Good morning, everyone. I'm Bill Szablewski, Global Head of Capital Markets for Viatris. It is my pleasure to welcome you to our Investor event. With us today is our CEO, Michael Goettler; our President, Rajiv Malik; and our CFO, Sanjeev Narula. We have a lot to share today regarding the reshaping of Viatris into a simpler, stronger and more focused company. But before we get started, I need to cover a few disclaimers. During today's investor event, we will be making forward-looking statements on a number of matters, including our financial guidance for 2022 and various strategic initiatives. These forward-looking statements are subject to risks and uncertainties that could cause future results or events to differ materially from today's projections. Please refer to today's slide presentation or the press release that we furnished to the SEC on Form 8-K earlier today for a full explanation of those risks and uncertainties and the limits applicable to forward-looking statements. We will be referring to certain actual and projected financial metrics of Viatris on an adjusted basis, which are non-GAAP financial measures. We will refer to these measures as adjusted and present them to supplement your understanding and assessment of our financial performance. Non-GAAP measures should not be considered as a substitute for or superior to financial measures calculated in accordance with GAAP. The most direct comparable GAAP measures as well as reconciliations of non-GAAP measures to those GAAP measures are available on our website at investor.viatris.com and in the appendix of today's slide presentation. The information discussed during the presentation, except for the participant questions, is the property of Viatris and cannot be recorded or rebroadcast without Viatris' expressed written consent and permission. An archived copy of today's presentation, along with a replay of the webcast, will be available on our website at investor.viatrise.com, following the conclusion of today's event. With that, now I'd like to hand it over to our CEO, Michael Goettler.

Thank you, Bill, and good morning, and welcome to Viatris 2022 Investor Event. This is truly an exciting day for all of us at Viatris; for our 37,000 colleagues around the world; and for our shareholders. Not only are we reporting strong financial results for the full year of 2021 meeting or exceeding our guidance. Today, we'll lay out for you exactly how we expect to deliver on our vision for Viatris. We'll further review with you our current pipeline, our scientific capabilities, our proven track record and how we intend to reshape our portfolio towards higher margin, more durable assets such as NCEs and 505(b)(2)s. And finally, we'll give you an update on our business performance and execution, our 2021 financial results and our 2022 guidance. Now what you will see is a Viatris that is simpler, that is stronger and that is more focused. At Viatris we expect to deliver more access to patients and more value to shareholders with a durable higher-margin portfolio, significant financial flexibility and shareholder-friendly capital allocation and further enhanced commercial and scientific capabilities. And we'll lay out to you our very bold plan to reshape our company. And with today's announcement of the Biocon biosimilar transaction, we've already taken the first bold step to unlock value, accelerate our financial commitments and increase availability of capital for investing in our future or returning value to shareholders. Viatris was created a little over a year ago, as you know, in November 2020, through the combination of Upjohn and Mylan. Our first year was focused on our immediate priorities of integrating the two companies and delevering our balance sheet, and we wasted no time. As you know, in December 2020, we already announced a significant global restructuring plan and executed against this plan. We defined and delivered clear financial targets, including our 2021 budget, our synergy targets, our goal to pay down $6.5 billion in debt by 2023 and the initiation and growth of a quarterly dividend. And I'm very pleased to say that we have now delivered four quarters consecutively of consistent and solid performance, meeting or exceeding our guidance. Sanjeev later will provide you more details on our full year 2021 results. Meanwhile, our pipeline achieved many significant milestones, including the historic approval of the first interchangeable biosimilar in the U.S. and the first approval of a generic to Restasis. Meanwhile, externally, we're recognized as one of the top five companies on Fortune's company that Changed the World list. We're recognized by Forbes as one of the World's Best Employers, and by Newsweek as one of America's Most Responsible Companies. But most importantly, most importantly, through 2021, we conducted a thorough strategic review of our entire business. We determined what was core and what was non-core to the future of our company. And today, I'm excited to share with you the output of that review and the actions that we're taking. Today, we're announcing a significant global reshaping initiative. The Biocon biosimilar announcement is only the first but critical step to unlock value and reshape Viatris. And combined with other initiatives, we expect to significantly enhance our financial flexibility, accelerate our financial commitments and enable us to invest in our future, continuing to move up the value chain by expanding to more innovative areas and to return value to shareholders. We're taking immediate and concrete actions to execute on that plan. To unlock value and to simplify our business beyond the Biocon biosimilar transaction, we've identified other select assets, which we expect will unlock additional value. And as we continue to execute against our plan, we will become more efficient, reduce complexity and make Viatris a simpler, stronger and more focused company. In total, we expect these initiatives to generate up to $9 billion in pretax proceeds by the end of 2023. And let me just put this in perspective. This is more than half of Viatris current market cap. In return, we're trading off approximately 20% of our current adjusted EBITDA. Share buybacks will be an important benchmark for us as we make future capital allocation decisions and decide how to invest in our future. Our goal is to enhance our proven scientific capabilities and current global platform, including our Global Healthcare Gateway, to create a durable and higher-margin portfolio of products. And that means further expanding beyond our current scope into more innovative products, including NCEs and global 505(b)(2)s. And for that, we've identified three core global therapeutic areas: ophthalmology, gastrointestinal and dermatology. And that, we believe, will particularly fit our capabilities and our platform and where we have a credible path to leadership. We're also further enhancing our commercial and scientific capabilities as needed for this future portfolio. And we intend to double our R&D investment, ramping up steadily to approximately 9% of revenue by 2026 to bolster our pipeline organically. And we expect to grow via business development through our Global Health Care Gateway. Now I'll explain further details on that strategy later. But for now, I would like to hand it over to Rajiv for further details on the Biocon biosimilar transaction.

