Organon & Co. (OGN) 4 Aug 222022 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to Organon Second Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. