What happened

Shares of Viatris (VTRS -2.07%) were jumping 16.2% higher as of 11:56 a.m. ET on Monday. The big gain came after the company announced its third-quarter results and revealed plans for two acquisitions.

Viatris reported Q3 revenue of $4.08 billion. This result was down 10% year over year and came in lower than the Wall Street consensus estimate of $4.14 billion.

The drugmaker delivered Q3 earnings of $354.3 million, or $0.29 per share, based on generally accepted accounting principles (GAAP), up from $311.5 million, or $0.26 per share, in the prior-year period. Viatris recorded adjusted net earnings of $1.06 billion, or $0.87 per share. The average analysts' estimate was for adjusted earnings of $0.84 per share.

Viatris reaffirmed its previous full-year 2022 guidance. The company still expects revenue of between $16.2 billion and $16.7 billion. In addition, Viatris said that it has entered into agreements to buy Oyster Point Pharma (OYST) and Famy Life Sciences for between $700 million and $750 million in cash. 

So what

Investors are almost certainly more excited about Viatris' planned acquisitions than they are about the company's Q3 results. That's because the two deals could help Viatris return to growth.

The goal of these acquisitions is to create an ophthalmology franchise. Oyster Point already has an approved drug on the market, Tyrvaya, which treats dry eye disease. Famy has a promising pipeline.

Viatris thinks that adding Oyster Point and Famy could boost its sales by at least $1 billion by 2028. The company also anticipates that its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) will increase by at least $500 million by then.

Now what

There are still some hoops for Viatris to jump with its acquisitions, including securing regulatory approval. However, the company expects the transactions will close in the first quarter of 2023.