Thank you, Michael. As Michael just outlined, we have identified certain assets as part of an extensive strategic review. These assets have the potential to unlock trapped value and are potentially non-core to the future direction of the company. These assets can generate up to approximately US$9 billion of pretax total proceeds. The plan is being executed as we speak, and up to $3.335 billion of these proceeds will come from the Biocon transaction, which I will walk you through now. The transaction we announced today is the first step towards creating a simpler, stronger and more focused Viatris. Under the terms of the agreement, Viatris will contribute its biosimilars business to create what we expect to be a unique vertically integrated global biosimilars leader. It's not only the right natural next step for our partnership but also a continuation of our biosimilars journey and enables us to participate in this space in a more optimized way while unlocking substantial trapped value. We believe this evolution positions Biocon Biologics to further optimize and maximize the biosimilars business. Viatris and Biocon started the journey together in 2009, even before the biosimilars regulatory pathway was defined in many markets. We had many successes together and continue to build upon our momentum by adding more products to our pipeline. Together as partners, we have seen this landscape evolve from a science, regulatory and customer perspective. Biosimilars are heading steadily toward a phase of a mature market. And as was the case with generics, vertical integration will prove to be decisive to stay ahead. We believe this transaction positions the company as a world-class vertically integrated biosimilars leader and will enable the new company to optimize end-to-end operational capabilities, serve market needs with competitive advantages and will have sustained power. The transaction is subject to customary closing conditions, including regulatory approvals. Viatris will receive total consideration of up to $3.335 billion. $3 billion of the consideration will be received immediately on closing, with $2 billion in cash and $1 billion of convertible preferred shares. Viatris also expects to receive deferred consideration of up to $335 million. Viatris will own a stake of at least 12.9% of the combined business on a fully diluted basis. We currently expect the combined business operating as Biocon Biologics to commence an IPO in India by late '23. The deal consideration represents a transaction multiple of approximately 16.5x based on estimated '22 adjusted EBITDA of our biosimilar business of approximately $200 million. Under the terms of the agreement, Viatris will contribute its biosimilar business, which includes all the programs currently partnered with Biocon as well as our biosimilars program for Humira, Enbrel and EYLEA. To facilitate a smooth commercial and operational transition, we will provide via TSA select services such as commercial, regulatory and clinical. We will receive costs plus a markup of USD 44 million annually for the duration of TSA. Now I provide an update on the share consideration. We will receive $1 billion of the convertible preferred shares that represent a stake of at least 12.9% on a fully diluted basis. We believe Viatris will be positioned to generate additional significant value through the potential upside of our ownership stake in the combined business. An IPO in India is targeted in late '23, and Viatris has certain priority rights in the IPO. Viatris will also receive customary anti-dilution and preemptive rights. On governance, Viatris will be granted one seat on the Board of Biocon Biologics. In terms of timing, while the transaction is subject to customary and regulatory closing conditions, we currently expect the transaction to close in the second half of '22. We expect the TSA services will end by quarter 4 of 2024. That transaction is an exciting evolution to our partnership with Biocon. I look forward to sharing more with you soon about how we will leverage the proceeds to reshape the Viatris for the future. Now I will turn it over to Sanjeev.

Thank you, Rajiv, and good morning, everyone. It's been an exciting day for Viatris. Today, we announced strong Q4 and full year 2021 results and financial guidance for 2022. We've entered into an agreement with Biocon Biologics for a total consideration of up to $3.335 billion. We've also announced a plan to reshape the company, which we expect to unlock additional value. In the next few slides, I'll walk you through the reshaping initiatives underway, how it strengthens our profile, accelerates financial flexibility and enhance our capital allocation framework. Slide 15 represents an illustrative pro forma for what Viatris could look like post-closing of the Biocon Biologics transaction and after the execution of the plan for other select assets. There are a few key takeaways to highlight. First, as a result of the partnership structure and profit-sharing arrangements of the biosimilar business, the estimated 2022 biosimilar adjusted EBITDA margin is relatively lower compared to our company average. Second, looking at pro forma company, total revenue and adjusted EBITDA will remain largely intact after the transactions. Next, the Biocon transaction at roughly 16x 2022 adjusted EBITDA and estimated proceeds from other select assets are expected to unlock significant value above our company's current valuation. Finally, we expect these transactions will significantly strengthen our financial profile, unlock up to $4 billion to $5 billion of after-tax proceeds that will be deployed for investing into business and returning capital to shareholders. Turning to Slide 16, we highlight our illustrative financial profile across revenue, profitability and the balance sheet. For revenue, we plan to complement annual product revenue of approximately $500 million with business development that is targeted towards assets that fit our strategic, commercial and financial criteria. These opportunities can come in the form of regional tuck-ins, a therapeutic focused pipeline and broader distribution type arrangements via our Global Health Care Gateway. For profitability, we expect gross margins to stabilize over time given the focus on complex products that are wholly owned and not subject to partnership payments. Given our track record of success and the value upside afforded by more durable, higher margin of complex products, we intend to increase our R&D investments. We expect SG&A to continue to benefit from synergies in 2022 and 2023, averaging out at approximately 20% of total revenue. And finally, upon closing of the Biocon transaction, our balance sheet will be immediately strengthened with $2 billion in pretax proceeds to accelerate our Phase I financial commitments.

