairment charge of $321.0 million related to its JANZ reporting unit in conjunction with its annual goodwill impairment test performed as of April 1, 2024.

Litigation Settlements and Other Contingencies, Net

The following table includes the losses recognized in litigation settlements and other contingencies, net during the years ended December 31, 2024 and 2023, respectively:

The following table includes the (gains)/losses recognized in litigation settlements and other contingencies, net during the years ended December 31, 2025 and 2024, respectively:

Year Ended December 31,

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Total litigation settlements and other contingencies, net $ (68.5) $ 350.9

The contingent consideration adjustment for the year ended December 31, 2024 was primarily due to fair value adjustments related to the Respiratory Delivery Platform and the Idorsia contingent consideration liabilities.

Refer to Note 9 Financial Instruments and Risk Management included in Part II, Item 8 of this Form 10-K for more information.

Also refer to Note 19 Litigation included in Part II, Item 8 of this Form 10-K for more information.

Refer to Note 4 Acquisitions and Other Transactions and Note 9 Financial Instruments and Risk Management included in Part II, Item 8 of this Form 10-K for more information with respect to the contingent consideration adjustment.

Also refer to Note 20 Litigation included in Part II, Item 8 of this Form 10-K for more information on litigation settlements, net.

Interest Expense

Interest expense for the year ended December 31, 2025 totaled $471.3 million, compared to $550.0 million for the year ended December 31, 2024, a decrease of $78.7 million.

The decrease was primarily due to the impact of debt repayments, partially offset by the non-cash accretion of the contingent consideration liability related to the Idorsia Transaction.

The decrease was primarily due to the impact of 2024 debt repayments.

Other Expense (Income), Net

Other expense (income), net includes gains and losses from divestitures of businesses, changes in the fair value of equity securities, extinguishment of debt, foreign exchange, expense (income) related to post-employment benefit plans, TSA income, and interest and dividend income.

Other expense (income), net for the year ended December 31, 2024 totaled $83.3 million of expense, compared to $(9.8) million of income for the year ended December 31, 2023, a decrease of $93.1 million.

The decrease in other income, net was driven by:

(1) higher net loss on divestitures of approximately $156.4 million, (2) charges of $184.6 million related to the impairment of our equity investment in Mapi and advances for GA Depot inventory (refer to Note 18 Licensing and Other Partner Agreements included in Part II, Item 8 of this Form 10-K for more information), (3) net gains recorded in the prior year of approximately $43.4 million as a result of remeasuring our equity interests in Mapi and Famy Life Sciences and the CCPS in Biocon Biologics to fair value, and (4) lower TSA income of approximately $98.1 million as the prior year included TSA income related to the reimbursement for transition services provided to Biocon Biologics.

Biocon Biologics had substantially exited all transition services with Viatris as of December 31, 2023.

The costs related to the transition services are included in SG&A and R&D.

Other expense, net for the year ended December 31, 2025 totaled $530.6 million, compared to $83.3 million for the year ended December 31, 2024, an increase of $447.3 million.

The increase was primarily driven by a loss of $534.8 million recorded in the current year period as a result of changes in the fair value of the CCPS in Biocon Biologics, compared to a net gain in the prior year period of $(373.5) million, lower interest income of $56.6 million, and lower TSA income of $30.5 million.

The reduction in the fair value of the CCPS in Biocon Biologics was primarily the result of the Company entering into definitive agreements with Biocon for the sale of the Company’s equity stake in Biocon Biologics.

Under the terms of the definitive agreements, Biocon acquired all of Viatris’ CCPS in Biocon Biologics for total consideration of $815.0 million.

This was partially offset by:

(1) current year gains of $373.5 million as a result of remeasuring the CCPS in Biocon Biologics to fair value, (2) higher interest income of approximately $32.1 million, and (3) gain on debt extinguishments of $16.5 million.

Income Tax Provision

For the year ended December 31, 2024, the Company recognized an income tax provision of $11.0 million, compared to an income tax provision of $148.2 million for the prior year, a change in the provision of $137.2 million.

(1) a decrease in loss on divestitures of $298.5 million compared to the prior year period;

(2) charges of $184.6 million recorded in the prior year related to the impairment of our equity investment in Mapi and advances for GA Depot inventory (refer to Note 19 Licensing and Other Partner Agreements included in Part II, Item 8 of this Form 10-K for more information);

and (3) a gain on debt extinguishments of $16.5 million recorded in the prior year.

Income Tax (Benefit) Provision

For the year ended December 31, 2025, the Company recognized an income tax benefit of $150.1 million, compared to an income tax provision of $11.0 million for the prior year, a change of $161.1 million.

The benefit in the current year period is primarily driven by the loss before income taxes, partially offset by the negative impact of the goodwill impairment charge, for which minimal tax benefit was realized, and a $17.7 million accrual related to the resolution of the previously disclosed Swedish tax matter.

The income tax provision for the year ended December 31, 2024 includes a tax benefit related to certain gains on the sale of subsidiaries in connection with the divestiture of the OTC Business which were partially exempt from tax.

This benefit was partially offset by the goodwill impairment charge recorded in the second quarter of 2024, for which no tax benefit was realized.

The income tax provision for the year ended December 31, 2023 was negatively impacted by the goodwill impairment related to the divestiture of the OTC Business, partially offset by the deferred tax impact of the Company’s internal tax restructuring.

The current year and prior year provisions were also impacted by the levels of income and the changing mix at which it is earned in jurisdictions with differing tax rates.

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• Costs related to formal restructuring programs and actions, including costs associated with facilities to be closed or divested, employee separation costs, impairment charges, accelerated depreciation, incremental manufacturing variances, equipment relocation costs, decommissioning and other restructuring related costs;

• Certain acquisition and divestiture costs, including costs relating to integration and planning, advisory and legal fees, certain financing related costs, certain reimbursements related to the Company’s obligation to reimburse Pfizer for certain financing and transaction related costs under the Business Combination Agreement and Separation and Distribution Agreement, certain other TSA related set-up and exit costs, and other business transformation and/or optimization initiatives, which are not part of a formal restructuring program, including employee separation and post-employment costs;

• Other costs, incurred from time to time, related to certain special events or activities that lead to gains or losses, including, but not limited to, incremental manufacturing variances, asset write-downs, including other-than-temporary impairments of investments in equity or debt instruments, or liability adjustments;

• Certain acquisition and divestiture costs, including costs relating to integration and planning, contractual obligations, including under supply agreements, advisory and legal fees, certain financing related costs, certain reimbursements related to the Company’s obligation to reimburse Pfizer for certain financing and transaction related costs under the Business Combination Agreement and Separation and Distribution Agreement, certain other TSA related set-up and exit costs, and other business transformation and/or optimization initiatives, which are not part of a formal restructuring program, including employee separation and post-employment costs;

• Other costs, incurred from time to time, related to certain special events or activities that lead to gains or losses, including, but not limited to, incremental manufacturing variances, contractual termination costs, certain remediation activities, asset write-downs, including other-than-temporary impairments of investments in equity or debt instruments, or liability adjustments;

• Certain costs to further develop and optimize our global enterprise resource planning systems, operations and supply chain;

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GAAP (Loss) Earnings Per Share to Adjusted EPS

A reconciliation between net (loss) earnings and diluted earnings (loss) per share as reported under U.S.

A reconciliation between net (loss) earnings and diluted (loss) earnings per share as reported under U.S.

GAAP, and adjusted net earnings and adjusted EPS for the periods shown follows:

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2,470.3 2,581.1 2,421.5

Impairment of goodwill (included in SG&A) (b)

Impairment of goodwill (b)

2,936.8 321.0 580.1

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Interest expense (primarily amortization of premiums and discounts on long term debt) (38.6) (23.0) (42.4)

Acquisition and divestiture-related costs (primarily included in SG&A) (c)

Acquisition and divestiture-related costs (primarily included in cost of sales and SG&A) (c)

208.2 361.0 377.9

Loss (gain) on divestitures of businesses (included in other expense (income), net) (d)

Loss on divestitures of businesses (included in other expense (income), net) (d)

101.0 399.4 239.9

Restructuring-related costs (e)

Restructuring costs (e)

170.0 211.1 125.2

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Significant items for the year ended December 31, 2025 include the following:

(a) Includes IPR&D intangible asset impairment charges of $177.1 million as the Company concluded that certain of its IPR&D assets were fully impaired due to unfavorable clinical results and/or changes in market conditions which led to the termination of the development programs.

