What happened
Shares of Viatris (VTRS), a biopharmaceutical company known for its branded, generic, and biosimilar therapies, saw its shares rise 18.8% in May, according to data provided by S&P Global Market Intelligence.
The stock was at $10.33 at the close on April 29, the last trading day of the month. It opened at $10.35 on May 2, the first trading day of the month, then rose to a monthly high of $12.35 on May 31 before closing at $12.27. The stock's 52-week low is $9.66, with its 52-week high at $15.92. Despite the strong month, the stock is still down more than 13% so far this year.
Image source: Getty Images.
So what
The company reported first-quarter earnings on May 9 and the news was mostly positive. While revenue was down 5% year over year to $4.19 billion, the company reported net income of $322.7 million, compared to a net loss of $1.037 billion in the same period last year, and earnings per share (EPS) of $0.33, compared to an EPS loss of $0.86 in the first quarter of 2021. The company also reported free cash flow of $1.074 billion, up 34% year over year. The last number was particularly welcome to investors because it means the company's 9% dividend increase to $0.12 per quarterly share, representing a yield of 4.1%, is safe.
The company did two other things that sat well with investors: It paid down $840 million in debt and said it was on track to retire $2 billion worth of debt by the end of the year.
Now what
Investors are hoping the healthcare company's sale of its biosimilar programs to Biocon Biologics won't hurt it in the long run. It's a legitimate concern, as the company's only product category that saw growth in revenue in the first quarter was its complex GX (complex biosimilars) and biosimilars segment, which grew by 21% year over year, to $390.8 million in revenue, of which $169 million came from biosimilars that will be part of the Biocon deal. The company said it is on track to complete the sale in the second half of 2022 and the $3.35 billion from the sale will allow it to pay down debt. As it is, the company's price-to-book value of 0.67% makes it attractive to value investors.
