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Organon Reports Results for the Fourth Quarter
and Full Year Ended December 31, 2025
Jersey City, N.J., February 12, 2026 - Organon (NYSE: OGN)
today announced its results for the fourth quarter and full year ended December 31, 2025.
"In 2025 we took action that demonstrated our commitment to improving
the balance sheet and to building more financial flexibility," said Joe Morrissey, Organon's interim Chief Executive Officer.
"In 2026 our primary objective is to maintain operational performance that aligns with last year. At the same time, we remain committed
to disciplined expense management and capital deployment to achieve progress on our deleveraging efforts."
Fourth Quarter 2025 Revenue
| in $ millions | Q4 2025 | Q4 2024 | VPY | VPY ex-FX | ||||||||||||
| Women's Health | $ | 398 | $ | 466 | (15 | )% | (16 | )% | ||||||||
| General Medicines | ||||||||||||||||
| Biosimilars | 181 | 163 | 11 | % | 11 | % | ||||||||||
| Established Brands | 913 | 935 | (2 | )% | (5 | )% | ||||||||||
| Other (1) | 15 | 28 | (48 | )% | (49 | )% | ||||||||||
| Revenue | $ | 1,507 | $ | 1,592 | (5 | )% | (8 | )% |
Totals may not foot due to rounding and percentages
are computed using unrounded amounts.
(1) Other includes manufacturing sales to third parties.
For the fourth quarter of 2025, total
revenue was $1.507 billion, down 5% on an as-reported basis and down 8% excluding the impact of foreign currency (ex-FX), compared
with the fourth quarter of 2024.
Women's Health revenue declined
15% as-reported and declined 16% ex-FX in the fourth quarter of 2025, compared with the fourth quarter of 2024. Sales of Nexplanon
(etonogestrel implant) decreased 20% ex-FX in the fourth quarter compared with the prior year period primarily due to: an approximate
$17 million decrease in sales due to the cessation of certain identified U.S. wholesaler sales practices described in the company's
Form 8-K filed with the U.S. Securities and Exchange Commission on October 27, 2025; lower U.S. demand mainly associated with
policy-related access restrictions and a reduction in physician demand in certain commercial segments; and an increase in the rebate rate
in the U.S. attributable to patient mix. The company's fertility business declined 6% ex-FX in the fourth quarter of 2025 which
is primarily related to sales performance in China, where socio-economic trends continue to weigh on the broader fertility market.
revenue increased 11% on both an as-reported basis and ex-FX in the fourth quarter of 2025,
compared with the fourth quarter of 2024, primarily due to strong performance of
Hadlima (adalimumab-bwwd). To a lesser extent, during the fourth quarter the
Biosimilars portfolio also benefitted from contribution from new assets; Bildyos (denosumab-nxxp) and Bilprevda
(denosumab-nxxp), which were approved by the U.S. Food and Drug Administration ("FDA") in third quarter 2025, and Tofidence
(tocilizumab-bavi), which the company acquired in the second quarter of 2025.
Brands revenue declined 2% as-reported and declined 5% ex-FX
in the fourth quarter of 2025. Revenue contributions from Emgality (1) (galcanezumab-gnlm), Vtama (2) (tapinarof)
and ArcoxiaTM (etoricoxib) partially offset a decline in the respiratory portfolio which was driven by pricing pressure,
particularly in the U.S. and China, as well as volume declines related to the adoption of revised medical guidelines that deprioritize
the use of montelukast, including Singulair (montelukast sodium), in various international markets.
(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.
Fourth Quarter 2025 Profitability
| in $ millions, except per share amounts | Q4 2025 | Q4 2024 | VPY | |||||||||
| Revenues | $ | 1,507 | $ | 1,592 | (5 | )% | ||||||
| Cost of sales | 766 | 696 | 10 | % | ||||||||
| Gross profit | 741 | 896 | (17 | )% | ||||||||
| Non-GAAP Adjusted gross profit (1) | 854 | 965 | (12 | )% | ||||||||
| Net (loss) income | (205 | ) | 109 | NM | ||||||||
| Non-GAAP Adjusted net income (1) | 165 | 235 | (30 | )% | ||||||||
| Diluted (Loss) Earnings per Share (EPS) | (0.79 | ) | 0.42 | NM | ||||||||
| Non-GAAP Adjusted diluted EPS (1) | 0.63 | 0.90 | (30 | )% | ||||||||
| Acquired in-process research & development (IPR&D) and milestones | - | - | -% | |||||||||
| Adjusted EBITDA (Non-GAAP) (1) | 383 | 448 | (15 | )% |
| Q4 2025 | Q4 2024 | |||||||||||
| Gross margin | 49.2 | % | 56.3 | % | ||||||||
| Non-GAAP Adjusted gross margin (1) | 56.7 | % | 60.6 | % | ||||||||
| Adjusted EBITDA margin (Non-GAAP) (1, 2) | 25.4 | % | 28.1 | % |
Reported gross margin in the fourth quarter
of 2025 was 49.2% compared with 56.3% in the prior year period. One-time costs associated with optimizing the company's manufacturing
and supply network were the most significant driver of the year-over-year decline in reported gross margin. Non-GAAP Adjusted gross margin
was 56.7% in the fourth quarter of 2025, compared to 60.6% in the fourth quarter of 2024. Unfavorable pricing, foreign exchange rates
and product mix were notable drivers in the decline of both reported gross margin and non-GAAP Adjusted gross margin.
Net loss for the fourth quarter of 2025
was $205 million, or $0.79 per diluted share, compared with net income of $109 million, or $0.42 per diluted share, in the fourth quarter
of 2024. Net loss for the fourth quarter of 2025 includes a non-cash goodwill impairment of $301 million, or $1.16 per share, related
to underperformance of several products in the U.S. For the fourth quarter of 2025, non-GAAP Adjusted net income was $165 million, or
$0.63 per diluted share, compared with $235 million, or $0.90 per diluted share, in 2024.