(b) Includes a goodwill impairment charge of $321.0 million related to the JANZ reporting unit.

(c) Acquisition and divestiture-related costs consist primarily of transaction costs including legal and consulting fees and integration activities.

(d) Consists primarily of pre-tax charges / (gains) related to the divestitures of the OTC, biosimilars, API, and women’s healthcare businesses of approximately $369.0 million, $60.0 million, $47.8 million, and $(77.8) million, respectively.

(a) Includes an IPR&D intangible asset impairment charge of $73.9 million as the Company concluded that one of its IPR&D assets was fully impaired due to unfavorable clinical results which led to the termination of the development program.

(b) Includes a goodwill impairment charge of $2.94 billion as a result of the interim goodwill impairment test performed as of March 31, 2025.

(c) Acquisition and divestiture-related costs consist primarily of contractual obligations related to divestitures, transaction costs including legal and consulting fees, and integration activities.

(d) Consists of pre-tax charges related to the divestitures primarily due to an increase in estimated transaction related costs, including the assumption of additional contractual obligations, as well as the impact of working capital and other transaction-related adjustments.

(e) Includes approximately $67.8 million in cost of sales, approximately $4.7 million in R&D, and approximately $97.5 million in SG&A.

(f) Includes incremental manufacturing variances at plants slated for sale or closure of approximately $109.4 million.

(g) Includes:

(1) a gain of approximately $373.5 million as a result of remeasuring the CCPS in Biocon Biologics to fair value;

(2) a gain on the extinguishment of debt of $16.5 million;

and (3) charges of $184.6 million related to the impairment of our equity investment in Mapi and advances for GA Depot inventory (refer to Note 18 Licensing and Other Partner Agreements included in Part II, Item 8 of this Form 10-K for more information).

(f) Includes certain asset impairments, contractual termination costs, and incremental manufacturing variances and certain remediation costs at plants slated for sale or closure or undergoing remediation activities of approximately $356.6 million.

(g) Includes a loss of approximately $534.8 million as a result of remeasuring the CCPS in Biocon Biologics to fair value.

(h) Adjusted for changes for uncertain tax positions.

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GAAP net (loss) earnings $ (3,514.9) $ (634.2) $ 54.7

Add adjustments:

Income tax provision 11.0 148.2 734.6

Add / (deduct) adjustments:

Income tax (benefit) provision

(150.1) 11.0 148.2

Interest expense (a)

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Litigation settlements and other contingencies, net (68.5) 350.9 111.6

Loss (gain) on divestitures of businesses 399.4 239.9 (1,754.1)

Loss on divestitures of businesses 101.0 399.4 239.9

Impairment of goodwill 2,936.8 321.0 580.1

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Nevertheless, our ability to satisfy our working capital requirements and debt service obligations, and fund planned capital expenditures, share repurchases, or dividend payments, will substantially depend upon our future operating performance (which will be affected by prevailing economic conditions), and financial, business and other factors, some of which are beyond our control.

Beginning in 2024, upfront and milestone payments related to externally developed IPR&D projects acquired directly in a transaction other than a business combination, which were previously included in cash flows from operating activities in the consolidated statements of cash flows, are now classified as cash flows from investing activities.

Certain reclassifications were made to conform the prior period consolidated financial statements to the current period presentation.

The adjustments resulted in an increase to net cash provided by operating activities and an increase to net cash used in investing activities of $100.4 million for the year ended December 31, 2023.

Operating Activities

Net cash provided by operating activities decreased by $597.1 million to $2.30 billion for the year ended December 31, 2024, as compared to net cash provided by operating activities of $2.90 billion for the year ended December 31, 2023.

Net cash provided by operating activities is derived from net (loss) earnings adjusted for non-cash operating items, gains and losses attributed to investing and financing activities and changes in operating assets and liabilities resulting from timing differences between the receipts and payments of cash, including changes in cash primarily reflecting the timing of cash collections from customers, payments to vendors and employees and tax payments in the ordinary course of business.

The decrease in net cash provided by operating activities was principally due to lower operating earnings, including as a result of divestitures in 2023 and 2024, higher transaction costs associated with divestitures, and the timing of cash payments and collections.

