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’ 2025 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) earnings for the three and six months ended June 30, 2026, and cash flows for the six months ended June 30, 2026 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’ 2025 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 and nine months ended September 30, 2026, and cash flows for the nine months ended September 30, 2026 are not necessarily indicative of the results to be expected for the full fiscal year or any other future period.

Previous wording

For more detailed information on the risks and uncertainties associated with Viatris, see the risks described in Part I, Item 1A in the 2025 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. 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). The contents of our website are not incorporated by reference in this Form 10-Q and shall not be deemed “filed” under the Securities Exchange Act of 1934, as amended. Viatris undertakes no obligation to update any statements herein for revisions or changes after the filing date of this Form 10-Q other than as required by law.

Current wording

For more detailed information on the risks and uncertainties associated with Viatris, see the risks described in Part I, Item 1A in the 2025 Form 10-K, Part II, Item 1A of this Form 10-Q, 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. 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). The contents of our website are not incorporated by reference in this Form 10-Q and shall not be deemed “filed” under the Securities Exchange Act of 1934, as amended. Viatris undertakes no obligation to update any statements herein for revisions or changes after the filing date of this Form 10-Q other than as required by law.

Previous wording

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 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.

Current wording

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 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. Regulatory approval, if and when obtained, may be limited in scope. Even if regulatory approvals for new products are obtained, the success of those products is dependent upon market acceptance.

Previous wording

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.

Current wording

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 throughout the world, 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.

Previous wording

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.

Current wording

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 three years ending 2028.

Previous wording

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. During the three and six months ended June 30, 2026, the Company recognized total charges of $27.3 million and $105.2 million, respectively, in the condensed consolidated statements of operations related to this restructuring program.

Current wording

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. During the three and nine months ended September 30, 2026, the Company recognized total charges of $52.1 million and $157.3 million, respectively, in the condensed consolidated statements of operations related to this restructuring program.

Previous wording

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 equity shares of Biocon were subject to a six-month lock up period. The Company completed the sale of its equity position in Biocon on July 14, 2026 for pre-tax total consideration of approximately $380 million, and recorded a pre-tax loss of $27.4 million in the third quarter of 2026. The pre-tax sale proceeds include the impacts of an approximate 2.7% block sale discount to market, transaction fees, and the strengthening of the U.S. dollar since the Company obtained the equity in January 2026. 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 the U.S. market. During the three and six months ended June 30, 2026, the Company recognized a (gain)/loss of approximately $(56.3) million and $8.6 million, respectively, as a result of changes in the fair value of the Biocon equity shares.

Current wording

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 equity shares of Biocon were subject to a six-month lock up period. The Company completed the sale of its equity position in Biocon on July 14, 2026 for pre-tax total consideration of approximately $380 million. The pre-tax sale proceeds include the impacts of an approximate 2.7% block sale discount to market, transaction fees, and the strengthening of the U.S. dollar since the Company obtained the equity in January 2026. 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 the U.S. market. During the three and nine months ended September 30, 2026, the Company recognized a pre-tax loss of approximately $27.4 million and $36.0 million, respectively, as a result of changes in the fair value and subsequent sale of the Biocon equity shares.

Previous wording

In May 2026, the FDA inspected the facility and issued Form 483 observations. The Company responded to the Form 483 observations and promptly initiated a comprehensive remediation plan. The Company has also engaged independent third-party subject matter experts to support its remediation plan. Activities under the remediation plan are ongoing and have led to intermittent disruptions at the facility.

Current wording

In May 2026, the FDA inspected the facility and issued Form 483 observations. The Company responded to the Form 483 observations and promptly initiated a comprehensive remediation plan. The Company has also engaged independent third-party subject matter experts to support its remediation plan. While production at the facility had resumed, the temporary suspension of manufacturing and activities under the remediation plan led to disruptions at the facility. The estimated negative impact of product supply in the third quarter of 2026 to total revenues was approximately $100 million.

