Viatris Inc

Previous wording

This discussion and analysis should be read in conjunction with the Consolidated Financial Statements, the related Notes to Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Viatris’ 2024 Form 10-K, the unaudited interim financial statements and related Notes included in Part I — Item 1 of this Form 10-Q and our other SEC filings and public disclosures. The interim results of operations and comprehensive loss for the three months ended March 31, 2025, and cash flows for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the full fiscal year or any other future period.

Current wording

This discussion and analysis should be read in conjunction with the Consolidated Financial Statements, the related Notes to Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Viatris’ 2024 Form 10-K, the unaudited interim financial statements and related Notes included in Part I — Item 1 of this Form 10-Q and our other SEC filings and public disclosures. The interim results of operations and comprehensive earnings (loss) for the three and six months ended June 30, 2025, and cash flows for the six months ended June 30, 2025 are not necessarily indicative of the results to be expected for the full fiscal year or any other future period.

Previous wording

For branded products, the majority of the product’s commercial value is usually realized during the period in which the product has market exclusivity. In the U.S. 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, we expect generic entry for Amitiza® 24 μg to occur in Japan in December 2025 upon expiration of patent exclusivity.

Current wording

For branded products, the majority of the product’s commercial value is usually realized during the period in which the product has market exclusivity. In the U.S. 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 December 2025 upon expiration of certain patent exclusivity.

Previous wording

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. Since the end of February 2025, the Company has 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.

Current wording

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.

Previous wording

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. Since the end of February 2025, the Company has 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. When compared to the prior year annual goodwill impairment test completed on April 1, 2024, the recent significantly increased uncertainty and volatility in the geopolitical and economic environments in which the Company operates has 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 recent significant increase in business risks and uncertainty have led to an increase in discount rate assumptions impacting all reporting units as compared to the April 1, 2024 annual goodwill impairment test. For the three months ended March 31, 2025, the Company recorded a non-cash goodwill impairment charge of $2.9 billion as a result of the interim goodwill impairment test performed as of March 31, 2025.

Current wording

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. In the first quarter of 2025, the Company recorded a non-cash goodwill impairment charge of $2.9 billion as a result of the interim goodwill impairment test performed as of March 31, 2025.

Previous wording

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 in the three months ended March 31, 2025, including the ARV business in Emerging Markets and select generic products in Europe.

Current wording

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 in the three and six months ended June 30, 2025, including the ARV business in Emerging Markets and select generic products in Europe.

Previous wording

We continue to anticipate negative impacts for the remainder of the year. The estimated negative impact to first quarter 2025 total revenues was approximately $140 million versus the first quarter of 2024, and we currently estimate the negative impact to 2025 total revenues to be approximately $500 million and to 2025 earnings from operations to be approximately $385 million.

Current wording

We continue to anticipate negative impacts for the remainder of the year. The estimated negative impact to second quarter 2025 total revenues was approximately $160 million versus the second quarter of 2024 and the estimated negative impact to total revenues for the six months ended June 30, 2025 versus the six months ended June 30, 2024 was approximately $300 million. We currently estimate the negative impact to 2025 total revenues to be approximately $500 million and to 2025 earnings from operations to be approximately $385 million.

Previous wording

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 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 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.

Current wording

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 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.