Net cash provided by operating activities increased by $13.0 million to $2.32 billion for the year ended December 31, 2025, as compared to net cash provided by operating activities of $2.30 billion for the year ended December 31, 2024.

Net cash provided by operating activities is derived from net (loss) earnings adjusted for non-cash operating items, including impairment of goodwill and fair value adjustments related to the Biocon Biologics CCPS investment, gains and losses attributed to investing and financing activities and changes in operating assets and liabilities resulting from timing differences between the receipts and payments of cash, including changes in cash primarily reflecting the timing of cash collections from customers, payments to vendors and employees and tax payments in the ordinary course of business.

The increase in net cash provided by operating activities was principally due to the timing of cash payments and collections, partially offset by lower operating earnings, including as a result of divestitures that closed in 2024, and the Indore Impact.

Investing Activities

Net cash from investing activities was $1.80 billion for the year ended December 31, 2024, as compared to net cash used in investing activities of $864.5 million for the year ended December 31, 2023, an increase of $2.67 billion.

Net cash used in investing activities was $427.7 million for the year ended December 31, 2025, as compared to net cash from investing activities of $1.80 billion for the year ended December 31, 2024, a decrease of $2.23 billion.

In 2025, significant items in investing activities included the following:

• proceeds from the sale of assets and businesses of $2.51 billion, primarily related to the divestitures of the OTC Business, the API business in India and the women’s healthcare business;

• cash paid for acquisitions, net of cash acquired, of $350.0 million related to the Idorsia Transaction;

• capital expenditures, primarily for equipment and facilities, totaling approximately $378.8 million.

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In 2024, significant items in investing activities included the following:

• cash paid for acquisitions, net of cash acquired, of $667.7 million;

• payments for product rights and other, net totaling approximately $97.5 million, related to various products;

• proceeds from the sale of assets and businesses of $2.51 billion, primarily related to the divestitures of the OTC Business, the API business in India and the women’s healthcare business;

• cash paid for acquisitions, net of cash acquired, of $350.0 million related to the Idorsia Transaction;

• capital expenditures, primarily for equipment and facilities, totaling approximately $326.0 million.

• proceeds from the sale of assets and businesses of $364.1 million, primarily related to divestitures of the Company’s rights to two women’s healthcare products in certain countries and commercialization rights in certain Upjohn Distributor Markets.

Financing Activities

Net cash used in financing activities was $4.33 billion for the year ended December 31, 2024, as compared to net cash used in financing activities of $2.30 billion for the year ended December 31, 2023, an increase of $2.03 billion.

Net cash used in financing activities was $1.29 billion for the year ended December 31, 2025, as compared to net cash used in financing activities of $4.33 billion for the year ended December 31, 2024, a decrease of $3.04 billion.

In 2025, significant items in financing activities included the following:

• repayment of Senior Notes through tender offers for and satisfaction and discharge of approximately $1.86 billion of Senior Notes;

• repayment of Senior Notes at maturity of approximately $1.86 billion, consisting of the 1.023% Euro Senior Notes and the 2.250% Euro Senior Notes;

• share repurchases of $500.5 million;

• cash dividends paid of $561.2 million;

• receipt of $245.0 million in deferred consideration from the Biocon Biologics Transaction, and net cash of $52.7 million collected on behalf of various partners, including Biocon Biologics, which are included in Other items, net.

• net cash of $188.2 million paid on behalf of other partners, which is included in Other items, net.

In 2024, significant items in financing activities included the following:

• repayments of Senior Notes at maturity of approximately $1.25 billion, consisting of the 3.125% Senior Notes and the 4.200% Senior Notes;

• repayment of Senior Notes through tender offers for and satisfaction and discharge of approximately $1.86 billion of Senior Notes;

• repayment of Senior Notes at maturity of approximately $1.86 billion, consisting of the 1.023% Euro Senior Notes and the 2.250% Euro Senior Notes;

• share repurchases of $250.0 million;

• cash dividends paid of $574.8 million;

• payment of $220.0 million to Biocon Biologics related to the closing working capital target, partially offset by net cash of $47.6 million collected on behalf of various partners, including Biocon Biologics, which are included in Other items, net.

Refer to the consolidated statements of cash flows in Part II, Item 8 of this Form 10-K for additional details on other significant sources and uses of cash during the years ended December 31, 2025 and 2024.

Capital Resources

Our cash and cash equivalents totaled $734.8 million at December 31, 2024.

Our cash and cash equivalents totaled $1.32 billion at December 31, 2025.

The majority of our cash is invested in U.S.

government money market funds and in bank deposits.

In order to support our global operations, we maintain significant cash and cash equivalents within the banking system with the majority of this at Global Systemically Important Banks.

In order to support our global operations, we maintain significant cash and cash equivalents within the global banking system with the majority of this at Global Systemically Important Banks.

We monitor the third-party depository institutions that hold our cash and cash equivalents on a regular basis.

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As of December 31, 2025, the Company did not have any borrowings outstanding under the Commercial Paper Program or the 2024 Revolving Facility.

The Company has a $400 million Receivables Facility which expires in April 2025.

The Company has a Receivables Facility for up to an aggregate amount of $600 million which expires in April 2028.

As of December 31, 2025, the Company did not have any borrowings outstanding under the Receivables Facility.

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The amount that we may borrow at a given point in time is determined based on the amount of qualifying accounts receivable that are present at such point in time.

Borrowings outstanding under the Receivables Facility bear interest at the applicable base rate plus 0.775% and are included as a component of short-term borrowings, while the accounts receivable securing these obligations remain as a component of accounts receivable, net, in our consolidated balance sheets.

Borrowings outstanding under the Receivables Facility bear interest at the applicable base rates plus applicable margins and are included as a component of short-term borrowings, while the accounts receivable securing these obligations remain as a component of accounts receivable, net, in our consolidated balance sheets.

In addition, the agreement governing the Receivables Facility contains various customary affirmative and negative covenants, and customary default and termination provisions.

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We derecognized $301.9 million and $68.5 million of accounts receivable as of December 31, 2025 and 2024, respectively, under these factoring arrangements.

Additionally, in 2023, we entered into a similar arrangement for certain European countries.

As of December 31, 2024 and 2023, we assigned and derecognized approximately $29.9 million and $415.7 million, respectively, of Trade Receivables, Net , which were included in Other Receivables .

Additionally, we have a similar arrangement for certain European countries.

As of December 31, 2024, we assigned and derecognized approximately $29.9 million of Trade Receivables, Net , which were included in Other Receivables .

As of December 31, 2025, no amounts were assigned and derecognized.

The Company has certain voluntary supply chain finance programs with financial intermediaries which provide participating suppliers the option to be paid by the intermediary earlier than the original invoice due date.

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In addition, we plan to continue to explore various other ways to unlock the value of the Company’s unique global platform in order to create shareholder value.

For information regarding our dividends paid and declared and share repurchase program, refer to Note 2 Summary of Significant Accounting Policies included in Part II, Item 8 of this Form 10-K.

For information regarding our dividends paid and declared and share repurchase program, refer to Note 13 (Loss) Earnings per Share included in Part II, Item 8 of this Form 10-K.

Long-term Debt Maturity

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The Company is in compliance with its covenants at December 31, 2025 and expects to remain in compliance for the next twelve months.

We and our subsidiaries and affiliates may from time to time, in our sole discretion, purchase, repay, redeem or retire any of our outstanding debt securities (including any publicly-issued debt securities) in privately negotiated or open market transactions, by tender offer or otherwise, or extend or refinance any of our outstanding indebtedness.

transactions, by tender offer or otherwise, or extend or refinance any of our outstanding indebtedness.

Refer to Note 10 Debt included in Part II, Item 8 of this Form 10-K for more information.

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(3) with respect to the Utah U.S.

Dollar Notes, the earlier to occur of (i) with respect to the guarantee provided by Mylan Inc., (x) the release of Utah

Acquisition Sub Inc.’s guarantee under all applicable Mylan Inc.

Dollar Notes, the earlier to occur of (i) with respect to the guarantee provided by Mylan Inc., (x) the release of Utah Acquisition Sub Inc.’s guarantee under all applicable Mylan Inc.

Debt (as defined in the applicable indenture) and (y) Mylan Inc.

