Good morning, everybody. I'm Chris Schott at J.P. Morgan, and it's my pleasure to be hosting a Fireside Chat today with Viatris. From the company, we're going to have a quick presentation from CEO Scott Smith, and then we're going to have a broader Q&A session with the rest of the management team. So over to you, Scott.
Thank you very much, Chris, and welcome, everybody. And good morning to everybody here on the webcast. I'm going to be making a couple of comments before we get into the Q&A, which will be the bulk of the presentation. But I just wanted to first show a forward-looking statement and just let everybody know that we will not be commenting on full year 2024 or providing guidance in 2025 during this presentation.
Next slide, please. Just for those who aren't familiar with Viatris, just a little snapshot of the company. We are a very strong, global, diverse company operating around the world. In the last 12 months, $15 billion in revenue, $4.8 billion in adjusted EBITDA, $2.4 billion in free cash flow. Tremendous financial strength in the company.
Not only do we have a strong global generics business, but we are also home to some of the most iconic brands in the pharma world: the Lipitor, Lyrica, Celebrex, Norvasc, Viagra, many, many very important global brands we own and we're the home of, which is a very important aspect of our company. From a geographic perspective, we operate in 165 countries. We have 32,000 employees. We have 26 manufacturing facilities, and we currently commercialize 1,400 approved molecules in 4,400 different SKUs.
I think the most important thing about the company, from my perspective, is every year we serve approximately 1 billion patients worldwide. Approximately 1 billion patients take Viatris medication, which gives us, I think, a phenomenal platform for which to affect human health care in a very positive way. We're going to talk a little bit about 2025 here, but before I want to go through 2024. It was an outstanding year for us, full of tremendous accomplishments. If you don't mind, I'll read the accomplishments because there was a lot of them, and I don't want to miss any of them, Chris.
We returned the base business to growth in 2024. We increased our new product revenue to approximately $600 million. We completed our divestitures. We simplified and streamlined the company. We returned close to $1 billion to shareholders in share buybacks and dividends. We paid down our debt to the desired leverage target. We expanded our innovative portfolio and added three new products: cenerimod, selatogrel, and sotagliflozin. I think, very importantly, we expanded our leadership team and added some new skill sets to the team.
You'll see some of those people here representing Viatris at J.P. Morgan for the first time. Very, very excited about where the company is right now as we move into 2025. Very excited about the company, the foundation, the team we've put together, and exciting times ahead. When I take a look and think about moving into 2025 and beyond, for me, it's a capital allocation story.
We are generating sector-leading cash flows, and we intend to use them to build the pipeline and return capital to shareholders, very importantly. On the BD front, we want to be very disciplined. We want to be focused on in-market or near-market assets that can help us grow our revenues in the short term. On the shareholder return front, we continue to deliver on. We'll continue to deliver on the dividend, and we will accelerate share repurchases.
I expect share repurchases will be a priority for us in 2025, given where the share price sits today. I'm very, very proud. Before we go to questions and answers, I'm very, very proud of what's been accomplished, particularly over the last 12, 18 months, the work that's been done to put the company in this position, and very, very excited about the future and the future being not just '25, but in the years beyond that. I think the company's been put in great shape to be able to use our sector-leading cash flows to really accelerate value for the company through building a pipeline and returning to shareholders, so with that, that's a little bit of a base setup. Chris, I'll turn it over to you for questions.
Perfect. Maybe first question, Scott, just you're about two years in the seat as Viatris's CEO. Just as you think about the business that you joined versus the business today, I guess what have been the biggest takeaways, positive and negative, for the portfolio across the company?
I have to say, just my almost two years in the CEO role, my impressions. The first impression is I spent a lot of time in airplane seats traveling around the world. It is a big company, and there's people all over the world. It's amazing just how big and diverse this company is. One of the key initiatives that I had was to try and get around, see people, really understand the culture, really be there geographically as a leader for the group.
The thing that really impresses me, first and foremost, was the strong, dedicated, committed workforce that's out there. There's been a lot of mergers and integrations and divestitures and things. What's been left from that is a core of really tremendous, very skilled, very dedicated employees. That really hit me. The other thing that hits me is just the scale and diversity of the company. It's incredible how big we are. 26 manufacturing facilities, for example, operating in 165 countries. Just a really, really big, diverse company with tremendous scale.
The thing that I didn't know about Viatris until I joined was this idea that we service a billion patients approximately every year. And that's not just a statistic or a number. It's what, I don't know, 15% of the world's population will take Viatris drugs this year, which is just an amazing thing. And it really speaks not only to our capability to be able to manufacture, deliver, commercialize to a billion patients, but I think it speaks to our future opportunities and the base that we put together as we bring products in, as we bring new technology in. We have a base that's able to deliver to a billion patients globally every year.
Great. Divestitures, I know, were a big focus over the last couple of years, but that now largely out of the way. What's the team's biggest areas of focus right now?
Moving forward, a lot of work on the divestitures, obviously. I think it was very, very important for us to do that. We have paid down or will have paid down by the end of 2024, $10 billion in debt, which is just amazing. Then so not doing that anymore, we move into a new era for the company. I think we're really focused on our three strategic pillars.
Those are continuing to build and support the base business. It's very, very important that we don't move away from the base business as we're evolving the company. We need to continue to invest in that base business. We need to build the pipeline. We need to move from this 1%-2% growth profile to 5%, 6%, 7% growth profile over the next three to five years.
Bringing new innovative patent-protected molecules into the pipeline is very important for us. More predictable, sticky revenue streams, those sorts of things. Very important for us to continue to build the pipeline. We want to do it in a disciplined and smart way, though. Returning capital to shareholders through dividends and share repurchases. Again, you have to be opportunistic with these things. I think in these early years with the share price where it is, particularly this year, I think we want to lean into share repurchases and return to shareholders a little more while building the pipeline. Maybe in a few years, maybe it moves more towards business development. In the short term, I think we're prioritizing share repurchases.
Great. Maybe one less bigger picture one. Just I know you're not giving formal guidance for 2025, but just headwinds and tailwinds, what are the things we should watch for as we go through this year?
So headwinds and tailwinds. So just one thing, and I'll let Doretta take on the headwinds and tailwinds from a finance perspective. One of the things that was announced was an import alert from our facility in Indore. And she will address that, I think, a little bit as a headwind for us. And just wanted to say before she gets into the headwinds and tailwinds that we take it very seriously.
The Indore facility is one of 26 manufacturing facilities. It's an important facility within our global network. It's focused on oral solid doses. The warning letter and import alert are a result of an inspection, which happened about eight months ago. And we're in close communication with the FDA and receiving initial FDA feedback some months ago. When we got that feedback, we agreed to immediate remediation at that time of the issues that they had.
The import alert involves 11 products in the U.S. However, four products of the 11 are on an exempt list. We're in active discussions with the FDA to add more products to that exempt list. That was one of the things. Doretta can go into it a little bit more, but provide a little bit of headwind for us as we move into 2025.
Just to give some additional color regarding our headwinds and our tailwinds, there are some pushes and pulls to consider as we think about 2025. From a tailwind perspective, we currently expect strong performance from Europe and China, contributions from our complex generics portfolio, as well as our broad portfolio of new product launches are expected to contribute somewhere between $450 million and $550 million of new product revenue next year.
From a headwind perspective, as Scott mentioned, specifically with respect to Indore, currently we're having ongoing discussions both with the FDA as well as current customers, and so we're not in a position right now to disclose specific products. And we're continuing to assess the potential impact from Indore. And lastly, just from a headwind perspective, we're continuing to monitor just given the strength of the U.S. dollar effects across our key currencies.
About 70% of our business is outside of the U.S. And just to give some perspective, if you were to apply 24 rates to the spot rates to kind of the average rate over 24, that would have had a 2%-3% impact to our 24, just to give some context. And so we plan ultimately, intention is when we kind of consistent with historical precedent to provide our outlook when we give Q4 results and guidance end of February, early March.
I know the specific products aren't disclosed and you're still working with. Just to quantify just how big is this facility from a revenue perspective?
So, as Scott, it's one of 26 facilities. It's an oral solid dose manufacturing facility. It services our network across the world. So it's a global facility for us as it relates to Indore.
Okay. Maybe pivoting over to capital allocation. I know we've talked about share repo or capital allocation, skewing more towards repo in 2025, which I know has been a topic of conversation we've had over the last little bit here. Can you just maybe first talk about the capacity you have for capital return in 2025? And how heavily weighted should we think about that capital return? Should we think about share repo versus BD as an example?
Yeah. So I think in terms of what the capacity is, we've talked in the past that once we get through, once we get through paying down the debt, once we get through one-time costs and things, we were talking at $2.3 billion in free cash flow on a yearly basis. And again, we're not guiding to what 2025 looks like, but that's what we've talked about publicly around that area, excluding one-time costs.
And so now that we're not paying down debt, that capital is available to us to be able to deploy for business development and for share repurchases and paying the dividend. It's very, very important for us. So having that capital to be used more productively as we move into 2025 and beyond is a really important principle for the company and something I think that's very attractive for us moving forward here.
A lot of that chopping wood and hard work and block and tackling done. Now we can be more future-facing and more productive with our capital. In terms of the 50/50, it's funny, this is one of the questions that I get asked most often. There's a number out there, 50/50. And when I think of the 50/50, I think about over a three to five-year period from now. If we say five years, you'd be talking about something like $10 billion-$12 billion in free cash flow.
And we're going to try and do relatively equal amounts of return to shareholders and business development. And any one year, you need to be opportunistic, I think. If the share price is low, you lean into share repurchases. If the share price gets a little more frothy and there's good opportunities to build the pipeline, then you maybe lean into business development. So not every year is going to be exactly 50/50. We need to be opportunistic to operate the business in a strong, productive way. But I think over a period of time, we want to deploy that capital relatively evenly between those two things.
But in terms of 2025, your focus seems like it's skewing more towards share repo.
I think so. Based on where the share price is and based on a lot of work that we've done on BD and understanding the opportunities and based on where the company is, I think that 2025 should be skewed more towards share repurchases, I believe. Yeah.
I guess the other question is on deleveraging, end of 3Q. I think you said you were down to about three times by year-end. How should we think about where leverage goes from here? So I think about potential BD. Would you ever think to bring that leverage back up? Conversely, is there a view that two times is the right number? I'm just trying to get a sense of where directionally you think the right place for Viatris is.
So I think what we stated in the past, and I'm fully supportive of, is getting to approximately three, operating between 2.8 and 3.2, somewhere in there. We don't plan to re-lever, hit three and re-lever. We don't plan to heavily pay down debt more than three at this point in time. I think three and operating between that 2.8, 3.2 is the right place for us to be. It puts us in good position. In terms of doing something transformational, something bigger, something that would really change the company. From my perspective, that's not part of the base plan.
The base plan is looking at business development, which is incremental, that we can leverage the existing infrastructure that we have that is either in market or near market. That's our real focus. That being said, if there's transformational deals, which can be very helpful to us, which can be accretive, which bring good value to the company, to shareholders, we would certainly look at that. But at this point in time, that's not part of our core plan for sure.
As you think about the type of deals, I think you mentioned it seems like near-term contributing to growth is a priority. Is that fair to say?
Absolutely. We've got a couple of products which should read out either in 2026 or 2027 in terms of selatogrel and cenerimod, which could be major drivers of revenue in the future. We see some things in the pipeline from a complex generic perspective and others that could really drive future growth. And I think what we want to do is start to bring that forward, really start to accelerate growth in the short term, try and turn the near-term into revenue growth higher than the sort of 1%-2% that we've seen from the base business so far. So my focus, and again, you look at everything. And if there was a tremendous opportunity to bring in that fit our capital allocation plan that was a little bit longer term, we would think about it. But my focus is on in-market or near-market things to drive revenue.
Great. And then maybe just talk a little bit about therapeutic verticals in terms of areas of focus. I think you've talked about eye, derm, GI being areas. Are those still really the categories to think about, or should we think about broadening out over time?
So those are three good categories for us. I mean, I think there's good opportunities within them. We've made some investments in ophthalmology. We look at GI and derm opportunities as well. We've taken a couple of derm opportunities very far down the road in terms of assessment and things. I will say, however, I think we should be a little more opportunistic than just looking at those.
To me, the important thing is can we find cornerstone assets that we can build on that can generate revenue, sticky long-term revenue that fit, that we can leverage this great organization we have. To me, that's the most important thing. The cornerstone asset is more important than therapeutic focus from my perspective. And as we talked about a couple of times, we have 1,400 approved molecules in the company, which means we're probably in every therapeutic area known to man. So we do have infrastructure somewhere in some of it. So although we do have a focus on those three areas, I'm open-minded to be opportunistic beyond that.
Right. And just talk about the landscape for BD right now. How competitive is it? Are you seeing interesting assets out there? Just give us some flavor of the.
Yeah. I mean, I think if I think about, and I've spent time in big pharma and big biotech and small biotech and here, if I think about the last 10 years, I think sort of these last two years of that 10-year period have been maybe I've seen more assets available and good assets available than in the prior years. I think it's a very asset-rich environment right now. You see a little bit of a capital-starved world from the biotech perspective, particularly 2021, 2022, 2023.
There's a lot of companies out there with interesting assets that have been able to advance them through clinical development, get them near-market approved or filed, and can see the way to potentially commercializing in the U.S. maybe, maybe with a partner, maybe alone, but certainly don't have the capacity and the capital to be able to commercialize on a global basis.
It seems like there's a lot of interesting assets out there that fit what we do. I think where we're a little bit different than, say, a big pharma company or small biotech, we've got the infrastructure. We've got the infrastructure of big pharma. Yet I'm very interested in doing BD deals that could be $500 million, $1 billion a peak, where there's not a lot of competition for those. We can put together three, four, or five of those. I think that would be very, very helpful for us. We're looking at a little bit different size and a little bit different type of asset. We're more than willing to work with partners in a constructive way, which works for them and works for us together.
And so I think we've got great opportunities to be able to build the pipeline over time. I don't feel pressured to do any kind of deal now. The company's in good shape. We want to be disciplined. We want to be smart in how we do it. We want to find good assets that we can leverage and bring in and build a pipeline. But we also aren't taking our eye off the ball of capital allocation, share repurchases, dividend, and other things.
Great. Maybe just pivoting to the fundamental business. Just in terms of, I guess, new launches for 2025, what's on the horizon there? What should we be focused on?
So let me start just by saying that 2024, as Scott mentioned, was a great year for Viatris R&D in terms of new product.
Before you start, can I ask you to introduce yourself?
Of course.
People who may not know who you are, we will.
Right. Thank you.
Philippe Martin, I'm the Chief R&D Officer for Viatris. So yeah, so 2024 was very strong. We were able to exceed our target range in terms of new product revenue, but also in terms of the number of submissions we were able to do in 2024. For 2025, we have a very good line of sight on the portfolio. We certainly believe that we'll be within that $450 million-$550 million in terms of new product revenue.
And that will be also, again, this year, be able to file over 100 submissions. In terms of what we're particularly excited from a launch standpoint, we have a number of complex generics that we believe we'll be able to launch this year. These are liraglutide, iron sucrose, octreotide, and glucagon that I think we're particularly excited about launching in 2025.
Just to comment on that, I mean, every year since the inception of the company, we've been able to deliver that $450 million-550 million in new product revenue. I think it was at one of the highest rates in 2024. I think we were guiding to around $600 million in new product revenue. And so regardless of what the individual product set is in any one year, we've got the machinery and the ability to continue to find $450-550 million in new revenue every year. And so that's where we get. And we're losing because of the age of the portfolio and some price erosion, losing $300 million a year kind of thing, which gives us that sustainable 1%-2% growth profile in the base business over a period of time.
Can I just follow up on those generic launches? Just line of sight in terms of your confidence that those are kind of achievable this year.
Yeah. We're very confident. We believe we're at the end of the conversation with the agency, and so we feel that we'll be able to launch all of them this year. Yeah.
Great. Another one is just on Idorsia and some of the assets there. Can we just get an update in terms of latest thinking in terms of maybe timelines around the phase 3 readouts and just how you're thinking about the commercial opportunities for those products?
Yeah. Before we go to Idorsia, maybe I just want to highlight the fact that we have a number of phase three readouts as part of our innovative portfolio that will be coming in the first half of the year. We're talking about our eye care franchise where we have three products that will read out phase three in the first half: meloxicam in acute pain. We have two phase three trials. One read out very late last year. We have the data in-house.
The second trial will be getting the data in the first half as well, and we'll be communicating about that at that point in time, but we are very excited about that asset, and then Xulane low dose using our transdermal technology for contraception that will get the data in the first half as well, so those, I think, are important assets, but switching to selatogrel.
Selatogrel, the clinical trials are ongoing, as you know, our SOS-AMI Phase III study, which has a fast-track designation. The trial is really going well. There's a lot of momentum behind it. I think what we are seeing is that people are very excited about the study around the world, not just in the U.S. That, I think, speaks to the very high level of unmet need that we have for the emergency treatment of acute MI. We believe we'll have enrollment done by 2026. It could be faster. We've initiated, and we believe we'll have about over 900 sites enrolling in 2025. As we get closer to 2026, I think we'll give you an update on those timelines. But as of now, we're sticking to what we've communicated in the past.
Great. And talk a little bit about the market development of that once we have the data. How do you think about the size of the opportunity and how quickly it can evolve?
Right. So I think you have a very high unmet need, which is in the time between the time the patient has a recurring MI and the time the patient gets to the hospital. We have the golden hour, which if the patient can be treated at that point in time, which is currently not the case, you can save muscle and you can save patients from further damage, from long stay in the hospital, so on and so forth. So I think there's really nothing right now that addresses that period of time and no competition, nothing of that nature. So we believe that it's a pretty straightforward case that we can make for selatogrel at this point. I don't know if Corinne, you want to add anything commercially to it?
No, yes. Thank you. I'm Corinne Le Goff, Chief Commercial Officer. Yeah. So I mean, selatogrel is very exciting because, as Philippe mentioned, this is an area where in this period of time for the patient, which is so crucial to avoid complications and costly complications to the healthcare systems, there is absolutely nothing. So we are pretty bullish about it, about the potential of this product going forward. And we think first, the mechanism of action is a proven one, but we'll feel like a number of patients will be able to benefit from it.
Yeah. And I couldn't be more excited personally about that particular program. Not only the high number of patients that could benefit, tremendous unmet medical need, real change in the paradigm of treating patients with acute MI really fits what we do, our ethos as a company. And I don't think there's any company in the world that's better positioned to be able to commercialize and deliver injectable life-saving medication to patients as we've done for many, many years. So I think this will be, if the studies come positive, and we hope this could be a tremendous asset in our portfolio and be a real driver, not only of revenue growth, but strategically in what we do and our position in the world.
Sorry, just to pack it in, one last thing. I think there were questions about how is the trial, are the assumptions that we used to build that trial really happening now that we have thousands of patients in the trial? I think what we've learned is that patients are able to self-inject. They're able to self-inject at the right time, which is critical within 30 minutes or so of the MI symptoms. And that what we've also learned, because we've had nine safety committees, that the drug is very well tolerated at this point in time. So I think the trial is really developing in the way we thought it would, and our assumptions are panning out at this point.
Great. One other, I guess, on the maybe more generic side or kind of brand generic side, GLP-1s, I think there's been a kind of discussion of what role a company like Viatris could play in that market. So can you just talk about, as we think about some of these products starting to come off patent over time, how are you thinking about that opportunity? How are you investing around that?
Yeah. So we think it is a very important opportunity for us going forward. I think we are in the final stages of finalizing our strategy, and we'll be sharing it more broadly once that's done. But I can summarize where we are today. I think we're going forward with a generic approach to it, but we're also looking at 505(b)(2) strategy in terms of once monthly tirzepatide or once monthly semaglutide. And then we'll also be looking at whether there's a play for us in a more innovative standpoint. But that is the last piece we need to put together.
In terms of our ability to compete, we've made significant investment already in our own infrastructure. And we've also been able to leverage all the network that we have in terms of manufacturing. We think we have the capacity to be able to supply the market, the generic market that we're looking for. We think it's going to be a significant opportunity for us in the near future.
As a company, I think we are uniquely positioned to be able to participate in this market long term. With our injectable competence and the expertise we have there, the distribution networks, our global commercialization networks, I think we're uniquely positioned to be able to be a long-term player in the GLP-1 and obesity marketplaces here.
What we want to do is we want to be able to present to people comprehensive global strategy, which products, which indications, which geographies. It's a complex area. There's a lot of protections out there, but there's also a ton of opportunities long term in this space. And so we want to deliver a comprehensive global plan on how to handle GLP-1s. And I also think of all the companies out there, we're uniquely positioned to be able to be very strong players long term in this market.
Can I just ask about the device component of that? That seems to be one of the particular bottlenecks. Just your confidence of, is there an opportunity just to go with needle, vial in some of these spaces, or do you think you need an auto injector?
We're going after every device. We have a very strong device team that over the years developed with EpiPen. And so we currently have decided that we'll develop each and every device that is available. And then as we get closer to launch, depending on what's left on the market, because it's a quickly evolving environment, so we will need to adapt at that point. But right now, the point is to give ourselves as many options as possible, and then we'll react to the market once it's time to do that.
Right? Yeah. And I think that's one of the things that actually puts us in a unique position here is our capabilities and our experience in devices and being able to marry the two, marry the ability to manufacture, to source, to distribute, to work on self-injectors, auto injectors of all different kinds. I think that's where we have all the components to be long-term major players here.
Great. Maybe just a bigger picture question on the generic market as a whole. We'd love just to get your views on how you're thinking about that market, stability of the market, maybe particularly U.S. Any observations you'd share there, I guess?
Maybe I can start here. Thank you. What we are seeing in terms of pricing environment in the U.S. is a relative stability. We've been seeing this over the last few quarters and a couple of years, and at least across our portfolio of products, and we believe that, first, our focus on new product launches, as Philippe mentioned, continuity of supply, but also the portfolio mix, because we have shifted toward more complex generics, and this environment kind of shields us to more competitive pricing pressure with the more simple generics or molecules.
So we believe that in 2025 for this year, we'll experience the same kind of stability that we've been experiencing. That's our assumption. Of course, you cannot predict any kind of volatility that could be due to any government actions or other macroeconomic environment related to the retail pharmacy sector, for instance. But we are quite confident about the stability of the trade prices in the U.S.
Yeah. And just to Corinne's point, if you look at the evolution of our portfolio and the investments that we've made in complex generics, kind of core U.S. generics for us, it's about 10%-12% of our overall portfolio. So it's not a kind of we've diversified our business both outside of the U.S. and within generics by moving up the value chain.
Perfect. Maybe just one specific generic product, generic Revlimid. How big of a tailwind has that been for you? And do we have to think about that as a headwind at some point as we look out to 2026 and beyond?
So generic Revlimid has been a stable component of our generic portfolio. That being said, the growth that we are experiencing in our generic portfolio comes from our complex generics like Breyna or Wixela. And we anticipate that, as you know, the generic market will become fully generic by 2026. So that's our forecast.
Yeah. Okay. Can I ask about China? Just latest thoughts on what you're seeing in the market there. I think there's obviously been some economic weakness. I'm just wondering, is that having impacts on any parts of your business, and just how do you think about the growth outlook for that segment of the portfolio?
We are very pleased with our performance in 2024 for our Greater China region. What we are seeing is that the increase of an elderly population that is now demanding high-quality healthcare. We are very well positioned to serve this category of patients specifically because we have a portfolio of what we call our iconic brands that have a strong equity, notably in cardiovascular, so addressing chronic cardiovascular conditions, so products like Lipitor, Norvasc, and we see good demand for these products.
Strong portfolio, but also I want to mention that we have a significant commercial presence in China, a very senior and savvy leadership team over there. We've traveled together as a management team there recently, quite impressed with what we saw. Our investments in the region, our commercial infrastructure gives us the possibility to really have the reach that we need to get to the volumes and to address the broader population across the region.
Just to reinforce, I mean, I think Corinne said it very, very well, but I've spent a lot of time in China over the last 18 months, and we as a team have been there. Very, very pleased with the strong team we have in China, particularly on the commercial side. We're building a pipeline to be able to utilize that commercial infrastructure in China. It's an important geography for us.
China is an interesting market. I first started working in China in the mid-1990s, built a plant, and had a sales force in China. So I've been involved with it for a long period of time, and there's always periods of volatility you see in China, right, from a policy perspective, which gets sort of unequally applied by provinces and things. So it can be a difficult environment to operate in with full clarity.
But I think I see our group being very strong. There's long-term growth potential there for us. We're building a pipeline. Even though you get some policy volatility, I think what you see is you see an aging population in China with disposable income that wants high-quality healthcare. I think there's nothing but upside for the Chinese market from a demographic perspective. Policy can be a bit unpredictable, but certainly, I think long term, it can be a very, very strong opportunity. And again, I think we're uniquely positioned to be able to participate in that marketplace given the size and effectiveness of our organization there.
Also, if I may add, in terms of how we manage the volatility of the policy environment, we've been doing this now for a few years. Important note is that 95% of our portfolio has been through VBP already.
Yeah. Excellent. Maybe just a couple of financial questions over the last few minutes here. Just maybe first of all, 2024, just any comments you'd make in terms of how the year's wrapping up, anything you'd highlight to investors to think about?
It's still January, so we're still in the process of wrapping up the fourth quarter. I would say overall, we're very proud of what we've accomplished over the course of 2024. As of Q3, Q3 represented the sixth straight quarter of operational revenue growth. We closed our divestitures. As Scott mentioned, we paid close to $4 billion of debt down this year. We added three patent-protected innovative pipeline assets to our portfolio.
We did mention on our Q3 call some normal kind of trends to expect in the fourth quarter, specifically around just some normal seasonality associated with mix and phasing, specifically around developed markets and China, and a kind of anticipated step down in margins just given mix and product impacting gross margins as well as just the cadence of our SG&A spend. That is consistent with what we've talked about on our Q3 call.
Okay. Great. And then just any initial color on expectations for EBITDA as we go into this year? I know there's obviously been some divestitures you have to annualize, but just any other moving pieces we should kind of think about for EBITDA?
Yeah. And to your point, just given the cadence of divestitures that we closed over the course of 2024, we're in the process of taking out the annualized impact of that. And we will provide that kind of baseline as we think about guidance in 2025. It's premature at this point to talk about specifically 2025, just given some of the puts and takes we've talked about in the ongoing discussions. But we do anticipate providing that color when we provide earnings in late February and early March.
Just anything with guidance now that we're past the divestiture, what should we think about for the future in terms of the way you're going to approach guidance? Will we be hitting longer-term targets? Will it just be a one-year outlook? Just how do you think about a guidance framework for the company going forward?
Yeah. We're currently evaluating the approach. We're anticipating giving 2025 guidance, and we're thinking through things around the potential to give longer-term guidance as well.
Yeah. I think it's something that we actively discuss as a group. And I think at some point, there's been a lot of moving parts, divestitures, other things. And we want to make sure we've got that base right, and then we want to be able to project off that going forward. And certainly, we discussed the idea of long-term guidance.
And we could do that as early as February or March in that meeting where if we don't feel exactly right, then we can push that off a little bit. But certainly, in the relatively short term, I believe we're going to want to start to talk more about the three to five-year outlook for the company. We've got growth assets coming in, launching potentially in 2027. We've got money to build the pipeline over time and build some revenue. So I think we want to be able to project and give a good view of what the long-term three to five-year health of the company is going forward.
Excellent. Well, I think we're just about out of time. Thank you so much for the comments today, and thanks for joining.
Thank you, Chris, and thank you, everybody, for your attention.
Great. Thanks so much.