Full Press Release Details
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Organon Reports Results for the Second Quarter
| Second quarter 2025 revenue of $1.594 billion | ||
| Second quarter 2025 diluted earnings per share of $0.56 and non-GAAP Adjusted diluted earnings per share of $1.00; GAAP diluted earnings per share includes a $46 million gain, or $0.14 per share, for early extinguishment of debt | ||
| Second quarter 2025 net income of $145 million and Adjusted EBITDA (non-GAAP) of $522 million, representing an Adjusted EBITDA margin of 32.7% | ||
| The company repaid $345 million of long-term debt during the quarter; on track to achieve a net debt to Adjusted EBITDA ratio of less than 4.0x by year-end | ||
| Revenue guidance range for full year 2025 raised to $6.275 billion to $6.375 billion based on the company's current views of foreign exchange; guidance range for Adjusted EBITDA margin (non-GAAP) affirmed at 31.0% to 32.0% |
Jersey City, N.J., August 5, 2025 - Organon (NYSE: OGN)
today announced its results for the second quarter ended June 30, 2025.
"During the quarter we paid down principal on our long-term
debt and began implementing meaningful cost savings, which together set us on a path to achieve net leverage below 4.0x by the end
of this year. We will aim to drive further improvement, with the goal of achieving net leverage of 3.5x or below by the end of
2026," said Kevin Ali, Organon's chief executive officer. "We are right where we want to be with VTAMA,
making significant progress on our access objectives, with the overall portfolio compensating well for the loss of exclusivity of Atozet
Second Quarter 2025 Revenue
| in $ millions | Q2 2025 | Q2 2024 | VPY | VPY ex-FX | ||||||||||||
| Women's Health | $ | 462 | $ | 449 | 3 | % | 2 | % | ||||||||
| General Medicines | ||||||||||||||||
| Biosimilars | 173 | 164 | 5 | % | 6 | % | ||||||||||
| Established Brands | 936 | 963 | (3 | )% | (4 | )% | ||||||||||
| Other (1) | 23 | 31 | (25 | )% | (24 | )% | ||||||||||
| Revenue | $ | 1,594 | $ | 1,607 | (1 | )% | (1 | )% |
Totals may not foot due to rounding and percentages
are computed using unrounded amounts.
(1) Other includes manufacturing sales to third parties.
For the second quarter of 2025, total revenue was $1.594 billion, down
1% on both an as-reported basis as well as excluding the impact of foreign currency (ex-FX).
Women's Health revenue increased 3% as-reported and increased
2% ex-FX in the second quarter of 2025, compared with the second quarter of 2024. The company's fertility business grew 15% ex-FX
in the second quarter driven by a favorable year-over-year comparison in Follistim AQ (follitropin beta injection) related
to the 2023 exit of a spin-related interim operating model agreement in the U.S., increased demand and favorable rate in the U.S., and
geographic footprint expansion. Sales of Nexplanon (etonogestrel implant) declined 1% ex-FX in the second quarter. Outside
the U.S., Nexplanon grew 10% ex-FX in the period largely offsetting a 5% decline in the U.S. In the U.S., customers relying on
federal and state subsidized programs are facing potentially constrained funding, which factored into their purchasing decisions for contraceptive
products during the second quarter.
Biosimilars revenue increased
5% as-reported and increased 6% ex-FX in the second quarter of 2025, compared with the second
quarter of 2024, primarily due to strong performance of Hadlima (adalimumab-bwwd),
which more than offset expected declines in Ontruzant (trastuzumab-dttb)
and Renflexis (infliximab-abda) associated with the maturity of those products.
Established Brands revenue declined
3% as-reported and declined 4% ex-FX in the
second quarter of 2025. Revenue contribution of Emgality (1) (galcanezumab-gnlm) and Vtama (2)
(tapinarof) partially offset the impact of the loss of exclusivity ("LOE") of Atozet (ezetimibe and atorvastatin)
in key markets in Europe and lower sales of Singulair (montelukast sodium), particularly in China and Japan.
(1) Organon acquired certain European licensing and distribution rights
to Emgality and Rayvow from Eli Lilly and Company ("Eli Lilly") beginning in early 2024. Emgality and
Rayvow are registered trademarks of Eli Lilly in the European Union and other countries (used under license).
(2) Vtama was acquired as part of Organon's acquisition of
Dermavant Sciences Ltd. ("Dermavant"), which closed on October 28, 2024.
Second Quarter 2025 Profitability
| in $ millions, except per share amounts | Q2 2025 | Q2 2024 | VPY | |||||||||
| Revenues | $ | 1,594 | $ | 1,607 | (1 | )% | ||||||
| Cost of sales | 720 | 668 | 8 | % | ||||||||
| Gross profit | 874 | 939 | (7 | )% | ||||||||
| Non-GAAP Adjusted gross profit (1) | 983 | 996 | (1 | )% | ||||||||
| Net income | 145 | 195 | (26 | )% | ||||||||
| Non-GAAP Adjusted net income (1) | 261 | 289 | (10 | )% | ||||||||
| Diluted Earnings per Share (EPS) | 0.56 | 0.75 | (25 | )% | ||||||||
| Non-GAAP Adjusted diluted EPS (1) | 1.00 | 1.12 | (11 | )% | ||||||||
| Acquired in-process research & development (IPR&D) and milestones | - | 15 | - | % | ||||||||
| Adjusted EBITDA (Non-GAAP) (1, 2) | 522 | 513 | 2 | % |
| Q2 2025 | Q2 2024 | |||||||
| Gross margin | 54.8 | % | 58.4 | % | ||||
| Non-GAAP Adjusted gross margin (1) | 61.7 | % | 62.0 | % | ||||
| Adjusted EBITDA margin (Non-GAAP) (1, 2) | 32.7 | % | 31.9 | % |
| (1) | See Tables 4 and 5 for reconciliations of GAAP to non-GAAP financial measures. | |
| (2) | Adjusted EBITDA and Adjusted EBITDA margin for Q2 2024 includes $15 million, related to acquired IPR&D and milestones. |
Gross margin was 54.8% as-reported and 61.7% on a non-GAAP adjusted
basis in the second quarter of 2025, compared with 58.4% as-reported and 62.0% on a non-GAAP adjusted basis in the second quarter of 2024.
Lower reported gross margin in the second quarter was due to higher year-over-year amortization expense related to the acquisition of
intangibles in the prior year, as well as amortization associated with the inventory fair value adjustment related to the Dermavant acquisition.
Non-GAAP Adjusted gross margin was consistent with the prior year period.
Net income for the second quarter of 2025 was $145 million, or $0.56
per diluted share, compared with $195 million, or $0.75 per diluted share, in the second quarter of 2024. Second quarter 2025 GAAP diluted
earnings per share includes a $46 million gain, or $0.14 per share, for early extinguishment of debt. For the second quarter of 2025,
non-GAAP Adjusted net income was $261 million, or $1.00 per diluted share, compared with $289 million, or $1.12 per diluted share, in
Non-GAAP Adjusted EBITDA margin was 32.7% in the second quarter of
2025 compared with 31.9% in the second quarter of 2024. The year-over-year improvement in Adjusted EBITDA margin was primarily driven
by a 3% reduction in operating expenses.
Today, Organon's Board of Directors declared a quarterly dividend
of $0.02 for each issued and outstanding share of the company's common stock. The dividend is payable on September 11, 2025, to
stockholders of record at the close of business on August 15, 2025.
As of June 30, 2025, cash and cash equivalents were $599 million,
and debt was $8.90 billion. During the second quarter of 2025, the company made principal repayments on long-term debt totaling $345 million;
the company repurchased and cancelled $242 million of its 5.125% notes due in 2031 prior to maturity (the "2031 Notes")
which resulted in a pre-tax gain on extinguishment of debt of $42 million; and the company paid and terminated a legacy funding agreement
of Dermavant valued at $103 million, which resulted in a pre-tax gain on extinguishment of debt of $4 million.
Organon does not provide GAAP financial measures on a forward-looking
basis because the company cannot predict with reasonable certainty and without unreasonable effort, the ultimate outcome of legal proceedings,
unusual gains and losses, the occurrence of matters creating GAAP tax impacts, and acquisition-related expenses. These items are uncertain,
depend on various factors, and could be material to Organon's results computed in accordance with GAAP.
Full year 2025 financial guidance is presented below on a non-GAAP
basis, except revenue.
| Previous Guidance as of May 1, 2025 | Current Guidance | |||
| Revenue | $6.125B - $6.325B | $6.275B - $6.375B | ||
| Nominal revenue growth | (4.3%) - (1.2%) | (2.0%) - (0.4)% | ||
| FX translation headwind | ~$200M | ~$50M | ||
| Ex-FX revenue growth | (1.2%) - 1.9% | (1.2%) - 0.3% | ||
| Adjusted gross margin | 60.0%-61.0% | Unchanged | ||
| SG&A | Mid 20% range | Unchanged | ||
| R&D | Upper single-digit | Unchanged | ||
| IPR&D* | $6 million | Unchanged | ||
| Adjusted EBITDA margin (Non-GAAP) | 31.0%-32.0% | Unchanged | ||
| Interest | ~$510M | Unchanged | ||
| Depreciation | ~$135M | Unchanged | ||
| Effective non-GAAP tax rate | 22.5%-24.5% | Unchanged | ||
| Fully diluted weighted average shares outstanding | ~263M | Unchanged |
*The company does not provide guidance for forward-looking IPR&D
and milestone expense. The $6 million of forecasted IPR&D expense reflects IPR&D expense recorded through June 30, 2025.
Organon will host a conference call at 8:30 a.m. Eastern Time
today to discuss its second quarter financial results. To listen to the event and view the presentation slides via webcast, join
from the Organon Investor Relations website at https://www.organon.com/investor-relations/events-and- presentations/. A
replay of the webcast will be available approximately two hours after the conclusion of the live event on the company's
website. Institutional investors and analysts interested in participating in the call may join by dialing (888) 596-4144 (U.S. and
Canada Toll-Free) or (646) 968-2525 and using the access code Conference ID: 1036555#.
Organon (NYSE: OGN) is a global healthcare company with a mission to
deliver impactful medicines and solutions for a healthier every day. With a portfolio of over 70 products across Women's Health
and General Medicines, which includes biosimilars, Organon focuses on addressing health needs that uniquely, disproportionately or differently
affect women, while expanding access to essential treatments in over 140 markets.
Headquartered in Jersey City, New Jersey, Organon is committed to
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Cautionary Note Regarding Non-GAAP Financial Measures
This press release contains "non-GAAP financial
measures," which are financial measures that either exclude or include amounts that are correspondingly not excluded or
included in the most directly comparable measures calculated and presented in accordance with U.S. generally accepted accounting
principles ("GAAP"). Specifically, the company makes use of the non-GAAP financial measures Adjusted EBITDA, Adjusted
EBITDA margin, Adjusted gross margin, Adjusted gross profit, Adjusted net income, and Adjusted diluted EPS, which are not recognized
terms under GAAP and are presented only as a supplement to the company's GAAP financial statements. This press release also
provides certain measures that exclude the impact of foreign exchange. We calculate foreign exchange by converting our
current-period local currency financial results using the prior period average currency rates and comparing these adjusted amounts
to our current-period results. The company believes that these non-GAAP financial measures help to enhance an understanding of the
company's financial performance. However, the presentation of these measures has limitations as an analytical tool and should
not be considered in isolation, or as a substitute for the company's results as reported under GAAP. Because not all companies
use identical calculations, the presentations of these non-GAAP measures may not be comparable to other similarly titled measures of
other companies. Please refer to Table 4 and Table 5 of this press release for additional information, including relevant
definitions and reconciliations of non-GAAP financial measures contained herein to the most directly comparable GAAP measures.