OGN Organon and Co

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): November 2, 2023

 

Organon & Co.

(Exact name of registrant as specified in its charter)

 

Delaware		001-40235		46-4838035
(State or other jurisdiction		(Commission		(I.R.S. Employer
of incorporation)		File Number)		Identification No.)
30 Hudson Street, Floor 33, Jersey City, NJ				07302
(Address of principal executive offices)				(Zip Code)

 

Registrant’s telephone number, including area code: (551) 430-6900

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.01 per share		OGN		NYSE

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

Item 2.02

Results of Operations and Financial Condition.

 

On November 2, 2023, Organon & Co. (the “Company”) issued a press release (the “Earnings Release”) regarding its results for the quarter ended September 30, 2023. The Earnings Release is included as Exhibit 99.1 to this report.

 

The information contained in this Item 2.02, including Exhibit 99.1 attached hereto, is considered to be “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability under that Section. The information in this Current Report shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act, except as shall be expressly set forth by specific reference in such filing or document. The release contains forward- looking statements regarding the Company and includes a cautionary statement identifying important factors that could cause actual results to differ materially from those anticipated.

 

Item 7.01

Regulation FD Disclosure.

 

In connection with the conference call announced in the Earnings Release, on November 2, 2023, the Company made available the Company Information Presentation relating to its financial results for the quarter ended September 30, 2023. The Company Information Presentation may be accessed within the investor relations section of the Company’s website, https://www.organon.com. A copy of the Company Information Presentation is attached hereto as Exhibit 99.2 and is incorporated herein by reference.

 

The information in this Item 7.01, including Exhibit 99.2 attached hereto, is considered to be “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to liability under that Section. The information in this Current Report shall not be incorporated by reference into any filing or other document pursuant to the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing or document. The Company Information Presentation contains forward-looking statements regarding the Company and includes a cautionary statement identifying important factors that could cause actual results to differ materially from those anticipated.

 

Item 9.01

Financial Statements and Exhibits.

 

(d)

Exhibits.

 

	Exhibit No.		Description
	99.1		Press Release, dated November 2, 2023, relating to results of operations and financial condition.
	99.2		Company Information Presentation.
	104		The cover page of this Current Report on Form 8-K, formatted in Inline XBRL.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

	Organon & Co.
	By:	/s/ Matthew Walsh
		Name:	Matthew Walsh
		Title:	Chief Financial Officer

 

Dated: November 2, 2023

 

 

 

Exhibit 99.1

 

 

 

 

Media Contacts:	Karissa Peer	Investor Contacts:	Jennifer Halchak
	(614) 314-8094		(201) 275-2711
	Kate Vossen		Alex Arzeno
	(732) 675-8448		(203) 550-3972

 

Organon Reports Results for the Third Quarter Ended September 30, 2023

 

•

Third quarter 2023 revenue of $1,519 million

•

Third quarter 2023 diluted earnings per share of $0.23 and non-GAAP Adjusted diluted earnings per share of $0.87

•

Adjusted EBITDA of $447 million

•

Board of Directors declares quarterly dividend of $0.28 per share

•

Full year 2023 financial guidance ranges updated:

◦

Revenue range narrowed and lowered to $6.15 billion to $6.25 billion

◦

Adjusted EBITDA margin range narrowed and lowered to 30.5% to 31.5%

 

Jersey City, N.J., November 2, 2023 – Organon (NYSE: OGN) today announced its results for the third quarter ended September 30, 2023.

 

"Since spin, we have given new life to Established Brands and have expanded our pipeline in both Biosimilars and Women's Health," said Kevin Ali, Organon's CEO. "Year to date, all three of our franchises have delivered growth on a constant currency basis. Over the medium term, we expect to deliver mid-single digit revenue growth with the power of our existing portfolio. As we move into 2024, we will be working to reduce leverage and continue to add products that could enhance that growth profile."

 

Third Quarter 2023 Revenue

 

in $ millions		Q3 2023				Q3 2022				VPY				VPY ex-FX
Women’s Health		$	418			$	454				(8	)%			(7	)%
Biosimilars			142				129				10	%			10	%
Established Brands			935				915				2	%			3	%
Other (1)			24				39				(36	)%			(38	)%
Revenues		$	1,519			$	1,537				(1	)%			(1	)%

 

(1) Other includes manufacturing sales to Merck & Co., Inc., Rahway, NJ, USA and other third parties.

 

 

For the third quarter of 2023, total revenue was $1,519 million, a decrease of 1% on an as-reported basis as well as excluding impact of foreign currency (ex-FX), compared with the third quarter of 2022.

 

Women’s Health revenue decreased 8% on an as-reported basis, and decreased 7% ex-FX in the third quarter of 2023 compared with the third quarter of 2022 driven primarily by a 23% ex-FX decrease of NuvaRing® (etonogestrel/ethinyl estradiol vaginal ring) which continues to be impacted by generic competition. Together, the company's fertility products declined 10% ex-FX in the third quarter as unfavorable discount rates in the United States offset growth in demand. Nexplanon® (etonogestrel implant) decreased 3% ex-FX due unfavorable discount rates and a change in the go-to-market model for the product. These factors were partially offset by revenue from the Jada® system, which more than doubled year over year.

 

Biosimilars revenue increased 10% on an as-reported basis as well as ex-FX in the third quarter of 2023, compared with the third quarter of 2022. Renflexis® (infliximab-abda) grew 15% ex-FX in the third quarter due to continued demand and strong volume growth in United States and Canada. Ontruzant® (trastuzumab-dttb) grew 34% ex-FX in the third quarter compared to the prior year period driven by the phasing of a tender in Brazil.

 

Established Brands revenue increased 2% as-reported and increased 3% ex-FX in the third quarter of 2023, despite the impact of Volume Based Procurement (VBP) initiatives in China. Growth in the quarter was driven by Atozet™ (ezetimibe and atorvastatin calcium), particularly in France, strong demand for Nasonex® (mometasone) and favorable pricing for Dulera® (formoterol/fumarate dihydrate) in the United States. Year to date, the Established Brands franchise grew 1% ex-FX. The company expects the Established Brands franchise to achieve flat to slightly better revenue growth on a constant currency basis for the full year 2023.

