Viatris To Slash 9,000 Jobs; Street Sees 29% Upside

Viatris announced a restructuring plan under which the healthcare company plans to cut its total workforce by 20%, which would impact about 9,000 jobs.

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Viatris (VTRS), which was formed in November 2020 through the combination of Mylan and Pfizer’s Upjohn business, has plans to reduce its costs by at least $1 billion by the end of 2024 or sooner.

The company said that it plans to close or divest up to 15 manufacturing sites globally, including shuttering plants in Morgantown, West Virginia, Baldoyle, Ireland and Caguas, Puerto Rico, with it also closing two manufacturing facilities in India. As a result of the plant closures, Viatris expects to incur a pre-tax charge of about $500 million to $600 million, while it expects annual cost savings of about $250 million to $300 million after the implementation of the restructuring.

Viatris’ CEO Michael Goettler said, “The actions we are announcing today are consistent with our commitment to optimally design our new company to operate efficiently. This initiative is part of Viatris’ roadmap to ensure we can maximize long-term value creation for shareholders and for all stakeholders, including the patients and customers we serve.” (See VTRS stock analysis on TipRanks)

Earlier on Nov. 17, Barclays analyst Balaji Prasad lowered the price target to $25 (44.2% upside potential) from $27 but maintained a Buy rating on the stock. The analyst remains optimistic about Mylan’s “robust portfolio” of biosimilars. Prasad also believes that a “steady dividend could attract a broader investor base to shares.”

Meanwhile, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 4 Buys, 2 Holds and 1 Sell. The average price target stands at $22.33 and implies upside potential of about 28.8% to current levels. Shares have increased 11.6% since it was listed on the NASDAQ on Nov.12, 2020.