What Happened?
Shares of medication company Viatris (NASDAQ: VTRS) fell 3.8% in the afternoon session after its experimental therapy for blepharitis, an inflammatory condition of the eyelids, failed to meet the main goal in a late-stage study.
The global healthcare company announced that its Phase 3 trial for an ophthalmic ointment, pimecrolimus 0.3% (MR-139), did not achieve its primary endpoint. The study, which involved 477 patients, was designed to evaluate if the treatment led to the complete resolution of debris on the eyelids after six weeks of use. This outcome was not met, prompting the company to re-evaluate the future of the drug's development program. Viatris' Chief R&D Officer, Philippe Martin, stated that the company was considering its next steps, which could include revising an additional planned Phase 3 study for the therapy. The setback in the trial for this eye condition represents a disappointment for the company's pipeline.
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What Is The Market Telling Us
Viatris’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock dropped 16.9% on the news that the company reported disappointing fourth-quarter results, with sales, earnings, and operating income all missing analysts' expectations.
Sales came in soft, driven by strength in Greater China and new product launches, but weighed down by weaker performance in Developed and Emerging Markets. Looking ahead, Viatris' 2025 guidance also disappointed, with revenue and adjusted EBITDA projections falling short of expectations. The company expected an approximately $500 million revenue hit and a $385 million impact on adjusted EBITDA due to ongoing regulatory challenges at its Indore facility. Overall, this was a weaker quarter, and there were few positives to take away from the results.
Viatris is down 28.1% since the beginning of the year, and at $8.92 per share, it is trading 33.3% below its 52-week high of $13.37 from November 2024. Investors who bought $1,000 worth of Viatris’s shares 5 years ago would now be looking at an investment worth $535.98.
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