Non-GAAP Adjusted EBITDA margin was 25.4%
in the fourth quarter of 2025 compared with 28.1% in the fourth quarter of 2024. The year-over-year decline in the fourth quarter 2025
Adjusted EBITDA margin was primarily driven by the lower Adjusted Gross Margin, which was only partially offset by a 5% reduction
in non-GAAP operating expenses.
Full Year 2025 Revenue
| in $ millions | FY 2025 | FY 2024 | VPY | VPY ex-FX | ||||||||||||
| Women's Health | $ | 1,752 | $ | 1,777 | (1 | )% | (2 | )% | ||||||||
| General Medicines | ||||||||||||||||
| Biosimilars | 691 | 662 | 4 | % | 5 | % | ||||||||||
| Established Brands | 3,691 | 3,849 | (4 | )% | (5 | )% | ||||||||||
| Other (1) | 82 | 115 | (28 | )% | (28 | )% | ||||||||||
| Revenue | $ | 6,216 | $ | 6,403 | (3 | )% | (3 | )% |
Totals may not foot due to rounding and percentages are computed
using unrounded amounts.
(1) Other includes manufacturing sales to third parties.
Full year 2025 revenue was $6.2 billion, a decrease of 3% on both an
as-reported basis and at constant currency as compared with full year 2024.
Women's Health revenue declined
1% as-reported and 2% ex-FX for full year 2025, compared with 2024. Growth in the company's fertility business and in the JADA
system substantially offset a 23% ex-FX decline in NuvaRing (etonogestrel / ethinyl estradiol vaginal ring) and a 4% ex-FX
decline in Nexplanon. Strong growth in Nexplanon outside the U.S. helped to offset a 9% decline in the U.S. where access
has been restricted by U.S. policy since early 2025. The company's fertility business grew 8% ex-FX for full year 2025 driven by
performance in the U.S., particularly in the first half of 2025, as well as geographic footprint expansion, which together offset declines
in China driven by socio-economic trends. For full year 2025, the JADA system delivered $74 million of revenue. On January 28,
2026 the company completed the divestiture of the JADA system.
Biosimilars revenue increased 4% on an
as-reported basis and 5% on an ex-FX basis for full year 2025, compared with the prior year, primarily driven by continued growth
in Hadlima. Renflexis and Ontruzant
declined 8% ex-FX and 30% ex-FX, respectively, as both products are in the mature phase of
their product life cycles and face significant competitive pricing pressure in the U.S. and Europe.
Revenue for Established Brands declined
4% on an as-reported basis and 5% ex-FX for full year 2025. Contributions from Emgality and Vtama partially offset the aforementioned
declines in the respiratory portfolio and the impact from the loss of exclusivity of Atozet in Europe and Japan.
Full Year 2025 Profitability
| in $ millions, except per share amounts | 2025 | 2024 | VPY | |||||||||
| Revenues | $ | 6,216 | $ | 6,403 | (3 | )% | ||||||
| Cost of sales | 2,903 | 2,688 | 8 | % | ||||||||
| Gross profit | 3,313 | 3,715 | (11 | )% | ||||||||
| Non-GAAP Adjusted gross profit (1) | 3,737 | 3,944 | (5 | )% | ||||||||
| Net income | 187 | 864 | (78 | )% | ||||||||
| Non-GAAP Adjusted net income (1) | 954 | 1,065 | (10 | )% | ||||||||
| Diluted Earnings per Share (EPS) | 0.72 | 3.33 | (78 | )% | ||||||||
| Non-GAAP Adjusted diluted EPS (1) | 3.66 | 4.11 | (11 | )% | ||||||||
| Acquired in-process research & development (IPR&D) and milestones | 6 | 81 | (93 | )% | ||||||||
| Adjusted EBITDA (1, 2) | 1,907 | 1,958 | (3 | )% |
| 2025 | 2024 | |||||||||||
| Gross margin | 53.3 | % | 58.0 | % | ||||||||
| Non-GAAP Adjusted gross margin (1) | 60.1 | % | 61.6 | % | ||||||||
| Adjusted EBITDA margin (1, 2) | 30.7 | % | 30.6 | % |
Reported gross margin was 53.3% for full
year 2025 compared with 58.0% for full year 2024. One-time costs associated with optimizing the company's manufacturing and
supply network were the most significant driver in the year-over-year decline in reported gross margin, followed by amortization expense
and acquisition-related costs associated with the company's purchase of Dermavant in October 2024. Adjusted gross margin was
60.1% for full year 2025, compared with 61.6% for full year 2024. Pricing pressure adversely impacted both reported and Adjusted gross
Adjusted EBITDA margin was 30.7% for
full year 2025 consistent with full year 2024 as the decline in Adjusted gross margin was substantially offset by lower R&D
Net income for full year
2025 was $187 million, or $0.72 per diluted share, compared with $864 million, or $3.33 per diluted
share in 2024. Full year 2025 reported net-income includes the aforementioned fourth quarter goodwill
impairment. Non-GAAP Adjusted net income was $954 million for full year 2025, or $3.66 per
share, compared with $1,065 million, or $4.11 per share, in full year 2024.
On February 11, 2026, information was brought to the Audit Committee's
attention relating to the timing of the company's purchases of biosimilars from a supplier in prior years. A review by the Audit
Committee will ensue. At this time, the company has not determined that anything inappropriate occurred in connection with these
purchases. The company is not aware of the need for any changes to prior financial statements, and currently anticipates that it