Viatris Inc. (VTRS) Earnings Call Transcript & Summary

Good morning, everyone, and thanks for joining the next session with Viatris. We're very pleased to have the Viatris management team here with us today, including the company's CEO, Michael Goettler; President, Rajiv Malik; and CFO, Sanjeev Narula. I'd just like to remind everyone that if you would like to ask a question during the course of this presentation, you can either e-mail me directly or use the Q&A feature through the webcast. I'm going to turn the floor over to Michael for some prepared remarks, and then we'll jump into the Q&A session. So Michael, thanks very much for your time. Let me hand it over to you.

Yes, good morning, Nathan, and thanks for having us. We're glad to be here. And thanks for allowing me some upfront remarks because Viatris is still a new company. We have deep roots, long roots, right, but we're new as a company and maybe helpful to iterate just a few key points before we key up the discussion. So when we go back to the beginning of our company, November 2020. When we launched Viatris in November, we had the vision really to create a new kind of health care company, one that's differentiated, that's differentiated by having a truly global operating platform that has significant scale. We have commercial capabilities now across all geographies around the world, expertise in science, manufacturing, legal, IP. So that's one. On the portfolio side, we have a broad and diverse product portfolio, that includes brands, that includes generics, that includes complex generics and biosimilars. That portfolio is synergistic, but it's agnostic to any particular therapeutic area, dosage form or delivery mechanisms, right? So that diversity gives us stability, allows us to balance any kind of negative impact in any particular part of the business, but jumping on opportunities as we see them. A strong R&D platform that is proven, well positioned to deliver a broad pipeline of complex and novel products, including our late-stage biosimilars and we have over 10 biosimilars in development in oncology, ophthalmology, immunology, diabetes and others. And last but not least, a unique platform. All of that makes a unique platform that makes us really the partner of choice for many companies, bringing together operational, scientific, commercial, regulatory capabilities with an unparalleled reach to connect more patients to more products around the world and we call that our Global Healthcare Gateway. So that's what we've built, right? And then very recently, we published our first full quarter, quarter 1 results, and we saw really underlying strengths to our business. And importantly, I think that strength of our results starts to validate that diversified robust business model that differentiates us as a company. And even before that, before we published those results, even before day 1, we've already laid out a very clear road map for shareholder value creation. And I can tell you we're firing in all cylinders, executing against that road map. That includes solid progress towards integrating our business, unlocking value, increasing operating leverage with $1 billion in synergies over the next 3 years, $500 million of which in this year alone. We're committed to an investment-grade balance sheet, with a disciplined capital allocation strategy to drive shareholder return and that includes our path to delevering. We committed $6.5 billion in debt reduction and have a long-term leverage ratio of 2.5. We initiated now our first quarterly dividend of $0.11 a share. That's consistent with what we said, 25% of our midpoint of the free cash flow guidance for this year and $0.11 annualized is just shy of 3% yield. So we expect to grow that in the coming years, subject to Board approval, in absolute terms, to grow that dividend. So I think that's our story. I just want to put that as a baseline out there. Thanks for helping -- allowing me to summarize that. I'm very pleased to be at this conference and take any questions you might have. Thank you, Nate.

Great. I think at the Analyst Day, if I go back, you broke the road map down into essentially 2 sections, now kind of through 2023 and then 2024 and beyond. I guess maybe to kind of tie your comments together, kind of what do you feel like are the key priorities for the business in this first kind of 3-year period that you want to see that would put the company on a path to achieve long-term revenue and EBITDA growth in that 2024 and beyond period?

Yes. Thank you, Nate. And look, what we said at the Analyst Day, we still see that. Absolutely we executed against that. That we see this as a kind of a 2-horizon kind of strategy, where you have the first horizon, maybe around 3 years and the second horizon. In that first horizon, our priority clearly is on delevering and rebalancing that business that we have, right? We really have great building blocks to build to it. But putting it all together, that means we see 2021 as our trough year. We consistently said that. We recently defined what that means to be a trough year. That means the midpoint of our guidance of $6.2 billion being the floor of our business going forward. We're focused on realizing our cost synergies. We're well on track to do that, re-basing the cost base of our business by doing that. We're focused on strong free cash flow generation, and that free cash flow will grow over time as the onetime cost over those 3 years decline, right? There's a natural growth. Even if everything else is constant, there's a natural growth build in there. And that free cash flow allows us then to, as we did initiate a dividend and subject to Board approval, grow that dividend over time and repay the $6.5 billion in debt and build the foundation for Horizon 2. And then the Horizon 2 is really about modest, durable revenue growth, increasing the operating leverage. And then we have significantly increased financial flexibility because of that strong cash flow to either grow the dividend more, delever more, invest in our pipeline, invest in external or internal opportunities, opportunistic business development or potentially once we reach our long-term target on share repurchases. These are the kind of 2 buckets that we see. The foundation will be made for that in these next few years.

And you've given a lot of detail on 2021 and the moving pieces on both top line and EBITDA. I guess as we think about going from this trough this year to beyond that, starting next year, what do you feel like are the key swing factors that investors should have in mind when they think about their model, both on the positive and headwind front that will determine kind of their growth in 2022 and 2023?

Yes. So we're not giving long-term guidance, as you know, we kind of defined the floor. We're going through our strategic plan process. We'll let that play out, and we're committed to giving a bit more color at the end of the year. But what gives us confidence in the 6.2 number is that we understand what these headwinds and tailwinds really are. We know what's at our disposal. Let me maybe ask Sanjeev and Rajiv to add to that. But let me just walk through kind of if you look at the revenue, right, you have to realize that we have a much more diversified revenue base, right? And that helps us to absorb any kind of headwinds that we signed in any particular part of the business. We do understand very well what our base business erosion is. We have an implicit base business erosion in our business, but we now also have no major -- after this year, no major LOEs going forward, right? So that's, I think, is an important factor to consider. We also understand what our pipeline can contribute, right? You take all of that together, and then we have the potential for revenue synergies. None of that baked into any numbers, but the potential is clearly there. So that gives you kind of the revenues. Clearly, we've laid out for this year some of the ups and downs, including Europe and China, et cetera, and we can talk about this. Then gross margin, we're very, very disciplined about how we rationalize our portfolio. That's an ongoing process that allows us to have some benefit on the gross margin as we rationalize the portfolio. And then last but not least, on SG&A, we get synergies. We typically have multiple levers, right, to continue to deliver, have confidence in that $6.2 billion adjusted EBITDA as a floor. And then again, later in the year, we'll get more color on that. Sanjeev?

Nate, if I could just jump in on the cash flow. I think the modeling part, as Michael pointed out right at the beginning. So take our guidance this year, which is [ 2150 ] mid part of our guidance in that, right? So I think in that we provided the details on the onetime cost, which is about roughly $1.5 billion this year. And we've got record to say that, that $1.5 billion costs will come down significantly over the next 2 years. And by the end of third year, I expect that cost to be in the range of what the legacy Mylan used to be, roughly about $500 million. So you can see that alone will drive cash flow improvement over the next 3 years that you can model then. And obviously, on top of that are 2 other factors. As our business, we fine-tuned the business in terms of EBITDA, operationally, what that drives from that perspective. And then also on the cash flow optimization work that we've initiated as a company. So that also will help on that. So clearly, that kind of give you the pieces to kind of figure out how the cash flow will model, which again, will grow significantly the next couple of years.

And Sanjeev, I can just follow up on that. So I think this year, there's $1.5 billion of onetime cash costs across a number of different buckets. So if I understood your comment correctly, you're saying that, that should go over the next 2 years down to $500 million, sort of the typical range that Mylan saw. So you're talking about sort of $1 billion step-up in free cash flow just from those factors over that couple of year period.

Absolutely right, Nate. That's exactly right. And then just stepping back, so the people understand the context behind $1.5 billion. We've initiated the synergy target, $1 billion synergy target, over the next 3 years. And that means impacting about 20 plants, impacting about 20% of our field force, all that drives the onetime cost. And as those plants get wrapped up as we realize those synergies, that cost will come down to the level that we just said.

And Sanjeev, maybe sticking with the guidance. As investors kind of look out to 2023, do you anticipate providing longer-term guidance for this first horizon 3-year period? And what factors or what things would you need to see to be comfortable to say, "Hey, okay, the business is in a position where we're comfortable giving this several year guidance to give investors this longer-term picture?"

