Full Press Release Details
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Organon Reports Results for the Fourth Quarter
and Full Year Ended December 31, 2024
Jersey City, N.J., February 13, 2025 - Organon (NYSE: OGN)
today announced its results for the fourth quarter and full year ended December 31, 2024.
"In 2024 we achieved our third year of constant currency revenue
growth and delivered Adjusted EBITDA margin expansion ex-IPR&D," said Kevin Ali, Organon's chief executive officer. "Our
2025 financial guidance reflects the potential for a fourth year of constant currency revenue growth despite the loss of exclusivity (LOE)
of our second largest product, Atozet, in certain markets. Further, we will continue to be extremely disciplined on operating costs to
support Adjusted EBITDA margins ex-IPR&D of 31.0% or better."
Fourth Quarter 2024 Revenue
| in $ millions | Q4 2024 | Q4 2023 | VPY | VPY ex-FX | ||||||||||||
| Women's Health | $ | 466 | $ | 465 | - | % | - | % | ||||||||
| Biosimilars | 163 | 199 | (18 | )% | (18 | )% | ||||||||||
| Established Brands | 935 | 915 | 2 | % | 2 | % | ||||||||||
| Other (1) | 28 | 19 | 53 | % | 52 | % | ||||||||||
| Revenue | $ | 1,592 | $ | 1,598 | - | % | - | % |
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 2024, total revenue
was $1.592 billion, flat on both an as-reported and ex-FX basis.
Health revenue was flat on both an as-reported and ex-FX basis in the fourth quarter of 2024, compared with the fourth quarter of 2023.
Nexplanon (etonogestrel implant) growth
of 12% ex-FX, offset a 37% ex-FX decline in
NuvaRing (etonogestrel / ethinyl estradiol
vaginal ring) attributable to ongoing generic competition, as well as an 8% ex-FX decline
in the company's fertility portfolio. The fourth quarter decline in the fertility portfolio was primarily due to an unfavorable
year-over-year comparison to the fourth quarter of 2023 when the company benefited from a one-time buy-in associated with the exit of
a spin-related Interim Operating Model Agreement in the United States.
revenue declined 18% on both an as-reported and ex-FX basis in the fourth quarter of 2024,
compared with the fourth quarter of 2023, primarily driven by the timing of tenders in Brazil
for Ontruzant (trastuzumab-dttb) and Brenzys (etanercept) as
well as a 16% ex-FX decline in Renflexis (infliximab-abda)
attributable to competitive pricing pressure in the U.S. Performance was partially offset by sales of Hadlima (adalimumab-bwwd)
that have continued to ramp up since its July 2023 launch in the U.S.
Brands revenue grew 2% both on an as-reported basis and ex-FX
in the fourth quarter of 2024, primarily related to the revenue contribution of Emgality (1) (galcanezumab-gnlm)
and Vtama (2) (tapinarof), which together more than offset the impact
of the loss of exclusivity ("LOE") of Atozet (ezetimibe and atorvastatin) in key markets in Europe and
(1) Emgality is a trademark registered in the United States
in the name of Eli Lilly and Company (used under license). Organon acquired certain European licensing and distribution rights to Emgality
and Rayvow from Eli Lilly beginning in early 2024.
(2) Vtama was acquired as part of Organon's acquisition
of Dermavant Sciences Inc., which closed on October 28, 2024.
Fourth Quarter 2024 Profitability
| in $ millions, except per share amounts | Q4 2024 | Q4 2023 | VPY | |||||||||
| Revenues | $ | 1,592 | $ | 1,598 | - | % | ||||||
| Cost of sales | 696 | 683 | 2 | % | ||||||||
| Gross profit | 896 | 915 | (2 | )% | ||||||||
| Non-GAAP Adjusted gross profit (1) | 965 | 964 | - | % | ||||||||
| Net income | 109 | 546 | (80 | )% | ||||||||
| Non-GAAP Adjusted net income (1) | 235 | 226 | 4 | % | ||||||||
| Diluted Earnings per Share (EPS) | 0.42 | 2.13 | (80 | )% | ||||||||
| Non-GAAP Adjusted diluted EPS (1) | 0.90 | 0.88 | 2 | % | ||||||||
| Acquired IPR&D and milestones | - | - | - | |||||||||
| Adjusted EBITDA (Non-GAAP) (1,2) | 448 | 449 | - | % | ||||||||
| Q4 2024 | Q4 2023 | |||||||||||
| Gross margin | 56.3 | % | 57.3 | % | ||||||||
| Non-GAAP Adjusted gross margin (1) | 60.6 | % | 60.3 | % | ||||||||
| Adjusted EBITDA margin (Non-GAAP) (1, 2) | 28.1 | % | 28.1 | % |
Gross margin was 56.3% as-reported and 60.6% on a non-GAAP adjusted
basis in the fourth quarter of 2024, compared with 57.3% as-reported and 60.3% on a non-GAAP adjusted basis in the fourth quarter of 2023.
Lower reported gross margin in the fourth quarter of 2024 was due to higher year- over-year amortization related to acquisitions completed
in 2024 and acquisition-related expense. The modest year-over-year improvement in non-GAAP Adjusted gross margin was primarily due to
favorable product mix partially offset by unfavorable price.
Net income for the fourth quarter of 2024 was $109 million, or $0.42
per diluted share, compared with $546 million, or $2.13 per diluted share, in the fourth quarter of 2023. In the fourth quarter of 2023,
a Swiss tax arrangement was terminated, resulting in a net benefit of $476 million to GAAP net income in that period, or a benefit of
$1.86 per share. For the fourth quarter of 2024, non-GAAP Adjusted net income was $235 million, or $0.90 per diluted share, compared with
$226 million, or $0.88 per diluted share, in 2023.
Non-GAAP Adjusted EBITDA margin was 28.1% in the fourth quarter of
2024 consistent with the fourth quarter of 2023 primarily due to flat year-over-year revenue, Adjusted gross profit and non-GAAP operating
expenses. There was no IPR&D or milestone expense impacting Adjusted EBITDA results in the fourth quarter comparable periods.
Full Year 2024 Revenue
| in $ millions | FY 2024 | FY 2023 | VPY | VPY ex-FX | ||||||||||||
| Women's Health | $ | 1,777 | $ | 1,702 | 4 | % | 5 | % | ||||||||
| Biosimilars | 662 | 593 | 12 | % | 12 | % | ||||||||||
| Established Brands | 3,849 | 3,847 | - | % | 2 | % | ||||||||||
| Other (1) | 115 | 121 | (6 | )% | (6 | )% | ||||||||||
| Revenue | $ | 6,403 | $ | 6,263 | 2 | % | 3 | % |
Other includes manufacturing sales to third parties.
Full year 2024 revenue was $6.4 billion, an increase of 2% as-reported
and 3% ex-FX, compared with the full year 2023.
Health revenue increased 4% as-reported and 5% ex-FX for full year 2024 compared with 2023. Nexplanon grew 17% ex-FX to record
revenue of $963 million. Jada System grew 40% ex-FX to achieve $61 million
in revenue. Together these factors more than offset a 33% ex-FX decline in NuvaRing, which continues to be impacted by generic
competition as well as a 2% ex-FX decline in the company's Fertility business.
revenue increased 12% on both an as-reported and ex-FX basis for full year 2024, compared with the prior year, primarily driven
by growth in Hadlima, following its U.S. launch in July 2023. Renflexis
and Ontruzant declined 1% ex-FX and 9%
ex-FX, respectively, as both products are in the mature phase of their product life cycles and face significant competitive pricing pressure.
for Established Brands was flat on an as-reported basis and increased 2% ex-FX for full year 2024. Contributions from Emgality
and Vtama, along with recovery in certain injectable steroid products following a market action in 2023 more than offset
the impact from the Atozet LOE in Europe and Japan and unfavorable pricing in Japan.
Full Year 2024 Profitability
| in $ millions, except per share amounts | 2024 | 2023 | VPY | |||||||||
| Revenues | $ | 6,403 | $ | 6,263 | 2 | % | ||||||
| Cost of sales | 2,688 | 2,515 | 7 | % | ||||||||
| Gross profit | 3,715 | 3,748 | (1 | )% | ||||||||
| Non-GAAP Adjusted gross profit (1) | 3,944 | 3,930 | - | % | ||||||||
| Net income | 864 | 1,023 | (16 | )% | ||||||||
| Non-GAAP Adjusted net income (1) | 1,065 | 1,061 | - | % | ||||||||
| Diluted Earnings per Share (EPS) | 3.33 | 3.99 | (17 | )% | ||||||||
| Non-GAAP Adjusted diluted EPS (1) | 4.11 | 4.14 | (1 | )% | ||||||||
| Acquired in-process research & development (IPR&D) and milestones | 81 | 8 | NM | |||||||||
| Adjusted EBITDA (1, 2) | 1,958 | 1,944 | 1 | % | ||||||||
| 2024 | 2023 | |||||||||||
| Gross margin | 58.0 | % | 59.8 | % | ||||||||
| Non-GAAP Adjusted gross margin (1) | 61.6 | % | 62.7 | % | ||||||||
| Adjusted EBITDA margin (1, 2) | 30.6 | % | 31.0 | % |
margin was 58.0% as-reported and 61.6% on an adjusted basis for full year 2024, compared with 59.8% as-reported and 62.7% on an
adjusted basis for full year 2023. The year-over-year decline in reported gross margin was driven by higher year-over-year amortization
related to 2024 acquisitions as well as acquisition-related expense. The year-over-year decrease in Adjusted gross margin reflects unfavorable
price as well as higher inflation impacts to material and distribution costs.
EBITDA margin was 30.6% for full year 2024, compared with 31.0% for full year 2023. The year-over-year decrease was primarily a
result of higher IPR&D expense in full year 2024, followed by lower Adjusted gross margin. Non-GAAP operating expenses were contained
to 1% growth in the full year 2024, inclusive of $81 million of IPR&D and milestone expense in 2024, compared with $8 million in 2023.
income for full year 2024 was $864 million, or $3.33 per diluted share, compared with $1,023 million,
or $3.99 per diluted share in 2023. Full year 2023 reported Net income benefited from the fourth quarter
termination of the aforementioned Swiss tax arrangement, which represented a benefit of $1.86 per share for the full year. Non-GAAP
Adjusted net income was $1,065 million for full year 2024, consistent with $1,061 million in
Today, Organon's Board of Directors declared a quarterly dividend
of $0.28 for each issued and outstanding share of the company's common stock. The dividend
is payable on March 13, 2025, to stockholders of record at the close of business on February 24, 2025.
As of December 31, 2024, cash and cash equivalents were $675 million,
and debt was $8.9 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 2024 actual results and 2025 financial guidance are presented
below on a non-GAAP basis, except revenue.
| Full Year 2024 Actuals | Full Year 2025 Guidance | |||
| Revenue | $6.403B | $6.125B-$6.325B | ||
| FX translation headwind | ~$80M | ~$200M | ||
| Adjusted gross margin | 61.6% | 60.0%-61.0% | ||
| SG&A | $1.57B/25% | Mid-20% range | ||
| R&D | $440M/6.9% | Upper single-digit | ||
| IPR&D* | $81M | - | ||
| Adjusted EBITDA margin (Non-GAAP) | 30.6% | 31.0%-32.0% | ||
| Interest | $520M | ~$510M | ||
| Depreciation | $126M | ~$135M | ||
| Effective non-GAAP tax rate | 18.8% | 22.5%-24.5% | ||
| Fully diluted weighted average shares outstanding | 259M | ~263M |
*The company does not provide guidance for forward-looking IPR&D
and milestone expense.
Organon will host a conference call at 8:30 a.m. Eastern Time
today to discuss its fourth quarter and full year 2024 financial results. To listen to the event and view the presentation slides via