Viatris CEO Stepping Down; New CEO NamedBy
Viatris has announced that its current CEO, Michael Goettler, is stepping down, and the company’s Board of Directors has named Scott A. Smith, recently President of BioAtla, a San Diego-based bio/pharmaceutical company, and former Celgene executive, as the company’s new CEO, effective April 1, 2023. Goettler will work with Smith to support a smooth transition and will then depart as CEO and as a member of the company’s Board.
Smith has been a member of the Viatris Board since December 2022 and has more than 35 years of experience in the bio/pharmaceutical industry. Prior to serving as President of BioAtla , he was President and Chief Operating Officer at Celgene, where he also served as Senior Vice President and Global Head of Immunology and President of Inflammation and Immunology.
New CEO will continue the company’s reshaping plan
Smith is taking over as CEO as Viatris executes what it has termed as a “re-shaping plan,” which includes restructuring, divestments of non-core assets, paying down debt, and generating improved revenue growth. The company is in Phase I of that plan, which set a target of achieving cost synergies of $1 billion-plus by the end of 2023 from the integration of the 2020 merger of Mylan (the legacy company of Viatris) and Upjohn, Pfizer’s generics and established medicines, to form Viatris. The company also has a goal to achieve $9 billion in pre-tax proceeds from the divestment of non-core assets. A key move in 2022 was a $3.35 billion deal to divest its biosimilars assets to Biocon Biologics, a Bangalore, India-based biosimilars company and subsidiary of Biocon Ltd., which gave Viatris gross proceeds of $2 billion in cash and a 12.9% stake in Biocon Biologics. To boost revenues, Viatris acquired two ophthalmology drug companies (Oyster Point Pharma and Famy Life Sciences) for a combined total of $750 million to establish an ophthalmology franchise as a new revenue source. Viatris officially launched its new Eye Care Division last month (January 2023) and is projecting to add more than $1 billion in net sales from its eye-care portfolio by 2028.
Phase I of the company’s reshaping plan ends in 2023 with Phase 2 of the plan beginning in 2024. In its 2022 earnings announcement earlier this week (February 27, 2023), Viatris provided an update of its strategic plan. In 2022, it paid down approximately $3.3 billion in debt and has paid down approximately $5.4 billion since 2021. Viatris says it also remains on track to execute planned further divestitures. Overall, in 2022, Viatris posted total revenues of $16.26 billion, a 9% decline from 2021, primarily due to the unfavorable impact of foreign currency translation, which accounted for approximately $1.24 billion of its $1.62-billion decline in revenues. For 2023, the company projects total revenues of between $15.5 billion and $16.0 billion, with approximately $500 million in new product revenue in 2023. In 2022, it had new product revenues of $483 million.
Source: Viatris (New CEO), Viatris (2022 Financial Presentation), and Viatris (2022 earnings release)