 

 

Third Quarter 2023 Profitability

 

in $ millions, except per share amounts		Q3 2023				Q3 2022				VPY
Revenues		$	1,519			$	1,537				(1	)%
Cost of sales			612				551				11	%
Gross profit			907				986				(8	)%
Non-GAAP Adjusted gross profit (1)			951				1,032				(8	)%
Adjusted EBITDA (1,2)			447				546				(18	)%
Net income			58				227				(74	)%
Non-GAAP Adjusted net income (1)			223				337				(34	)%
Diluted Earnings per Share (EPS)			0.23				0.89				(74	)%
Non-GAAP Adjusted diluted EPS (1)			0.87				1.32				(34	)%
Acquired in-process research & development (IPR&D) and milestones			—				10				NM
Per share impact to diluted EPS from acquired IPR&D and milestones			—				(0.04	)			NM

 

		Q3 2023				Q3 2022
Gross margin			59.7	%			64.2	%
Non-GAAP Adjusted gross margin (1)			62.6	%			67.1	%
Adjusted EBITDA margin (1, 2)			29.4	%			35.5	%

 

(1)

See Tables 4 and 5 for reconciliations of GAAP to non-GAAP financial measures

 

(2)

Adjusted EBITDA and Adjusted EBITDA margin include $10 million in the third quarter of 2022 related to acquired IPR&D and milestones, no such expense was incurred in the third quarter of 2023

 

Gross margin was 59.7% as-reported and 62.6% on an adjusted basis in the third quarter of 2023 compared with 64.2% as-reported and 67.1% on an adjusted basis in the third quarter of 2022. The year-over-year decline in gross margin is primarily due to foreign exchange translation and inflationary manufacturing and distribution costs. Product mix and pricing erosion were also factors, but to a lesser extent.

 

EBITDA margin was 29.4% in the third quarter of 2023 compared with 35.5% in the third quarter of 2022 primarily due to lower Adjusted gross profit and to a lesser extent an increase in non-GAAP SG&A expense and loss on foreign exchange translation.

 

 

Net income for the third quarter of 2023 was $58 million, or $0.23 per diluted share, compared with $227 million, or $0.89 per diluted share, in the third quarter of 2022. Non-GAAP Adjusted net income was $223 million, or $0.87 per diluted share, compared with $337 million, or $1.32 per diluted share, in 2022. The year over year decrease in net income was a result of a lower Adjusted EBITDA, as well as higher interest expense.

 

Capital Allocation

 

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 December 14, 2023, to stockholders of record at the close of business on November 13, 2023.

 

As of September 30, 2023, cash and cash equivalents were $414 million, and debt was $8.7 billion.

 

Full Year Guidance

 

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.

 

The company is updating its full year 2023 guidance ranges previously provided on August 8, 2023. The range for full year 2023 revenue is narrowed and lowered to $6.15 billion to $6.25 billion, which primarily reflects current foreign currency exchange rates, changes to the go-to-market model for Nexplanon, a slower uptake of Hadlima™ (adalimumab-bwwd) and macroeconomic factors in China.

 

The range for full year Adjusted EBITDA margin is now 30.5% to 31.5% to reflect a lower gross margin stemming from the impacts of foreign exchange on revenue, unfavorable product mix, and the timing of manufacturing costs. Organon's financial guidance does not assume an estimate for future IPR&D and milestone payments for business development transactions not yet executed.

 

 

Full year 2023 financial guidance is presented below on a non-GAAP basis.

 

		Previous guidance as of August 8, 2023		Current guidance
Revenues		$6.250B-$6.450B		$6.150B-$6.250B
Adjusted gross margin		Low-mid 60% range		Low 60% range
SG&A (as % of revenue)		Mid 20% range		Unchanged
R&D (as % of revenue)		Upper single-digit		Unchanged
Adjusted EBITDA margin		31.5%-33.0%		30.5%-31.5%
Interest		~$525 million		Unchanged
Depreciation		~$120 million		Unchanged
Effective non-GAAP tax rate		17.5%-19.5%		Unchanged
Fully diluted weighted average shares outstanding		~257 million		Unchanged

 

Webcast Information

 

Organon will host a conference call at 8:30 a.m. Eastern Time today to discuss its third quarter 2023 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 must register in advance by clicking on this link:

 

^{https://conferencingportals.com/event/VfCOQYEG}

 

Following registration, participants will receive a confirmation email containing details on how to join the conference call, including dial-in information and a unique passcode and registrant ID. Pre-registration will allow participants to bypass an operator and be placed directly into the call.

 

 

About Organon

 

Organon is a global healthcare company formed to focus on improving the health of women throughout their lives. Organon offers more than 60 medicines and products in women’s health in addition to a growing biosimilars business and a large franchise of established medicines across a range of therapeutic areas. Organon’s existing products produce strong cash flows that support investments in innovation and future growth opportunities in women’s health and biosimilars. In addition, Organon is pursuing opportunities to collaborate with biopharmaceutical innovators looking to commercialize their products by leveraging its scale and presence in fast growing international markets.

 

Organon has a global footprint with significant scale and geographic reach, world-class commercial capabilities, and approximately 10,000 employees with headquarters located in Jersey City, New Jersey.

 

For more information, visit ^{http://www.organon.com} and connect with us on ^LinkedIn, ^Instagram, ^X (formerly known as Twitter) 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 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. You should refer to Table 4 and Table 5 of this press release for relevant definitions and reconciliations of non-GAAP financial measures contained herein to the most directly comparable GAAP measures.

 

 

In addition, the company’s full-year 2023 guidance measures (other than revenue) are provided on a non-GAAP basis because the company is unable to reasonably predict certain items contained in the GAAP measures. Such items include, but are not limited to, acquisition related expenses, restructuring and related expenses, stock-based compensation, the ultimate outcome of legal proceedings, unusual gains and losses, the occurrence of matters creating GAAP tax impacts and other items not reflective of the company's ongoing operations.

 

The company uses non-GAAP financial measures in its operational and financial decision making, and believes that it is useful to exclude certain items in order to focus on what it regards to be a more meaningful representation of the underlying operating performance of the business.

 

Cautionary Note Regarding Forward-Looking Statements

 

Except for historical information, this press release includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about management’s expectations about Organon’s future financial performance and prospects, including full-year 2023 guidance estimates and predictions regarding other financial information and metrics, franchise and product performance and strategy expectations for the remainder of 2023 and for future periods, expectations regarding the impact of VBP and developments in China. Forward-looking statements may be identified by words such as "foresees" “expects,” “intends,” “anticipates,” “plans,” “believes,” “seeks,” “estimates,” “will” or words of similar meaning. These statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.

