Okay, good morning, everyone. Let's kick things off. Welcome to the Piper Sandler Healthcare Conference. This is David Amsellem from the Biopharma Research Team, and we're delighted to have Viatris with us. Lots to talk about. We have Doretta Mistras, CFO, and Philippe Martin, Chief R&D Officer. Thanks, both of you, for joining us. I'm going to fire away with lots of questions, and there's lots to talk about. Just starting at a high level, I wanted to get your thoughts on capital deployment. I'm particularly interested in how aggressively you will look to pursue brand assets. That's been an increasingly visible theme at the company. How do you balance that versus prioritizing the return of capital to shareholders?
Thanks, David. It's great to be here. Thanks for having us. From a capital allocation perspective, our philosophy has remained consistent. We want to be balanced and disciplined between kind of over a three to five-year period of 50/50 between capital deployment and capital return, as well as investment in business development for long-term growth. In any one year, we may lean in in one area versus the other, depending on the opportunities that we have ahead of us. For example, this year, we prioritized capital returns and especially share buybacks just in light of operationally what we had going on and our stock price.
That may change in any given year, given what we have. We want to maintain a balance between being 50/50. From a BD perspective, to your point, we are focused on really, especially in the U.S., adding innovative, branded, patent-protected, higher-margin assets that can really accelerate our near-term revenue and EBITDA growth. Outside of the US, we're focused really on leveraging our existing infrastructure. The Aculys Pharma transaction that we recently did is a good example of that. We added two CNS assets, pitolisant and Spydia, that leveraged our Japan infrastructure. It really is being balanced and opportunistic in a disciplined way.
Just a quick follow-up here. Obviously, capital structure, net leverage is an important theme and important to investors. How much would you lever up to in order to execute on a transaction or transactions? In other words, how far beyond that net debt EBITDA in the 3x range would you go to if you saw something you really liked?
Yeah, when we look at transactions, the type of asset really plays an important role in terms of how we think about overall consideration, as well as how we think about leverage. We want to be thoughtful around our financial policy. Our focus, as I said, is really on commercial-stage branded opportunities. We always look at assets in the context of our overall financial policy, how quickly we deliver in terms of our long-term targets.
What is your appetite for taking on additional R&D risk beyond cenerimod and selatogrel?
Our focus right now continues to be on commercial-stage assets, assets that are in market or nearly approved or commercial stage. To your point, selatogrel and cenerimod, when we in-license them, we're in that late-stage phase, and we continue to believe that they have significant potential. You're never going to pass up an opportunity if it's a great asset, but that's not currently the focus of our strategy right now.
Got it. Okay. I have a lot of questions for Philippe on the pipeline. I wanted to talk about cenerimod, and we're not that far away from the SLE data. Just taking a step back here, I mean, SLE, pretty active development landscape. We have a lot of data readouts in 2026 for a range of products. One comes to mind is Biogen's litifilimab. There's also Bristol 's SOTYKTU, just to name a couple. Lots going on in SLE. Where do you see cenerimod and its particular mechanism fitting in within a potentially more varied treatment landscape?
Thank you. Let me start with reminding people that we have two large phase III studies ongoing for cenerimod in SLE, OPUS-1 and OPUS-2. OPUS-2 is fully enrolled, and OPUS-1 will follow shortly. The intent there, and we know the preference from physicians and patients in SLE, is for an oral treatment that can be given once a day with a differentiated risk-benefit profile. That is what we are seeing with cenerimod in the data. Importantly, the drug can be given on top, and that is what we are studying, on top of standard treatment, and without adding more baggage to the safety profile of the existing treatment. That positioning prior to biologics, the one you mentioned, even the new entrants, we do not expect them to change that dynamic.