Previous wording

On February 28, 2022, the Company announced that its Board of Directors had authorized a share repurchase program for the repurchase of up to $1.0 billion of the Company’s shares of common stock. The Company subsequently announced that on February 26, 2024, its Board of Directors authorized a $1.0 billion increase to the Company’s previously announced $1.0 billion share repurchase program. As a result, the Company’s share repurchase program now authorizes the repurchase of up to $2.0 billion of the Company’s shares of common stock. Such repurchases may be made from time-to-time at the Company’s discretion and effected by any means, including but not limited to, open market repurchases, pursuant to plans in accordance with Rules 10b5-1 or 10b-18 under the Exchange Act, privately negotiated transactions (including accelerated stock repurchase programs) or any combination of such methods as the Company deems appropriate. The program does not have an expiration date. During the three months ended March 31, 2025 and 2024, the Company repurchased approximately 18.6 million shares of common stock at a cost of approximately $175.4 million, and approximately 19.2 million shares of common stock at a cost of approximately $250 million, respectively, under the program. As of March 31, 2025, the Company had repurchased a total of approximately 59.1 million shares of common stock at a cost of approximately $675.4 million under the program. Additionally, subsequent to March 31, 2025, the Company repurchased approximately 16.4 million shares of common stock at a cost of approximately $139.5 million, bringing the total to approximately 75.5 million shares of common stock at a cost of approximately $814.9 million under the program, in each case through and including May 7, 2025. The share repurchase program does not obligate the Company to acquire any particular amount of common stock.

Current wording

On February 28, 2022, the Company announced that its Board of Directors had authorized a share repurchase program for the repurchase of up to $1.0 billion of the Company’s shares of common stock. The Company subsequently announced that on February 26, 2024, its Board of Directors authorized a $1.0 billion increase to the Company’s previously announced $1.0 billion share repurchase program. As a result, the Company’s share repurchase program now authorizes the repurchase of up to $2.0 billion of the Company’s shares of common stock. Such repurchases may be made from time-to-time at the Company’s discretion and effected by any means, including but not limited to, open market repurchases, pursuant to plans in accordance with Rules 10b5-1 or 10b-18 under the Exchange Act, privately negotiated transactions (including accelerated stock repurchase programs) or any combination of such methods as the Company deems appropriate. The program does not have an expiration date. During the three months ended June 30, 2025, the Company repurchased approximately 20.2 million shares of common stock at a cost of approximately $175.0 million. During the six months ended June 30, 2025 and 2024, the Company repurchased approximately 38.9 million shares of common stock at a cost of approximately $350.4 million, and approximately 19.2 million shares of common stock at a cost of approximately $250 million, respectively, under the program. As of June 30, 2025, the Company had repurchased a total of approximately 79.3 million shares of common stock at a cost of approximately $850.4 million under the program. The share repurchase program does not obligate the Company to acquire any particular amount of common stock.

Previous wording

The table below is a summary of the Company’s financial results for the three months ended March 31, 2025 compared to the prior year period:

Current wording

The table below is a summary of the Company’s financial results for the three and six months ended June 30, 2025 compared to the prior year period:

Previous wording

(4)For the three months ended March 31, 2025, other revenues in Developed Markets, JANZ, and Emerging Markets were approximately $6.9 million, $1.0 million, and $3.2 million, respectively.

Current wording

(4)For the three months ended June 30, 2025, other revenues in Developed Markets, JANZ, and Emerging Markets were approximately $10.3 million, $1.0 million, and $1.8 million, respectively.

Previous wording

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 38% and 34% for the three months ended March 31, 2025 and 2024, respectively.

Current wording

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 37% and 33% for the three months ended June 30, 2025 and 2024, respectively.

Previous wording

Net sales from Developed Markets decreased by $273.7 million or 13% for the three months ended March 31, 2025 when compared to the prior year period. Net sales decreased by approximately $179.7 million or 8% due to the inclusion of net sales in the prior year period related to divestitures that closed during 2024. The unfavorable impact of foreign currency translation was approximately $33.2 million or 2%. Constant currency net sales from the remaining business decreased by approximately $60.8 million or 3% when compared to the prior year period, 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 $80 million, partially offset by new product sales. Net sales within North America totaled approximately $800.9 million and net sales within Europe totaled approximately $1.09 billion.

Current wording

Net sales from Developed Markets decreased by $199.9 million or 9% for the three months ended June 30, 2025 when compared to the prior year period. Net sales decreased by approximately $174.8 million or 8% 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 $60.8 million, or 3%. Constant currency net sales from the remaining business decreased by approximately $85.9 million or 4% when compared to the prior year period, 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 $110 million, partially offset by new product sales. Net sales within North America totaled approximately $870.1 million and net sales within Europe totaled approximately $1.25 billion.

Previous wording

Net sales from Emerging Markets decreased by $106.5 million or 17% for the three months ended March 31, 2025 when compared to the prior year period. Net sales decreased by approximately $47.5 million, or 8%, 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 $27.6 million, or 4%. Constant currency net sales from the remaining business decreased by $31.4 million, or 5% when compared to the prior year period, primarily driven by lower volumes in our ARV business, mainly as a result of the Indore Impact of approximately $57.0 million. These decreases were partially offset by new product sales in certain Latin American countries.

Current wording

Net sales from Emerging Markets decreased by $23.0 million or 4% for the three months ended June 30, 2025 when compared to the prior year period. Net sales decreased by approximately $26.4 million, or 5%, 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 $4.3 million, or 1%. Constant currency net sales from the remaining business increased by $7.7 million, or 1% when compared to the prior year period, primarily driven by 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 $45 million.

Previous wording

Cost of sales decreased from $2.16 billion for the three months ended March 31, 2024 to $2.09 billion for the three months ended March 31, 2025. The decrease in cost of sales was largely driven by the impact of the decrease in net sales, including as a result of the divestitures that closed during 2024 and the Indore Impact.

Current wording

Cost of sales decreased from $2.35 billion for the three months ended June 30, 2024 to $2.25 billion for the three months ended June 30, 2025. The decrease in cost of sales was largely driven by the impact of the decrease in net sales, primarily as a result of the divestitures that closed during 2024 and the Indore Impact.

Previous wording

Gross profit for the three months ended March 31, 2025 was $1.16 billion and gross margins were 36%. For the three months ended March 31, 2024, gross profit was $1.50 billion and gross margins were 41%. The changes in gross profit and gross margins are primarily related to the impact of the divestitures and the Indore Impact. Adjusted gross margins were approximately 56% for the three months ended March 31, 2025, compared to approximately 59% for the three months ended March 31, 2024.

Current wording

Gross profit for the three months ended June 30, 2025 was $1.33 billion and gross margins were 37%. For the three months ended June 30, 2024, gross profit was $1.45 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 Indore Impact. Adjusted gross margins were approximately 57% for the three months ended June 30, 2025, compared to approximately 58% for the three months ended June 30, 2024.

Previous wording

R&D expense for the three months ended March 31, 2025 was $222.0 million, compared to $199.7 million for the comparable prior year period, an increase of $22.3 million. This increase was primarily the result of higher expenses for the selatogrel and cenerimod development programs.

Current wording

R&D expense for the three months ended June 30, 2025 was $218.8 million, compared to $204.1 million for the comparable prior year period, an increase of $14.7 million. This increase was primarily the result of higher expenses for the selatogrel and cenerimod development programs.

Previous wording

Interest expense for the three months ended March 31, 2025 totaled $115.5 million, compared to $138.4 million for the three months ended March 31, 2024, a decrease of $22.9 million. The decrease was primarily due to the impact of 2024 debt repayments.

Current wording

Interest expense for the three months ended June 30, 2025 totaled $116.6 million, compared to $145.8 million for the three months ended June 30, 2024, a decrease of $29.2 million. The decrease was primarily due to the impact of 2024 debt repayments.

Previous wording

The decrease in other income, net was primarily driven by: (1) a loss of $115.8 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 gain of $46.9 million in the prior year period; (2) loss on divestitures of $36.9 million recorded in the current year period 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, compared to a net gain of $70.4 million recorded in the prior year period primarily related to the divestiture of the women’s healthcare business which closed in March 2024; and (3) lower interest income of $11.7 million.

Current wording

The increase in other expense, net was primarily driven by a loss of $284.0 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 $248.7 million related to our non-marketable equity investments, including the CCPS in Biocon Biologics, and lower interest income of $11.1 million. This was partially offset by a decrease in loss on divestitures of $215.0 million compared to the prior year period. Refer to Note 11 Financial Instruments and Risk Management includedin Part I, Item 1 of this Form 10-Q for more information with respect to the change in the fair value of the CCPS in Biocon Biologics.