Thank you, Sanjeev. Now as we said, we plan to expand our portfolio to more innovative and more durable assets such as NCEs and 505(b)(2)s, and we will do that in a very focused way. Now for this, we conducted a thorough analysis of our current strengths and capabilities, especially our scientific capabilities. We looked at market sizes and growth opportunities. We looked at the degree of unmet medical need and the opportunity for innovation, the availability of Phase II and Phase III late-stage assets. And we looked at who our competitors would be and who our prescribers are. And the results were clear. Some therapeutic areas had too much competition or too much scientific risk for us to see a credible path to leadership in the time horizon that we're looking at. Others were too small or didn't provide enough room for innovation. And as I already mentioned earlier, three therapy areas in particular hit the sweet spot for us. That's ophthalmology, dermatology and gastrointestinal. Depending on the opportunity, we may not pursue all of these equally at the same time, but they represent the kind of therapeutic area where we have the ability to leverage our existing infrastructure and maximize the opportunities. Viatris today already has a unique hybrid model with the requisite capability spanning from what is needed to be successful in the generic space to a strong base for what is needed in the brand and innovator space. And we expect to further expand on the innovator capabilities as we hone in on the targeted therapeutic areas. In fact, today, we're announcing that we already have entered into our first Global Healthcare Gateway transaction focused on ophthalmology, acquiring an exclusive license for Pimecrolimus ophthalmic ointment for the treatment of blepharitis, which is a very common type of eye irritation. This product will contribute to the ophthalmology franchise while we continue to search for an anchor asset. And the path to leadership for us starts with the acquisition of an anchor asset in one or more of the three therapeutic areas as well as expanded R&D investment in those areas. It's through the Global Healthcare Gateway and our global platform that we believe we can leverage the full global potential of these assets, organically or inorganically add complementary growth assets in some of these therapeutic areas and then leverage the benefit of therapeutic area leadership and focus by leveraging the existing health care provider coverage, leveraging our existing development expertise, leveraging our existing medical expertise, leveraging the connections we have in the scientific community, etc. As I said, we see a clear path to therapeutic area leadership in one or several of the TAs that we identified. So let me summarize. Viatris of the future is simpler, stronger and more focused. We have and are already executing on a clear plan to reshape the entire company and build a durable higher-margin portfolio consistent of generics, complex products and off-patent brands. We take strategic actions on certain assets but add an innovative growth engine of NCEs and 505(b)(2)s in our targeted therapeutic areas. And with this, we expect Viatris to have significant financial flexibility. In addition to debt paydown and dividend growth, we now expect to have the opportunity for increased R&D investment for extensive BD activities as well as share buybacks. And finally, building on our current platform and capabilities, we intend to have further enhanced commercial and medical excellence with a focus on the identified therapeutic areas. Bottom line, a simpler, stronger and more focused company delivering access to patients and value to shareholders. With that, I'd like to hand it over to Rajiv now, who will be giving you more details on our pipeline and how we are further enhancing that pipeline in line with our strategic vision.

Thanks, again, Michael. I'm going to focus this next session on the role our strong development platform can play to achieve the end goal of going up the value chain. As we have already touched on, enhancing our R&D is an essential part to achieve the future direction of the company. I am very proud of the many accomplishments of our science team over the years. As I see it, we are a development house with capabilities that can be further strengthened and focused in the coming years as we continue to move up the value chain. We intend to leverage our Global Healthcare Gateway to further strengthen our R&D engine with differentiated and novel products that target gaps in care. We believe that we are an ideal development partner that offers strong science, regulatory and clinical skills as well as a strong global commercial footprint to companies with Phase II and III assets. We'll continue to invest in generics with a focus on complexity and diligently pursue life-cycle management opportunities around our current therapeutic areas. We expect to ramp up our R&D investments steadily to approximately 9% of revenue by 2026. This slide shows our roadmap to execute our R&D evolution. On the left, you see where our portfolio and pipeline is today, which is diverse across a wide range of therapeutic areas across segments and markets. We intend to continue to build the pipeline focusing on products with complexity and also investing in life-cycle management of certain key products in our current portfolio of various regions. I'll walk you through certain examples in one of my following pipeline slides. We will seek additional inorganic assets through our Global Healthcare Gateway around current therapeutic areas of regional focus. More importantly, we'll be aggressively looking into several Phase II and Phase III opportunities to build critical mass of new chemical entities and 505(b)(2)s novel products in the three focused therapeutic areas of GI, ophthalmology and dermatology, as Michael mentioned. In order to execute our R&D strategy, we will leverage the foundation that has been built over a number of years. This slide highlights our extensive scientific capabilities across a broad range of dosage forms and delivery mechanisms. We also have proven expertise in all of the related areas that are essential to develop and scale these types of products up through and including novel products. For example, the robust API and formulation development capabilities; global expertise in preclinical study design and execution as well as device engineering, strong clinical development and medical affairs across multiple therapeutic areas; strong in-market regulatory, legal and IP skill sets; and broad and scalable manufacturing capabilities. The backbone of this platform is, of course, a strong team of 3,000 scientists and medical professionals working across 12 development centers and having regulatory expertise in 55 markets. We have a broad range of demonstrated clinical experience and have conducted over 80 clinical development and post-marketing programs, including Phase I, Phase II, Phase III and Phase IV studies. The bottom line is that we believe we are well positioned to support and enable the advancing of the science of the value chain. There is no better representation of our scientific expertise than this slide with our proven results. When we make a decision to pursue the development of a complex generic or a novel product, our track record shows our commitment. On average, complex products can take 7 to 9 years from development to approval. We are proud to bring most of these products first to the market. Recently, we added another first to our basket with the approval of generic Restasis, building off the momentum of our first interchangeable biosimilar assembly. I would like to dive a bit deeper into our existing pipeline to help visualize this progression. Beginning with our core generics, as you can see, we have either launched or have approval or have submitted some of significant products such as generics for Revlimid, Xarelto and Eliquis. We are targeting launching many of these core generics in the next 1 to 2 years. Flipping to the next slide, as you can see, we are continuing to move up the value chain with more complex products. Projected launch timings for many of these are in the next 2 to 4 years. What's unique about our complex generics pipeline is that it's primarily vertically integrated, giving us much better control over the execution of these programs and R&D flexibility. You need to succeed and bring these products to the market. It also improves the margin profile of these products as we will no longer be sharing the profits. I'm very confident that, like in the past, we are well-positioned to bring the first generic of many complex products to the market such as Symbicort, INVEGA TRINZA, Pentasa and Abilify long-acting injection. As I mentioned earlier, in the next five years, we also intend to invest in the life-cycle management of certain core products in our portfolio to meet unmet patient needs. We are already doing this for many products such as levothyroxine oral suspension, which we have submitted and expect regulatory action this year; glatiramer once monthly injection, builds upon our success with generic Copaxone. And we are completing the clinical phase of the development in remitting and relapsing multiple sclerosis. We have also initiated a Phase IV trial and are investing in the science around our Yupelri to explore the impact of revefenacin on a peak inspiratory flow rate and further expand the patient base. We are investing in the life-cycle management of our XULANE product and have initiated a Phase III study on a low-dose option. We have initiated a clinical study for EFFEXOR in Japan to extend the labeling for generalized anxiety disorder. And we are developing several new fixed-dose combinations in cardiovascular for the Chinese market. Finally, we are also developing meloxicam for rapid onset post-surgical pain. We have submitted our IND and are now entering into our Phase II studies. As we enhance our R&D investments and put our capital to use, we look forward to concentrating this pipeline around GI, ophthalmology and dermatology. Our pipeline, excluding biosimilars, that we shared with you today is well-positioned to deliver approximately $500 million plus in new product launches annually after '23. Our total pipeline is valued at $183 billion in IQVIA brand value. This broad pipeline also shows that we will cover almost 80% of the current top 100 IQVIA products, and it's more heavily weighted on complex products. I hope you can feel and appreciate the excitement and the confidence we have in our platform. Let's now pivot and discuss the business execution for the near term. While we reshape Viatris in the coming years, our business execution remains a top priority. I walked you through how we will reshape our portfolio and deliver the pipeline earlier. So now I'll provide an update on how we performed in '21, the progress on integration and how we expect to continue to further stabilize the business in '22. '21, we performed strongly as a team while creating a new company and navigating a dynamic environment. I truly appreciate and thank all of my colleagues around the world, who seamlessly executed a successful first year as Viatris. We made significant progress with our integration. We executed our restructuring program and achieved our target of approximately $500 million of cost synergies while already executing the Pfizer TSA exits for several programs. We delivered strong overall results, exceeding our expectations across all segments.