 

 

Risks and uncertainties include, but are not limited to, an inability to fully execute on our product development and commercialization plans within the United States or internationally; an inability to adapt to the industry-wide trend toward highly discounted channels; changes in tax laws or other tax guidance which could adversely affect our cash tax liability, effective tax rates, and results of operations and lead to greater audit scrutiny; an inability to execute on our business development strategy or realize the benefits of our planned acquisitions; efficacy, safety, or other quality concerns with respect to marketed products, including market actions such as recalls, withdrawals, or declining sales; political and social pressures, or regulatory developments, that adversely impact demand for, availability of, or patient access to contraception or fertility products; general economic factors, including recessionary pressures, interest rate and currency exchange rate fluctuations; general industry conditions and competition; the impact of the ongoing COVID-19 pandemic and emergence of variant strains; the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances; new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the company’s ability to accurately predict its future financial results and performance; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; difficulties developing and sustaining relationships with commercial counterparties; dependence on the effectiveness of the company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions.

 

The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s filings with the Securities and Exchange Commission ("SEC"), including the company’s Annual Report on Form 10-K for the year ended December 31, 2022 and subsequent SEC filings, available at the SEC’s Internet site (www.sec.gov).

 

 

TABLE 1

 

Organon & Co.

Condensed Consolidated Statement of Income

(Unaudited, $ in millions except shares in thousands and per share amounts)

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2023				2022				2023				2022
Revenues		$	1,519			$	1,537			$	4,665			$	4,689
Costs, Expenses and Other
Cost of sales			612				551				1,832				1,700
Selling, general and administrative			538				440				1,424				1,234
Research and development			137				127				394				329
Acquired in-process research and development and milestones			—				10				8				107
Restructuring costs			—				11				4				11
Interest expense			134				108				398				303
Exchange losses (gains)			14				4				25				(21	)
Other expense, net			4				4				11				15
			1,439				1,255				4,096				3,678
Income Before Income Taxes			80				282				569				1,011
Taxes on income			22				55				92				202
Net Income			58				227				477				809
Earnings per Share:
Basic		$	0.23			$	0.89			$	1.87			$	3.19
Diluted		$	0.23			$	0.89			$	1.86			$	3.17
Weighted Average Shares Outstanding:
Basic			255,588				254,348				255,112				253,986
Diluted			256,349				255,067				256,162				255,094

 

 

TABLE 2

 

Organon & Co.

Sales by top products

(Unaudited, $ in millions)

 

		Three Months Ended September 30,																								Nine Months Ended September 30,
		2023												2022												2023												2022
		U.S.				Int’l				Total				U.S.				Int’l				Total				U.S.				Int’l				Total				U.S.				Int’l				Total
Women’s Health
Nexplanon/Implanon NXT		$	146			$	74			$	220			$	151			$	78			$	229			$	418			$	181			$	599			$	401			$	194			$	595
Follistim AQ			22				32				54				27				33				60				74				105				179				79				100				179
NuvaRing			18				20				37				27				23				50				50				67				117				65				68				133
Ganirelix Acetate Injection			4				21				25				6				30				36				15				74				88				20				77				97
Marvelon/Mercilon			—				30				30				—				31				31				—				97				97				—				85				85
Jada			12				—				13				5				—				5				30				—				31				12				—				12
Other Women's Health (1)			16				22				39				19				23				42				52				74				126				68				70				138
Biosimilars
Renflexis			57				12				69				54				7				60				172				29				201				145				20				166
Ontruzant			11				28				40				15				14				29				36				57				93				35				52				87
Brenzys			—				13				13				—				24				24				—				45				45				—				52				52
Aybintio			—				12				12				—				10				10				—				34				34				—				29				29
Hadlima			2				6				8				—				6				6				2				18				20				—				14				14
Established Brands
Cardiovascular
Zetia			2				65				66				2				85				87				5				234				239				7				280				287
Vytorin			2				31				33				1				30				31				5				95				100				6				98				104
Atozet			—				126				126				—				109				109				—				397				397				—				350				350
Rosuzet			—				17				17				—				17				17				—				52				52				—				55				55
Cozaar/Hyzaar			3				65				68				2				68				70				8				217				225				11				244				256
Other Cardiovascular (1)			1				42				44				1				34				35				2				124				126				3				117				120
Respiratory
Singulair			3				88				91				3				92				94				8				282				290				8				308				316
Nasonex			—				54				55				—				49				49				—				187				188				9				173				182
Dulera			40				9				49				31				9				40				116				28				144				98				30				127
Clarinex			2				26				28				—				25				26				4				103				107				3				96				99
Other Respiratory (1)			17				9				25				11				10				21				42				20				61				34				32				66
Non-Opioid Pain, Bone and
Arcoxia			—				64				64				—				64				64				—				207				207				—				185				185
Fosamax			1				40				41				1				35				36				2				121				123				2				115				117
Diprospan			—				31				31				—				28				28				—				58				58				—				91				91
Other Non-Opioid Pain, Bone and Dermatology (1)			4				70				74				2				63				65				11				196				207				10				200				210
Other
Proscar			—				25				25				—				26				27				1				76				77				1				76				77
Propecia			2				21				22				2				28				30				5				86				92				5				90				95
Other (1)			5				72				76				6				81				87				10				231				240				21				230				251
Other (2)			—				24				24				—				39				39				(1	)			103				102				—				115				116
Revenues		$	370			$	1,149			$	1,519			$	366			$	1,171			$	1,537			$	1,067			$	3,598			$	4,665			$	1,043			$	3,646			$	4,689

 

Totals may not foot due to rounding. Trademarks appearing above in italics are trademarks of, or are used under license by, the Organon group of companies.

 

(1)	Includes sales of products not listed separately. Revenues from Marvelon and Mercilon and Jada were previously reported as part of Other Women's Health. Revenue from an arrangement for the sale of generic etonogestrel/ethinyl estradiol vaginal ring is included in Other Women's Health.

(2)	Other includes manufacturing sales to Merck & Co., Inc., Rahway, NJ, USA and other third parties.