Previous wording

For the three months ended March 31, 2025, Viatris reported total revenues of $3.25 billion, compared to $3.66 billion for the comparable prior year period, representing a decrease of $409.1 million, or 11%. Total revenues include both net sales and other revenues from third parties. Net sales for the three months ended March 31, 2025 were $3.24 billion, compared to $3.65 billion for the comparable prior year period, representing a decrease of $410.3 million, or 11%. Other revenues for the three months ended March 31, 2025 were $11.1 million, compared to $9.9 million for the comparable prior year period.

Current wording

For the six months ended June 30, 2025, Viatris reported total revenues of $6.84 billion, compared to $7.46 billion for the comparable prior year period, representing a decrease of $623.6 million, or 8%. Total revenues include both net sales and other revenues from third parties. Net sales for the six months ended June 30, 2025 were $6.81 billion, compared to $7.44 billion for the comparable prior year period, representing a decrease of $627.2 million, or 8%. Other revenues for the six months ended June 30, 2025 were $24.2 million, compared to $20.6 million for the comparable prior year period.

Previous wording

Net sales decreased by approximately $237.4 million or 6% 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 $85.1 million, or 2%, primarily reflecting changes in the U.S. Dollar as compared to the currencies of subsidiaries in the EU, Japan, China, and countries in Emerging Markets. On a constant currency basis, net sales from the remaining business decreased by approximately $87.8 million, or 2%, for the three months ended March 31, 2025 compared to the prior year period. The decrease was the result of base business erosion of approximately $154.6 million, approximately $140 million of which relates to the Indore Impact. This decrease was partially offset by new product sales of approximately $66.8 million, primarily in Developed Markets. 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.

Current wording

Net sales decreased by approximately $449.6 million or 6% 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 $23.6 million, or less than 1%, 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 decreased by approximately $154.0 million, or 2%, for the six months ended June 30, 2025 compared to the prior year period. The decrease was the result of net base business erosion of approximately $300.4 million, of which approximately $300 million related to the Indore Impact. This decrease was partially offset by new product sales, primarily in Developed Markets, of approximately $146.4 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.

Previous wording

Net sales from Greater China increased by $11.6 million or 2% for the three months ended March 31, 2025 when compared to the prior year period. The unfavorable impact of foreign currency translation was approximately $12.0 million, or 2%. Constant currency net sales increased by approximately $24.1 million or 4% when compared to the prior year period, driven by strong growth across multiple channels, including e-commerce, retail, and private hospitals. Divestitures did not have a significant impact on the net sales for the current year period.

Current wording

Net sales from Greater China increased by $61.5 million or 6% for the six months ended June 30, 2025 when compared to the prior year period. The unfavorable impact of foreign currency translation was approximately $11.6 million, or 1%. Constant currency net sales increased by approximately $73.6 million or 7% when compared to the prior year period, primarily driven by strong growth across multiple channels, including e-commerce, retail, and private hospitals, as well as customer purchasing patterns. Divestitures did not have a significant impact on the net sales in either period.

Previous wording

Net sales from JANZ decreased by $41.7 million or 13% for the three months ended March 31, 2025 when compared to the prior year period. This decrease was partially driven by the unfavorable impact of foreign currency translation of approximately $12.3 million, or 4%. In addition, net sales decreased by approximately $9.7 million, or 3%, due to the inclusion of net sales in the prior year period related to divestitures that closed during 2024. Constant currency net sales from the remaining business decreased by approximately $19.7 million, or 6%, when compared to the prior year period, driven primarily by lower net sales of existing products in Japan as a result of government price reductions and additional competition, and by the Indore Impact of approximately $3.0 million.