Let me speak on the integration path forward. We remain on track to realize an additional $500 million cost synergies over the next 2 years, resulting in $1 billion cumulative cost synergies since becoming Viatris. Our synergies in '21 were largely focused on actions around cost of goods, SG&A, cost reductions and restructuring. And as planned, the remaining focus for our cost synergies in '22 and '23 is on the restructuring and exiting the remaining Pfizer TSAs. We have already completed a number of TSA exits through February of '22 and expect to exit the remaining TSAs by the end of the year. Let me now talk to you about '22. We are laser-focused to continue to further stabilize the business during this transition period. You will have this slide as a reference point, as I would like to move to the next one to review the headwinds and tailwinds in '22. We are well-positioned to build on the momentum of '21. And we will do this by delivering the approximately $600 million of new product launches, which I will talk about more on the next slide; driving growth in our key markets, including Europe, where we expect mid-single-digit growth; as well as China retail, where we continue to invest in the same. The key emerging markets like Turkey, Thailand, Mexico, Brazil and Korea are also expected to grow on the back of a more normalized market environment post-COVID-19. Growing products such as Yupelri, Viagra, our Thrombosis portfolio, Creon, Amitiza and Dymista are also expected to grow in '22 and lend strength and stability to the business in the respective geographies; continued ramping up of our market share of interchangeable assembly to mid- to high teens in '22, and building off our successful launch; and by maintaining our leadership in Wixela and XULANE. At the same time, dynamic market conditions are an inherent part of our business. And our job is to perform in this ever-evolving environment. So '22 is going to be no different. We expect mid-single-digit pace business erosion in '22, largely driven by the continuation of increased competition in certain high-margin key products, like Perforomist and Miacalcin; continued implementation of China's health care policy; the changes in the anti-retroviral therapy guidelines, which we expect to continue to drive contraction of the market that has been stable or expanding over the last 10 years. In '22, we'll also face the inflationary impact on input costs on manufacturing operations of our business. Going into more detail regarding our $600 million of expected new product launches in '22, of which about one-third is related to biosimilars. First, I'm excited to highlight that approximately 95% of our new product launches in '22 and '23 are already scientifically executed, meaning that they have been either already launched, approved or are pending approval. Interchangeable insulin glargine, Revlimid, Restasis, insulin aspart are a few key products in this bucket. So while we have not included Symbicort in our '22 financial guidance, we are happy with the progress on the product and remain ready to launch if the opportunity presents itself in '22. While I won't go into great detail on the following segment slides, I'll hit on a few highlights. In developed markets, we expect low single-digit growth, primarily driven by strong performance in Europe. In Europe, we expect to continue to see strong growth, driven by our Thrombosis portfolio, Creon and Influvac, along with the robust new generic launches like Revlimid and Zytiga. In North America, our balanced portfolio of brands, complex generics, injectables and retail generics as well as our robust product launches will help us partially offset the inherent erosion in the market, as well as competition and lower EpiPen volumes coming off COVID-19 demand in '21. Yupelri will be one of the key contributors to offset this. In emerging markets, we expect to see a year-over-year decline entirely driven by the impact of lower COVID-19 product-related volumes. In JANZ, we expect strong volume growth from our key brands like Amitiza, Lipacreon, and EFFEXOR, as well as continued success in building our authorized generics. We also expect common price regulations to have an increased impact, resulting in a high single-digit decline year-over-year. Our strong and well-established commercial presence in the hospital segment in China will support us as we continue to navigate the evolution of the health care policy. At the same time, we are confident in the macro drivers of China, supported by growth in health care consumerism, and therefore are focused on continuing to expand our footprint in the retail segment. To sum up, it's all about execution of our key priorities. We will complete the integration and realize remaining cost synergies. We will deliver the pipeline and expand our robust development house to move up the value chain, and we will continue further stabilizing the business. While we take actions to reshape the company, we'll close the biosimilar transaction in the second half of '22. We'll start working on the other identified divestment opportunities to continue to unlock value and simplify the portfolio. More importantly, we'll continue leveraging the Global Healthcare Gateway to find value-creating business development opportunities. With this clear execution plan, we will create a simpler, stronger and more focused company of the future.

Thank you, Sanjeev. We had another excellent quarter and closed out the year on a strong note. It's been an incredibly successful first full year for Viatris, and I'm really pleased how two organizations have come together. Our strong financial performance demonstrates the breadth of our global platform. As I reflect on 2021, we delivered on our integration plan, met our financial commitment for deleveraging and dividends and developed a plan for bold strategic action to reshape our company going forward. Moving to Slide 53, we exceeded our November midpoint guidance in total revenue, adjusted EBITDA and free cash flow. Total revenue was driven by strong performance in developed markets, which saw approximately 7% operational growth in Europe, which included the benefit of our thrombosis franchise. In North America, new product revenue was offset by anticipated base business erosion and competition in complex products. Taking these factors into account, generic price erosion was in line with our expectation. In JANZ, the impact from Celebrex and Lyrica LOE totaled approximately $600 million and is now largely behind us as we move into 2022. In Greater China, operational revenue was flat to the prior year as we continue to shift our business to the retail channel. Emerging market revenue was impacted by pressure on the ARB business due to new treatment regimens, which were partially offset by the benefit of COVID-related products. Adjusted gross margin came in at 58.7% for the year, driven by strong brand performance and taking into account competition on key products in North America. In 2021, we were able to execute an accelerated integration timeline, which allowed us to capture approximately $500 million in synergies across cost of goods sold and SG&A. Free cash flow benefited from underlying business performance, working capital optimization initiatives and low taxes. I'm pleased with the free cash flow generation for the year, which has enabled us to meet our financial commitments.

Slide 54 captures our reported financial results relative to the combined adjusted estimates for the prior year. Slide 55 identifies the driver of free cash flow for the quarter and the full year. As we mentioned late last year, we anticipated Q4 2021 free cash flow to be impacted by several factors. These included timing of interest payment, higher CapEx and anticipated phasing of one-time cash costs. For the full year, business performance, working capital benefits and lower cash taxes absorbed the higher one-time cash cost. These costs are expected to step down in 2022 and 2023 as we complete integration and restructuring activities. We delivered on our financial commitment and returned approximately $400 million in dividends and paid down over $2 billion in debt. Slide 56 captures key assumptions of the 2022 financial plan. The total revenue estimate assumes base business erosion to be in mid-single-digit range. Foreign exchange has a significant impact on results given our international exposure, which comprises approximately 70% of our total revenue. Key exposures include the euro and yen, with strong appreciation in the U.S. dollar over the second half of 2021. And more recently, into 2022, our financial guidance incorporates approximately 2% headwind on the total revenue and adjusted EBITDA. We expect another strong year for new product revenue across a broad range of generic, complex and biosimilar products. In generics, we expect important launches, including Revlimid, Restasis and Sutent. In biosimilars, we are seeing solid uptake of the interchangeable version of Semglee. Our guidance assumed a full year of biosimilars, which is approximately $875 million in total revenue and adjusted EBITDA of approximately $200 million. New product revenue includes approximately $200 million for biosimilars.

Thank you, Sanjeev. Now turning to revenue build, Slide 58. This bridges the illustrated expected major drivers for 2022 relative to 2021 actuals. Removing the impact of foreign exchange, our year-on-year total revenue is declining by approximately 2%. Base business erosion consists of two buckets. The first is approximately $200 million and is related to expected continued competition on key products, including Miacalcin and Perforomist. The second captures the expected erosion from price deterioration in North America generics, the annual price reset across the Japan product portfolio and the continuing pressure on ARB business due to new treatment regimens and lower COVID-related products. In the base business, we expect strength across categories in Europe and higher volumes in China.

Moving to Slide 59. We're expecting inflationary pressures across the third-party supply chain for input cost, distribution and finished goods. We expect adjusted gross margin to be under slight pressure due to competition on key products and erosion of ARB volumes in emerging markets. Through our planned reshaping initiatives between now and 2026, we intend to invest more in R&D to drive our strategy and pipeline towards NCEs and 505(b)(2)s. On the commercial side, our financial guidance reflects investment in some segments to build demand generation and in-market capabilities. Turning to Slide 60. We expect another strong year for free cash flow generation. Lower restructuring and integration costs will be partially offset by the impact of the EpiPen litigation settlement. We expect to broaden implementation of working capital optimization initiatives in receivable and payable areas to continue to benefit us on free cash flow generation. Before I close, a few points on phasing. We expect total revenue and adjusted EBITDA to be slightly higher in the second half due to the ramping of new products and normal product seasonality. We estimate free cash flow will be evenly weighted between the first half and second half. In general, the second and fourth quarter tend to be lower due to the timing of semiannual interest payments.

In closing, we're coming off a strong year and are well-positioned for a solid start in 2022. The estimated proceeds from the Biocon transaction, along with other reshaping initiatives are expected to strengthen the company and position us for long-term success. Thank you for that question. As I said at the very beginning of today, this is an exciting day for Viatris, an exciting day for our employees, it's an exciting day for shareholders. I think we've laid out for you a very clear path going forward. 2021 really was the year we delivered against the targets we set. We integrated and achieved our synergies, brought the two companies together, but we also used that time to really lay out, do a thorough strategic review, and lay out a path forward. We now have a path that unlocks up to $9 billion in pretax proceeds that we can reinvest, use to return value to shareholders and/or invest in our business. We've clearly laid out to you what we're going to do in R&D. We tried to lay out to you in BD, which areas of the Global Healthcare Gateway we're going to focus on to add to that innovative growth engine of NCEs and 505(b)(2)s, on top of the solid core that we have with generics, complex generics and off-patent brands. We're excited about the future, and we look forward to keeping you updated as we deliver value to shareholders and provide access to patients.

Good morning, everyone. Thank you for listening in to our investor event. We're going to move to the Q&A portion now. First question we're going to take, operator, is Chris Schott from JPMorgan. Thank you.

I wanted to clarify the strategy a bit regarding what triggered this decision. It seems like a departure from the broader portfolio you're developing with Upjohn. Can you elaborate on whether this was a financial decision? Given where your stock is trading and the valuations of some of these assets, it seems financially sensible to proceed. Or was it more influenced by the company's performance or changes in the portfolio over the past year or two? I'm looking for a bit more insight into what initiated this process. Additionally, I'd like clarification on the valuation for the additional $4 billion to $6 billion in asset divestitures. Referring to Slide 15, it appears there’s $300 million to $500 million of EBITDA associated with these assets, which seems to suggest a low double-digit EBITDA multiple. Am I understanding that valuation range correctly? Is that the appropriate benchmark for valuation? Any insights would be appreciated.

Chris, we missed the very beginning of your question. There was the sound missing for about 30 seconds. Let me repeat that then, if that works. Sorry. Thank you, Chris. As we promised, we have conducted a thorough strategic review of all our businesses, taking our time in 2021 to assess our entire portfolio. Our direction is clear. We aim to remain a diversified business with generics, complex generics, and off-patent brands, while also introducing some innovative growth drivers. In regard to our biosimilar business, the deal highlights the value of what we've built and the attractiveness of this sector, which we believe is reflected in the appealing valuation we've achieved. This deal immediately unlocks value, providing us with $2 billion in cash up front. We will maintain our involvement in the biosimilar business in a different capacity, holding at least a 12.9% stake in the future Biocon Biologics, along with the associated upside potential. We have established a company that is better positioned for success through vertical integration, aligning with our view of market trends, where vertically integrated companies will lead.

