Is Viatris Inc. (VTRS) the Best Weight Loss Drug Stock to Buy According to Analysts?

Viatris Inc. (VTRS) has been making waves in the pharmaceutical industry, particularly in the realm of weight loss drugs. With its potential to launch generic versions of Novo Nordisk's popular weight loss drugs, Wegovy and Ozempic, Viatris has analysts buzzing about its prospects. However, the company faces challenges, including an ongoing patent infringement lawsuit with Novo Nordisk. Let's delve into the potential market share, revenue growth, and competitive position of Viatris' weight loss drug portfolio, and explore whether it's the best stock to buy in this sector.

Viatris' weight loss drug portfolio is driven by several key factors, including strong commercial execution, advancements in the pipeline, capital return, remediation plan for Indore, and an enterprise-wide initiative to review its global infrastructure and identify additional cost savings. These factors have contributed to the company's divestiture-adjusted operational revenue growth of 2% in 2024, despite the broader industry landscape and historical performance.

One of the standout achievements in 2024 was Viatris' new product revenues of $582 million, which represent a diverse range of therapeutic areas, including weight loss drugs. This diversification reduces the company's reliance on a single product or therapeutic area, thereby mitigating risks associated with market fluctuations or patent expirations. The new product revenues also demonstrate Viatris' ability to generate growth through innovation, which is crucial for long-term success.

Looking ahead to 2025, Viatris has provided financial guidance that includes the expected financial impact from the Indore facility warning letter and import alert. The company anticipates six Phase 3 data readouts and the achievement of important late-stage development milestones for its innovative assets Selatogrel, Cenerimod, and Sotagliflozin. Additionally, Viatris plans to prioritize capital return in 2025, including $500 million to $650 million in share repurchases. This plan aligns with the company's overall capital allocation strategy and shareholder value creation, as it balances the return of capital to shareholders, continuing to fuel the base business, and investing in future growth.



In comparison to other competitors in the market, Viatris' weight loss drug portfolio is well-positioned to capture a significant portion of the market. The company's focus on complex generics, which have more complex formulations, dosage forms, or are injected or have more complex administration, allows it to differentiate itself from other generic drug manufacturers. Additionally, Viatris' strong commercial execution and pipeline advancements have positioned it well to compete with other weight loss drug manufacturers, such as Novo Nordisk, which has two golden cash cows in the diabetes drug Ozempic and the weight loss drug Wegovy.

However, there are some challenges that Viatris faces in the market, such as the ongoing lawsuit with Novo Nordisk over patent infringement allegations. If Viatris loses the lawsuit, it may need to pay royalties or defer action for a while, assuming it can move forward at all. This uncertainty makes investing in Viatris based solely on the potential launches of its weight loss drugs less than advisable. Nevertheless, the company's difficult-to-disrupt business model and dividend yield of 4.2% make it an attractive investment option for those seeking income.

In conclusion, Viatris' weight loss drug portfolio is driven by several key factors, including strong commercial execution, advancements in the pipeline, capital return, remediation plan for Indore, and an enterprise-wide initiative to review its global infrastructure and identify additional cost savings. The company's focus on complex generics and strong commercial execution position it well to compete with other weight loss drug manufacturers, despite the challenges it faces in the market. While the potential for significant revenue growth exists, it is not guaranteed, and investors should consider the risks and uncertainties associated with the ongoing patent infringement lawsuit.