Organon & Co. (OGN) 17 Feb 222021 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the Organon Fourth Quarter and Full Year 2021 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded. you. Thank like Investor call Relations. now Halchak, to turn President, Vice to would over the Jennifer I Please your begin conference.

year presentation Today, the on be Organon With that Events Thank R&D, portion our will Head you, Investor Organon’s of a the Chief our following be us for the for full Financial our you call joining joining Presentations thank Chief available this presentation will will call. you during earnings of Mary. we’ll Relations Good Matt Sandra call today morning, also Q&A This this fourth everyone, also Executive website Officer; Officer; visible quarter be be Walsh, section www.organon.com. Kevin Dr. today & on referencing of of those webcast. at are me and and for XXXX Ali, call. our and Organon’s Milligan,

would Before materially by discussed filings. this registration management during information statements and uncertainties Commission, we the caution Actual forward-looking begin, could are which including certain will business, and statements. I listeners or that implied by Company’s associated those Form the in forward-looking stated and results call the like our conference to XX due Company’s include discussed from filings periodic Exchange with subsequent with to differ risks Securities statement

accordance our the GAAP I to considered in CEO, we will now prepared to supplement press and presentation. release the over as and these be would Ali. of the GAAP. non-GAAP this turn to conference to on measures financial not should Kevin is in measures comparable included addition, measures like call call In substitute which discuss certain measures A non-GAAP call, a for reconciliation financial with

welcome quarter you, full we year XXXX. Good Jen. call fourth our about of to everyone, where morning, and results for the thank today’s and talk will And

a objectives $X.X of we employees, achieved vision financial on founders existing XX% on EBITDA women’s would to the laid of spin our start also revenue commitments. fulfill the build me and EBITDA financial billion, by time portfolio In the provided XXXX. all do we above We in X,XXX we at did that of to margins delivered we becoming and we XXXX, below of guidance team what the saying and of our November. to Let equating tightened end our said leader last $X.X Full began out adjusted adjusted high just of are our in billion year ranges health. the our

double-digit and three XXXX. our Nexplanon, and to continue growth expect from in we double Importantly, engines, performance again fertility all digits, XXXX, all in biosimilars, grew

Now, we exited XXXX on note. a very positive

In fact, has fourth overcoming is ex-supply Sales in a loss the the and from product the whole from time China. sales as Volume in grown. first quarter the or the VBP portfolio of initiatives products portfolio our exclusivity headwind Based the our X% of of impacts quarter, that in grew marks Procurement

We’re see several encouraged by areas. the we in key progress

let’s brands look is XX franchise. customer Established loyalty. a includes of at that products This portfolio with First, Brands our significant

can we most the the and of the business nominal very revenue exactly what behind basis durable significant on the and flows decline that would to In in moderated such our year LOEs in digits, that in once Brands currency growth further X% engines. quarter. invest constant said, And declines single have the both the down and in the cash fourth that this stabilize is Established XXXX, were the We us, impact is ended happening. use would franchise and business we significant that low

with in cardiovascular, In the through. family portfolio fact, where the of areas the in all LOEs Brands the washing are quarter included in grew ezetimibe therapy the the Established still fourth exception

other several believe business. Brands LOE we on significantly there have portfolio. But forward, exposure weighing Established are durability our of in to will beyond reasons the this less Going that,

level Established that earnest as today and half cycle in Brands Established given supported we delivered by our XXXX is paying business entrepreneurial double the which XX% And Established this in First, in attention portfolio. focus for up has growth XXXX increased for managing the initiated the we Brands VBP, in China. Brands is Since through channel, an an digits is individual we China. in spin, X% a the have is at important in This representing about business the of channel us There China of XXXX is implemented full across and us, of often efforts we has and growing due now represents and dividends management been for business China and country our these in market reality our into Brands are have of in down China. the stabilization the demand in year retail only geographies revenue. moving cardiovascular been hospital revenue performance channel channel China our Established the fourth currently channels products have our dermatology, also we find about as Across X% and business growing respiratory, successfully worldwide. currency. process accordingly. VBP of ways XXXX. competitors, the XX% have remaining not successful opportunities is in strong new our been well. primarily geographies XX% in an pain the Despite those through and for dozen to of about in all out and hospital in, double like manage into to portfolio. operate Already, that and VBP, has to non-opioid was constant put with estimated digits must a our Brands subject To quarter other the of XX% impacts Established management started been life the launches XXXX business the retail was at portfolio date, our products secondary of

Another the revenue. Nexplanon in its posted history was performance. of sales $XXX fourth the quarter with product milestone in million highest the Nexplanon’s in

our dependent volumes brand cycles. removal Nexplanon trained go-to-market our emerging while professionals demand. and ramping on government a impact our is reasons markets in insertion number means engage important significantly And Nexplanon’s we having patients positive regular believe a renewals. need physician is Nexplanon are driving for product tender-driven, this everyone, script than the the not drive Also, quarter-to-quarter. can that durable customers with new everyone few the run There very growth caution largely this. to said, patient are and Nexplanon’s on sales to remind to efforts of and budget I is modernize where health we That chronic to relying of in want which and business I a disease, care our rather to approaches rate. Now, are up new not want vary on

collaborator decade. includes with U.S., basis. pursuing let’s to deliver the rates Now, Samsung, business planned annual tenders, growth about We we of which our encouraged mid-XXXX half for patent the continue on will quarter-to-quarter, opportunity, will in billion see next and sizable performance Company. a another the committed we estimated of going we commercial remain launch growth about biosimilars, to double-digit be biosimilar talk an biosimilar very off we of particularly but expect to as engine well-positioned which the the to We by outside vary for biologics U.S. biosimilar Humira biosimilars an remain undertaking blockbuster $XXX subject the are over With of interchangeability study.

biosimilar these will opportunities well as with developers. other Samsung as pipeline evaluate We

diseases In laid leader the most some of and fertility a becoming to the pursuit scope that We and by and expanding women. of the executed impacting vision maternal in transactions addition spin, including health, underserved and have and in include other to achieving illnesses we contraception our vision. established our four health. in building since we to out do have women’s And women’s conditions in peripartum commitments, bold plan financial this of our positions on global leading

to as As pills you can those told stage daily a we very as Mercilon, of the we already manufacturers oral Macau, prescription XX This entered assets contraceptive of other to From commercial business products the rights transaction in reacquired Hong both contraceptive alone, markets. Marvelon to week in Kong as expect announced our products China, was People’s us the already have an that and attractive well. development Vietnam rights hormonal these Organon as in agreement a acquire owns, this have oral perspective, we these commercialized. and mix pipeline market combined a and as you, we for including activity to Republic include into well and

of or this to patients estrogen large company and therefore reproductive with Forendo the to is In approved globally. Such affects for age. pain of were a we XXXX, EBITDA market. makes up acquisition women XX% unmet pain. development Additionally, able density are unsuitable target menopausal closed is Endometriosis systemic which to million underserved at of in endometriosis-related reduce valuation immediately a women patients. all mineral studied Currently, but that adjusted long-term endometriosis is to clinical-stage accretive Organon’s investigational XXX need a our ability on priority being for its often and to treatments bone lead Endometriosis December, symptoms. asset high lead use triggers whose we impacts therapies up This associated depletion, for transact to profitability. a

and of preclinical the Forendo Phase XXXX has X. X progression study supporting completed Phase the into

about globally. treatment studied biological program. estimated start development further announced study babies We Ebopiprant select X innovation licensing to or XXXX. investigational And potential born potential also first-in-class and manufacturer for in commercial Xa X as determine in the year the Phase impacts This will XX% a performed currently the asset, to labor, agent global we countries. of small ObsEva. from for European expect July, this another the development out is all has to and in of ebopiprant babies X results Phase Phase Those XX demonstrated a Phase investigational an of work read activity million last rights which being a preterm

with will Our of anticipate birth. treated Phase satisfy commercialized device submission And into commercial we work more investing so, technical growth this aim to significant the aimed to IND is in been enable most We product. is bleeding Organon infrastructure common for of at Overall, Health the which U.S. To preclinical the exciting that X,XXX date, to U.S. our already the demand. and our first study X continue spin is and is system, need the investment critical requires The mothers And to of complications development in the involving and was development. our and an to ensure one be Alydia studies abnormal with both, to and in agent unmet XXXX, do controlling have the brand is in or start. the over hemorrhage continued necessary our given off and now in criteria baby its X pregnant globally. relevant Phase additional a right studies meet phase mother. regulatory authorities close after acquisition collaboration women safety postpartum JADA

well-positioned are a guidance. he We Matt discusses about as speak which Over XXXX, more for you, solid to Matt. will

Kevin. you, Thank

As results the I’ve done as and presented convention, in previous a our carve-out quarters, if a present is of prior to company. which I’ll basis on that GAAP you results standalone were not accounting, to intended Organon it’s are remind spin-off

I that year results, spin won’t to clear, for represent because be items the prior discuss Xnd, a want third June P&L standalone Organon. post-spin apples-to-apples quarter we we all it draw XXXX as financials our can until to So, results that where line be true was comparison of

year time, start that is financial periods, the the have prior best to until revenue we’ll and where where that’s discussion. comparability So, we’ll

growth saw slide solid X%, and by as the both in was quarter and reported revenue of in $X.X offset decrease performance billion well was So, We a sales. in and our constant down supply X. at as turning as women’s decline health Brands from Established biosimilars that Fourth currency. franchises to

grew revenue and the And slide X% mentioned, volume with It quarter X, fourth can contributing bridge. underlying this see marketed offsetting on products graphically VBP. in of portfolio on favorably Kevin from performed LOE and the and depicted As price you headwinds the well.

business is total Established forward, for erosion across fourth next years the exposure in has approximately year-over-year mentioned, million the $XXX $XXX LOE continue moderated year to NuvaRing impact the our the with So, flatten negative remaining Japan over back LOE quarter, million as to LOE impact VBP impact very of was limited China. risk $XX Continuing exposure to The waterfall in in Zetia about Paediatric, quarter one the to fourth the going to combined. the million associated fourth that as drag believe what portfolio and curves Brands and should half chart, And $XX in of XXXX. on of four where was actually third the from Proscar, was the our read in The our Kevin U.S. and from run the the million. sales the of we impact and VBP. relative quarter included We to we impact year was been, Singulair round have with less Arcoxia. in the business and approximately was so a that’s COVID-XX fourth in saw of that far, products, And Propecia the rate while fourth of quarter. to And compared four the saw last Organon’s our quarter with largest than

fourth Brands this impacts. and up comparison VBP. in VBP favorable in impacted from offset being performance not mostly came the grew that biosimilars ends quarter, products in So, LOE for growth those a and year-on-year. slight China Volume continued as well as Volume in Established growth and Nexplanon’s strong growth by

lower Merck third margin represents of sales The and contract consists arrangements. of under supply sales primarily to products other which bucket pharmaceutical other parties, manufacturing

but down contributed smaller XXXX, to foreign million favorability mostly Full much XXXX for we and will year in more $XX about total translation supply expect of supply percentage-point about quarter. added And revenues to because X.X exchange the we sales decline. quarter. contribute growth about was the like extrapolation an fourth quarter arrangements even the revenue amount to year fourth full will For finally, saw the an under than of these XXXX, volumes look $XX in million sales

So now, We’ll let’s on health slide by take start a women’s look performance at X. franchise. with

both business at reported as up women’s X%, fourth in Our quarter. constant was currency health the and

reasons individual quarter, X% impacts Nexplanon’s But the quarter-to-quarter, $XXX tough initial when demand the Kevin COVID most some primarily be was For influence period at physician of the year driving Nexplanon in of first and of the based the quarterly franchise vaccination last XXXX the in saw vary this up beginning to remarkable timing a XXXX. prominent had explained, reported a most the full and comparison quarter will lapping of tenders the growth will XX%. currency. X% constant which quarters year, will of on XXXX, for million, And in how the up as likely we fourth revenues of prior optimism be year.

XX% currency. Nexplanon grew For completed, just at the year constant

returned than fertility expect We was The more and China XXXX, fourth clinics that to the by in to XXXX half United in outside similar quarter. come patients had relatively which did. in offset very was than that Europe, U.S. growth U.S. outside fertility business as the faster flat strong States. growth of from patients grew the quarters but U.S. and especially Europe, in with Fertility expected XX%,

full initiatives in Volume selling the increasing from fertility very towards patients of returning negative came macro as rates. portfolio for year, trends government double advanced to grew consequences Overall, For birth global world fundamentals, the a trend of of age well time-sensitive clinics maternal number of including result attractive lower well digits fertility treatment. market future has global address macro as efforts a an this around on as the accounts demand percentage growth basis. from to the the economic fertility increase as increased as an from new

us double-digit XXXX. with nicely another focus portfolio, year fertility in on growth expect from increased set to Now, these this trends of up together our

the comfort for XX. the July and U.S. down the Now, launched the fourth the currency increasing, biosimilars timing a year, up Globally, double-digit grew half competitive stable of would patients. about quarter, our U.S. offered turning to grew our for points quarter quarter In add. the some continues in of Established XX% expect biosimilar the full we is U.S. U.S. updates biosimilars But on fourth the our by deliver and expect quarter year, largely the the XX% Brazil. constant and covered market of continue Ontruzant, growth XX, Ontruzant last America’s region was year. biosimilars due the by growth increasing full XX% in specifically and year grew year. of the outside portfolio two growing over increased U.S. offerings and for itself Kevin volatility upon growth largest globally, but have the recent and ex-FX. that are and X% decrease quarter, year, for of year. depending we XX% you which in driven transitioning five biosimilar that the for the but full and slide infliximab well. details the XXXX, but timing Established I as offset for for was ex-FX XX% offerings in can to also and find tenders Renflexis about and pressures of also and unit XX% franchise. Renflexis in highlights The they’re in in both to in in biosimilars fiscal the two fourth the is portfolio in year, Brands With Ontruzant will quarter-to-quarter good the States, the the and per in in EU United acceptance the some to within Brands, was in with physician business tenders, Latin payer market On uptake at slide

that the XX% associated price, X%. First, by exclude to was and currency Established XX% of volume Brands if for loss volume basis, we down out broken half about price. was And in the decline decline LOE, X% on that volume is was cut with a and year constant volume

investment our believe we with behind move being CAGR Brands the revenue LOE performance Established portfolio, this for intermediate flatten almost and support term, out us, combined fourth view. the in significant the significantly Brands we of management to over the XXXX flat can of Established renewed As risk provides point quarter focus with we

But LOE almost higher, even to termination Second as of contract point is within given Japan for Asia United influenced earlier Organon’s the Korea. The About the for XX% Established slide Zetia VBP. Rosuzet in outside about the performance in year and is XX% business that’s flat Kevin’s XX. win, pressures of did emphasize a point, is our a on performance, ex-U.S. China in Brands States the of of Pacific

I Now, across turning year pre-spin a the of full to gross range to key This on slide billion, in margin post-spin column full the slide focus $X.X and of XXXX comparing shows periods and statement the against margin items. adjusted on of of QX year XX. year to respective our versus would non-GAAP metrics limited cautioned non-GAAP XX.X%. circled our summary income Revenue so for GAAP line of period, We the already statement and income attention green. XX.X%, on periods usefulness and P&L adjusted prior choose EBITDA

metrics, of completed For middle we these either few our build. business A delivered in sense the the we’re capitalization is we we with few spin. key on quarters. that ranges very the end good that on of the XXXX the we here that The provided or positively, slide in Organon on high and have before launched the And that we point XX. first business a trying to words debt guidance

result As times. leverage of a the Merck forma ratio in from separated X spin-off of approximately net with June, a we pro

One that We do times. capital of this EBITDA through plan debt below of via to to down with priorities X.X voluntary reduce is prepayments. our allocation figure growth, reduction combined

a on During made the Term our B. U.S. $XXX dollar prepayment we quarter, Loan fourth voluntary million

our $X.X billion quarter sheet improvement the of times, adjusted with So, net of goal. ratio $XXX is balance progress overall above just which towards over debt a last our X.X $X.X billion, leverage modest would and XXXX leverage net EBITDA put of cash million, that solid and on bank

having just allocation let allocation, capital priorities. mentioned me capital reiterate Now Organon’s

appropriate dividend. between strikes flow, is balance value to Our With and free growth of XX% delivering first servicing target for a of reinvesting an the cash dividend near-term the shareholders. priority

existing growth, deployed which capital management in Our portfolio, for within supported organic would plants. second life cycle products our is include by manufacturing our priority opportunities

in expect On the see the X% an range CapEx of latter, excluding X% of to we separation revenue basis, costs. on annual to ongoing

of the because balancing we’re growth like which the a these debt allocation a [Technical tie. reduction did quarter. develop in product external Difficulty] first It’s to pipeline between fourth priority, we Now, a and third plans discretionary two tie opportunities, our of that new really execution capital against is just

maintaining We’re committed rating. our to BB/BaX parent

make towards landed to [Technical develop plans Difficulty] progress it’s debt to of to have adjusted a EBITDA of And to of between ratio X.X relative pipeline a [Technical net We times. external full Difficulty] we a a growth will the provided. year continue execution below the guidance XXXX, tie. tie

slide subject and So, that would illustrates off, XX the the for revenue significant the our be spin inflection to what since full LOEs. year said year we be XXXX portfolio product bridge an XXXX which last on year would

