Item 1A. RISK FACTORS

Except as set forth below, there have been no material changes in the Company’s risk factors from those disclosed in Viatris’ 2022 Form 10-K.

There are risks and uncertainties associated with the Announced Divestitures, including the OTC Transaction, one or more of which could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends or stock price.

On October 1, 2023, we announced we had received an offer for the divestiture of substantially all of our OTC business (the “OTC Transaction”) and had entered into definitive agreements to divest our women’s healthcare business and, separately, in another transaction, our rights to two women’s healthcare products, our API business in India and commercialization rights in the Upjohn Distributor Markets (all such transactions, including the OTC Transaction, the “Announced Divestitures”). There are a number of risks and uncertainties associated with the Announced Divestitures, including, among other things:

• the Announced Divestitures not being completed on the expected timelines or at all (including that, should we elect to exercise our option to accept the offer in the OTC Transaction and enter into a transaction agreement, either party will have the right to terminate that transaction agreement if the closing has not occurred by August 1, 2024, subject to two automatic extensions to no later than October 1, 2024 if certain conditions relating to regulatory approvals have not been satisfied or waived on such date), including but not limited to the inefficiencies and lack of control that may result if the Announced Divestitures are delayed or not implemented effectively, and unforeseen difficulties and expenditures that may arise as a result;

• the risk that the conditions set forth in the definitive agreements with respect to the Announced Divestitures will not be satisfied or waived (including that, should we elect to exercise our option to accept the offer in the OTC Transaction and enter into a transaction agreement, the potential failure of the conditions in that transaction agreement related to obtaining required regulatory and other consents and approvals, which could give rise to the termination of that transaction agreement or that the financing closing condition in the case of the API business divestiture will not be met, which could give rise to the termination of that transaction agreement);

• failure to realize the total transaction values for the Announced Divestitures and/or the expected proceeds for any or all of the Announced Divestitures, including as a result of any purchase price adjustment or a failure to achieve any conditions to the payment of any contingent consideration (including, should we elect to exercise our option to accept the offer in the OTC Transaction and enter into a transaction agreement, that transaction agreement’s net indebtedness and working capital adjustments as well as the up to €100.0 million in contingent additional cash consideration);

• the possibility that the Company may be unable to realize the intended or expected benefits of, or achieve the intended or expected goals, outlooks, synergies or operating efficiencies with respect to, the Announced Divestitures, including but not limited to as a result of carrying stranded costs; the risk that the Company may elect not to exercise its option to accept the offer in the OTC Transaction;

• the risk that we will incur losses related to the Announced Divestitures, including that, with respect to the OTC Transaction, we expect to record a pre-tax loss ranging from $600 million to $700 million in the fourth quarter of 2023 for the difference between the estimated consideration to be received and the carrying value of the business to be divested, including an allocation of goodwill (see Note 5 - Divestitures in Part I, Item 1 of this Form 10-Q for more information);

• the risk that if the remaining Upjohn Distributor Market transactions are not completed, the distribution arrangements will expire in accordance with our agreement with Pfizer and the Company will wind down operations in these markets, which may result in additional asset write-offs and other costs being incurred, which could be in excess of $150 million; and

• the risk that we may incur losses related to unhedged foreign exchange exposure related to receiving proceeds from the divestiture of the OTC business in Euros.

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To the extent that the current market price of our common stock reflects an assumption that the Announced Divestitures will be consummated in the timeframe and manner currently anticipated, and that the Company will prioritize use of net proceeds from the Announced Divestitures for debt paydown, any delay in closing or failure to close the Announced Divestitures could result in a decline in the market price of our common stock. Similarly, any delay in closing or failure to close the Announced Divestitures could result in damage to our relationships with customers, suppliers and employees and have an adverse effect on our business. Pending the completion of the Announced Divestitures, the attention of our management may be directed toward such transactions and related matters, and their focus may be diverted from the day-to-day business operations of our company, including from other opportunities that might otherwise be beneficial to us. We have agreed to indemnify the respective purchasers in the Announced Divestitures and certain of their respective representatives against certain losses suffered as a result of certain breaches of our representations, warranties, covenants and agreements in the applicable transaction agreements and related documents. In particular, should we elect to exercise our option to accept the offer in the OTC Transaction and enter into a transaction agreement, and subject to certain limitations as set forth in that transaction agreement, we will indemnify the purchaser, its affiliates and certain of its and its affiliates’ representatives for certain liabilities and for certain losses arising out of breaches of certain representations, warranties, covenants and agreements in that transaction agreement. Any event that results in a right for the purchaser in the OTC Transactions or the other Announced Divestitures to seek indemnity from us could result in substantial liability to us and could adversely affect our financial position and results of operations. In addition, should we elect to exercise our option to accept the offer in the OTC Transaction and enter into a transaction agreement, at the closing of that transaction we will enter into a transition services agreement pursuant to which we will provide services to the purchaser, including manufacturing, quality, supply chain, pricing and procurement, regulatory, product safety and risk management, medical affairs, IT, finance, human resources, real estate, commercial development and local commercial operations services substantially the same as we currently provide to our OTC business, generally for a period of up to 12 months. Once in effect, our obligations under the transition services agreement may result in additional expenses that are borne by us and may divert our focus and resources that would otherwise be invested into maintaining or growing our retained business.

Whether the Announced Divestitures are ultimately consummated or not, their pendency could have a number of negative effects on our current business, including potentially disrupting our regular operations, diverting the attention of our workforce and management team, and increasing workforce turnover. It could also disrupt existing business relationships, make it harder to develop new business relationships, or otherwise negatively impact the way that we operate the business, which could negatively impact Viatris’ results of operations and cash flows during the pendency of the transactions.

If we successfully complete the Announced Divestitures, our total revenues, results of operations and cash flows from operating activities are expected to be reduced after the close of each transaction. In addition, we have expended significant time and resources, and expect to continue to expend significant time and resources, on these transactions, including management time and focus, costs and expenses related to the separation of the businesses from Viatris, the provision of the transition services and other transaction costs. Many of these expenses must be paid regardless of whether the transactions close, and even if the expected benefits are not achieved. These costs may be significant and we currently do not expect to be reimbursed for them. We may also face other challenges as a result of the announcement and completion of the Announced Divestitures, including that we may not be able to realize the anticipated benefits from such transactions, such as prioritizing use of net proceeds from these divestitures for debt paydown, maintaining employee morale and retaining key management and other employees to provide the transition services and to operate our retained business, and the inability to effectively minimize liabilities and stranded costs associated with the Announced Divestitures.

Any of the risks described above could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price. Refer to Note 5 - Divestitures in Part I, Item 1 of this Form 10-Q for more information about the Announced Divestitures.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There were no repurchases of the Company’s common stock during the three months ended September 30, 2023. Refer to Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations– Recent Developments of this Form 10-Q for additional information regarding the Company’s authorized share repurchase program.

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