Shares of the global healthcare company Viatris (NASDAQ:VTRS) are rising in the pre-market session today after it received an offer to divest substantially all of its over-the-counter (OTC) business and agreed to divest its Women’s Healthcare business and Active Pharmaceutical Ingredients (API) business in India. The company is also divesting commercialization rights in certain non-core markets.
However, Viatris is retaining the rights for Viagra, Dymista, and select OTC assets in certain markets. The move completes Viatris’ planned divestitures for 2023. The company expects net proceeds of ~$5.2 billion from the divestments.
Viatris plans to use the funds raised for paring down debt to reach a gross leverage target of 3x in the first half of 2024. Importantly, the divestments are expected to help simplify Viatris’ organizational structure with the transition of 12 facilities and nearly 15% of its workforce. The company expects the divestitures to be completed by the end of H1 2024.
Is VTRS a Good Stock to Buy?
Overall, the Street has a consensus price target of $12.25 on Viatris, alongside a Hold consensus rating. This implies a 24.2% potential upside in the stock.
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