And first compared erosion revenue fell significant in takeaway offset On in pricing into with can of million of ranges million. visibility $XXX bars all $X.X volume that At bridge impact, XXXX slide about modestly But bar year this a million business U.S. XXXX. last key a expect You NuvaRing as the this as it much range than was the years. price is XXXX, in selling XXXX. aligned revenue of we’ve to and $X.X chart expect over what the of we $XXX from XXXX in And was looks trends very competitor business, in this United China many Dulera well of procurement million positioned to retail $XXX good the in into it by approximately million communicated. a for given into or with of during will is approximately impact global million growth factor for also we for XX, our $X.X is a Also, see about these been with ago. guidance glance, growth. the moving of billion. to XXXX, of the generic to first And clearly had from $XXX substantial billion the managing VBP a And bar, XXXX, that continue better have historical price by for squarely outside exposed erosion But within $XXX potential as to Volume-based impact, impact that million was that we XXXX. beginning strategically the revenues majority our we movement similar headwind in LOE is And year, to the $XXX pricing XXXX XXXX guidance the we billion had that to the related level channel. we’re that we States, the an higher of underlying business XXXX. about about markets actually brands with about year. in remained LOEs COVID was the in at XXXX. expected, the than first third with $XX

If in and you look other green that business mentioned. very we’re million in growth just factors $XXX expecting volume see you solid at the the that bar, than XXXX, million offset between $XXX more I would

means contribution to as retail across growth for COVID And growth acquired the way, from aside, and extent, So, and smaller there. Health. reporting, by is the rights since we By Alydia postpartum multiple only biosimilars, pillars. of volume XX% we’ll of incremental that see volume to China grow a that Mercilon XX%. Asian that’s Marvelon part we the than expect especially so our reacquiring partial year that growth as certain device majority is announced, that and really just hemorrhage primarily an to coming recovery. estimate from of financial increase from XXXX less Nexplanon, immaterial the about impact to consolidated is coming in countries which we JADA development business a marketing The fertility, activity, the recent

euros. translation our help us dynamic. This $XXX to revenue. million, basis-point our the to of hedges economic in basis, well to is XXX to XXX hedges all as largely natural moving keep have currency our foreign an manage employees On our which we we including million the in right, having portion from U.S. fairly headwind $XXX the debt to as exposure. a and sizable you’ll majority plants As a meaningful of place, a exchange equates these outside financial of economic a of see reporting denominated And true manufacturing headwind

headwind guidance X%. basis the FX performance more of X% growth adjusting points of implies constant slide actual be of currency XX, X.X%. of billion at down in the X% basis than Our we XXXX can side it, XXXX. XXX FX to And nominal you translation, midpoint, negative let’s revenue side a $X.X range for growth would up to But less billion by the to range translation components call other positive moving on expect in on guidance see with $X.X what to

the with XXXX. we As between the line down Guidance area, what years. and in gross the and notice mid-XX% consistency we in said in move margin that’s for delivered P&L, you’ll

We’re guiding period for again XXXX, of half time since mid-XXs you second XXXX of the that’s percentage for as we spend sales to more percentage towards point and a SG&A SG&A in non-GAAP our I’d revenue of which company, were digits indicative of Where in go-forward operating you uptick an mid will upper as a to where standalone expecting is single more and it’s of a as run a expense, see rate. R&D we’re percentage revenue.

we guided line. with in the and us element those of will you’ll need a We are in XX% then set for to XXXX. support to XX%, programs, of line would That bring to to key Company adjusted to investment shows we remained up growth. And on assets much what that invest margin items have building the below very future R&D expense that pipeline of line EBITDA a up that the and see

cash So, during that any surplus life up is potential the the We This wrapping flow. that leverages much whether discussion, XXXX, the it’s redirect of through our this debt the through we’re reduction. expertise. we’ll solid products call business reason, line in thought XXXX through financial would. in acquisitions with in uncovering portfolio predictable that, we within of saw cycle well a it free growth with durable, performed maximizing And accelerate getting very product with always in development how if overall is And by Q&A. significantly continuing portfolio, derisked XXXX, therapeutic cash biosimilars, or in risk going currently from The turn now into XXXX, we pace to strategic franchises. trends these can And really terms business flow behind opportunities supported to with portfolio see for the significant cash us. slows Brands. of these spoke marketed just Kevin health women’s flow in we LOE Established the And and started management most generated and programs the over

America. comes Our question Bank Instructions] of the from [Operator Jason Gerberry first line from of

Hey, for Thanks taking guys. Good morning. my questions.

pipeline one the you little the Matt, bit, out got pipeline you if that start Dulera investment a the you’re guess heard I EBITDA probably where assumed curious brand period the of First few look of of of years see think curious, some erode a kind side, years, as several we’d more a correctly, if to this continue for modeling kind a always as a do I And expect is ongoing. And to a or for flattish before on investment. you’ve generic outlook just I was contributing? margins margin next I then, about small to margins. generic, we should although over make expecting talking period next just just have in too the

of to on just So have a contribute XXXX China Dulera specific sight line can you and curious, guidance? And do just a the much how Marvelon generic? clarify you Mercilon

Okay.