 

 

TABLE 3

 

Organon & Co.

Sales by geographic area

(Unaudited, $ in millions)

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2023				2022				2023				2022
Europe and Canada		$	392			$	363			$	1,259			$	1,243
United States			370				366				1,067				1,043
Asia Pacific and Japan			284				283				869				888
China			202				241				661				721
Latin America, Middle East, Russia, and Africa			239				236				687				665
Other (1)			32				48				122				129
Revenues		$	1,519			$	1,537			$	4,665			$	4,689

 

(1) Other includes manufacturing sales to Merck & Co., Inc., Rahway, NJ, USA and other third parties.

 

 

TABLE 4

 

Reconciliation of GAAP Reported to Non-GAAP Adjusted Information

(Unaudited, $ in millions except per share amounts)

 

		Three Months Ended September 30, 2023
		GAAP				Spin related Costs(1)				Restructuring				Stock-based Compensation				Amortization				Other(1)				Non-GAAP Adjusted
Revenues		$	1,519																							$	1,519
Cost of sales			612				(10	)			—				(5	)			(29	)			—				568
Gross profit			907																								951
Gross margin			59.7	%																							62.6	%
Selling, general and administrative			538				(41	)			—				(18	)			—				(87	)			392
Research and development			137				(4	)			—				(4	)			—				—				129
Acquired in-process research and development and milestones			—				—				—				—				—				—				—
Restructuring costs			—				—				—				—				—				—				—
Interest expense			134				—				—				—				—				—				134
Exchange losses			14				—				—				—				—				—				14
Other expense (income), net			4				(3	)			—				—				—				—				1
			1,439																								1,238
Income before income taxes			80																								281
Taxes on income			22				16				—				4				5				11				58
Net income		$	58																							$	223
Earnings per share - Diluted		$	0.23																							$	0.87

 

(1) Represents one-time costs. Spin-related includes costs from the separation of Merck & Co., Inc., Rahway, NJ, US and Other primarily includes inventory step-up amortization, impairment charges and legal reserves.

 

		Three Months Ended September 30, 2022
		GAAP				Spin related Costs(1)				Restructuring				Stock-based Compensation				Amortization				Other(1)				Non-GAAP Adjusted
Revenues		$	1,537																							$	1,537
Cost of sales			551				(8	)			—				(3	)			(32	)			(3	)			505
Gross profit			986																								1,032
Gross margin			64.2	%																							67.1	%
Selling, general and administrative			440				(33	)			—				(12	)			—				(17	)			378
Research and development			127				(2	)			—				(3	)			—				(1	)			121
Acquired in-process research and development and			10				—				—				—				—				—				10
Restructuring costs			11				—				(11	)			—				—				—				—
Interest expense			108				—				—				—				—				—				108
Exchange gains			4				—				—				—				—				—				4
Other expense (income), net			4				(6	)			—				—				—				—				(2	)
			1,255																								1,124
Income before income taxes			282																								413
Taxes on income			55				10				2				2				6				1				76
Net income		$	227																							$	337
Earnings per share - Diluted		$	0.89																							$	1.32

 

(1) Represents one-time costs. Spin-related includes costs from the separation of Merck & Co., Inc., Rahway, NJ, US and Other primarily includes inventory step-up amortization, impairment charges and legal reserves.

 

 

TABLE 4 (Continued)

 

Reconciliation of GAAP Reported to Non-GAAP Adjusted Information

(Unaudited, $ in millions except per share amounts)

 

		Nine Months Ended September 30, 2023
		GAAP				Spin related Costs(1)				Restructuring				Stock-based Compensation				Amortization				Other(1)				Non-GAAP Adjusted
Revenues		$	4,665																							$	4,665
Cost of sales			1,832				(30	)			—				(13	)			(88	)			(2	)			1,699
Gross profit			2,833																								2,966
Gross margin			60.7	%																							63.6	%
Selling, general and administrative			1,424				(131	)			—				(50	)			—				(88	)			1,155
Research and development			394				(10	)			—				(11	)			—				—				373
Acquired in-process research and development and milestones			8				—				—				—				—				—				8
Restructuring costs			4				—				(4	)			—				—				—				—
Interest expense			398				—				—				—				—				—				398
Exchange losses			25				—				—				—				—				—				25
Other expense (income), net			11				(13	)			—				—				—				—				(2	)
			4,096																								3,656
Income before income taxes			569																								1,009
Taxes on income			92				42				1				12				16				11				174
Net income		$	477																							$	835
Earnings per share - Diluted		$	1.86																							$	3.26

 

(1) Represents one-time costs. Spin-related includes costs from the separation of Merck & Co., Inc., Rahway, NJ, US and Other primarily includes inventory step-up amortization, impairment charges and legal reserves.

 

		Nine Months Ended September 30, 2022
		GAAP				Spin related Costs(1)				Restructuring				Stock-based Compensation				Amortization				Other(1)				Non-GAAP Adjusted
Revenues		$	4,689																							$	4,689
Cost of sales			1,700				(18	)			—				(9	)			(88	)			(17	)			1,568
Gross profit			2,989																								3,121
Gross margin			63.7	%																							66.6	%
Selling, general and administrative			1,234				(86	)			—				(35	)			—				(17	)			1,096
Research and development			329				(8	)			—				(8	)			—				(2	)			311
Acquired in-process research and development and			107				—				—				—				—				—				107
Restructuring costs			11				—				(11	)			—				—				—				—
Interest expense			303				—				—				—				—				—				303
Exchange gains			(21	)			—				—				—				—				—				(21	)
Other expense (income), net			15				(20	)			—				—				—				—				(5	)
			3,678																								3,359
Income before income taxes			1,011																								1,330
Taxes on income			202				24				2				7				15				4				254
Net income		$	809																							$	1,076
Earnings per share - Diluted		$	3.17																							$	4.22

 

(1) Represents one-time costs. Spin-related includes costs from the separation of Merck & Co., Inc., Rahway, NJ, US and Other primarily includes inventory step-up amortization, impairment charges and legal reserves.

 

 

TABLE 5

 

Organon & Co.

