OGN - Organon jumps ~9% on strong Q2 driven by higher contraceptive sales growth in biosimilars

2023-08-08 14:47:06 ET

Organon ( NYSE: OGN ) stock on Tuesday was among the top percentage gainers on the S&P 500 ( SP500 ), after the women's health company reported strong Q2 results on the back of increased sales of its contraceptive Nexplanon and growth in its biosimilars business.

Shares of OGN advanced 8.8% to $23.73 in late afternoon trading.

OGN earlier in the day reported Q2 adjusted earnings per share of $1.31, beating estimates by a solid 32 cents . Revenue came in at $1.61B versus an expected figure of $1.56B.

Pharmaceutical giant Merck ( MRK ) spun-off Organon ( OGN ) in June 2021 in an effort to streamline its operations into two patient-focused companies.

OGN said its quarterly revenue growth of 4%, excluding the effects of foreign exchange, was driven by a 10% and 15% increase in revenue in the women's health and biosimilars businesses, respectively.

"Performance of Nexplanon in the U.S. was particularly strong this quarter, with revenue growth of 19%," OGN CEO Kevin Ali said on the earnings conference call , adding that he continued to believe that the etonogestrel implant would achieve $1B in revenue by 2025.

Sales of contraceptives have generally been strong since the U.S. Supreme Court's landmark decision last year in June to overturn a ruling that established a constitutional right to abortion. The case was known as Dobbs v. Jackson Women's Health Organization.

"In the United States, the Dobbs decision has driven an increase in demand from patients obtaining Nexplanon through providers under the 340B program, which is a more highly discounted channel," OGN CFO Matthew Walsh said on the conference call.

OGN also saw 17% growth in its fertility portfolio during the quarter, partly due to post-COVID rebound in China as patients returned to clinics for treatment.

The company's biosimilars unit will likely see revenue growth going forward after Organon ( OGN ) and partner Samsung Bioepis recently announced the launch of a biosimilar to AbbVie's ( ABBV ) blockbuster arthritis drug Humira.

Additionally, OGN tightened its full year revenue guidance range to $6.25B-$6.45B from a prior outlook of $6.15B-$6.45B, primarily due to the effects of foreign currency.

More on Organon

• OGN earnings presentation
• OGN Quant rating
• OGN growth metrics
• Organon: Big Dividend And Upside Potential

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