Yes, I would say, Chris, that it continues the vision and direction we established, as we have mentioned our intention to move up the value chain. So, it's consistent with that approach. A couple of years ago, we started assembling various assets both organically and inorganically. We carefully evaluated our products to determine which ones made sense and which did not. We reassessed our businesses to identify the essentials that align with our long-term strategy, keeping in mind that some other focused players may be able to derive greater value from certain assets than we could. This process allowed us to examine each aspect of our business and ask ourselves how we can unlock value, reshape the company for the future, and strategically position ourselves for success.

If I can just add, Michael. Chris, the other thing that you keep in mind, you talked about performance. We're actually coming from a position of strength. If you think about how we've performed, including the results we announced earlier today, of four quarters of solid performance. And even without these reshaping initiatives, we are on track with our Phase I commitments that we talked about in terms of generating over $1 billion of free cash flow in three years. So it's actually coming from a position of strength and naturally evolving to where Rajiv and Michael just talked about is the next stage in our journey.

Right. And Chris, the second part of your question was on the additional assets. So obviously, we're not, at this point, disclosing what they are for reasons, for the integrity of the process, for competitive reasons, etc. We'll disclose that as we come closer to it. But again, it's driven by the same motivation. It's either unlocking of value. It's a question of is it core and non-core for the future of our business going forward? And does it help us to simplify the business and reduce execution risk and complexity of the business that we have. That's the main motivation behind those assets as well.

Yes. Thank you, Chris, for the question. Our next question, operator, we're going to go to Balaji from Barclays.

A couple of questions for me. Firstly, on the guidance, as we look at 2022 guidance, I remember, Rajiv, you had called out $6.2 billion as the floor in the last call? And that seems to be the higher end of the range now. So what's changed to have this delta and believe that this includes the biosimilars business as part of 2022? Second, as you look at the therapeutic areas that you've targeted for growth, can you give the current revenue and EBITDA size of these three therapeutic areas today? And what would you consider a successful build out by 2025 for these three therapeutic areas? Thank you.

Let me start with the question on EBITDA. Sanjeev outlined the various components and where we stand for 2022. We are not setting any targets for 2023 at this time because it wouldn’t make sense given the changes that can occur, especially if one of the businesses launches in the middle or at the end of the year. What we aimed to provide is a vision for what RemainCo will look like after all of this. This does not account for any potential business development, research and development activities, or share repurchase plans, so it's just a baseline business we are discussing moving forward. Our focus now is on the future, and 2022 and 2023 should really be viewed as execution years. We remain committed to our Phase I objectives, which include debt reduction, dividend growth, achieving $8 billion in cash flow, and realizing synergies, among others. We are fully dedicated to these goals. It's crucial that we execute against the initiatives we laid out for 2022 and 2023 to establish a strong future for Viatris starting in 2024 and to return this business to growth. That's the essence of Viatris. Regarding the three therapeutic areas, we strategically selected them, and we do have some existing business within these areas. Sometimes this is derived from our generic business, and other times from our branded business that we are able to expand. We chose these areas because they align with our future objectives. If you examine them, you'll notice they share some common characteristics: they are of reasonable size, with market sizes between $27 billion and $56 billion; they are projected to grow at mid-single digit rates of 4%, 5%, and 6%; they possess multiple assets that are in development, primarily in Phase II and Phase III, with most of these being advanced not by big pharmaceutical companies, but by mid and small-cap firms, making them accessible to us potentially through the Global Healthcare Gateway. They are very specialist-focused, meaning we don’t require a large primary care sales force to reach these markets. We can effectively build specialty sales forces that can connect with these physicians. The probability of success is moderate, not low, as these areas necessitate smaller studies and are not outcome-driven. When you review the details, they all exhibit characteristics that we believe align well with our platform and the competitive landscape we will be navigating. Would you like to add anything?

Yes, in response to your question about gastrointestinal products, we have strong franchises in Europe and other markets such as Japan and Australia. Amitiza fits well within the gastrointestinal category for Japan. It's not just about the market size; it's also about our presence in that area, which has been a key consideration, as Michael pointed out. Similarly, in ophthalmology, we have valuable knowledge from Upjohn regarding Xalatan. We believe we have a solid understanding of that market commercially. These are some of the factors we've considered while identifying these focus areas.

And the first deal that we just announced.

Yes.

Balaji, regarding the EBITDA, I mentioned that on Chart 59. There are two significant factors that are not exclusive to Viatris but are prevalent in the industry. The first factor is foreign exchange; our business is 70% international. As observed in the second half of last year and the start of this year, the dollar has strengthened against key currencies like the euro and yen, which is causing approximately a 2% headwind on our EBITDA, amounting to about $120 million. The second factor is the inflation in input costs related to third-party supply, including solvents, procured APIs, and distribution costs, which is also a widespread industry issue, accounting for around $196 million. Together, these factors have been taken into account in our guidance, where the midpoint is set at $6 billion.

Next question is going to be Ronny from Bernstein.

So I want to touch on two or three things. First of all, the baseline business. I'm aware that the generic business typically has its kind of a 5% erosion rate, but I was thinking that your international off-brand business is a lot more stable than that. Is the 5% you're giving us just a result from your projection for 2022? Or should we just think long term about that international business on existing products as facing a 5% erosion over time? And then second, you're kind of doing a big shuffle here. I was under the impression that your strategy was. We have this global presence. We're just going to license products from other companies and put that on that basis, and that will be our strategy. And now you seem to be shifting this to focus on specific three areas, one of which you would probably pick. Is that false strategy simply not viable? Can we simply not take therapeutic-agnostic products and launch them globally using your infrastructure? And following up on that, you begin to talk about why you're picking the products, the strategy, the area you're picking. Just for us who follow big pharma, those are hypercompetitive areas. Can you just tell us a little bit more granularity about where in those areas you're going to compete? Just because otherwise, you look like you're just competing with much larger companies with much bigger R&D budgets.