Michael, let me speak and then you can jump in as well. So Michael has said that before. We will come back by the end of the year and talk about that long-term guidance look like. And the way I think about that is more in line of the EBITDA and the top line and then cash flow. So I think that's kind of what we said that before. And the reason for saying that is, Nate, we are kind of a company that has come together. We focused -- when we came together in November '16, focused on 1 year, and then we provided you transparency and the guidance for 1 year. Right now, we kicked off the strategic plan. The entire company is working on that. Commercial leaders are looking at bottoms-up buildup of SKU level, what that portfolio looks like for next several years and looking at all strategic levels that we need to be pulling to put together. That work is going on. That work will inform what the long-term guidance will look like. And at the right time, we'll come back to you about what that will look like, both for the top line, EBITDA and on the cash flow.

That's helpful. And maybe one last one on cash flow, and then I want to dig into some of the different areas of the business. But as cash flow grows, Sanjeev, how do you think about prioritizing uses of cash between reinvesting in the business, maybe looking at M&A or partnerships and then the debt paydown and dividend piece? Could you maybe just think about -- help us think about priorities for cash flow?

Great question, Nate. This question comes a lot. And I think one of the great trends that, as a company, we cut the capital deployment product base clear right at the beginning with the support from the Board. And we've said that our priorities are 2 pillars. One is the dividend, which we initiated, and we'll be paying out the first dividend in a couple of weeks on that, which is $0.11 per share for this year. And then second is the debt paydown, which Michael alluded to, $6.5 billion by end of 2023 and our long-term commitment to have an investment grade with a leverage of 2.5x. So those are given, right? That priority is given. And then with that priority, if you take into account, I think for near term, we obviously are focused on those, and then we'll see where we need to invest on BD opportunities, more tuck-in kind of areas or invest in our business, which we have an R&D budget of about $700 million. We continue to evaluate that in terms of where that business is going. But let's be clear about that. I think priorities were not going to come -- do any BD deals that come in our way from our priorities in terms of debt paydown of dividend. The last item, I'd say, we've come out with a dividend which is $0.11 for this year, and we've also said the dividend -- we expect the dividend dollar values to grow, obviously, with the Board decision as we go forward.

Great. Rajiv, maybe one for you. Starting at a high level, how should we think about the growth opportunity across the different geographies of the business? You've provided a breakdown between developing markets, JANZ, emerging markets and then China. Trying to put your commentary together from the Analyst Day, it seems like developing markets, JANZ, emerging markets, longer term, but once you get past some of the headwinds that are impacting this year, should be relatively stable, plus or minus. And then China feels like there's maybe more growth longer term, again, going through some headwinds near term maybe this year and maybe a little bit into next year. Is that, at a high level, the right way to think about it? I know that's oversimplifying a very complex business. But I'd love to get your thoughts there.