Reconciliation of GAAP Income Before Income Taxes to Adjusted EBITDA

(Unaudited, $ in millions)

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2023				2022				2023				2022
Income before income taxes		$	80			$	282			$	569			$	1,011
Depreciation			32				25				88				72
Amortization			29				32				88				88
Interest expense			134				108				398				303
EBITDA		$	275			$	447			$	1,143			$	1,474
Restructuring costs			—				11				4				11
One-time costs (1)			145				70				274				168
Stock-based compensation			27				18				74				52
Adjusted EBITDA		$	447			$	546			$	1,495			$	1,705
Adjusted EBITDA margin			29.4	%			35.5	%			32.0	%			36.4	%

 

(1) One-time costs primarily include costs incurred in connection with the spin-off of Organon, inventory step up adjustments, impairment charges and legal reserves.

 

 

Exhibit 99.2

 

[Organon] Confidential Third Quarter 2023 Earnings Organon

[Organon] Confidential Disclaimer statement, cont. Cautionary Note Regarding Forward - Looking Statements Except for historical information, this presentation includes “forward - looking statements” within the meaning of the safe harbo r provisions of the U.S. Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about management’s expectations about Organon’s future financial performance and pr osp ects, including full - year 2023 guidance estimates and predictions regarding other financial information and metrics, franchise and product performance and strategy expectations for the remain der of 2023 and for future periods, expectations regarding the impact of VBP and developments in China. Forward - looking statements may be identified by words such "foresees" “expects,” “intends,” “ant icipates,” “plans,” “believes,” “seeks,” “estimates,” “will” or words of similar meaning. These statements are based upon the current beliefs and expectations of the company’s management and are sub jec t to significant risks and uncertainties. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forw ard - looking statements. Risks and uncertainties include, but are not limited to, an inability to fully execute on our product development and commerc ial ization plans within the United States or internationally; an inability to adapt to the industry - wide trend toward highly discounted channels; changes in tax laws or other tax guidance which could adversely af fect our cash tax liability, effective tax rates, and results of operations and lead to greater audit scrutiny; an inability to execute on our business development strategy or realize the benefits of o ur planned acquisitions; efficacy, safety, or other quality concerns with respect to marketed products, including market actions such as recalls, withdrawals, or declining sales; political and social pressur es, or regulatory developments, that adversely impact demand for, availability of, or patient access to contraception or fertility products; general economic factors, including recessionary pressures, in ter est rate and currency exchange rate fluctuations; general industry conditions and competition; the impact of the ongoing COVID - 19 pandemic and emergence of variant strains; the impact of pharmaceutical indu stry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances; new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the company’s ability to accurately predict its future financial results and performance; manu fac turing difficulties or delays; financial instability of international economies and sovereign risk; difficulties developing and sustaining relationships with commercial counterparties; dependence on the ef fec tiveness of the company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions. The company undertakes no obligation to publicly update any forward - looking statement, whether as a result of new information, f uture events or otherwise. Additional factors that could cause results to differ materially from those described in the forward - looking statements can be found in the company’s filings with the Securiti es and Exchange Commission ("SEC"), including the company’s Annual Report on Form 10 - K for the year ended December 31, 2022 and subsequent SEC filings, available at the SEC’s Internet site (www.s ec.gov). See Slides 22 - 27 of this presentation for a reconciliation of non - GAAP measures. 2

[Organon] Confidential Disclaimer statement Cautionary Note Regarding Non - GAAP Financial Measures This presentation contains “non - GAAP financial measures,” which are financial measures that either exclude or include amounts th at 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”). Speci fic ally, the company makes use of the non - GAAP financial measures Adjusted EBITDA, Adjusted gross margin, Adjusted gross profit, Adjusted net income, and Adjusted diluted EPS, which are not r eco gnized 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 ex change. 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 ou r 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 thes e m easures 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 i den tical calculations, the presentations of these non - GAAP measures may not be comparable to other similarly titled measures of other companies. You should refer to Table 4 and Table 5 of this pre ss release for relevant definitions and reconciliations of non - GAAP financial measures contained herein to the most directly comparable GAAP measures. In addition, the company’s full - year 2023 guidance measures (other than revenue) are provided on a non - GAAP basis because the co mpany is unable to reasonably predict certain items contained in the GAAP measures. Such items include, but are not limited to, acquisition related expenses, restructuring and related expens es, stock - based compensation, the ultimate outcome of legal proceedings, unusual gains and losses, the occurrence of matters creating GAAP tax impacts and other items not reflective of the company's on going operations. The company uses non - GAAP financial measures in its operational and financial decision making, and believes that it is useful to exclude certain items in order to focus on what it regards to be a more meaningful representation of the underlying operating performance of the business. 3

[Organon] Confidential Third quarter 2023 highlights 4 • Revenue of $1.5 billion, down 1% ex - FX • Adjusted EBITDA of $447 million • Diluted EPS of $0.23; Adjusted Diluted EPS of $0.87 • Revenue guidance range narrowed and lowered to $6.15 billion to $6.25 billion • Adjusted EBITDA margin guidance range narrowed and lowered to 30.5% to 31.5% See Slides 22 - 27 of this presentation for a reconciliation of non - GAAP measures.

[Organon] Confidential Women's Health • NuvaRing LOE primary driver of 7% ex - FX decline • Nexplanon down 3% ex - FX; new GTM model • Fertility expected to deliver high - single digit growth for full year 2023 • Jada doubles revenue year - over - year ex - FX • Recent launch of Xaciato • Franchise growth of 10% ex - FX • Strong demand and volume growth for Renflexis; Ontruzant up 34% ex - FX on tender phasing • Market slowly forming for biosimilair of Humira • Revenue up 3% ex - FX despite VBP, policy initiatives in China • Expect franchise to achieve flat - to - slightly better performance ex - FX for full year 2023 5 Established Brands Biosimilars Women's Health Humira is a trademark registered in the United States in the name of AbbVie Biotechnology Ltd

[Organon] Confidential Solid relative performance for Hadlima Source : Healthcare Analytics, LLC (Jul 14 - Oct 6, 2023) 2023 U.S. Weekly Total Prescriptions (TRx) ~3.0X units vs next closest to competitor from July cohort 6

[Organon] Confidential Durability of Established Brands Expanding manufacturing Stemming price erosion Durability and diversity of brands LCM / entrepreneurial focus Established Brands 7

[Organon] Confidential Stable, global Established Brands business delivered through strength of execution & diversification 8 4% - 2% - 4% 1% 0% 3% Total Established Brands Franchise US EUCAN APAC China LAMERA Q2 ‘22 Q3 ‘22 Q4 ‘22 Q1 ‘23 Q2 ‘23 Q3 ‘23 % Change Total Established Brands business Established Brands sales eX - FX variance by quarter vs. prior year, %

[Organon] Confidential Revenue by geography Navigating macro environment in China $ mil Q3 - 23 Q3 - 22 Actual VPY Ex - FX VPY YTD 2023 YTD 2022 Actual VPY Ex - FX VPY Europe and Canada 392 363 8% 3% 1,259 1,243 1% 2% United States 370 366 1% 1% 1,067 1,043 2% 2% Asia Pacific and Japan 284 283 — % 2% 869 888 (2)% 3% China 202 241 (16)% (11)% 661 721 (8)% (2)% Latin America, Middle East, Russia and Africa 239 236 1% 6% 687 665 3% 7% Other (1) 32 48 (31)% (34)% 122 129 (6)% (7)% Total Revenues 1,519 1,537 (1)% (1)% 4,665 4,689 (1)% 2% 9 (1) Other includes manufacturing sales to Merck & Co., Inc., Rahway, NJ, USA and other third parties.

[Organon] Confidential (1%) reported (1%) ex - FX $ mil 10 Volume growth offset LOE, VBP and pricing (1) LOE = Loss of Exclusivity (2) VBP = Volume Based Procurement (3) Other includes manufacturing sales to Merck & Co., Inc., Rahway, NJ, USA and other third parties (3) (1) (2) FX ~(65) bps headwind to growth in Q3 ~ ~ ~ ~ ~ ~

[Organon] Confidential Women’s Health Women’s Health Revenues $ mil Q3 - 23 Q3 - 22 Act VPY Ex - FX VPY 2023 YTD 2022 YTD Act VPY Ex - FX VPY Nexplanon ® (contraception) 220 229 (4)% (3)% 599 595 1% 2% NuvaRing ® (contraception) 37 50 (26)% (23)% 117 133 (12)% (10)% Marvelon Œ / Mercilon Œ (contraception) 30 31 (3)% (2)% 97 85 13% 17% Follistim ® (fertility) 54 60 (10)% (8)% 179 179 — % 3% Ganirelix Acetate Injection (fertility) 25 36 (30)% (29)% 88 97 (9)% (7)% Jada (device) 13 5 134% 134% 31 12 150% 150% Other Women's Health products 39 42 (8)% (8)% 126 138 4% 5% Total Women's Health 418 454 (8)% (7)% 1,237 1,240 — % 2% 11 • Nexplanon down 3% ex - FX • Expect high single digit growth in fertility ex - FX for full year • YTD Jada revenue more than double 2022 Totals may not foot due to rounding . Trademarks appearing above in italics are trademarks of, or are used under license by, the Organon group of companies .

[Organon] Confidential Biosimilars Biosimilars Revenues $ mil Q3 - 23 Q3 - 22 Act VPY Ex - FX VPY 2023 YTD 2022 YTD Act VPY Ex - FX VPY Renflexis ® 69 60 15% 15% 201 166 22% 22% Ontruzant ® 40 29 36% 34% 93 87 8% 7% Brenzys Œ 13 24 (43)% (41)% 45 52 (13)% (8)% Aybintio Œ 12 10 18% 11% 34 29 17% 16% Hadlima Œ 8 6 38% 42% 20 14 48% 55% Biosimilars 142 129 10% 10% 394 346 14% 15% 12 • Franchise grew 10% in third quarter • Renflexi s up 15% ex - FX; on track for 6th consecutive year of growth • Ontruzant and Brenzys performance reflective of tender phasing Totals may not foot due to rounding . Trademarks appearing above in italics are trademarks of, or are used under license by, the Organon group of companies .

[Organon] Confidential Established Brands Established Brands Revenues $ mil Q3 - 23 Q3 - 22 Act VPY Ex - FX VPY 2023 YTD 2022 YTD Act VPY Ex - FX VPY Cardiovascular 354 349 1% — % 1,139 1,171 (3)% — % Respiratory 248 231 7% 10% 790 790 — % 4% Non - Opioid Pain, Bone & Derm 210 193 9% 10% 595 603 (1)% 1% Other 123 143 (14)% (14)% 408 423 (4)% — % Total Est. Brands 935 915 2% 3% 2,932 2,987 (2)% 1% 13 • Established Brands grew 3% ex - FX despite VBP and market action in early 2023 • Expect flat to slightly positive performance for full year Totals may not foot due to rounding .

[Organon] Confidential Gross margin drove profitability variance; attributable to FX and inflationary pressures All numbers presented on non - GAAP basis (1) Q3 - 23 Q3 - 22 Actual VPY 2023 YTD 2022 YTD Actual VPY Revenue 1,519 1,537 (1)% 4,665 4,689 (1)% Cost of sales 568 505 12% 1,699 1,568 8% Adjusted Gross profit 951 1,032 (8)% 2,966 3,121 (5)% Selling, general and administrative 392 378 4% 1,155 1,096 5% R&D 129 121 7% 373 311 20% Acquired IPR&D and milestones — 10 NM 8 107 NM Total research and development including IPR&D 129 131 (2)% 381 418 (9)% Adjusted EBITDA 447 546 (18)% 1,495 1,705 (12)% Adjusted diluted EPS 0.87 1.32 (34)% 3.26 4.22 (23)% Per share impact to diluted EPS from acquired IPR&D and milestones — (0.04) NM — (0.04) NM Adjusted Gross margin 62.6% 67.1% 63.6% 66.6% Adjusted EBITDA margin 29.4% 35.5% 32.0% 36.4% 14 (1) See Slides 23 - 28 of this presentation for a reconciliation of non - GAAP measures to their respective GAAP measures

[Organon] Confidential 15 Bank covenant (*) net leverage ratio ~4.3x; Upward pressure on leverage expected to peak in Q4 Net Debt as of September 30, 2023 $ mil Dec 2021 Dec 2022 Mar 2023 Jun 2023 Sept 2023 Cash and cash equivalents 737 706 459 326 414 Gross Debt (1) 9,134 8,913 8,711 8,730 8,654 Net Debt (1) 8,397 8,207 8,252 8,404 8,240 (*) The definition of net debt in the company's credit agreement excludes unamortized fees but includes capitalized lease ob lig ations. Additionally, the LTM EBITDA calculation excludes acquired IPR&D and milestone charges. (1) Debt figures are net of discounts and unamortized fees of $124 million, $105 million, $97 million, $93 million and $87 m ill ion as of December 31, 2021, December 31, 2022, March 31, 2023, June 30, 2023 and September 30, 2023, respectively.

[Organon] Confidential Despite Q3 improvement in FCF before OTC, Net Working Capital Consumption remained a headwind 16 (1) Free cash flow represents net cash flows provided by operating activities plus capital expenditures, acquired in - process researc h and development, and the effect of exchange rate changes on cash and cash equivalents. • Expect ~$700 - $800M FCF before one time costs in FY 2023 • Net working capital use primarily driven by ERP implementation • Expect >70% of FCF to be generated in 2H23, consistent with prior year (USD millions) Q1 Q2 Q3 2023 YTD Adjusted EBITDA $518 $530 $447 $1,495 Less: Net cash interest expense (65) (179) (68) (312) Less: Cash taxes (61) (29) (55) (145) Less: Change in NWC (207) (233) (52) (492) Less: CapEx (23) (33) (37) (93) Free Cash Flow Before One Time Costs $162 $56 $235 $453 Less: One time costs (82) (94) (77) (253) Free Cash Flow (1) $80 $(38) $158 $200

[Organon] Confidential Continued volume growth, moderating headwinds in LOE, VBP, price $ mil 17 (1) LOE = Loss of Exclusivity (2) VBP = Value Based Pricing (3) Other includes manufacturing sales to Merck and other third parties, and allocated amounts from pre - spin revenue hedging activit ies through the date of separation. (1) (2) (3) ~ +1.6% to +3.3% growth at constant currency, ~ (0.4)% to + 1.2%, reported Fx~(195) - (210) bps headwind to growth in 2023 ~ ~ ~ ~ ~ ~

[Organon] Confidential Full Year 2023 guidance ranges 18 Provided on a Non - GAAP basis, except revenue Guidance provided August 8, 2023 Guidance provided as of November 2, 2023 Revenues $6.250B - $6.450B $6.150B - $6.250B Adjusted gross margin Low - mid 60% range Low 60% range SG&A (as % of revenue) Mid 20% range Unchanged R&D (as % of revenue) Upper single - digit Unchanged Adjusted EBITDA margin 31.5% - 33.0% 30.5% - 31.5% Interest ~$525 million Unchanged Depreciation ~$120 million Unchanged Effective non - GAAP tax rate 17.5% - 19.5% Unchanged Fully diluted weighted average shares outstanding ~257 million Unchanged

[Organon] Confidential Q&A

[Organon] Confidential Appendix

[Organon] Confidential Franchise performance $ mil Q3 - 2023 Q3 - 2022 Actual VPY Ex - FX VPY 2023 YTD 2022 YTD Actual VPY Ex - FX VPY Women’s Health 418 454 (8)% (7)% 1,237 1,240 — % 2% Biosimilars 142 129 10% 10% 394 346 14% 15% Est. Brands 935 915 2% 3% 2,932 2,987 (2)% 1% Other (1) 24 39 (36)% (38)% 102 116 (12)% (12)% Total Revenues 1,519 1,537 (1)% (1)% 4,665 4,689 (1)% 2% (1) Other includes manufacturing sales to Merck & Co., Inc., Rahway, NJ, USA and other third parties. 21

[Organon] Confidential Reconciliation of GAAP Reported to Non - GAAP Adjusted Information 22 Three Months Ended September 30, 2023 Unaudited, $ in millions except per share amounts GAAP Spin related Costs (1) Restructuring Stock - based Compensation Amortization Other (1) Non - GAAP Adjusted Revenues $ 1,519 $ 1,519 Cost of sales 612 (10) — (5) (29) — 568 Gross profit 907 951 Gross margin 59.7 % 62.6 % Selling, general and administrative 538 (41) — (18) — (87) 392 Research and development 137 (4) — (4) — — 129 Acquired in - process research and development and milestones — — — — — — — Interest expense 134 — — — — — 134 Exchange losses 14 — — — — — 14 Other expense (income), net 4 (3) — — — — 1 1,439 1,238 Income before income taxes 80 281 Taxes on income 22 16 — 4 5 11 58 Net income $ 58 $ 223 Earnings per share - Diluted $ 0.23 $ 0.87 ( 1 ) Represents one - time costs . Spin - related includes costs from the separation of Merck & Co . , Inc . , Rahway, NJ, US and Other primarily includes inventory step - up amortization, impairment charges and legal reserves .

[Organon] Confidential Reconciliation of GAAP Reported to Non - GAAP Adjusted Information 23 Nine Months Ended September 30, 2023 Unaudited, $ in millions except per share amounts GAAP Spin related Costs (1) Restructuring Stock - based Compensation Amortization Other (1) Non - GAAP Adjusted Revenues $ 4,665 $ 4,665 Cost of sales 1,832 (30) — (13) (88) (2) 1,699 Gross profit 2,833 2,966 Gross margin 60.7 % 63.6 % Selling, general and administrative 1,424 (131) — (50) — (88) 1,155 Research and development 394 (10) — (11) — — 373 Acquired in - process research and development and milestones 8 — — — — — 8 Restructuring costs 4 — (4) — — — — Interest expense 398 — — — — — 398 Exchange losses 25 — — — — — 25 Other expense (income), net 11 (13) — — — — (2) 4,096 3,656 Income before income taxes 569 1,009 Taxes on income 92 42 1 12 16 11 174 Net income $ 477 $ 835 Earnings per share - Diluted $ 1.86 $ 3.26 ( 1 ) Represents one - time costs . Spin - related includes costs from the separation of Merck & Co . , Inc . , Rahway, NJ, US and Other primarily includes inventory step - up amortization, impairment charges and legal reserves .

[Organon] Confidential Reconciliation of GAAP Reported to Non - GAAP Adjusted Information 24 Three Months Ended September 30, 2022 Unaudited, $ in millions except per share amounts GAAP Spin related Costs (1) Restructuring Stock - based Compensation Amortization Other (1) Non - GAAP Adjusted Revenues $ 1,537 $ 1,537 Cost of sales 551 (8) — (3) (32) (3) 505 Gross profit 986 1,032 Gross margin 64.2 % 67.1 % Selling, general and administrative 440 (33) — (12) — (17) 378 Research and development 127 (2) — (3) — (1) 121 Acquired in - process research and development and milestones 10 — — — — — 10 Interest expense 108 — — — — — 108 Exchange gains 4 — — — — — 4 Other expense (income), net 4 (6) — — — — (2) 1,255 1,124 Income before income taxes 282 413 Taxes on income 55 10 2 2 6 1 76 Net income $ 227 $ 337 Earnings per share - Diluted $ 0.89 $ 1.32 ( 1 ) Represents one - time costs . Spin - related includes costs from the separation of Merck & Co . , Inc . , Rahway, NJ, US and Other primarily includes inventory step - up amortization, impairment charges and legal reserves .

[Organon] Confidential Reconciliation of GAAP Reported to Non - GAAP Adjusted Information 25 Nine Months Ended September 30, 2022 Unaudited, $ in millions except per share amounts GAAP Spin related Costs (1) Restructuring Stock - based Compensation Amortization Other (1) Non - GAAP Adjusted Revenues $ 4,689 $ 4,689 Cost of sales 1,700 (18) — (9) (88) (17) 1,568 Gross profit 2,989 3,121 Gross margin 63.7 % 66.6 % Selling, general and administrative 1,234 (86) — (35) — (17) 1,096 Research and development 329 (8) — (8) — (2) 311 Acquired in - process research and development and milestones 107 — — — — — 107 Interest expense 303 — — — — — 303 Exchange gains (21) — — — — — (21) Other expense (income), net 15 (20) — — — — (5) 3,678 3,359 Income before income taxes 1,011 1,330 Taxes on income 202 24 2 7 15 4 254 Net income $ 809 $ 1,076 Earnings per share - Diluted $ 3.17 $ 4.22 ( 1 ) Represents one - time costs . Spin - related includes costs from the separation of Merck & Co . , Inc . , Rahway, NJ, US and Other primarily includes inventory step - up amortization, impairment charges and legal reserves .

[Organon] Confidential Income before income taxes to Adjusted EBITDA Unaudited, $ in millions Q3 - 2023 Q3 - 2022 Income before income taxes 80 282 Depreciation 32 25 Amortization 29 32 Interest expense 134 108 EBITDA 275 447 Restructuring costs — 11 One - time costs (1) 145 70 Stock - based compensation 27 18 Adjusted EBITDA 447 546 Adjusted EBITDA margin 29.4 % 35.5 % 26 ( 1 ) One - time costs primarily include costs incurred in connection with the spin - off of Organon, inventory step up adjustments and legal reserves .

[Organon] Confidential Income before income taxes to Adjusted EBITDA Unaudited, $ in millions YTD Sept. 2023 YTD Sept. 2022 Income before income taxes 569 1,011 Depreciation 88 72 Amortization 88 88 Interest expense 398 303 EBITDA 1,143 1,474 Restructuring costs 4 11 One - time costs (1) 274 168 Stock - based compensation 74 52 Adjusted EBITDA 1,495 1,705 Adjusted EBITDA margin 32.0 % 36.4 % 27 ( 1 ) One - time costs primarily include costs incurred in connection with the spin - off of Organon, inventory step up adjustments and legal reserves .

[Organon] Confidential Reinvesting in the business to create a pipeline of future revenue opportunities 28 Commercialized/soon to be commercialized asset Building a pipeline Licensing Agreement for Xaciato Œ (clindamycin phosphate vaginal gel, 2%) March 2022 Bacterial Vaginosis Gel FDA - approved for BV in females 12 and over, the most common cause of vaginits worldwide estimated to affect approximately 21 million women in the US. (1) Marvelon Œ (desogestrel and ethinyl estradiol) and Mercilon Œ (desogestrel and ethinyl estradiol) February 2022 Contraception Expanding portfolio - recapturing commercial rights to certain currently marketed products in Asia Acquisition of Alydia Health/JADA® System June 2021 Medical Device Postpartum hemorrhage - one of the most common complications of birth, requiring pharmacologic treatment in up to 10% of mothers (2) Claria Medical January 2023 Medical Device Being studied for use during minimally invasive laparoscopic hysterectomy - one of the most commonly performed surgeries for women Cirqle Biomedical July 2022 Contraception Expanding portfolio - preclinical, non - hormonal contraceptive candidate, large, unmet need for non - hormonal contraception Licensing Agreement for biosimilar candidates referencing Perjeta (3) and Prolia (3) /Xgeva (3) through Shanghai Henlius June 2022 Biosimilar Candidates for Osteoporosis and Breast Cancer Exclusive global commercialization rights except for China; including Hong Kong, Macau and Taiwan Forendo Pharma December 2021 Endometriosis Clinical stage / Phase 2a/2b - chronic condition that affects up to 1 in 10 of reproductive age women / girls globally (5) (1) Centers for Disease Control and Prevention Bacterial Vaginosis CDC Fact Sheet: https://www.cdc.gov/std/bv/stdfact - bacterial - vaginosis (2) Widmer M et al. "Heat - Stable Carbetocin versus Oxytocin to Prevent Hemorrhage after Vaginal Birth." N Engl J Med 2018; 379:743 - 752 (3) Perjeta is a trademark registered in the U.S. in the name of Genentech, Inc.; Prolia and Xgeva are trademarks registered in the U.S. in the name of Amgen Inc (4) WHO Key Facts, 2018: https://www.who.int/news - room/fact - sheets/detail/preterm - birth (5) WHO Key Facts, 2023: https://www.who.int/news - room/fact - sheets/detail/endometriosis

[Organon] Confidential Number of products 13 5 49 Women’s Health Biosimilars Established Brands Broad and diverse portfolio 29 TM TM

 

v3.23.3

Cover	Nov. 02, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 02, 2023
Entity File Number	001-40235
Entity Registrant Name	Organon & Co.
Entity Central Index Key	0001821825
Entity Tax Identification Number	46-4838035
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	30 Hudson Street
Entity Address, Address Line Two	Floor 33
Entity Address, City or Town	Jersey City
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	07302
City Area Code	551
Local Phone Number	430-6900
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	OGN
Security Exchange Name	NYSE
Entity Emerging Growth Company	false

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