The positioning before biologics with a drug that has the right benefit-risk profile is where I think the largest unmet need is and where cenerimod fits the best. You added something about mechanism of action. I think mechanism of action of cenerimod fits very well for SLE. It's the only asset currently that goes after multiple mechanisms involved in the pathogenesis of SLE. We believe that this mechanism is very well fitted for SLE and very well fitted for lupus nephritis as well.
Yeah. Let's talk about the phase II trials. You had patients in the study with high interferon I levels. That's where you saw, I think, the greatest signal. Talk to how the phase III trials are designed to account for those learnings in phase II, and what does that mean for the potential addressable population?
In phase II, we had three phase II studies, right, to remind everybody. We saw consistent small efficacy data at 4 mg across all three of those phase II studies. As you point out, where we saw the largest treatment effect was in the most active TVR patients, interferon I high patients typically. These are the patients that you typically see in phase III. If you look at other phase III studies that have been run recently or even older studies, you tend to see about 80% or so of patients with high interferon signature. In the phase II study in the 4 mg arm, we saw about close to 50% of the patients were interferon I high, and these were the patients that responded the best to treatment.
Okay. You moved cenerimod into a phase III in lupus nephritis. What was the thought process behind going right into phase III in lupus nephritis? Maybe help us better understand what phase II data you can point to that gave you conviction that advancement in LN made sense.
Yeah. I think it's a natural evolution for the asset. We're trying to optimize the life cycle of this asset and studying the lupus nephritis or any phase III programs. It is now the right time to do that. We started about nine months ago developing this program. We had interaction with the FDA and the EMA, and we took their feedback into account. That led to the phase III program that we've designed and for which we anticipate first patient by the end of the year. I think what we learned, if you look at the lupus nephritis patient population, it is much more similar to the severe SLE patients that you see in phase II. They're typically interferon I high patients. The mechanism of action looks very similar in SLE than it is in lupus nephritis.
Lastly, I think we just generated data recently, a clinical pharmacology study where we showed that cenerimod can be given in patients with any renal function, including patients with severe impairment. That was critical to the decision to move forward into lupus nephritis.
Okay. That makes sense. Certainly, there's a dearth of treatment options in LN that I'm sure played a role in your decision as well.
Yeah. I mean, I think it's a similar dynamic as you see in SLE. A lot of biologics that have some level of efficacy but have some safety baggage, are pretty immunosuppressive in general. I think having a drug, again, with the right benefit-risk profile that can be given before those biologics is critical in lupus nephritis and is where the unmet need is.
Okay. Wanted to toggle over to selatogrel. Any update on the pace of phase III enrollment? I think you did talk about this on the third quarter call, but just give us a refresher on where things stand on the enrollment, rate of patient enrollment, and should we think of results as a 2027 event?
Yeah. So just as a reminder, we have a large phase III global program going on for selatogrel for the treatment of Acute MI. Enrollment is going quite well. We are now seeing we're nearing 1,000 patients per month. We anticipate that we'll have full enrollment by the end of this year. It is an event-driven study. Whether we're able to report the result by the end of the year or early 2027, we'll have to see. I think we're very well on pace to get the enrollment done by the end of the year and results shortly after that.
There has been some development in the marketplace. You have CeleCor's zalunfiban with recent data. How are you thinking about probability of success and just the overall market development given zalunfiban's success, decreasing the odds of a major adverse composite clinical endpoint compared with placebo in one month? Maybe you can talk to that.
Yeah. I think I see this as a strong proof of concept for selatogrel. I mean, there's obviously, and as has been pointed out externally, a number of issues with that study. I think what we've learned is that early platelet inhibition, that concept, which is the same we're using for selatogrel, leads to a risk reduction in those patients. They ended up having a 21% risk reduction overall, which is what we sized our study to be for selatogrel. I think this bodes well for the success of selatogrel. I think what I would point out, what's interesting in their data is the fact that from onset of symptoms to treatment, it was about 90 minutes, nine-zero. What we're targeting for selatogrel and what we're seeing is that treatment is within 30 minutes for selatogrel, so much earlier than what you saw with this drug.