So Nate, to give you much more qualified answer, that's why we're doing this very expansive -- exhaustive strat plan exercise. Because when the 2 companies come together, it was not just 2 portfolio, a different portfolio, but our geographic reach significantly enhanced. So can we -- do we believe that we can do more with what we have? Absolutely, we can do more with that. So we are trying to figure out in the market where our geographic reach has enhanced what -- how this portfolio, when you bring this together, not just Upjohn legacy portfolio, but put together the Mylan portfolio, how can we get more with that? You call it revenue synergy, but some of this is more than revenue synergies because we can -- we are going to be dropping additional products to these geographies. So the launches which we have, we can perhaps get more from those launches than we stand-alone Mylan would have got. So that work is going to give us a little bit more about the growth. But the way you define -- when we look into the developed markets, within developed markets, Europe itself is the much more -- and it's a much more like, I would say, mature market from that perspective. Why? Because it comes back to our portfolio. If you look into the European portfolio, it's much more. It's about 65%, 70% branded and then 30% generic and maybe about 5%, 6% at the moment at the biosimilars and complex. That diversity within the portfolio sets Europe up for the near-term growth. Sets data for the near-term growth. And if you recall, when we were in our Investor Day, we did call out Europe as on an organic basis, about 4% to 5% growth. So if I take developed markets, I think U.S. is going to be stabilizing over a period of next couple of years, whereas Europe will drive that growth. I'm excited with emerging markets, opportunity we have with emerging markets because of the -- our part -- our geographic reach from Brazil to Mexico to Korea to Turkey, Middle East has enhanced. So I think I'm excited what can we come up over there. China I think there's a significant -- it's a strategic market. Let's just talk about strong economic fundamentals, which are underpinning. Health care consumerism, moving towards private insurance, moving -- even the hospital business is moving more from the state hospitals to the private hospitals. There's a large chunk of population, which can pay for now -- which can pay for their health care or pharmaceuticals. We have taken our time to develop a fully integrated organization, which is basically -- if you come back to see how -- what we have done in China in the last 1 year or so, we have positioned ourselves to manage well the VBP impact. Almost 90% portfolio has gone through the VBP at the moment. But our relationships of our -- very rich relationships of our field force, relationship with the KOL, our orientation, that has helped us manage this VBP impact well. That's number one. Second, I think we reorganized ourselves to focus on retail channel because we knew the health care consumerism is going to open up an opportunity there. Our portfolio is pretty much retail-oriented. So we have seen that double-digit -- high double-digit growth of our retail. And today, we have more than 40% of business in China is retail. So when we look into this, the fundamentals, and we know there's still URP impact, and we had talked about the URP is going to basically determine -- the extent of URP and the timing of URP is going to determine the -- what is the trough for China. We have taken that into our calculations. But we are now investing in pipeline. We are dropping in products there because we believe China is an opportunity market for us to, once we hit that trough, to grow from there. So I think all in all, if I go around the world, there are pockets of excitement. I think this is our opportunity now to understand this business. I appreciate how we manage this business going forward and bring it back to the growth.

And Nate, we -- let me, if I jump in on the China part. There a lot that have come on China that we've gotten after the Q1 call. And if you allow me, I can provide a little bit of clarity. There are a lot of happening, as you pointed out, dynamics in the business, and that impacts the phasing of our China business. So yes, if you look at -- if you kind of look at the facts that we've had, on the Investor Day, we talked about China. The guidance we gave was China was 1/10 of our business, Greater China region, which is that's $1.75 billion, right? That's the kind of the estimate we've provided on that. And we also said at that point in time, that business is going to decline roughly about 10% between '20 and '21, primarily driven by VBP and URP and then offset by a little bit of growth in the retail sector in products like Viagra, Sermion and [ Caduet ]. So that's what we said at that point in time. So now just look at what happened this year. First quarter, we predicted $591 million, $592 million for Greater China. And we've also said about 90% of our business in that region comes from China in that. So first quarter was favorably impacted by retail growth that Rajiv talked about it. We did better than our expectation on the hospital channel. Then there was the COVID recovery. If you recall last year, China was impacted in a big way on the COVID. And this year, there is a recovery in the COVID, and you can see that in the numbers. So as you go forward, Q2 will see a quarter-to-quarter decline because some of the VBP impact starts to kick in like products like Lyrica are getting VBP in month of May, that's going to have an impact on -- and then there's obviously a stabilization in the hospital portfolio. So Q2 is going to be impacting. Second half of the year, because of the URP, is going to be lower than first half of the year. So that's the rhythm of the number that you would see for Greater China region. Overall, we are on track with the estimate that we've given, which is the [ 1750 ], and then we'll come more on the URP and then that will decide the trough year for China based when the URP is implemented in those 5 provinces.

That's really helpful. And can you help investors understand the mechanics of the URP program? I guess it's our understanding that brand drugs that were covered by the national drug list, they'll now be reimbursed at the generic price instead of the brand price. So that shifts some of the cost burden onto the consumer. Does that just impact the public hospital setting? And when you think about private hospitals and the retail channel, there might be some more brand loyalty in those channels. And so that's really what the growth opportunity is. You'll have to go through an adjustment period, maybe in the public hospital setting. But once you get by that, you can really kind of benefit from the growth in retail. Is that the right way to think about it?

Yes.