Yes. Ronny, if we consider all the businesses together, we're indicating that the blended erosion is approximately 4% to 5%. That's the 5% you mentioned. You're correct that generics can experience 5% to 6% erosion, while LOEs might range from 3% to 4%, but not exactly at those levels. I'm pleasantly surprised by how well we've managed to maintain our position. This year, because of various factors— and I'm not using this as an excuse— we expect to operate in a more normalized fashion, allowing our team to engage more actively. There have been some fluctuations, but I would suggest looking at the brands for erosion around 2% to 4%. Japan is a significant area where price erosion for these brands is considerable. However, when you look at emerging markets, the erosion isn't as severe. Once we stabilize that, it's one key piece.

Yes. The second was the Global Healthcare Gateway question.

Before I address Gateway, I want to clarify that we are not abandoning any of our business. My slides on R&D indicate that we are still focused on the generic space. We have some promising products lined up for 2022 to 2025, including Symbicort and Revlimid, along with complex injectables. Our R&D investments are increasing in complex generics, and we are also moving forward with products like our 505(b)(2) applications, such as Copaxone, which is a monthly treatment. We have initiated studies on EFFEXOR for general anxiety disorder, Yupelri for the PIFR study to broaden our patient base, and Xulane Low Dose. We are strategically selecting our initiatives, approaching them with care and diligence. When we evaluate new chemical entities and related areas, it is crucial to focus on specific therapeutic areas.

Yes.

Yes. I think we have a good understanding of that space commercially. So these are some of the factors, which we have taken into consideration while picking up these areas.

Next question is going to be Eric from Evercore.

This is Eric speaking. Just the first one on EBITDA. I know we're talking about this a lot. But previously, you guys just mentioned a $6.2 billion EBITDA floor. After this transaction for RemainCo, will that EBITDA be flat or growing over time? And then my second question: You mentioned at least a 12.9% equity stake, which implies about a $7.7 billion valuation for Biocon Biologics. That's compared to like a $4.9 billion valuation from the stake sold to Serum Institute. So since it's at least 12.9%, does that mean there's room to renegotiate the size of that stake?

Let me begin with the question about EBITDA, Eric, and I will ask Rajiv to address the 12.9% devaluation topic. Regarding EBITDA, we are providing guidance for 2022 but not long-term guidance at this time due to various uncertainties. We have shared what RemainCo would look like without any business development transactions or other potential changes. This is our current position. Our aim is to transition the company into the future, beyond 2024, returning to growth and establishing a more sustainable high-margin portfolio. That is our focus. Whether growth will occur in 2024 or later is still uncertain at this moment. Rajiv, perhaps you can provide insights on the 12.9%.

Yes, Eric, I want to begin by expressing our appreciation for the value attributed to our biosimilar business by our partner and an external party. Each deal is unique, and we are fully aware of our own business's value and what we aim to achieve. Our priority is to ensure the success of the company as a vertically integrated entity. We plan to hold equity in that company to benefit from its growth and support them in achieving success. This transaction is accretive to our value at around three times our current standalone multiples, with nearly two-thirds of the consideration received as immediate cash. This also allows us to allocate our R&D and capital deployment as needed, whether for reinvesting in the business or for share buybacks. I believe this is a beneficial deal for us, and it makes perfect sense strategically. We have structured the company in a thoughtful manner, and my experience in this space since 2009 has provided us with valuable insights into achieving success. I am confident that this is the right decision, and I am pleased to be part of this journey and this team.

Thanks, Eric, for the question. Next one, we're going to go to Nate at Goldman. Go ahead, Nate.

I wanted to ask about the growth outlook for new products. You mentioned $600 million this year, with $200 million of that coming from biosimilars. Some key launches this year are also in the biosimilar area. Looking ahead, how should we consider the revenue progression from new products? You had previously aimed for $600 million to $700 million. How does that estimate change in light of the biosimilar divestiture announced yesterday and the new NCE strategy moving forward?

So Nate, the schedule should reflect the $500-plus million mentioned, excluding biosimilars, based on our current pipeline. It does not account for the increase in R&D and our ability to invest more in R&D, business development, and related deals. That's how you should interpret this.

Thank you, Nate, for the question. Next question, we're going to go to David Amsellem. Please go ahead.

Okay. So I wanted to get some more granularity regarding your thought process on R&D. I think the target is 9% by 2026. So how do you think about that target? I mean? And can you talk about how your thought process evolved here? In other words, what are some of the assumptions here? And I guess, going forward, with this sort of focus or leaning into brand assets, whether they're NMEs or 505(b)(2) assets, do you have a target in mind in terms of portion of the mix, the product mix, the revenue mix then our brands, say, by 2025 or 2026? And how do you think about that? And then I guess the last piece is with this brand focus, how much internal R&D capabilities can you bring to bear in terms of these therapeutic verticals that you're focusing on?

I will address the second question, and then Rajiv will discuss the 9% R&D and how we arrived at that figure. David, we need to recognize that today's announcement is a crucial first step in unlocking value, enhancing financial flexibility, and establishing a clear capital allocation strategy for the future. Our focus will be on how we utilize those funds, whether for share repurchases, R&D, or business development, with a targeted approach in the business development and R&D sectors. We have a two-year timeline to execute this strategy, and we will keep you updated throughout the process. While we do not have a specific allocation planned for the future, we have an approximate idea of the areas we want to invest in and the reasons for rebalancing the portfolio, which will become evident as we progress over the next two years. Rajiv, could you provide insights on the 9%?

Yes, I would like to take a step back. We have been investing approximately $600 million to $700 million in R&D each year for the past few years. During this time, we have launched products valued at a similar range, indicating that our R&D efforts are quite effective. The increase to 9% signifies that we will be doubling our R&D investment, raising it from around $600 million to $700 million to approximately $1.3 billion to $1.4 billion by 2026. Our capabilities in dosage forms, clinical trials, and regulatory matters are well-established, and we are currently pursuing numerous 505(b)(2) opportunities. We are collaborating with Theravance on the Yupelri project, which underscores our strong clinical capabilities, illustrated by our involvement in multiple Phase II, Phase III, and Phase IV studies. I am confident that as we increase our R&D efforts and incorporate late-stage Phase II and Phase III assets, we have the infrastructure to succeed and align with the future direction that Michael outlined, ultimately guiding us toward higher value, higher gross margin, and more scientifically advanced products. This is how I perceive the transition in our R&D strategy.

