Viatris Annual Report 2021

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Viatris Annual Report 2021 Viatris Annual Report 2021 Form 10-K (NASDAQ:VTRS) Published: March 1st, 2021 PDF generated by stocklight.com UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☑ Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year Ended December 31, 2020 OR ☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to . Commission file number 001-39695 VIATRIS INC. (Exact name of registrant as specified in its charter) Delaware 83-4364296 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 1000 Mylan Boulevard, Canonsburg, Pennsylvania, 15317 (Address of principal executive offices)(Zip Code) (724) 514-1800 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of Each Class: Trading Symbol(s) Name of Each Exchange on Which Registered: Common Stock, par value $0.01 per share VTRS The NASDAQ Stock Market Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☑ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☑ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑ The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 26, 2020, the last business day of the registrant’s most recently completed second fiscal quarter: No established public trading market for the registrant’s common stock as of such date. The number of shares of common stock outstanding, par value $0.01 per share, of the registrant as of February 22, 2021 was1 ,207,082,624. INCORPORATED BY REFERENCE Part of Form 10-K into Which Document Document is Incorporated An amendment to this Form 10-K will be filed no later than 120 days after the close of registrant’s fiscal year. III VIATRIS INC. INDEX TO FORM 10-K For the Year Ended December 31, 2020 Page PART I ITEM 1. Business 8 ITEM 1A. Risk Factors 17 ITEM 1B. Unresolved Staff Comments 46 ITEM 2. Properties 46 ITEM 3. Legal Proceedings 46 PART II ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 47 ITEM 6. Selected Financial Data 49 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 50 ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk 78 ITEM 8. Financial Statements and Supplementary Data 80 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 158 ITEM 9A. Controls and Procedures 158 ITEM 9B. Other Information 158 PART III ITEM 10. Directors, Executive Officers and Corporate Governance 159 ITEM 11. Executive Compensation 159 ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 159 ITEM 13. Certain Relationships and Related Transactions, and Director Independence 159 ITEM 14. Principal Accounting Fees and Services 159 PART IV ITEM 15. Exhibits and Consolidated Financial Statement Schedules 160 Signatures 168 Glossary of Defined Terms Unless the context requires otherwise, references to “Viatris,” “the Company,” “we,” “us” or “our” in this 2020 Form 10-K (defined below) refer to Viatris Inc. and its subsidiaries. We also have used several other terms in this 2020 Form 10-K, most of which are explained or defined below. 2003 LTIP 2003 Long-Term Incentive Plan One-Time Special Performance-Based Five-Year Realizable Value 2014 Program Incentive Program adopted in February 2014 Abbott Abbott Laboratories AbbVie AbbVie Inc. Patient Protection and Affordable Care Act, as amended by the Health ACA Care and Education and Reconciliation Act Non-GAAP financial measure that the Company believes is appropriate to provide information to investors - EBITDA (defined below) is further adjusted for share-based compensation expense, litigation settlements, Adjusted EBITDA and other contingencies, net, restructuring and other special items Amgen Amgen Inc. and Amgen Manufacturing Limited AMP Average Manufacturer Price ANDA Abbreviated New Drug Application AOCE Accumulated other comprehensive earnings APIs Active pharmaceutical ingredients ARV Antiretroviral medicines ASC Accounting Standards Codification Aspen Aspen Global Incorporated ASU Accounting Standards Update Business Combination Agreement, dated as of July 29, 2019, as amended BCA from time to time, among Viatris, Mylan, Pfizer and certain of their affiliates BEAT Base Erosion Anti-Abuse Tax BIAM Biosimilar Initial Advisory Meeting Biocon Biocon Ltd. BPCIA Biologics Price Competition and Innovation Act of 2009 CARES Act Coronavirus Aid, Relief, and Economic Security Act CAT Competition Appeals Tribunal CCPA California Consumer Privacy Act of 2018 cGMP Current Good Manufacturing Practices Corporate Integrity Agreement, dated August 16, 2017, entered into CIA between the OIG-HHA, Mylan Inc. and Mylan Specialty L.P. CJEU European Court of Justice Used to define the three equity method investments the Company has in limited liability companies that own refined coal production plants whose clean energy investments activities qualify for income tax credits under the Code CMA Competition and Markets Authority CMS Centers for Medicare & Medicaid Services CNS Central Nervous System Code The U.S. Internal Revenue Code of 1986, as amended Refers to Mylan combining with Pfizer's Upjohn Business in a Reverse Combination Morris Trust transaction to form Viatris The $1.65 billion unsecured commercial paper program entered into as of November 16, 2020 by Viatris, as issuer, Mylan Inc., Utah Acquisition Sub Commercial Paper Program and Mylan II B.V., as guarantors, and certain dealers from time to time Commission European Commission Contribution Pfizer's contribution of the Upjohn Business to Viatris COPD Chronic obstructive pulmonary disease COSO Committee of Sponsoring Organizations of the Treadway Commission COVID-19 Novel coronavirus disease of 2019 Unsecured, short-term commercial paper notes issued pursuant to the CP Notes Commercial Paper Program DCGI Drug Controller General of India DEA U.S. Drug Enforcement Agency Viatris’ business segment that includes our operations primarily in the Developed Markets segment following markets: North America and Europe DGCL Delaware General Corporation Law Pfizer's distribution to Pfizer stockholders all the issued and outstanding Distribution shares of Upjohn Inc. DOJ U.S. Department of Justice Non-GAAP financial measure that the Company believes is appropriate to provide information to investors - U.S. GAAP net earnings (loss) adjusted for net contribution attributable to equity method investments, income tax EBITDA provision (benefit), interest expense and depreciation and amortization EDPA U.S. District Court for the Eastern District of Pennsylvania EMA European Medicines Agency Viatris’ business segment that includes, but is not limited to, our operations primarily in the following markets: Parts of Asia, the Middle East, South Emerging Markets segment and Central America, Africa, and Eastern Europe Prior to the EPD Business Acquisition, Abbott Laboratories non-U.S. EPD Business developed markets specialty and branded generics business Mylan N.V.'s acquisition of Mylan Inc. and the EPD Business on February EPD Business Acquisition 27, 2015 EU European Union EURIBOR Euro Interbank Offered Rate Exchange Act Securities Exchange Act of 1934, as amended The Facility The Novartis TOBI Podhaler® production facility in San Carlos, California FASB Financial Accounting
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