What is Viatris Probability of Financial Distress (%)?
Probability of Financial Distress (%) measures the probability that a company will go bankrupt in the upcoming year given its current financial position. A higher ratio indicates a larger probability of bankruptcy for the company, while a lower ratio indicates a healthier fundamental. As of today, Viatris's Probability of Financial Distress (%) is 0.06%.
Like the Altman Z-Score, the PFD measures a company's bankruptcy risk. However, the main drawback of the Z-score is it does not apply to banks and insurance companies. According to Investopedia, the concept of "working capital" does not apply to banks and insurance companies, as financial institutions do not have typical current assets or current liabilities like inventories or accounts payable.
Competitive Comparison of Viatris's Probability of Financial Distress (%)
For the Drug Manufacturers - Specialty & Generic subindustry, Viatris's Probability of Financial Distress (%), along with its competitors' market caps and Probability of Financial Distress (%) data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Viatris's Probability of Financial Distress (%) Distribution in the Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, Viatris's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Viatris's Probability of Financial Distress (%) falls into.
Viatris Probability of Financial Distress (%) Calculation
Probability of Financial Distress (%) (PFD) was developed by John Campbell, Jens Hilscher and Jan Szilagyi in their Search of Distress Risk. It measures the probability that a company will go bankrupt within the next 12 months given its current financial position.
The Probability of Financial Distress (%) was obtained by a logit probability model based on eight explanatory variables. The logit formula to compute the probability of financial distress (LPFD) is given below:
| LPFD | = | -20.12 * NIMTAAVG | + | 1.60 * TLMTA | - | 7.88 * EXRETAVG | + | 1.55 * SIGMA | - | 0.005 * RSIZE | - | 2.27 * CASHMTA | + | 0.070 * MB | - | 0.09 * PRICE | - | 8.87 |
| = | -7.44 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.06% |
The eight explanatory variables are:
1. NIMTAAVG = Net Income to Market Total Assets
*Note that for companies reported quarterly, geometrically declining weighted quarterly Net Income data in latest four quarters are used.
2. TLMTA = Total liabilities to Market Total Assets
3. CASHMTA = Cash to Market Total Assets
For non-financial companies, CASHMTA is measured as:
4. EXRETAVG = Excess Return compared to the S&P 500
EXRETAVG is the weighted excess return compared to the S&P 500 in past 12 month. Geometrically declining weights are imposed on the monthly excess return to reflect lagged information. The weight is halved each quarter.
5. SIGMA = Standard Deviation of Daily Returns
For sigma, we use the annualized standard deviation of a company's returns over the past 92 days (or 63 trading days).
6. RSIZE = Relative Size
| RSIZE | = | log (Market Cap | / | Total Market Cap of S&P 500 companies) |
7. MB = Market to Adjusted Book Equity Ratio
8. PRICE
PRICE is measured as the log of the stock price, capped at log(15).
Viatris (Viatris) Business Description
Traded in Other Exchanges
Address
1000 Mylan Boulevard, Canonsburg, PA, USA, 15317
Viatris was formed in November 2020 through the combination of Upjohn, a wholly owned subsidiary of Pfizer that specialized in off-patent drugs, and Mylan, a global pharmaceutical manufacturer that focused on generic and specialty drugs. By joining forces, Viatris became one of the largest generic drug manufacturers in the world, servicing over 165 countries. Generics (commoditized and complex) and biosimilars make up roughly 40% of Viatris' total sales. Remaining 60% of sales is derived from its portfolio of legacy products which includes Lipitor, Norvasc, Lyrica, and Viagra. While it covers more than 10 major therapeutic areas, Viatris has identified dermatology, ophthalmology, and gastroenterology as its three key areas of focus for future innovations.
Executives
| Andrew Cuneo |
officer: See Remarks |
1000 MYLAN BOULEVARD, CANONSBURG PA 15317 |
| Xiangyang (sean) Ni |
officer: President, Greater China |
1000 MYLAN BOULEVARD, CANONSBURG PA 15317 |
| Leo Frans Groothuis |
director |
1000 MYLAN BOULEVARD, CANONSBURG PA 15317 |
| Scott Andrew Smith |
director |
C/O CELGENE CORPORATION, 86 MORRIS AVENUE, SUMMIT NJ 07901 |
| Elisha W Finney |
director |
C/O VARIAN MEDICAL SYSTEMS, INC, 3100 HANSEN WAY M/S E-327, PALO ALTO CA 94304 |
| Van Der Meer Mohr Pauline |
director |
1000 MYLAN BOULEVARD, CANONSBURG PA 15317 |
| Menassie Taddese |
officer: See Remarks |
1000 MYLAN BOULEVARD, CANONSBURG PA 15317 |
| Robert J Coury |
director, officer: Executive Chairman |
BUILDING 4, TRIDENT PLACE, MOSQUITO WAY, HATFIELD, HERTFORDSHIRE X0 AL10 9UL |
| W Don Cornwell |
director |
|
| Brian Roman |
officer: Global General Counsel |
1000 MYLAN BOULEVARD, CANONSBURG PA 15317 |
| Anthony Mauro |
officer: See Remarks |
BUILDING 4, TRIDENT PLACE, MOSQUITO WAY, HATFIELD, HERTFORDSHIRE X0 AL10 9UL |
| James M Kilts |
director |
120 PARK AVE, NEW YORK NY 10017 |
| Melina E Higgins |
director |
BUILDING 4, TRIDENT PLACE, MOSQUITO WAY, HATFIELD, HERTFORDSHIRE X0 AL10 9UL |
| Ian C Read |
director |
PFIZER INC ATTN CORPORATE SECRETARY, 235 EAST 42ND STREET, NEW YORK NY 10017 |
| Dillon Joellen Lyons |
director |
BUILDING 4, TRIDENT PLACE, MOSQUITO WAY, HATFIELD, HARTFORDSHIRE X0 AL 109UL |
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