Thanks for the question. Next question, we're going to go to Greg Fraser, Truist.

On the China business, what percentage of that business is retail? And how much of the China sales do you expect the retail channel to account for over time? And you mentioned intensifying competition in the retail channel. Is that being driven by other multinationals or Chinese companies? And then just a follow-up on the additional asset sales that you're considering, are those sales likely to come in 1 or 2 larger deals or a series of smaller deals? Any color on that would be helpful.

Regarding China, there are three segments to consider. The public hospital segment will be significantly impacted by the health care policy and represents about 40% of our business. The retail segment accounts for around 45%, with the remainder consisting of private hospitals. We are focusing our investments and efforts on expanding our presence in these areas to counterbalance the challenges we anticipate in public hospitals. These are the three key factors to note from our perspective on China. Additionally, as you might expect, there has been heightened competition in retail, driven by both multinational and local Chinese companies. However, we still see a strong appreciation for global brands and quality, which is how we differentiate ourselves from many local competitors.

Yes. And Greg, on the assets, I mean, all I can tell you is it's a mix. There are several of them. It's not a single one. But I really don't want to disclose more at this point, again, to preserve the integrity of the process that we are running as well as for competitive reasons. And just like we saw with the Biocon deal, we're ready to talk about it. We come out, and we'll tell you the complete story.

Yes. Thanks for the question. We're going to go to Gary from BMO.

First, by divesting biosimilars, does that impact the rest of the complex generic portfolio in any way by not having that combined offering for customers under the same roof? I'm curious how you think that dynamic is going to play out. And then Rajiv, I think you mentioned biosimilars are approaching a mature phase. Is that the case? I thought we were just scratching the surface there in terms of biosimilars. So how are you thinking about unlocking the value of that business now? And then maybe you could talk about the commercial execution with Semglee and Restasis. How quickly you've been able to get good coverage and penetrate those markets? Is this in line with expectations as we think of your ability to execute in those areas? And just in terms of the cash from the Biocon transaction, you're going to be deploying it in a bunch of ways. Just how committed are you to the dividend and growing that dividend as part of the overall mix?

Look, we continue to be committed to growing the dividend. We continue to be committed to returning value to shareholders. The Board has already authorized a $1 billion share repurchase program. And we continue to also be committed to investing in this company and growing it appropriately. And the trade-off between all of these is a bit of a case-by-case thing, like as the opportunities come in, right? I mean you see if you look at the Pimecrolimus deal that we just announced, it's a very creative structure. We committed $40 million upfront and have no scientific risk really and have an option at the back end. So continue to expect us to be creative here and be committed to returning value to shareholders. And obviously, the dividend, as we said, always for our Phase I commitment, we're committed to growing that and delivering that. Rajiv, if you want to comment on the other questions, please?

Yes. The first question was about whether the divestment of biosimilars would affect our customer reach. Greg, we still have a broad and deep portfolio, and importantly, a strong pipeline. In a few years, the biosimilars may no longer be part of it, but we will keep adding new products to ensure we remain significant. As always, for the past two decades, our focus has been on being a partner to our customers, and that commitment will not change. Regarding my comments on maturity, I am looking at a decade into the future and considering the journey biosimilars have undergone over the past 5 to 6 years, including the evolution of the market and the competitive landscape. For instance, with Humira, although it may be a unique case, there are 15 competitors in that space. In Europe, tender processes have progressed to a point where competition can come close to brand erosion of 80% or 90%. When I mention that we are heading towards a mature phase, I take all these factors into account. Just as we have adapted over the last 20 years, being vertically integrated has helped us manage similar situations in generics. This is where we currently stand, and looking ahead 10 years, maintaining vertical integration is essential, making this the right next step for us.

And that's how we were so excited about creating this vertically integrated biosimilar champion and staying involved in it with at least 12.9% stake and being able to participate in the upside on that as well when the IPO happens. So we're thrilled about participating in the business, in a better setup and in a different and more optimized way.

Okay. Thank you, Aaron. Next question is going to be Navann from Citi.

Could you go through the use and the breakdown of the $3.3 billion proceeds in the near and medium term, given that you have $3.1 billion of bond maturities due this year and next, the $1 billion buyback and other uses of proceeds? And then just a second question for Rajiv. Could you describe your and Viatris' involvement in Biocon Biologics in the future?

Yes, the Biocon deal is immediately beneficial and enhances our commitment to Phase I. The $2 billion we expect to receive after taxes in the fourth quarter will be used to pay down our short-term debt. We will still have cash remaining at the end of the year and additional funds available next year. This cash could be utilized for potential business development or share buybacks, and we will evaluate each situation individually to decide the best course of action. Additionally, once we receive the proceeds from the IPO, expected in early Q3 or Q4 2024, it will provide further flexibility for either business development opportunities or share repurchases. In summary, the $2 billion will enhance our Phase I commitments and provide further funds for share buybacks or business development.

It's a very complementary deal. We have a significant responsibility for the next two years. My role will be to assist in integrating it smoothly, ensuring these businesses execute effectively over this period. Nothing should hinder our progress. As we approach 2024 and 2025, we need to ensure a seamless transfer of capabilities and resources to set up the new company for success, supporting them in every possible way as we have a meaningful stake in that company. I will do everything I can to assist with that.

Okay. Right now, thank you for that question. As I said at the very beginning of today, this is an exciting day for Viatris, an exciting day for our employees, it's an exciting day for shareholders. I think we've laid out for you a very clear path going forward. 2021 really was the year we delivered against the targets we set. We integrated and achieved our synergies, brought the two companies together, but we also used that time to really lay out, do a thorough strategic review, and lay out a path forward. We now have a path that unlocks up to $9 billion in pretax proceeds that we can reinvest, use to return value to shareholders and/or invest in our business. We've clearly laid out to you what we're going to do in R&D. We tried to lay out to you in BD, which areas of the Global Healthcare Gateway we're going to focus on to add to that innovative growth engine of NCEs and 505(b)(2)s, on top of the solid core that we have with generics, complex generics and off-patent brands. We're excited about the future, and we look forward to keeping you updated as we deliver value to shareholders and provide access to patients.