Current wording

Net sales from JANZ decreased by $85.6 million or 13% for the six months ended June 30, 2025 when compared to the prior year period. Net sales decreased by approximately $20.8 million, or 3%, due to the inclusion of net sales in the prior year period related to divestitures that closed during 2024. This decrease was also partially driven by the unfavorable impact of foreign currency translation of approximately $7.5 million, or 1%. Constant currency net sales from the remaining business decreased by approximately $57.3 million, or 9%, when compared to the prior year period, 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 $6 million.

Previous wording

Acquired IPR&D expense for the three months ended March 31, 2025 was $10.0 million, compared to $6.1 million for the comparable prior year period, an increase of $3.9 million. The current period expense is related to an upfront licensing payment for rights to cenerimod in Japan, South Korea and certain countries in the Asia-Pacific region.

Current wording

Acquired IPR&D expense for the six months ended June 30, 2025 was $10.0 million, compared to $(1.7) million for the comparable prior year period, an increase of $11.7 million. The current period expense is related to an upfront licensing payment for rights to cenerimod in Japan, South Korea and certain countries in the Asia-Pacific region.

Previous wording

SG&A expense for the three months ended March 31, 2025 was $948.1 million, compared to $1.02 billion for the comparable prior year period, a decrease of $69.4 million. The decrease was primarily due to the impact of the divestitures, and lower acquisition and divestiture-related costs of approximately $48.7 million. These decreases were partially offset by higher restructuring-related costs of approximately $56.7 million.

Current wording

SG&A expense for the six months ended June 30, 2025 was $1.88 billion, compared to $2.05 billion for the comparable prior year period, a decrease of $177.7 million. The decrease was primarily due to the impact of the divestitures, and lower acquisition and divestiture-related costs of approximately $108.9 million. These decreases were partially offset by higher restructuring costs of approximately $62.2 million.

Previous wording

The Company performed an interim goodwill impairment test as of March 31, 2025, and in conjunction with the interim goodwill impairment test, the Company recorded a goodwill impairment charge of $2.94 billion during the first quarter of 2025. Refer to Note 10 Goodwill and Intangible Assets in Part I, Item 1 of this Form 10-Q for more information.

Current wording

The Company performed an interim goodwill impairment test as of March 31, 2025, and in conjunction with the interim goodwill impairment test, the Company recorded a goodwill impairment charge of $2.94 billion in the first quarter of 2025. Refer to Note 10 Goodwill and Intangible Assets in Part I, Item 1 of this Form 10-Q for more information. During the prior year period, 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.

Previous wording

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 three months ended March 31, 2025 totaled $99.3 million of expense, compared to $139.1 million of income for the three months ended March 31, 2024, a decrease of $238.4 million.

Current wording

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 six months ended June 30, 2025 totaled $432.8 million of expense, compared to $133.0 million of income for the six months ended June 30, 2024, a decrease of $565.8 million.

Previous wording

For the three months ended March 31, 2025, the Company recognized an income tax benefit of $55.0 million, compared to an income tax provision of $90.7 million for the comparable prior year period, a change of $145.7 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 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.

Current wording

For the six months ended June 30, 2025, the Company recognized an income tax benefit of $267.5 million, compared to an income tax provision of $25.3 million for the comparable prior year period, a change of $292.8 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 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.

Previous wording

•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;

Current wording

•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, certain remediation activities, asset write-downs, including other-than-temporary impairments of investments in equity or debt instruments, or liability adjustments;

Previous wording

Reconciliation of U.S. GAAP Net (Loss) Earnings to Adjusted Net Earnings and U.S. GAAP EPS to Adjusted EPS

Current wording

Reconciliation of U.S. GAAP Net Loss to Adjusted Net Earnings and U.S. GAAP Loss Per Share to Adjusted EPS

Previous wording

A reconciliation between net (loss) earnings and diluted EPS as reported under U.S. GAAP, and adjusted net earnings and adjusted EPS for the periods shown follows:

Current wording

A reconciliation between net loss and diluted loss per share as reported under U.S. GAAP, and adjusted net earnings and adjusted EPS for the periods shown follows:

Previous wording

(a)For the three months ended March 31, 2025, includes a goodwill impairment charge of $2.94 billion as a result of the interim goodwill impairment test performed as of March 31, 2025.