30 unchanged sentences

(1,008.2) (1,206.6)

Net (loss) earnings

(3,514.9) (634.2)

Other Commitments

3 unchanged sentences

We have approximately $535 million accrued for legal contingencies at December 31, 2025.

inherently uncertain and may develop over a long period of time, and so it is not possible to predict the ultimate resolution of any such matter.

While the Company believes that it has meritorious defenses with respect to the claims asserted against it and the assumed legal matters referenced above, and intends to vigorously defend its position, the process of resolving these matters is inherently uncertain and may develop over a long period of time, and so it is not possible to predict the ultimate resolution of any such matter.

It is possible that an unfavorable resolution of any of the ongoing matters could have a material effect on the Company’s business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price.

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In connection with the API business divestiture, we entered into a manufacturing and supply agreement pursuant to which we are purchasing a significant amount of API from the purchaser in that transaction.

Some of these agreements include various ongoing financial obligations.

The transition services were substantially concluded as of December 31, 2025.

At December 31, 2025, our material cash requirements from known contractual and other obligations primarily relate to repayment of outstanding borrowings and interest, open purchase orders, post-employment benefit plans, unrecognized tax benefits, capital expenditures, dividends and leases.

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• Chargebacks :

the Company has agreements with certain indirect customers, such as independent pharmacies, retail pharmacy chains, managed care organizations, hospitals, nursing homes, governmental agencies and pharmacy benefit managers, which establish contract prices for certain products.

the Company has agreements with certain indirect customers, such as independent pharmacies, retail pharmacy chains, managed care organizations, hospitals, nursing homes, governmental agencies and PBMs, which establish contract prices for certain products.

The indirect customers then independently select a wholesaler from which to purchase the products at these contracted prices.

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Our estimate of these rebates is based on the historical trends of rebates paid as well as on changes in wholesaler inventory levels and increases or decreases in the level of sales.

We estimate discounts on branded prescription drug sales to Medicare Part D participants in the Medicare “coverage gap” based on historical experience of prescriptions and utilization expected to result in the discount of the “coverage gap”.

Outside the U.S., the majority of our pharmaceutical sales are contractually or legislatively governed.

In certain European countries, certain rebates are calculated on the governments total pharmaceutical spending or on specific product sale thresholds.

In certain European countries, certain rebates are calculated on the government’s total pharmaceutical spending or on specific product sale thresholds.

We utilize historical data and obtain third party information to determine the adequacy of these accruals.

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Accordingly, changes in the assumptions described above could have a material impact on the Company’s consolidated financial condition and results of operations.

The Company reviews goodwill for impairment at least annually or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable based on management’s assessment of the fair value of the Company’s reporting units as compared to their related carrying value.

Under the authoritative guidance issued by the FASB, we have the option to first assess the qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test.

If we choose to use qualitative factors and determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the goodwill impairment test would be required.

The goodwill impairment test requires the Company to estimate the fair value of the reporting unit and to compare the fair value of the reporting unit with its carrying amount.

If the carrying amount is less than its fair value, then no impairment is recognized.

If the carrying amount recorded exceeds the fair value calculated, an impairment charge is recorded for the difference.

The judgments made in determining the projected cash flows used to estimate the fair value can materially impact the Company’s financial condition and results of operations.

The Company performed its annual goodwill impairment test on a quantitative basis for its five reporting units, North America, Europe, Emerging Markets, JANZ, and Greater China.

The Company reviews goodwill for impairment annually on April 1st or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable.

As a result of these factors, the Company determined that a triggering event had occurred for each of its reporting units and performed an interim goodwill impairment test as of March 31, 2025.

The Company also performed the annual goodwill impairment test as of April 1, 2025.

There were no significant changes from the interim goodwill test performed at March 31, 2025 and the results were consistent with the interim goodwill impairment test.

Also, no triggering events have been identified since the April 1, 2025 impairment test date.

The Company performed both its interim and annual goodwill impairment tests on a quantitative basis for its five reporting units, North America, Europe, Emerging Markets, JANZ, and Greater China.

In estimating each reporting unit’s fair value, the Company performed an extensive valuation analysis, utilizing a discounted cash flow approach.

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These estimates and assumptions, utilizing Level 3 inputs, primarily include, but are not limited to, the discount rate, terminal growth rates, operating income before depreciation and amortization, capital expenditures forecasts and control premiums.

The Company reviews goodwill for impairment annually on April 1st or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable.