Yes, Nate. So URP policy will perhaps cap the reimbursement of the molecule to the VBP leader -- whatever the VBP price is. But today, for example, the reimbursement is different. But maybe that's where the cash, where it happens in one go or whether they basically scale it down from where they are in the phases. But you're right, it's going to impact the hospital business. And it's largely going to impact the state hospitals. The retail business is not going to be, to a larger extent, impacted by anything to do with the URP. Now it's interesting, the private hospitals are right there in the middle. Now how you capture the patients from the private hospital and move them to retail, that's where the technology comes in. That's where we are working around the digital landscape again because they're reaching out to the patients, reaching out to the doctors over there. There's a lot of -- China has made a lot of strides in technology, and that's where we are trying to evolve and working very aggressively. And that's, if you ask me, that's helping us grow this retail business. So from here onwards, we're looking how we invest more in retail, in the channel. And even when we are picking up our portfolio, that's the lens we are applying.

Great. Can you -- I wanted to kind of move to the -- I think, 2 factors that are important to revenue. So first being base business erosion. You've said 3% to 4%. And Michael, you said earlier that you feel like you have pretty good line of sight on this, it should be in that range year-to-year. So maybe starting with that, and then I want to transition over to the pipeline and new product revenue. But with the base business erosion, can you maybe talk about the components of that? Why you feel comfortable that 3% to 4% is the right number? And how that maybe breaks down across the different businesses that you have when we think about brands, generics and complex products and biosimilars?

Sanjeev?

Yes. Thanks, Michael. Before we, Nate, go there, I'd break it up by -- I think you need to understand and appreciate what is driving that. And one is this, the resilience. 60% of this is brands, 30% is generics and 10% is complex and biosimilars today. And it's moving more towards the complex and biosimilars. Now in the 60% branch, it's made up of 3 type of brands. We talked about growth brands, which is exclusive brands like Yupelri, which are growing. There are more than $1 billion of established brands like Creon, [indiscernible], Influvac, which is, again, not declining business, which is a modest growth business. And then the third bucket is LOEs where after we have seen the major LOEs, there is some degree of erosion, continued erosion over there on some of those brands because they're different from established brands in terms of the complexity and the competitive landscape. And then there is a generic bucket. So generic bucket, we said mid-single digit. But then you put this whether a little bit of growth coming from the growth brands with a little bit of growth coming from our established brands, and then of -- that being offset by some of the decline, we see 2% to 4% startup. That's what we were modeling 3% -- roughly 3% that erosion coming in from the brand. But when you put this together, whole portfolio, 3% to 4% erosion. Now pocket of biosimilars is growing. As you saw, Q1 was 27% growth in that bucket of complex and biosimilars. That's very much all the biosimilar growth, 27% worth of biosimilars growth. There are complex products, but when you get out of the U.S., North America, which is about 10%, that U.S. -- our U.S. generics is about 10% of overall pie. If you get out of that, outside of U.S.A., that complex pocket is largely biosimilars. But within U.S., for example, in that bucket is products like Wixela, huge -- a great success story for us. But now we see competition coming in with Hikma coming in. So are we going to see some of that -- us losing that volume on that? We saw XULANE competition coming through. XULANE is another pocket in that -- product in that bucket. So XULANE is we're going to see -- now seeing the competition coming from Amneal. So some of this, overall, that 27% growth you saw will be offset by some of the volume we lose over here on the anticipated competition on these products. So I think these are -- there's no one product. There's no one geography. There's multiple factors. It's highly complex. But I can assure you that we have our fingers on this pulse of this highly complex business, and we are managing it very proactively. Now having said that, the business transformation, which we embarked upon 2 years back, where we are trying to -- and if you go back on Investor Day, I said, it's about understanding of these molecules at the SKU levels, at the current levels and then get behind them from investment products because every product is not the same. And if you see them losing the margin and going into the red zone that -- where you're not making a positive economic profit, you rationalize it. It's a continuous cycle to add and rationalize it. And I think we are -- if I'm going to see the Q1 and Q2, we are right on track how we expected and seeing better than what we anticipated performance.

Rajiv, I wanted to ask you on just what you've been seeing with generic pricing. I think in the U.S., it's been a focus that the last couple of months, the data has maybe been a little bit softer. You also have more difficult compares because I think there was a little bit of a price spike as COVID hit, so maybe a bit of noise in the data. And I know it's becoming a smaller part of your business relative to maybe what it was with Mylan. But it would just be great to get your thoughts on kind of what you're seeing from a generic pricing standpoint?

And Nate, I have always said that it's basically derivative of one's portfolio in that quarter of time. If you lose a product where you have been exclusive, like XULANE for a period of time and in that quarter, you lose that volume, you're going to see, "My god, we lost the volume over there," and for us, it may look different. But I'll tell you that inherent -- even within the generic portfolio, the transdermals, the dermals, injectables, complex oral solids, has given us that resilience, but we have been seeing mid-single digit -- we continue to forecast for us the mid-single digit. And I don't see this different because I see there's a bunch of commodity products where you will keep on losing some volume and some price. And we are -- that's what we have seen and that's what I'm seeing as we go at least for the next couple of quarters.

Makes sense. I just thought I'd ask. Going back to your comments on the kind of complex generics and biosimilars. It sounds like there are some moving pieces, but it's on pace to be a sizable business, probably around $1 billion, if not north of that. I guess, how do you think about the durability of this segment maybe relative to traditional generics? Just do you think it will remain kind of a more limited competitive landscape, and so in turn translate into more durable revenue over time? It's just kind of great to get your thoughts longer term.

No, absolutely. Absolutely, the hurdles -- the hurdle rate from the science is high. The cost of development product is high. The manufacturing capabilities you need to do is not just like another oral solid or even another simple commodity injectable is high. So you definitely need to think 10x before you will start investing in these programs, given that everything can become competitive and all that. And what we have seen is whether it's biosimilar or all, these are interesting attractive areas. There are challenges. This landscape is evolving. But if we divide this into 2 buckets of, let's say, the biosimilars and other complex -- and I'm very excited with the complex even when I talk about injectables. There are niche opportunities. These products require not only just complexity of the science from the depot injection and the nanoparticles and the liposomes and all that, you require dedicated facilities to manufacture them, which are not just available, that you will have to create those facilities. The size -- it's all about the clinical trials and sometimes inpatient clinical trials. So the hurdle rate is pretty high. So these products are not going to be easily commoditized, but these products, you can't just get easily also over the fence line. So we believe that all what we have acquired over -- the experience we have acquired over a few years, we are trying to bring that, that create this niches and portfolio, which are more sticky, longer annuity. There might be a little bit slower ramp than -- they are not like peaks like you go up and come down like that, but they are more sort of durable, I would call, from that point of view when you compare it to the commodity generics. No, they are going to decline at a point in time when you get the competition. Nothing lasts forever. But yes, their decline rates and their ramp rates are very different than what you see for commodity generics.

And how important, on the biosimilar front, do you feel like interchangeability is? And like -- I mean or like a product like Semglee, for example, like what -- how are you thinking about kind of the hurdles? Like does interchangeability kind of remove a hurdle in terms of building market share for one of those products?

Great example, great example. When you -- when we got Semglee approval and when we went to our peers and all that, what are you trying to match them with the rebates. They all get rebates. If you ask into the rebate space, perhaps insulin is the largest chunk of the rebates these payers get from -- get. So you can't compete over there. Lilly has already established themselves in this market as a diabetic player based on their last so many years of experience. So what are you bringing to the table? So I think the inter -- wherever we have been having this discussion with our customers, they are looking for give us more books. So an interchangeability in a product like insulin is a great add. Now you not only have -- you have a comprehensive portfolio, you have a pen, of course, you have a [indiscernible]. Now you are giving an interchangeable product. You change that dialogue because it's at the -- let's not forget, it's at the pharmacy still. Now I think the payers and the customers are getting much more of an argument about why this product is ready for a switch at a point in time? Now it's different than in oncology product dynamics, which are -- which you all appreciate. But I think interchangeability is giving us an opportunity to really change the direction over here, change the dialogue, relaunch effectively this new product. And we are in this for a long time because it's followed by interchangeable aspart. We're going to be -- we are already working on the [indiscernible]. We are -- we have a product in the pipeline like lispro. So I think, very soon, we will be talking to these customers not just from one product perspective, but from a portfolio perspective, and that's what they have been looking for. For something like insulins and diabetes, they want to talk to a portfolio player and very soon, we'll be there.