Current wording

(a)For the six months ended June 30, 2025, includes a goodwill impairment charge of $2.94 billion as a result of the interim goodwill impairment test performed as of March 31, 2025.

Previous wording

(b)For the three months ended March 31, 2025, 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.

Current wording

(b)For the three and six months ended June 30, 2025, 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.

Previous wording

(d)For the three months ended March 31, 2025, charges include approximately $19.8 million in cost of sales, approximately $0.8 million in R&D, and approximately $72.3 million in SG&A.

Current wording

(d)For the three and six months ended June 30, 2025, charges include approximately $11.3 million and $31.1 million, respectively, in cost of sales, approximately $1.4 million and $2.2 million, respectively, in R&D, and approximately $14.0 million and $86.3 million, respectively, in SG&A.

Previous wording

(e)For the three months ended March 31, 2025, charges include incremental manufacturing variances at plants slated for sale or closure or undergoing remediation activities of approximately $31.7 million.

Current wording

(e)For the three and six months ended June 30, 2025, charges include incremental manufacturing variances at plants slated for sale or closure or undergoing remediation activities of approximately $36.7 million and $68.4 million, respectively.

Previous wording

(f)For the three months ended March 31, 2025, includes a loss of approximately $115.8 million as a result of remeasuring the CCPS in Biocon Biologics to fair value.

Current wording

(f)For the three and six months ended June 30, 2025, includes a loss of approximately $284.0 million and $399.8 million, respectively, as a result of remeasuring the CCPS in Biocon Biologics to fair value.

Previous wording

Below is a reconciliation of U.S. GAAP net (loss) earnings to EBITDA and adjusted EBITDA for the three months ended March 31, 2025 compared to the prior year period:

Current wording

Below is a reconciliation of U.S. GAAP net loss to EBITDA and adjusted EBITDA for the three and six months ended June 30, 2025 compared to the prior year period:

Previous wording

(c)See items detailed in the Reconciliation of U.S. GAAP Net (Loss) Earnings to Adjusted Net Earnings.

Current wording

(c)See items detailed in the Reconciliation of U.S. GAAP Net Loss to Adjusted Net Earnings.

Previous wording

Our primary source of liquidity is net cash provided by operating activities, which was $535.5 million for the three months ended March 31, 2025. We believe that net cash provided by operating activities and available liquidity will continue to allow us to meet our needs for working capital, capital expenditures, interest and principal payments on debt obligations, dividend payments, and share repurchases. 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.

Current wording

Our primary source of liquidity is net cash provided by operating activities, which was $755.2 million for the six months ended June 30, 2025. We believe that net cash provided by operating activities and available liquidity will continue to allow us to meet our needs for working capital, capital expenditures, interest and principal payments on debt obligations, dividend payments, and share repurchases. 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.

Previous wording

Net cash provided by operating activities decreased by $79.1 million to $535.5 million for the three months ended March 31, 2025, as compared to net cash provided by operating activities of $614.6 million for the three months ended March 31, 2024. 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.

Current wording

Net cash provided by operating activities decreased by $238.5 million to $755.2 million for the six months ended June 30, 2025, as compared to net cash provided by operating activities of $993.7 million for the six months ended June 30, 2024. Net cash provided by operating activities is derived from net loss adjusted for non-cash operating items, including 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.

Previous wording

Net cash used in financing activities was $467.0 million for the three months ended March 31, 2025, as compared to $425.6 million for the three months ended March 31, 2024, an increase of $41.4 million.

Current wording

Net cash used in investing activities was $117.6 million for the six months ended June 30, 2025, as compared to net cash from investing activities of $221.5 million for the six months ended June 30, 2024, a decrease of $339.1 million.