The Company performed the annual goodwill impairment test as of April 1, 2024.

When compared to the prior year’s annual goodwill impairment test completed on April 1, 2023, due to certain macroeconomic conditions, the Company has experienced fluctuations in foreign exchange rates in certain international markets, combined with an increase in market interest rates.

These conditions impacted all reporting units, with the most significant impact in JANZ and Emerging Markets.

The impact in the other reporting units was offset by changes in other discount rate assumptions.

As of April 1, 2024, the allocation of the Company’s total goodwill was as follows:

For the March 31, 2025 interim goodwill impairment test, when compared to the prior year annual goodwill impairment test completed on April 1, 2024, the significantly increased uncertainty and volatility in the geopolitical and economic environments in which the Company operates increased the Company’s business risks, including, but not limited to, the potential for continued or additional drug pricing reduction pressures, general uncertainty related to timing of responses and approvals from the FDA resulting from evolving regulatory priorities and associated changes to the operations of the agency, and the potential for adverse impacts from future tariffs and trade restrictions.

The negative impact of any or all of these factors could be material.

The significant increase in business risks and uncertainty led to an increase in discount rate assumptions impacting all reporting units as compared to the April 1, 2024 annual goodwill impairment test.

As of March 31, 2025 (prior to the impairment charges noted below), the allocation of the Company’s total goodwill was as follows:

North America $3.09 billion, Europe $3.92 billion, Emerging Markets $1.17 billion, JANZ $0.30 billion and Greater China $0.92 billion.

In conjunction with its annual goodwill impairment test, the Company recorded a goodwill impairment charge of $321.0 million during the second quarter of 2024 related to its JANZ reporting unit, which was recorded within SG&A in the consolidated statement of operations.

The impairment charge was primarily the result of a 1.0% increase in the discount rate and a 0.5% reduction in the terminal growth rate assumption for the reporting unit.

For the JANZ reporting unit at April 1, 2024, the Company forecasted cash flows for the next 10 years.

During the forecast period, the revenue compound annual growth rate was approximately negative 0.3%.

In conjunction with its March 31, 2025 interim goodwill impairment test, the Company recorded the following impairment charges in the first quarter of 2025:

(In millions) North America

Emerging Markets

Impairment charge

$ 707.0 $ 1,554.0 $ 300.8 $ 375.0 $ 2,936.8

For the North America reporting unit at March 31, 2025 and April 1, 2025, the Company forecasted cash flows for the next 10 years.

During the forecast period, the revenue compound annual growth rate was approximately 3.1%.

A terminal year value was calculated with a negative 3.0% revenue growth rate applied.

The discount rate utilized was 12.5% and the estimated tax rate was 24.8%.

For the Europe reporting unit at March 31, 2025 and April 1, 2025, the Company forecasted cash flows for the next 10 years.

During the forecast period, the revenue compound annual growth rate was approximately 3.3%.

A terminal year value was calculated with a 2.0% revenue growth rate applied.

The discount rate utilized was 12.0% and the estimated tax rate was 15.8%.

Following the goodwill impairment charge recorded in the JANZ reporting unit, the carrying value of the reporting unit was equal to its estimated fair value as of April 1, 2024.

If market conditions or the projected results were to change materially, it may be necessary to record further impairment charges to the JANZ reporting unit in future periods.

As of April 1, 2024, the Company determined that the fair values of the North America, Greater China, and Emerging Markets reporting units were substantially in excess of the respective unit’s carrying value.

For the Europe reporting unit, the estimated fair value exceeded its carrying value by approximately $882 million or 7.9% for the annual goodwill impairment test.

As it relates to the discounted cash flow approach for the Europe reporting unit at April 1, 2024, the Company forecasted cash flows for the next 10 years.

For the Emerging Markets reporting unit at March 31, 2025 and April 1, 2025, the Company forecasted cash flows for the next 10 years.

During the forecast period, the revenue compound annual growth rate was approximately 3.5%.

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The discount rate utilized was 14.5% and the estimated tax rate was 16.7%.

If all other assumptions are held constant, a reduction in the terminal value growth rate by 1.5% or an increase in discount rate by 1.0% would result in an impairment charge for the Europe reporting unit.