That's really interesting. It kind of dovetails into the next topic I wanted to touch on was just the breadth of the pipeline. Because I think kind of relative to the peers that we've typically looked at a much broader pipeline than anyone else has. Could you maybe help us think about across the different areas, biosimilars, complex products, injectables, sort of the relative sizes of the opportunities and maybe what you're most excited about in terms of coming to market over the next several years?

A lot of opportunities in this pipeline. And over a period of time, it is moving from value chain perspective. Today, almost 75% of our portfolio is around complex and biosimilars. We are not moving away from generics, but we have been smart about that. We have been diligent about that, that how we pick our spots and compete in that. So when it comes to the biosimilars, I think next couple of years,will be an opportunity like -- and I'm excited by EYLEA. I think we are still -- because as you've seen by this time, not in U.S.A., everywhere else also, the first to market is becoming a decisive advantage. And that's where our -- we want to focus on, how can we be the first to the market. And EYLEA is -- we just had a successful readout of our Phase III. We are in very much as we have said that we'll be filing this we are able -- within this year. We remain on track. That's one. BOTOX is very exciting for us because, again, we are leading the pack over here, having good engagement with the FDA. FDA is excited that there are some restocking about bringing another biosimilar over here. So I think that's building up. Very excited about Copaxone once a month. Phase III trial is going as we had planned. We will be having our readout by the Q4 of next year. And that's another very exciting product. But more importantly, I think, as I had been saying, there's a bunch of complex injectables, some we have disclosed like paliperidone or INVEGA SUSTENNA, INVEGA TRINZA, [ Octreotide ]. But more products, at least 7, 8 more products, which will come over the period of '24, '25, '26. And we are not disclosing those names upfront because of the obvious -- it's a very competitive landscape. But once we reach a meaningful milestones, we'll disclose that like we have disclosed our rest of the pipeline.

And just maybe to remind investors of the guidance. So you're targeting $600 million a year roughly of new product revenue, and obviously, that can kind of vary year-to-year. But is that sort of the right benchmark to think of going forward?

You're right, yes.

Great. And then maybe in just a couple of minutes we have left, going back to the Healthcare Gateway and the potential commercial capabilities that you can bring to partners, can you maybe just talk us through that? And how you can maybe -- how you're pitching your scale to potential partners that might be looking to kind of commercialize through you? Is that the right way to think about the value that Viatris brings?

Yes. Thanks, Nate. Look, I think the gateway goes way beyond just commercial capabilities. It really is a truly unique global platform that includes a commercial presence at scale in every important geography in the world, right? But it also includes capabilities we have on operations, on manufacturing, the supply chain that we built in R&D, regulatory, in legal, right? And it's really the whole gamut. And we can bring all of that scale, all of that reach, all of that quality and what we can provide to our partners, offering partners ready access to expanded markets, connecting more products with more patients, right? That's kind of the value proposition. That's a win-win. And I think we're uniquely positioned in that, both in terms of what we bring to the table as well as what we are looking for, right? And so what are some of the areas we're looking for. And dovetailing on what Rajiv told you about our pipeline and the trajectory of our pipeline, right? We are looking at established brands within our therapeutic areas within our commercial footprint, where it's synergistic with where we are already. And take the most recent deal we did with Aspen, as an example. That's a great example because not only is it one of those longer tail kind of durable products that we're looking for, it's also great synergistic fit with our hospital business in Europe. So that's an example of that category. Then anything that enhances our push into biosimilars, complex generics, injectable products, complex injectables, et cetera, is helpful. Geographically, China will be a focus for us, leveraging the incredible platform that we have in that country, both operations as well as commercial and really anything that moves us up the value chain, anything that helps us more differentiate, longer tails. We're really looking for long-term sustainable revenue and EBITDA and doing it, and that's important in a very disciplined approach in how we're allocating capital to ultimately create shareholder value.

Great. I think that's all the time we have this morning. So I'd just like to thank Michael, Rajiv and Sanjeev one last time. Thanks a lot for your time. I really found the session valuable. And thanks, everyone, for tuning in. Good luck with the rest of the conference.

And yes, thank you, Nate.

Thanks, Nate.