Previous wording

During the three and six months ended June 30, 2026, the Company recognized total charges of $14.9 million and $86.8 million, respectively, within Cost of Salesin the condensed consolidated statements of operations primarily related to the write off of inventory and fixed assets damaged in the fire and incremental manufacturing variances. The Company believes it has certain insurance coverages for these losses, including for assets and business interruption. In the event the plant cannot be returned to sustained 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.

Current wording

During the three and nine months ended September 30, 2026, the Company recognized total charges of $11.8 million and $98.6 million, respectively, within Cost of Salesin the condensed consolidated statements of operations primarily related to the write off of inventory and fixed assets damaged in the fire and incremental manufacturing variances. The Company believes it has certain insurance coverages for these losses, including for assets and business interruption. In the event the plant cannot be returned to sustained 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.

Previous wording

The Company has been impacted by and continues to face potential risks associated with the manufacture and supply of its products (including at its Indore and Nashik manufacturing facilities as discussed above), including temporary facility shutdowns, regulatory inspections, the issuance of observations by government authorities, enforcement actions, including warning letters and import alerts, quality control or compliance issues, and operational disruptions affecting the Company or its third-party contract manufacturers and suppliers. These events have resulted in and may in the future result in delays in production, product launches, interruptions in product supply, increased operating costs, or reduced product availability, which could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares and/or stock price.

Current wording

The Company has been impacted by and continues to face potential risks associated with the manufacture and supply of its products (including at its Indore and Nashik manufacturing facilities as discussed above), including temporary facility shutdowns, regulatory inspections, the issuance of observations by government authorities, enforcement actions, including warning letters and import alerts, quality control or compliance issues, and operational disruptions affecting the Company or its third-party contract manufacturers and suppliers. These events have resulted in and may in the future result in delays in production, product launches, interruptions in product supply, increased operating costs, or reduced product availability, one or more of which could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares and/or stock price.

Previous wording

During the three and six months ended June 30, 2026, the Company repurchased approximately 9.4 million shares of common stock at a cost of approximately $150.0 million under the program. During the three and six months ended June 30, 2025, the Company repurchased approximately 20.2 million shares of common stock at a cost of approximately $175.0 million, and 38.9 million shares of common stock at a cost of approximately $350.4 million, respectively, under the program. As of June 30, 2026, the Company had repurchased a total of approximately 103.5 million shares of common stock at a cost of approximately $1.15 billion under the program. Additionally, subsequent to June 30, 2026, the Company repurchased approximately 7.1 million shares of common stock at a cost of approximately $120.2 million under the program, bringing the total to approximately 110.6 million shares of common stock at a cost of approximately $1.27 billion under the program, in each case through and including August 4, 2026.

Current wording

During the three and nine months ended September 30, 2026, the Company repurchased approximately 8.9 million shares of common stock at a cost of approximately $150.0 million, and 18.3 million shares of common stock at a cost of approximately $300.0 million, respectively, under the program. During the three and nine months ended September 30, 2025, the Company repurchased approximately 6.8 million shares of common stock at a cost of approximately $67.9 million, and 45.6 million shares of common stock at a cost of approximately $418.3 million, respectively, under the program. As of September 30, 2026, the Company had repurchased a total of approximately 112.5 million shares of common stock at a cost of approximately $1.30 billion under the program.

Previous wording

The table below is a summary of the Company’s financial results for the three and six months ended June 30, 2026 compared to the prior year period:

Current wording

The table below is a summary of the Company’s financial results for the three and nine months ended September 30, 2026 compared to the prior year period:

Previous wording

(3)For the three months ended June 30, 2026, other revenues in Developed Markets, JANZ, and Emerging Markets were approximately $9.3 million, $0.1 million, and $1.5 million, respectively.

Current wording

(3)For the three months ended September 30, 2026, other revenues in Developed Markets, JANZ, and Emerging Markets were approximately $8.9 million, $3.9 million, and $2.0 million, respectively.

Previous wording

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

Current wording

(4)Amounts exclude intersegment revenue which is eliminated on a consolidated basis.

Previous wording

For the three months ended June 30, 2026, Viatris reported total revenues of $3.76 billion, compared to $3.58 billion for the comparable prior year period, representing an increase of $174.7 million, or 5%. Total revenues include both net sales and other revenues from third parties. Net sales for the current quarter were $3.75 billion, compared to $3.57 billion for the comparable prior year period, representing an increase of $176.9 million, or 5%. Other revenues for the current quarter were $10.9 million, compared to $13.1 million for the comparable prior year period.

Current wording

For the three months ended September 30, 2026, Viatris reported total revenues of $3.75 billion, compared to $3.76 billion for the comparable prior year period, representing a decrease of $10.4 million, or essentially flat. Total revenues include both net sales and other revenues from third parties. Net sales for the current quarter were $3.73 billion, compared to $3.75 billion for the comparable prior year period, representing a decrease of $12.8 million, or essentially flat. Other revenues for the current quarter were $14.8 million, compared to $12.4 million for the comparable prior year period.

Previous wording

The favorable impact of foreign currency translation was approximately $210.9 million, or 3%, primarily reflecting changes in the U.S. Dollar as compared to the currencies of subsidiaries in the EU and China. On a constant currency basis, net sales increased by approximately $232.5 million, or 3%, for the six months ended June 30, 2026 compared to the prior year period. The increase was the result of new product sales, primarily in Developed Markets, of approximately $171.8 million, and net base business growth of approximately $60.7 million, driven by strong net sales in Greater China. New product sales include new products launched in 2026 and the carryover impact of new products, including business development, launched within the last twelve months.

Current wording

The unfavorable impact of foreign currency translation was approximately $1.9 million. On a constant currency basis, net sales decreased by approximately $10.9 million, or essentially flat, for the three months ended September 30, 2026 compared to the prior year period, as new product sales, primarily in Developed Markets, of approximately $115.2 million, were largely offset by net base business erosion of approximately $126.1 million, driven primarily by continued supply constraints in Europe and Emerging Markets and additional competition on certain products. This was partially offset by the strength of the North American business, including estradiol transdermal products sales, and strong net sales in Greater China. New product sales include new products launched in 2026 and the carryover impact of new products, including business development, launched within the last twelve months.

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 37% for the three months ended June 30, 2026 and 2025, 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 41% and 38% for the three months ended September 30, 2026 and 2025, respectively.

Previous wording

1%. Constant currency net sales increased by approximately $43.6 million, or 2%, when compared to the prior year period, driven primarily by new product sales, primarily octreotide acetate in North America, and strong sales of estradiol transdermal systems. This was partially offset by lower net sales of certain existing products, primarily as a result of certain supply constraints in Europe. Net sales within North America totaled approximately $882.7 million and net sales within Europe totaled approximately $1.31 billion.

Current wording

Net sales from Developed Markets decreased by $39.7 million, or 2%, for the three months ended September 30, 2026 when compared to the prior year period. The unfavorable impact of foreign currency translation was approximately $16.3 million, or 1%. Constant currency net sales decreased by approximately $23.4 million, or 1%, when compared to the prior year period, driven primarily by lower net sales of certain existing products, primarily as a result of certain continued supply constraints in Europe and additional competition on certain products. This was partially offset by new product sales, primarily octreotide acetate, and higher sales of estradiol transdermal products of approximately $126.0 million, both in North America. Net sales within North America totaled approximately $923.4 million and net sales within Europe totaled approximately $1.29 billion.

Previous wording

Net sales from Greater China increased by $124.9 million, or 21%, for the three months ended June 30, 2026 when compared to the prior year period. The favorable impact of foreign currency translation was approximately $28.6 million, or 5%. Constant currency net sales increased by approximately $96.3 million, or 16%, when compared to the prior year period, primarily driven by strong growth across multiple channels, including e-commerce and retail, driven primarily by increased marketing and selling efforts.

Current wording

Net sales from Greater China increased by $87.4 million, or 14%, for the three months ended September 30, 2026 when compared to the prior year period. The favorable impact of foreign currency translation was approximately $26.3 million, or 4%. Constant currency net sales increased by approximately $61.1 million, or 10%, when compared to the prior year period, primarily the result of strong growth across multiple channels, including e-commerce, retail, and hospitals, driven primarily by increased marketing and selling efforts.

Previous wording

Net sales from Emerging Markets increased by $2.7 million, or essentially flat, for the six months ended June 30, 2026 when compared to the prior year period. The favorable impact of foreign currency translation was approximately $12.5 million, or 1%. Constant currency net sales decreased by approximately $9.8 million, or 1%, when compared to the prior year period, primarily driven by lower ARV volumes related to continued supply constraints. This decrease was partially offset by higher pricing and volumes of existing products in certain Middle Eastern and Asian countries.

Current wording

Net sales from Emerging Markets decreased by $41.3 million, or 7%, for the three months ended September 30, 2026 when compared to the prior year period. The unfavorable impact of foreign currency translation was approximately $6.9 million, or 1%. Constant currency net sales decreased by $34.4 million, or 6%, when compared to the prior year period, primarily driven by lower ARV volumes related to continued supply constraints. This decrease was partially offset by new product sales and higher net sales of existing products in certain Middle Eastern and Asian countries.

Previous wording

Gross profit for the three months ended June 30, 2026 was $1.46 billion and gross margins were 39%. For the three months ended June 30, 2025, gross profit was $1.33 billion and gross margins were 37%. The changes in gross profit and gross margins are primarily driven by product mix. Adjusted gross margins were approximately 57% for the three months ended June 30, 2026, compared to approximately 57% for the three months ended June 30, 2025.

Current wording

Cost of sales decreased from $2.39 billion for the three months ended September 30, 2025 to $2.31 billion for the three months ended September 30, 2026, a decrease of $76.9 million. Gross profit for the three months ended September 30, 2026 was $1.44 billion and gross margins were 38%. For the three months ended September 30, 2025, gross profit was $1.37 billion and gross margins were 36%.

Previous wording

The following table includes the losses/(gains) recognized in litigation settlements and other contingencies, net during the three months ended June 30, 2026 and 2025, respectively:

Current wording

The following table includes the (gains)/losses recognized in litigation settlements and other contingencies, net during the three months ended September 30, 2026 and 2025, respectively:

Previous wording

Other (income) expense, net includes gains and losses from divestitures of businesses, changes in the fair value of equity securities, foreign exchange, expense (income) related to post-employment benefit plans, TSA income, and interest and dividend income. Other (income) expense, net for the three months ended June 30, 2026 totaled $50.4 million of income, compared to $333.5 million of expense for the three months ended June 30, 2025, a change of $383.9 million.

Current wording

Other expense, net includes gains and losses from divestitures of businesses, changes in the fair value of equity securities, foreign exchange, expense (income) related to post-employment benefit plans, TSA income, and interest and dividend income. Other expense, net for the three months ended September 30, 2026 totaled $21.2 million, compared to $67.1 million for the three months ended September 30, 2025, a decrease of $45.9 million.

Previous wording

The change was primarily driven by a loss in the prior year period of $399.8 million as a result of changes in the fair value of the CCPS in Biocon Biologics, and a decrease in the loss on divestitures of $66.8 million. This was partially offset by a loss of $8.6 million recorded in the current year period as a result of changes in the fair value of equity shares of Biocon. Refer to Note 10 Financial Instruments and Risk Management included in Part I, Item 1 of this Form 10-Q for more information with respect to the Biocon equity shares.

Current wording

The decrease was primarily driven by a loss in the prior year period of $100.0 million as a result of changes in the fair value of the CCPS in Biocon Biologics. This was partially offset by a loss of $27.4 million in the current year period as a result of changes in the fair value and subsequent sale of equity shares of Biocon. Refer to Note 11 Financial Instruments and Risk Management included in Part I, Item 1 of this Form 10-Q for more information with respect to the Biocon equity shares.

Previous wording

For the three months ended June 30, 2026, the Company recognized an income tax provision of $54.8 million, compared to an income tax benefit of $(212.5) million for the comparable prior year period, a change of $267.3 million. The current quarter was negatively impacted by losses in jurisdictions for which minimal benefit can be recognized and accruals for certain international tax matters, partially offset by the release of reserves for uncertain tax positions due to statute of limitations expirations. The benefit in the prior year period was primarily driven by the loss before income taxes. The current quarter and prior quarter provisions were 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 three months ended September 30, 2026, the Company recognized an income tax provision of $453.2 million, compared to an income tax provision of $120.3 million for the comparable prior year period, a change of $332.9 million. The current quarter was negatively impacted by losses in jurisdictions for which minimal benefit can be realized. The provision in the prior year period was primarily driven by reduced tax benefits related to certain remediation costs as well as certain discrete tax items. The current quarter and prior quarter provisions were impacted by the levels of income and the changing mix at which it is earned in jurisdictions with differing tax rates.

Previous wording

(3)For the six months ended June 30, 2026, other revenues in Developed Markets, JANZ, and Emerging Markets were approximately $14.5 million, $0.2 million, and $3.5 million, respectively.

Current wording

(3)For the nine months ended September 30, 2026, other revenues in Developed Markets, JANZ, and Emerging Markets were approximately $23.4 million, $4.1 million, and $5.5 million, respectively.

Previous wording

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

Current wording

(4)Amounts exclude intersegment revenue which is eliminated on a consolidated basis.

Previous wording

For the six months ended June 30, 2026, Viatris reported total revenues of $7.27 billion, compared to $6.84 billion for the comparable prior year period, representing an increase of $437.4 million, or 6%. Total revenues include both net sales and other revenues from third parties. Net sales for the six months ended June 30, 2026 were $7.26 billion, compared to $6.81 billion for the comparable prior year period, representing an increase of $443.4 million, or 7%. Other revenues for the six months ended June 30, 2026 were $18.2 million, compared to $24.2 million for the comparable prior year period.

Current wording

For the nine months ended September 30, 2026, Viatris reported total revenues of $11.02 billion, compared to $10.60 billion for the comparable prior year period, representing an increase of $427.0 million, or 4%. Total revenues include both net sales and other revenues from third parties. Net sales for the nine months ended September 30, 2026 were $10.99 billion, compared to $10.56 billion for the comparable prior year period, representing an increase of $430.6 million, or 4%. Other revenues for the nine months ended September 30, 2026 were $33.0 million, compared to $36.6 million for the comparable prior year period.

Previous wording

The favorable impact of foreign currency translation was approximately $49.2 million, or 1%, primarily reflecting changes in the U.S. Dollar as compared to the currencies of subsidiaries in the EU and China. On a constant currency basis, net sales increased by approximately $127.7 million, or 4%, for the three months ended June 30, 2026 compared to the prior year period. The increase was the result of new product sales, primarily in Developed Markets, of approximately $101.0 million, and net base business growth of approximately $26.7 million, driven by strong net sales in Greater China. New product sales include new products launched in 2026 and the carryover impact of new products, including business development, launched within the last twelve months.

Current wording

The favorable impact of foreign currency translation was approximately $209.1 million, or 2%, primarily reflecting changes in the U.S. Dollar as compared to the currencies of subsidiaries in Europe and China. On a constant currency basis, net sales increased by approximately $221.5 million, or 2%, for the nine months ended September 30, 2026 compared to the prior year period. The increase was the result of new product sales, primarily in Developed Markets, of approximately $286.9 million, partially offset by net base business erosion of approximately $65.4 million, driven by continued supply constraints in Europe and Emerging Markets and additional competition on certain products. This was partially offset by the strength of the North American business, including estradiol transdermal products sales, and strong net sales in Greater China. New product sales include new products launched in 2026 and the carryover impact of new products, including business development, launched within the last twelve months.

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 39% and 37% for the six months ended June 30, 2026 and 2025, 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 40% and 37% for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

Net sales from Developed Markets increased by $203.5 million, or 5%, for the six months ended June 30, 2026 when compared to the prior year period. The favorable impact of foreign currency translation was approximately $148.5 million, or 4%. Constant currency net sales increased by approximately $55.0 million, or 1%, when compared to the prior year period, driven by new product sales, primarily octreotide acetate in North America, and strong sales of estradiol transdermal systems. This was partially offset by lower net sales of certain existing products, primarily as a result of certain supply constraints in Europe. Net sales within North America totaled approximately $1.71 billion and net sales within Europe totaled approximately $2.50 billion.

Current wording

Net sales from Developed Markets increased by $163.8 million, or 3%, for the nine months ended September 30, 2026 when compared to the prior year period. The favorable impact of foreign currency translation was approximately $132.3 million, or 2%. Constant currency net sales increased by approximately $31.5 million, or 1%, when compared to the prior year period, driven by new product sales, primarily octreotide acetate, and higher sales of estradiol transdermal products of approximately $234.1 million, both in North America. This was partially offset by lower net sales of certain existing products, primarily as a result of continued supply constraints in Europe and additional competition on certain products. Net sales within North America totaled approximately $2.63 billion and net sales within Europe totaled approximately $3.80 billion.

Previous wording

Net sales from Greater China increased by $249.5 million, or 22%, for the six months ended June 30, 2026 when compared to the prior year period. The favorable impact of foreign currency translation was approximately $54.2 million, or 5%. Constant currency net sales increased by approximately $195.3 million, or 17%, when compared to the prior year period, primarily the result of strong growth across multiple channels, including e-commerce and retail, driven primarily by increased marketing and selling efforts.

Current wording

Net sales from Greater China increased by $336.9 million, or 19%, for the nine months ended September 30, 2026 when compared to the prior year period. The favorable impact of foreign currency translation was approximately $80.5 million, or 5%. Constant currency net sales increased by approximately $256.4 million, or 15%, when compared to the prior year period, primarily the result of strong growth across multiple channels, including e-commerce, retail, and hospitals, driven primarily by increased marketing and selling efforts.

Previous wording

Net sales from JANZ decreased by $12.3 million, or 2%, for the six months ended June 30, 2026 when compared to the prior year period. The unfavorable impact of foreign currency translation was approximately $4.3 million, or 1%. Constant currency net sales decreased by approximately $8.0 million, or 1%, when compared to the prior year period, driven primarily by lower net sales of existing products in Australia due to additional competition, partially offset by new product sales.

Current wording

Net sales from JANZ decreased by $31.5 million, or 4%, for the nine months ended September 30, 2026 when compared to the prior year period. The unfavorable impact of foreign currency translation was approximately $9.3 million, or 1%. Constant currency net sales decreased by approximately $22.2 million, or 2%, when compared to the prior year period, driven primarily by lower net sales of existing products due to additional competition in Australia and government price reductions in Japan, partially offset by new product sales, primarily in Japan.

Previous wording

Net sales from Emerging Markets decreased by $12.8 million, or 2%, for the three months ended June 30, 2026 when compared to the prior year period. The unfavorable impact of foreign currency translation was approximately $2.1 million, or less than 1%. Constant currency net sales decreased by $10.7 million, or 2%, when compared to the prior year period, primarily driven by lower ARV volumes related to continued supply constraints. This decrease was partially offset by higher pricing and volumes of existing products in certain Middle Eastern and Asian countries.

Current wording

Net sales from Emerging Markets decreased by $38.6 million, or 2%, for the nine months ended September 30, 2026 when compared to the prior year period. The favorable impact of foreign currency translation was approximately $5.6 million, or less than 1%. Constant currency net sales decreased by approximately $44.2 million, or 3%, when compared to the prior year period, primarily driven by lower ARV volumes related to continued supply constraints. This decrease was partially offset by higher pricing and volumes of existing products in certain Middle Eastern and Asian countries.

Previous wording

Cost of sales increased from $4.34 billion for the six months ended June 30, 2025 to $4.66 billion for the six months ended June 30, 2026. The increase in cost of sales was largely driven by the increase in net sales, higher restructuring costs, and higher costs associated with other special items, which include certain costs for plants slated for sale or closure or undergoing remediation activities, including $86.8 million related to the write off of inventory and fixed assets damaged in the fire at the Nashik manufacturing facility and incremental manufacturing variances.

Current wording

Cost of sales increased from $6.73 billion for the nine months ended September 30, 2025 to $6.97 billion for the nine months ended September 30, 2026, an increase of $240.9 million. The increase in cost of sales was largely driven by the increase in net sales, higher restructuring costs primarily related to the EWSR, and higher costs associated with other special items, which include certain costs for plants slated for sale or closure or undergoing remediation activities, including $98.6 million related to the write off of inventory and fixed assets damaged in the fire at the Nashik manufacturing facility and incremental manufacturing variances.

Previous wording

Gross profit for the six months ended June 30, 2026 was $2.61 billion and gross margins were 36%. For the six months ended June 30, 2025, gross profit was $2.49 billion and gross margins were 36%. The changes in gross profit and gross margins are primarily related to the increase in net sales and cost of sales discussed above. Adjusted gross margins were approximately 57% for the six months ended June 30, 2026, compared to approximately 56% for the six months ended June 30, 2025.

Current wording

Gross profit for the nine months ended September 30, 2026 was $4.05 billion and gross margins were 37%. For the nine months ended September 30, 2025, gross profit was $3.87 billion and gross margins were 36%. The changes in gross profit and gross margins are primarily related to the increase in net sales and cost of sales discussed above. Adjusted gross margins were approximately 57% for the nine months ended September 30, 2026, compared to approximately 56% for the nine months ended September 30, 2025.

Previous wording

A reconciliation between cost of sales, as reported under U.S. GAAP, and adjusted cost of sales and adjusted gross margin for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 is as follows:

Current wording

A reconciliation between cost of sales, as reported under U.S. GAAP, and adjusted cost of sales and adjusted gross margin for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 is as follows:

Previous wording

R&D expense for the three months ended June 30, 2026 was $248.3 million, compared to $218.8 million for the comparable prior year period, an increase of $29.5 million. This increase was primarily the result of higher expenses for the selatogrel and cenerimod development programs.

Current wording

R&D expense for the nine months ended September 30, 2026 was $728.6 million, compared to $691.2 million for the comparable prior year period, an increase of $37.4 million. This increase was primarily the result of higher spending on the selatogrel and cenerimod development programs.

Previous wording

Acquired IPR&D expense for the six months ended June 30, 2026 was $0.2 million, compared to $10.0 million for the comparable prior year period, a decrease of $9.8 million. The current period expense was related to an upfront payment for a licensing deal, and the prior period expense was 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 nine months ended September 30, 2026 was $5.2 million, compared to $10.0 million for the comparable prior year period, a decrease of $4.8 million. The current period expense was related to an upfront payment for a licensing deal, and the prior period expense was 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 six months ended June 30, 2026 was $2.06 billion, compared to $1.88 billion for the comparable prior year period, an increase of $186.5 million. The increase was primarily driven by a charge of $177.8 million related to the planned sale of the product rights for Tyrvaya®. Refer to Note 4 Divestitures in Part I, Item 1 of this Form 10-Q for more information.

Current wording

SG&A expense for the nine months ended September 30, 2026 was $3.01 billion, compared to $2.76 billion for the comparable prior year period, an increase of $250.7 million. The increase was primarily driven by a charge of $177.0 million related to the sale of the product rights for Tyrvaya® (refer to Note 5 Divestitures in Part I, Item 1 of this Form 10-Q for more information), and certain costs related to the EWSR.