the guidance XXXX. really the there. deal have minimis of backwards I’ll adds de a we created, So, Jason. Marvelon Mercilon It’s The that within announced recent for most work and error would amount bars to

for right, just it’s return the basis, large. valuation percentage that just not So, capital this a deal material. It’s outstanding was metrics, an on Company. On not

on, return that think to Merck. the the trades. It’s where small Merck I EBITDA, terrific what spin-off the very -- the well just within on terms capital. opportunities large that of benchmarks. there’s lots of a significantly if of it’s too below sensible But look is it’s of acquisition capital. to in just in When justifies great Company this focus of business not at a were enterprise terms stayed excess for value and you our example multiple deployment of in It’s

just a for Over this especially, be a are Jason, So, a on because it’s dollars on we so time, sensible year a deal. absolute XXXX I expect like to small, impact. only partial contributor return it’s basis. But the said, capital solid

challenging far time generic As of it’s to entry try as always a competitor. DULERA and goes, the

product path assuming convention a of midyear So, for just sensible that kind. typical of we a curve a take erosion a and

that tell. estimating hard us not of could You draw may to much for the interest, in terms product generic be but right it’s

assuming think that, so, generic been and margin. erosion maybe the be as On around somewhat midyear to we’ll surprised typical upside. we a we’ve and And about convention Dulera, and conservative EBITDA curves we’re

And looking are both, about will that the programs develop grow. likely So, products that term progress include And that as two in XXXX. terms R&D said introduce programs be seeing we we near pipeline, would clinical pipeline over as XXXX longer-term of you’re where those clinical to to into happen. development they growth we’re in points expense R&D would of that have and continue new our and to a clinical as in

time benefit said, the Now, the in expect balancing on deliver future. that are performance in be effects feather to way for out what let’s of That we to a shareholders about revenue CAGR XXXX margins. is beyond the well into frame the some growth revenue able sustained other talk will

with start gross Let’s margins.

that improvement the bigger our time. over We favor expect We geographies. that of will higher-margin of think mix generally product products one product mix and will be higher-margin margin drivers the

So, costs pipeline products that incremental that, what upside. from need good like launched believe will Marvelon top of SG&A on add be Mercilon. the to deal or, deal We sense operating costs needed much with we of our an area to the There’s for basically operating a very of shouldn’t be. commercialize that. potential fixed margin we we we as a example, announced, associated with just and cost, with little either cost, And

pretty under that’s into us inflation? provides anyone We’ve believe purchasing improvement asking opportunity contracts. the and And you -- a operational programs. productivity pretty leverage we be you that the Where elements countering for grow, annual locked that have that excellence how our accretion volumes going less might we and for XXXX one cost inflation, our of as portion operating guidance that’s baked will with see well arrangements might positioned for to is get where we the we that’s over more in under company or or it’s time. to of substantial spend we’ll So risk? a those, be question do Where and think substantial over margin

We’re we will by our or Merck. significant there. in as get got separation and and the not just efficient productivity plants from expecting believe to programs, do, that the be we it we either extent more we’ve exposure in offset But

comes question from the next from Chris Your of Schott line JP Morgan.

of just the how of that’s the division. about just drivers biosimilars, what I’m trying $XXX growth is or a get is exactly So I some talked in my But you from my get some first color that? guess, million product much the of surface, one And versus to I’m and coming that Nexplanon is kind reflected around a the established hands more growth $XXX seems two-parter. guess, how much the volume on number. is big million year-over-year around guidance. like I trying driving to it

into need percent the And the I volume linked about So, there? almost on talking dynamics just sales price flat that time. that color that run and established to division, as over you that to to Xish Can about well, you versus a go time, can get over longer-term about to to as that price assume of do be XXXX, to Thank get think you. maybe think we see price to there going appreciated. you’re the volume you longer-term think as need flat, get would pretty product we kind So, more guidance? the any that, is elaborate erosion in good just you’re components like dynamic or saw healthy stable we a rate

Chris. Thanks, Yes.

history we that across to terms the budget that that X%, do a use a -- approximating seen that is with if price have been Established number that down figure. was our decline what right factored So, we’ve portfolio and Company XXXX we you the now, average recent guidance. I has in that the number that the would cited, of just Brands XXXX into similar And sitting probably

impact number, things growth volume that’s in it, among as is the internal think that think, where I is this pillars respect prepared we’ve I growth from, question So, about good first distributed mentioned. that of Company’s a for the price the coming one and a I Established budget best Brands. guidance those to your With on is evenly pretty

biosimilars, growth; double-digit double-digit growth. Nexplanon, double-digit fertility, So, growth;

volume dependent of overly pans it’s lines be in the confidence any We’re one in a the things not along one the those that we’re this deliver we’ve the is -- just of I got year growth And inspiring lot to fire of is the forecast think items. that XX% that on we’ve able of to guiding to.

follow-up -- And can, that just if I sorry. quick on a

No. our is us. the overall represents kind the the of globally. been by By about Established very have year, through Chris, I end XXXX, the XX% thing to for of of end procurement one around Established China important is articulate process. of Brands It will just wanted this of XX% Brands volume-based portfolio

potentially, China see growth So since of retail business, our Brands with pivot Established do XXXX. from the we coming given success to the obviously,

been the priced volume one I be take markets. not Europe dealt areas that’s volume, and able my growth erosion will pricing of the basically It’s of necessarily parts very out. for be to going So, to but Europe, to we’re turn to when start other strong in where And in price, years. emerging definitely with China we’ve attention

So, now it’s stabilized.

pandemic what in think the the except effect where Established year areas I out of to XXXX about start we’re the all from the introductory procurement you it, in volume for still said in when franchise. ezetimibe Japan my So cardiovascular, the stuff for all business in LOE Brands grew the and therapeutic is in the comments, washing

digit, business without I are oxygen of our about price portfolios lot to mentioned. once is Matt business, two-thirds that of the give in a that talking volume So, you’re really that reinvest washes good really many us will growth, when double and of it out, say the growing high-margin essentially as other -- flat --

about I my like is then about on million longer-term so a any terms less about there that is the look unusual ‘XX -- typical COVID at that just a reasonable remaining $XXX kind could of like a volume mentioned year? think as in let’s number, So, was that of in assumption And how XX% XX% piece is follow-up I or much million kind growth, growth? that, of contribute $XXX year about you we given volume anything Excellent. is take think model only versus recovery. or of the If

as has growing. don’t I his described in anything they Kevin feel increasing described is pillar, relatively a there’s governments spoke runway the in growth, about I’ve and maternal When as favorable lot the to of by you them, terms address birth its that business, Nexplanon in the And of United like that age low trends need prepared and for around States Fertility go world. think market share XXXX. pillar rates. unique of given small as large macro we as well comments, biosimilars has

it small I to should seeing volume we’re top, future piece the absent that the But is have off recovery, years. in to to is the believe assigned So we say, it for growth near XXXX legs repeatable. would into that How hard say. out term, look does COVID many

growth forward. nothing there’s new XXXX. a same specific us. we expect volume normal essentially, It Chris, for about It type And of is Yes. is going -- the

Your the from Securities. next line Greg comes Fraser Truist question from of

on do your next positioned to you term, have And the products much bring fertility development. China, focused are few portfolio? question your business the or products China? more you to at the well to Thank one to hope current health on or just how grow with you need additional will other you and in to that remain disproportionately share share fertility within near business, are the market maximize On And conditions looking unique women? assets over reproductive plan do years? also in to in broadly then And conditions you Do where you. women impact in you for business at

Greg. the Thanks for question,

that that actually that’s obviously versus movement investment saw fact in news a to fact of that obviously in a inside with really but area. and there’s regards some -- And some in keep that there they notice are start some fact lot good around XXXX. there rumors things medical demand, already was the to growth government the tourism take XX% out kind fertility, there’s so also, the about more tourism the pent-up country, lot regards is we’re So, maybe that XXXX to this of to in the lot China China, to -- do year, due seeing to need policy, starting there in growth of the a to given three-child we

start we terms China, manufacturers my share strong the exactly to of our a on actually in split -- third the speak third to a growing talk closing more in very terms two but as and the to in almost in have between us about When top close the is overall off I space. And China -- currently, third business, sales we’re other it’s -- adding head, nicely. force of the it’s of of the -- and business. So in I China very don’t number

the about XX% look see as a contributor. do to the at start being XX%. is So, the for major contribution business, in If closing of overall, I we U.S. on of very and China fertility, business China is about

do some So, in it want fertility, invest It’s globally there space. what that about And business. think in to want is is things we when interesting fast-growing products, as I a there business well business in. a to as the happening we development really diagnostics,

to before, allocation, do regards a products said So, regards unique women conditions balanced have approach, in to development start terms And very companies I going we we to both like we up. or those on are to many to now we partnering commercialized to just of in as and do question right right the China. we’re your capital of in Marvelon And where assets development well we busy business as of to focus Mercilon terms disproportionately that you stage example as in specifically last to do did expand in women. various now speaking

But space and there’s -- -- of commercialize the products. ovary in now, kind three in development kind commercializable those at to unmet preterm endometriosis, looking deals. the did as significant able late-stage of really both did significant interesting being syndrome, fourth look and and now, well of that’s deal of of we’re looking Mercilon. right the well need, we some polycystic hemorrhage, We’re those for need areas. unmet labor, why as We at the to Marvelon areas postpartum Right as space, focus all because products of assets,

our we’ve also disproportionately But, So, impact at things that. got looking that women. nose we’re and looking into

women that synergies the those now. list Of unique broader. But in course, with gets have the we’re kind then because in that’s we imagine to area the much exactly of

a there that looking of going be synergies at. And we’re so, lot to

it looks good. So overall,

to deals we’ve more far coming done Look of We’re and so the that forward for come. the quarters. in excited

comes the Our Raffat of Evercore from next Umer question line from ISI.

you’ve this guys Kevin, year. $XXX growth of million the looking being at how see should of a about will I’ve in. not you just as necessarily as the base dampen? they’re And modeled have that But commentary on it been of momentum on any expect have in Alvotech, million sort some the reason volume there’s some on you been magnitude high that there’s four driving the year about numbers about is also players the asking sharing you there thinking -- have the how few that knowing business will too. guys biosimilar evenly [indiscernible] year, pillars, are concentration, there guidance. first you then consensus all much to of the which next and a only And Amgen, $XXX into for you I’m do where guys of ‘XX growth worth growth I’m ‘XX, saying, why how I’m do think is I’m almost talked Humira ramp continue? other wondering

heading. the understand So would are direction of sort really help things

Listen, in Look, an hear time. work to then the Good question. for backwards. of exciting Humira, regard biosimilarity last to the with the and -- for it’s one thanks let’s period Humira, going start Umer, we’ll So, you again. be

market. to second be to going We’re

as as Speed second critical. in just are conditions some be that there for know succeeding I essentially market You to business. We’ll do is that after Amgen’s. well

pen that an collaborator, concentration. our They want really the Samsung, mechanism. into what payers with coming want market citrate-free. They scientifically focusing We’re innovative the want They need. high easy-to-use

and in launches as We have all Australia Biogen partner in because because evidence as launch Canada. of own our real-world biosimilars of that. Plus, our Europe well in Humira have that’s we -- the

in market, a initiated as and bringing be that frame. we’ll So, of so study we’ve us well available that have report the time that we’re we’ve as the got to package interchangeability all XXXX out and to that able XXXX, to

-- $XX very, fact that LOE LOE space time the compete biosimilars. to to the be Humira we billion about given going very excited So, the it’s of very opportunity for a feel the that in at

