OGN - Organon trades lower after Q4 miss uptick in Women's Health but Established Brands revenue dips

Organon ( NYSE: OGN ) stock fell ~4% premarket on Thursday after Q4 results missed estimates.

Q4 adjusted EPS declined -28.3% Y/Y to $0.81. Revenue fell -7.4% Y/Y to ~$1.49B but grew +1% Y/Y excluding the impact of foreign currency (ex-FX).

"Since these products have been in our hands, we have set three quarterly sales records for Nexplanon, delivered two consecutive years of double-digit revenue growth in Biosimilars and demonstrated the durability of the Established Brands franchise," said Organon's CEO Kevin Ali.

Revenue from Women's Health segment grew +4.3% Y/Y ( +9% ex-FX) to $433M.

The increase was driven mainly by birth control implant Nexplanon (etonogestrel implant), which grew +8% ex-FX Y/Y. The franchise also benefited from +4% ex-FX Y/Y growth in the fertility portfolio and contributions from business development activity including combined oral contraceptives Marvelon (ethinylestradiol, desogestrel) and Mercilon (ethinylestradiol, desogestrel) which together grew 25% ex-FX Y/Y, according to the company.

However, the franchise's growth was partially offset by a decline of -5% ex-FX Y/Y in sales of NuvaRing (etonogestrel/ethinyl estradiol vaginal ring for pregnancy prevention) which continued to be impacted by generic competition.

Revenue from Biosimilars segment increased +13.5% Y/Y (+ 17% ex-FX) to $134M, driven by double-digit growth from Renflexis (infliximab-abda), Ontruzant (trastuzumab-dttb), Hadlima (adalimumab-bwwd) and Aybintio (bevacizumab). Organon noted that this was offset by a 13% ex-FX decline in Brenzys (etanercept) due to the timing of a tender in Brazil.

Revenue from Established Brands decreased -14% Y/Y (-4% ex-FX) to $888M.

The decline was mainly due to the November 2022 inclusion of Ezetrol (ezetimibe) in the seventh round of VBP (Volume Based Procurement) in China.

In addition, in January 2023, Organon started a market action in certain markets for betamethasone suspension injections sold under the names Diprospan, Celestone Chronodose, and Celestone Soluspan, related to a non-conforming component of a manufacturing line at Organon's Heist, Belgium facility.

The company noted that this action resulted in a reduction of Established Brands revenue of $8M in Q4 2022.

No product quality complaints have been reported, and there have been no reported adverse events attributable to the potentially impacted and distributed product batches, according to the company.

Gross margin in Q4 was 60% as-reported, compared to 62.7% in Q4 2021.

Outlook :

Organon expects full year 2023 revenues to be between $6.15B and $6.45B ( consensus $6.32B).

OGN -4.31% to $28 premarket Feb. 16

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