For the JANZ reporting unit at March 31, 2025 and April 1, 2025, the Company forecasted cash flows for the next 10 years.

During the forecast period, the revenue compound annual growth rate was approximately negative 0.9%.

A terminal year value was calculated with a 1.0% revenue growth rate applied.

The discount rate utilized was 8.5% and the estimated tax rate was 30.2%.

After the goodwill impairment charge recorded during the first quarter of 2025, there is no remaining goodwill allocated to the JANZ reporting unit.

Following the goodwill impairment charges recorded in these reporting units, since the carrying value of the reporting units is equal to their estimated fair value as of March 31, 2025 and April 1, 2025, if market conditions or the projected results were to negatively change, it may be necessary to record further impairment charges to one or more of these reporting units in future periods.

Any such future charges could be material.

For the Greater China reporting unit, the estimated fair value exceeded its carrying value by approximately $322.0 million or 5.8% for both the March 31, 2025 and April 1, 2025 goodwill impairment tests.

As it relates to the discounted cash flow approach for the Greater China reporting unit at March 31, 2025 and April 1, 2025, the Company forecasted cash flows for the next 10 years.

During the forecast period, the revenue compound annual growth rate was approximately 1.6%.

A terminal year value was calculated with a negative 1.5% revenue growth rate applied.

The discount rate utilized was 15.0% and the estimated tax rate was 24.7%.

If all other assumptions are held constant, a reduction in the terminal value growth rate by 3.5% or an increase in discount rate by 1.0% would result in an impairment charge for the Greater China reporting unit.

Due to the inherent uncertainty involved in making these estimates, actual results could differ from those estimates.

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Favorable resolution would be recognized as a reduction to our provision for income taxes in the period of resolution or expiration of the underlying statutes of limitation.

Based on this

evaluation, as of December 31, 2024, our reserve for unrecognized tax benefits totaled $255.7 million, of which $182.2 million was recorded in connection with the Combination and is subject to Pfizer’s indemnification obligations to Viatris under the Tax Matters Agreement.

Based on this evaluation, as of December 31, 2025, our reserve for unrecognized tax benefits totaled $263.2 million, of which $170.1 million was recorded in connection with the Combination and is subject to Pfizer’s indemnification obligations to Viatris under the Tax Matters Agreement.

Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets.

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The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as projections for growth.

When assessing the realizability of deferred tax assets, management considers all available evidence, including historical information, long-term forecasts of future taxable income and possible tax planning strategies.

When assessing the realizability of deferred tax assets, management considers all available evidence, including historical information, long-term forecasts of future

taxable income and possible tax planning strategies.

Amounts recorded for valuation allowances can result from a complex series of estimates, assumptions and judgments about future events.

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Any future increases to the Company’s valuation allowances could materially impact the Company’s consolidated financial condition and results of operations.

At December 31, 2024 and 2023, the Company’s net deferred tax assets totaled $753.0 million and $692.9 million, respectively.

At December 31, 2025 and 2024, the Company’s net deferred tax assets totaled $1.06 billion and $753.0 million, respectively.

A variance of 5% between estimated reserves and valuation allowances and actual resolution and realization of these tax items would have an effect on our reserve balance and valuation allowance of approximately $85.0 million.

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Dollar and the local currencies in the markets in which we operate, mainly the Euro, Indian Rupee, Chinese Renminbi, Japanese Yen, Australian Dollar, Canadian Dollar, Pound Sterling and South Korean Won affect our results as previously noted.

In recent years, the global economy has been impacted by high levels of inflation and rising energy costs, which has resulted in significant economic volatility.

As a result, central banks have tightened their monetary policies and increased interest rates.

In recent years, the global economy has experienced significant volatility, including inflation, increased interest rates and rising energy costs.

While inflationary and other macroeconomic pressures may ease and interest rates may decline, we do not expect to see a corresponding reduction in these higher costs.

These macroeconomic pressures combined with the volatility in foreign exchange rates, including the strengthening of the U.S.

dollar versus certain of the other currencies in which we operate, have impacted and may continue to negatively impact our results of operations.

Dollar versus certain of the other currencies in which we operate, have impacted and may continue to impact our results of operations.

We proactively look to manage such macroeconomic pressures by implementing strategies to mitigate and partially offset the impact of these factors.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis