Viatris (VTRS) risk factors, FY2024 10-K

Other

1. 01Below is a summary of some of the more significant risks and uncertainties we face. This summary is not exhaustive and is qualified by reference to the full set of risk factors set forth in this Part I, Item 1A
2. 02which could result in substantial monetary damages, impact our ability to launch a product and/or our ability to continue marketing a product, and/or force us to expend substantial resources in resulting litigation, the outcome of which is uncertain

Strategic Risks

1. 03We may not realize the intended benefits of, or achieve the intended goals or outlooks with respect to, our strategic initiatives and priorities, including divestitures, acquisitions or other potential transactions
2. 04There are ongoing risks and uncertainties associated with our recent divestitures, one or more of which could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price
3. 05divestitures, including maintaining employee morale and retaining key management and other employees to provide the transition services and to operate our retained business, and managing stranded costs
4. 06The integration of acquired businesses as well as restructuring programs have presented and may in the future present significant challenges
5. 07We have and may continue to experience pressure on the pricing of and reimbursements for certain of our products due to pricing controls, social or government pressure to lower the cost of drugs, and consolidation across the supply chain
6. 08Healthcare reform legislation could have a material adverse effect on our business
7. 09We have significant operations globally, which exposes us to the risks inherent in conducting our business internationally
8. 10Charges to earnings resulting from acquisitions could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price
9. 11A significant portion of these adjustments could be accounted for as expenses that will decrease our net income and earnings per share for the periods in which those costs are incurred
10. 12The pharmaceutical drug supply is vulnerable to illegal counterfeiting and the presence of counterfeit or IP-infringing products in a growing number of markets, including widespread sales over the internet
11. 13We face vigorous competition that threatens the commercial acceptance and pricing of our products
12. 14A relatively small group of products may represent a significant portion of our revenues, net sales, gross profit, or net earnings from time to time

Operational Risks

1. 15Current and changing economic conditions, including inflation, may adversely affect our industry, business, partners and suppliers
2. 16Failure to comply with applicable environmental and occupational health and safety laws and regulations worldwide could adversely impact our business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price
3. 17The pharmaceutical industry is heavily regulated, and we face significant costs and uncertainties associated with our efforts to comply with applicable laws and regulations
4. 18The occurrence of any of the above risks could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price
5. 19If we are unable to successfully introduce new products in a timely manner, our future revenue and profitability may be adversely affected
6. 20In the EU and other countries and regions, there is no exclusivity period for the first generic product. The European Commission or national regulatory agencies may grant marketing authorizations to any number of generics
7. 21We expend a significant amount of resources on R&D efforts that may not lead to successful product introductions
8. 22our collaboration partners may experience delays in our ongoing or future clinical trials, and we do not know whether planned clinical trials will begin or enroll subjects on time, need additional financing, need to be redesigned, or be completed on schedule, if at all
9. 23Even if our products in development receive regulatory approval, such products may not achieve expected levels of market acceptance
10. 24Our business is highly dependent upon market perceptions of us, our products and brands, and the safety and quality of our products and brands, as well as the effectiveness of our sales and marketing activities, and we may be adversely impacted by negative publicity or findings
11. 25A significant portion of our revenues is derived from sales to a limited number of customers
12. 26We have a limited number of manufacturing facilities and certain third-party suppliers produce a substantial portion of our API and products, some of which require a highly exacting and complex manufacturing process
13. 27Our future success is highly dependent on our ability to attract, motivate and retain key personnel
14. 28We rely on the effectiveness of our patents, trademarks, confidentiality agreements and other measures to protect our intellectual property rights
15. 29We are involved in various legal proceedings and certain government inquiries and may experience unfavorable outcomes of such proceedings or inquiries
16. 30We are increasingly dependent on IT and information systems and our systems and infrastructure face certain risks, including cybersecurity and data leakage risks
17. 31We are subject to data privacy and security laws and regulations in many different jurisdictions and countries where we do business, and our or our vendors’ inability to comply could result in fines, penalties, or reputational damage, and could impact the way we operate our business
18. 32Similar initiatives could increase the cost of developing, implementing or maintaining our IT systems, require us to allocate more resources to compliance initiatives or increase our costs
19. 33Increasing scrutiny and evolving expectations from customers, regulators, governments, investors, lenders, employees, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks
20. 34Our business and operations are subject to risks related to climate change
21. 35There can be no guarantee that we will continue to pay dividends or repurchase shares under our share repurchase program
22. 36If the intercompany terms of cross border arrangements that we have among our subsidiaries are determined to be inappropriate or ineffective, our tax liability may increase
23. 37We may not be able to maintain competitive financial flexibility and our corporate tax rate which could adversely affect us and our shareholders
24. 38Unanticipated changes in our tax provisions or exposure to additional income tax liabilities and changes in income tax laws and tax rulings may have a significant adverse impact on our effective tax rate and income tax expense
25. 39Viatris may be subject to significant U.S. tax liabilities or be obligated to indemnify Pfizer for any such tax liability imposed on Pfizer in connection with the Combination
26. 40Currency fluctuations and changes in exchange rates have impacted and could continue to adversely affect our business, financial condition, results of operations, cash flows, ability to pay dividends or repurchase shares, and/or stock price
27. 41We have significant indebtedness, which could lead to adverse consequences or adversely affect our financial position and prevent us from fulfilling our obligations under such indebtedness, and any refinancing of this debt could be at significantly higher interest rates
28. 42We must maintain adequate internal controls and be able to provide an assertion as to the effectiveness of such controls on an annual basis
29. 43Viatris has suffered and in the future could suffer additional losses due to impairment charges
30. 44Viatris may be adversely affected by disruptions in the credit markets, including disruptions that reduce customers’ access to credit and increase the costs to customers of obtaining credit
31. 45Viatris has certain material obligations relating to defined benefit pension and termination benefit programs

General Risks

1. 46The market price of our common stock has been and may continue to be volatile, and the value of your investment could materially decline
2. 47The expansion of social media platforms presents new risks and challenges
3. 48Provisions in the Viatris Charter and Viatris Bylaws and of applicable law may prevent or delay an acquisition of Viatris, which could decrease the trading price of Viatris common stock
4. 49The exclusive forum provisions in the Viatris Charter could discourage lawsuits against Viatris and its directors and officers