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Organon Reports Results for the Third Quarter
Ended September 30, 2025
Jersey City, N.J., November 10, 2025 - Organon (NYSE: OGN)
today announced its results for the third quarter ended September 30, 2025.
"I am humbled to be working alongside our talented team during
this pivotal time for Organon," said Joe Morrissey, Organon's Interim Chief Executive Officer. "We are harnessing the
company's many strengths, including a diverse portfolio that we expect will generate more than $900 million in free cash flow before one-time
costs this year. We also remain committed to exercising cost discipline and reducing our debt burden proactively, where possible. These
actions will create additional balance sheet capacity, positioning us to pursue future growth opportunities in women's health and
further our mission to deliver impactful medicines and solutions for a healthier every day."
Third Quarter 2025 Revenue
| in $ millions | Q3 2025 | Q3 2024 | VPY | VPY ex-FX | ||||||||||||
| Women's Health | $ | 429 | $ | 440 | (3 | )% | (4 | )% | ||||||||
| General Medicines | ||||||||||||||||
| Biosimilars | 196 | 165 | 19 | % | 19 | % | ||||||||||
| Established Brands | 956 | 951 | 1 | % | (3 | )% | ||||||||||
| Other (1) | 21 | 26 | (15 | )% | (18 | )% | ||||||||||
| Revenue | $ | 1,602 | $ | 1,582 | 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 third quarter of 2025, total
revenue was $1.602 billion, up 1% on an as-reported basis and down 1% excluding the impact of foreign currency (ex-FX), compared
with the third quarter of 2024.
Women's Health revenue declined
3% as-reported and declined 4% ex-FX in the third quarter of 2025, compared with the third quarter of 2024. Sales of Nexplanon
(etonogestrel implant) decreased 9% ex-FX in the quarter compared with the prior year period primarily due to lower demand in the
United States primarily driven by decreased funding of government programs, partially offset by increased demand in Brazil and the timing
of tenders, primarily in Mexico. Third quarter Nexplanon performance was partially offset with 5% ex-FX growth in NuvaRing
(etonogestrel / ethinyl estradiol vaginal ring), 4% ex-FX growth in MarvelonTM (desogestrel and ethinyl estradiol pill)
and MercilonTM (desogestrel and ethinyl estradiol pill), as well as a 29% ex-FX increase in Jada
*Estimated net impact from pull-forward Nexplanon revenue
associated with the company's sales practices for wholesalers in the U.S. as referenced in the company's Current Report
on Form 8-K, filed with the SEC on October 27, 2025, was approximately $2 million during the third quarter ended
September 30, 2025. The company has ceased these sales practices for wholesalers.
revenue increased 19% on both an as-reported basis and ex-FX in the third quarter of 2025,
compared with the third quarter of 2024, primarily due to strong performance of Hadlima
(adalimumab-bwwd) and the favorable timing of an international tender for Ontruzant
(trastuzumab-dttb). To a lesser extent, during the third quarter the Biosimilars portfolio also benefitted from contribution from new
assets; Bildyos (denosumab-nxxp) and Bilprevda (denosumab-nxxp), which was approved by the FDA in September 2025,
and Tofidence (tocilizumab-bavi), which the company acquired in the second quarter of 2025.
Brands revenue increased 1% as-reported and declined 3% ex-FX
in the third 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 as well as declines in the respiratory portfolio. Performance in the respiratory portfolio was primarily driven by an
approximate 40% ex-FX decline in Singulair
(montelukast sodium), due to lower demand outside of the United States
and the negative impact from price reductions in Japan and China as well as performance of Dulera (formoterol and fumarate
dihydrate), which declined 30% ex-FX primarily due to the loss of a customer contract in the first part of the year, combined with increased
discount rate pressure in the United States, as well as supply constraints.
(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.
Third Quarter 2025 Profitability
| in $ millions, except per share amounts | Q3 2025 | Q3 2024 | VPY | |||||||||
| Revenues | $ | 1,602 | $ | 1,582 | 1 | % | ||||||
| Cost of sales | 745 | 659 | 13 | % | ||||||||
| Gross profit | 857 | 923 | (7 | )% | ||||||||
| Non-GAAP Adjusted gross profit (1) | 966 | 976 | (1 | )% | ||||||||
| Net income | 160 | 359 | (55 | )% | ||||||||
| Non-GAAP Adjusted net income (1) | 263 | 226 | 16 | % | ||||||||
| Diluted Earnings per Share (EPS) | 0.61 | 1.38 | (56 | )% | ||||||||
| Non-GAAP Adjusted diluted EPS (1) | 1.01 | 0.87 | 16 | % | ||||||||
| Acquired in-process research & development (IPR&D) and milestones | - | 51 | -% | |||||||||
| Adjusted EBITDA (Non-GAAP) (1, 2) | 518 | 459 | 13 | % |
| Q3 2025 | Q3 2024 | |||||||
| Gross margin | 53.5 | % | 58.3 | % | ||||
| Non-GAAP Adjusted gross margin (1) | 60.3 | % | 61.7 | % | ||||
| Adjusted EBITDA margin (Non-GAAP) (1, 2) | 32.3 | % | 29.0 | % |
Reported gross margin in the third quarter
of 2025 was 53.5% compared with 58.3% in the prior year period. One-time costs associated with optimizing the company's manufacturing
and supply network was the most significant driver in the year-over-year decline in reported gross margin. Non-GAAP Adjusted gross margin
was 60.3% in the third quarter of 2025, compared to 61.7% in the third quarter of 2024. Unfavorable foreign exchange in inventory turns,
pricing pressure and product mix were drivers in the decline of both reported gross margin and non-GAAP Adjusted gross margin.
Net income for the third quarter of 2025 was $160 million, or $0.61
per diluted share, compared with $359 million, or $1.38 per diluted share, in the third quarter of 2024. For the third quarter of 2025,
non-GAAP Adjusted net income was $263 million, or $1.01 per diluted share, compared with $226 million, or $0.87 per diluted share, in
Non-GAAP Adjusted EBITDA margin was 32.3%
in the third quarter of 2025 compared with 29.0% in the third quarter of 2024. The year-over-year improvement in Adjusted EBITDA margin
was primarily driven by a 14% reduction in non-GAAP 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 December 11, 2025, to
stockholders of record at the close of business on November 20, 2025.
As of September 30, 2025, cash and cash equivalents were $672
million, and debt was $8.83 billion.
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 August 5, 2025 | Current Guidance | |||
| Revenue | $6.275B - $6.375B | $6.200B - $6.250B | ||
| Nominal revenue growth | (2.0%) - (0.4%) | (3.2%) - (2.4%) | ||
| FX translation impact | ~$50M headwind | ~ $35M - $45M tailwind | ||
| Ex-FX revenue growth | (1.2%) - 0.3% | (3.7%) - (3.1%) | ||
| 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% | ~31.0% | ||
| 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 September 30, 2025.
Organon will host a conference call
at 8:30 a.m. Eastern Time today to discuss its third 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
X, YouTube, TikTok and Facebook.
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