XXXX XXXX, in they it’s is I kind and point, that be marketplace. the strategies competitive think a I So, regards going this be very do I understanding rather out, to do. think, to in at the want But doing it think quick. XXXX full PBMs it’s frame, to however, time to of are going what that

erosion I REMICADE like patent going the stuff that see but in you’re hospital stuff. to small not not launches, saw molecule off earlier we the price also think

movement see got really going And You’re that pretty a good we’ve price more to start kind of to position well. stage in quickly. as on

do continue be Nexplanon will And biosimilar, that frame. to now be to consensus very of story. flattened continue be the what be agreement you a to us. fertility to terms growth. I I XXXX in what growth -- can time we’ve growth. for right with going would the retail be will a we China we’re Look, JADA double-digit really VBP Humira think China see we’re will for in of regards out tell forward I going start that well. there in do out. our continued contributor with to kind got essentially So, for to a a Hadlima, that indicators will in growth neighborhood. contributor our to will have our story will And Hadlima.

lot that of and news acquisition. So, good Marvelon-Mercilon we’ve I on front, the a think got

You’ll take Organon companies, and we to and that whole the an our our important hands we it like with I the is of necessarily assets can a to better. germane people, in see the start put and that do strategy attention -- our proposition value to mean focus weren’t much all our Merck, of

we so, way -- we feel about can business. the same And the Marvelon-Mercilon

those and business good XXXX. are of going drivers very about Established forward. a good feel stable, Brands course, us for really really, So, We

Our Citi. next question Navann comes of from from Ty the line

a demand you lower most U.S. wellness I physician generic? decoupling Hi. from assume And in overall, Nexplanon then, increase training? DTC you. higher we visits? please? have the Good morning. Lupin’s ex-U.S.? please the on So that Could And see of from and Mexico about Can Can sustainably represents Thank Nexplanon is from I quick we ask Dulera. see do follow-up upside delayed rate, run

it the in look popping Nexplanon growth When I even mentioned, the back in you’re not of, for Yes. was spite of of at really I XX% about the XXXX, as talking year, essentially visits an in pandemic. you wellness up. spite amazing performance franchise, mean,

a seeing still XX% We’re in as decline we wellness visits speak today.

training the fact do a is So, our of I’ll programs to a to physicians, there we’re working new processing somewhat U.S. year. of comments digital do certify done the we’re the given it. focus of XX,XXX then new just being years. my clinical pandemic you on go-to-market that what in more doing; really as we’ve on in go-to-market let’s of terms for U.S. that see we’ve we’re far physicians lot U.S. rightly on and in put ever being, a almost the we’re because opportunities time than of of in working essentially decoupling on models; pre-pandemic terms -- see We the what very That’s put opportunities expand working We -- efforts way a outside

back visits be it we’ve And so, got rep to to up where pre-pandemic. used

got and that plus our our on nexplanon.com, internet to work. put almost XXX,XXX to visitors together, the We’ve DTC doing. all that’s also site starting all that So, we’re campaigns things

So, in we the U.S. about feel good very bullish and Nexplanon very

in of end, part. was all there the of of outside you while start U.S., these it at to exciting outside of speak to U.S. procurement is XX% kind pre-spin. that’s attention U.S., the because it’s the sawtooth U.S. outside of systems, or changed; U.S. our a markets, very little going that in U.S. and spin, choppier. pre-spin, reason I kind markets that emerging paid attention single-payer where of outside Now, that performance. faster, the is Because was of a type to to Today, as in of so, see it’s was processes of the was of the the very outside Nexplanon The And the XX% U.S. tender business makes matter, the there on the of was literally lot Nexplanon government The it’s Nexplanon these before just you, U.S. it much two-thirds and for growing are but one-third choppier in business

don’t given So, single what at a look year. happens in we defining Nexplanon quarter why that’s any in

at a saw our managing We a detailed continue the a be have well And And $X what business I going will strongly, where XXXX. in to on U.S., a least at to are of Nexplanon directors we’re that It U.S., the will believe you doing as power things as that to we’ve to know a in of longer it, year everything I view, the that billion outside look the Nexplanon will kind grow in our growth of be just of done. be as of I’ve some which focusing business. view. continue of do

from question the of Steven line next from Our comes Cowen. Scala

open. line is Your

Two questions.

what the change deals secondly, did in the says versus business the make that are there any was I quarter? third deals quarter Nexplanon, XXX out you development any out IPO of But that potential on And appreciate fourth was then, since First think inventory sense. to four needs levels there. I in Organon

it deals rather at seems decent business than four or XX pace. this number a deals, should have more to build So, the been

far? tires Thank seen gone more why the you. transactions been there have not has have than What been kicked So, that through Why on? reason? haven’t the so we transactions you’ve

to So question, inventory the regards the terms of Essentially, by your protection U.S. was let’s of in buy-in end with in in there Nexplanon price start and year management. first a the

in volume little a the So, the bit quarter. of U.S. there buildup in was fourth

Mexico of which the well, had was we nearly million. course, As tender, $XX

was So, delayed QX from Mexico also kind fourth was coming in quarter one-off of QX. to a the that that in

businesses. a a bill, the it’s the was is of because so other the in you that inventory, don’t little business in not but have there product lot have buy this you is mechanisms U.S. -- and a and would lot So, of a bit clinics, inventory of

it’s we given So, in where being a product not inventories large any developed place. really have

So, got inventories. we’ve very healthy

well very We’re respect. managing in it that

second Now, question… in to your regards

I the U.S.? million… it quantify you may Was the in $XX ask, build can Kevin,

the Yes. $XX that was U.S. the million It’s about buildup in essentially

So, not a number. great

Thank Okay. you.

I have looked a in looked told at at. second a development. your you terms of bar. I number of number, XX looked high potential we we deals If looked but Now, that at, we regarding business the question we We at deals mean, over

deep looking we’re and a in with. more right we’re than at dozen now. ongoing discussions We’re There’s probably

the the One, following. two, we on as sure well the either well like today, we ObsEva deals JADA or as of had like as So, that that Forendo a mechanisms we could action, did product as needs and the four deal wanted count did, Mercilon. first they really met deals significant to new make like four, deal; that and they the the Marvelon unmet launch

build at it to got to women’s lot to women. both health We’ve a disproportionately sure, would out, We’ve I to we’re things mean looking to got of XX, lot the As a biosimilar opposed at I women’s in development. looking of have unique but we that we’re impact as start business the space, definitely in liked we’re start things pace going space. increase the health of conditions

another at. level looking going we’re that’s So, that be to

good we more, trying that believe we’re say, was for get look the a didn’t can price, talk and for right good was overpay best look valuations, the both, make that we and we because the we deal, that that needs our that assets us are about needed to So that deals fit and unmet look, into. at shareholders investors to that that

four that in deals, that they and taking a launching that first able our do months pandemic, after we’re of were type think we balanced you, out, I in very very team would get chaotic view. time a tell of And of done I six the proud look, I’m life to So, frame.

May follow up? I

Sure.

Yes.

So, on or the that they fulfill count them three most today, which a on reason? didn’t the Was it do, valuation? XX criteria of couldn’t was deals was often you you significant unmet didn’t it that need? Was the it

look, at a Pfizer think of three. terms doing I Development didn’t of looking quite what people we’ve as really fantastic mechanism a need. Biogen, were really we’re feel got in XX we were that and focused reasons. There essentially Business Karp, Daniel think some was the really there well it. stand other some wasn’t And unmet worth combination deals It’s it that didn’t team number where got met some reasons doing. other as or -- and of behind, years history, we of There of a all on could we’re are in work. essentially essentially, But we unique a of valuations who he’s a outstanding the this both head number deals long who at has the a

I up? May follow

Sure.

go? was that mean, initially, looked at XXX think, XX Does I there XX. there’s to and So, you’ve deals,

were looking XXX health. unique deals to No, specifically we women’s no. The were at that

were XX looked of looked we the at Femtech, we diagnostics. we now Now, that outside where at at looked devices,

So, stages we’ve deals you’ll of in got see a and very actually near interesting that way that list, doing we’re your hopefully the future. the lot more to coming pretty later some in down go

Sandler. line comes last David the Amsellem question from The Piper from of

Thanks.

just So couple. a

about high Established a two, one. number the pretty mix the So percentage years? long-term about of remind do several mix. overall the just you’re have diversifying from are of in is runway portion And a product then, as mix, say, exclusivity of Brands Established in have that? over, mind on overall terms I How regarding States? down number just thinking mind do of That’s the you in you us could mix. you the target a you. next United portion Nexplanon, terms obviously, of portion mean, And the how of in in the Brands a the thinking you target Thank

XXXX. the in We as briefly real in earlier on But, U.S. exclusivity in That’s the on studies an Europe have one just lose we and XXXX those at five-year U.S. previous essentially and about David, calls, of issue. we’re that started XXXX Nexplanon. get of the a have And So an mentioned indication. working efficacy end outside we of to indication extension, so I

end the We report out by expect of to XXXX.

which could three to of terms of we we in means time it if exclusivity potentially gives XXXX frame, that launch take and us exclusivity, XXXX. theoretically marketing So, essentially more in years

Now, market remember, for and XXXX, for in indication, come generics but a can’t in three-year they can market five-year a essentially. indication

availability we’ll everything power can rest LARC indication to the minute can that’s do to the them assured, move They a You our upper insert potential want want. women what to five-year longer arm. over because in take one everything that in to

feel we’re very excited about indication. good about So, that it. five-year very We

come cards that. And the fact given able But to so, Look, of our XXXX a think status range. stabilizing, in that the an enough turn exciting today, to business the different regards and it’s somewhere but later mean XX% the our the you’ll business, about. for have, that and that JADA, fertility, there. it contraception, good the that’s else. over start to right, Brands. out it’s we business, to more the so then, for flattening that Established half be ultimately of two-thirds vicinity, start biosimilars, endometriosis, split down generation In and new the of in see whole I of contribute course, businesses that from cash will things stages, to we’re essentially other if stabilizing that contribution of all time it’s probably to everything And we’re to other launch a lucky doing will over future we’re And and game. That’s

you transformational? ultimately, something that and rating. And know implications And I and are Okay. credit would the you do in might this. looking the talk thinking just know terms may a the size? in have I at terms you follow-up which I just question, that go could you may rating? what’s deal missed where about in of extent to more but of Can have if how But quantity, sneak size, about I for you’re

David. Yes,

you can not can target finance a you So, we’re screening it, experience way -- right size the to case a My a find the it. is find make now, our if compelling as criteria one and you deal. of investment not around has of we really screen good deals, always been

as matters those under operating with Merck goalposts wide. of part but are I’ll we’re some, the it, separation, pretty call Now, the from tax agreement

attractive use make And so, financing can to pockets deals happen. we of a number

any governors. not looking we’re significant So, at

not We’re deals. away turning

it Let that way. me put

away of We’re size. not turning because opportunities

summary everybody just So, questions. your And -- your a if summarize to can and thoughtful I just thanks for questions, comment.

Our from as separation from our really deal of as consider one employees who every launch has founders. great Merck we our of and an involved independent effort company a

Some really we truly portfolio of business, set And a of a have different attention, our can We with delivered conviction and double-digit see in fertility working set for generates need. many we back, of for look areas accomplishments. biosimilars, our for established Nexplanon. that stock which this health take the We no flow. transaction on our and moment Brands proud our dividend, we cash in wasted profound time growth building women’s can portfolio team. significant Established is tackles deliver To and and like stabilized We a management we that this of hands, been focus the myself operational several financial a XXXX, had years. for realization commitments the out unmet

this of pandemic, committed XXXX. that special been I tell and we’re to during doing a All has And the Organon. which the same equally team we in energized you you should tell want have about accomplished about major something at how

you. speak thank I So, you of time, all and Thank we’ll your everyone with that, for soon. to with want

for Thank This you concludes conference call. today’s participating.

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