The other data point I think is important is between the time of treatment to the time of PCI, it was about 50 minutes, which was very short and gives very little time for the drug to differentiate versus placebo. It will be much longer for selatogrel. In short, I think this study increased our probability of success. It is a strong proof of concept. It solidifies our assumptions. We feel good about the potential outcome of that study.
Okay. That's helpful. I wanted to move along and talk about your fast-acting meloxicam product. First, where do you stand with the filing on that and your expectation for the review cycle? Is an accelerated review for the product possible?
Yeah. We are scheduling a meeting with the agency, a pre-NDA meeting. We expect it over the next few weeks. That discussion will have a couple of key discussion points there. One of them is timing of filing and ability for the FDA to grant us accelerated review. We'll be discussing that with them. We'll also be discussing our approach to the label a little bit, specifically around opioid sparing because our data is very strong, and we follow their guidance and recommendations during the development to get to language in the label around opioid sparing. These will be the two key discussion points with the agency. Depending on the timing of this meeting, we'll be able to file shortly thereafter, so either end of the year or early next year.
I wanted to take a step back on the meloxicam product. This is obviously a very well established NSAID. And certainly, it's important to have more non-opioid alternatives. Help us understand how you're thinking about the use cases or potential use cases here. In other words, are you thinking about it for mainly acute pain? Is it post-operative pain? Is this going to be a hospital product? Is this going to be an office-based product? Help us just understand. It might be all those things, but how do you think about that?
Yeah. To your point, David, we're really excited about the fast-acting meloxicam opportunity. Just to frame the opportunity holistically, there are over 80 million acute pain cases per year, and still over kind of about 50% are still used opioids despite the recognized risks of dependence and misuse. Additionally to that, we're seeing a multimodal approach where patients are leaving with multiple options to manage their pain. In that context, as we think about market segmentation, we're really focused on two areas. One is the outpatient and ambulatory surgical centers where you see high-volume procedures like joint replacements and bunionectomies. In addition to that, the kind of in-office physician procedures like dental offices and cosmetic procedures. To your point, yes, in the hospital, that does play a role in the overall acute pain treatment landscape.
In our experience, we've found that to be a more challenging market just given the overall review process. Our intention at this point, and we'll continue to refine and formalize our strategy close to launch, is really to focus on the outpatient and in-office procedure setting.
Okay. That's helpful. Maybe a follow-up to that. Obviously, just putting opioids aside, there's a whole host of generically available options here, oral options. In that vein, where do you think the meloxicam, the fast-acting meloxicam product, will fit within this vast treatment armamentarium, albeit flawed? In other words, and this sort of leads to sort of a question about payer access. How are you thinking about that?
Yeah. In line with payer access, ultimately, is pricing. We're still in the process of doing that work. Ultimately, a key component of how we think about it is going to be the label and the value proposition. We'll be in a better position to give that clarity as we get closer to launch. That being said, our goal really is to ensure two things. Number one, that we're reflecting the value that fast-acting meloxicam can play, but also, importantly, that we're getting broad adoption and access for patients.
I know you can't provide specifics on pricing yet, but there is a potential analog of Vertex's suzetrigine. I guess maybe the best way to ask the question is, is that a good way to think about pricing? Is that the best analog as we think about pricing for fast-acting meloxicam?
I think that's certainly an analog, but it's not the only one, and it's still early. As we continue to do work, it really is truly a balance between the value proposition, but also broad access to care. We'll be in a better position to provide that clarity as we get our label, as we kind of complete filing and get closer to launch.
I think uptake is also a key component of that decision-making based on the fact that this is a 505(b)(2). We will also take that into account, obviously, in our decision around how we price the drug.
Are you going to commercialize the product on your own, or would you want a co-promote partner? I mean, you mentioned dental offices, and there's orthopedists, and there's a lot of different call points here. How are you thinking about commercialization?
Yeah. That is another area we're continuing to evolve, and we'll provide further clarity as we get closer to launch. We feel very confident in our ability to commercialize a fast-acting meloxicam ourselves. Really, we're going to be focused on the kind of high-volume specialists by using a targeted field force where we can really drive adoption. Opportunistically, we will have the opportunities to explore other partnerships. That would be driven by an ability to significantly expand the value of the product. We'll continue to evaluate it, but we continue to have confidence in our ability.
Okay. Just talk real quick to the exclusivity runway, potential exclusivity runway for the meloxicam product.
To Philippe's point, we are pursuing a fast-acting meloxicam through the 505(b)(2) pathway. That gives us a minimum of three years of exclusivity, but we're continuing to explore opportunities to extend that. We've already filed additional patent applications with the patent office, and we're in the process of submitting additional ones that, if approved, would extend the runway. Taking a step back, we have confidence that fast-acting meloxicam will be a meaningful opportunity for us, at least through the decade and potentially beyond that as well.
Okay. Wanted to switch gears to MR-141 for presbyopia. Interesting opportunity here. There are other pharmacologics now that are on the market. A couple of questions here. One, how are you thinking about the opportunity? Secondly, how do you see differentiation versus the other new modalities on the market for presbyopia?
I can start with the opportunity, and then I'll kick it over to Philippe to talk a little bit about the differentiation. If we take a step back from the presbyopia perspective, this is a very large and untapped market opportunity. I think the statistic is over 90% of adults over the age of 45 suffer from presbyopia. Yet, from a pharmaceutical perspective, it is a largely untapped market. We're also seeing a renewed interest in the space, especially given some of the eye drop treatment options that have been approved. We're seeing kind of a renewed interest in the category. From our perspective, we see our asset as a natural extension to our existing phentolamine kind of franchise. We have Ryzumvi that's already approved. We're also developing phentolamine in dim light disturbance.
We have a strong foundation from which to build on. If you combine not only the significant unmet need, but in addition to that, the positive data that we've shown, as well as the early market adoption, we really see presbyopia as a growth opportunity for us within our eye care franchise.
To the second part of your question in terms of differentiation versus other assets on the market, I think what's important is that it is a different mechanism of action. It's not a miotic. It doesn't affect the ciliary muscle. Therefore, the issues that you see with the miotics, including the newer ones, of lots of headaches being reported, as well as potential risk for retinal detachment, we're not seeing with phentolamine. The other key aspect is also what we're not seeing is reduced vision under dim light, right? It's actually the contrary, which is a significant issue for patients. As well as with the miotics, what you tend to see is patients losing distance vision, and that's also problematic, which we're not seeing with phentolamine. It is all about the benefit-risk profile of the drug for presbyopia.
We believe we have the assets with the most relevant benefit-risk profile for this indication.
Got it. I wanted to sneak in one more question. Just talk to the enterprise-wide strategic review. That is something that you talked about on the last call. Ultimately, I guess the question is, where does this lead? Is it manufacturing efficiencies? Is it cuts to spend? Is it a bit of both?
Yeah. We really wanted to take a thorough and detailed review. Just given everything the organization has gone through over the past four years in terms of mergers, divestitures, the goal of the enterprise-wide review is to really position the company for long-term sustainable revenue and EBITDA growth. We looked at everything. From a commercial perspective, we're looking at our infrastructure and our product mix. We're looking at our R&D, regulatory, medical activities. We're also looking at our sourcing, our manufacturing, as well as our inventory levels and all the corporate support functions that look at that, with the ultimate goal of being able to invest in the business and support our long-term growth, but in an aggregate basis, really deliver net savings over a phased multi-year approach. We'll be in a position, once we're nearing completion, to share that in early next year.
All right. Terrific. Thanks so much, Doretta. Thanks so much, Philippe. And thanks to everyone in the audience.
Thank you.
Thank you for having me.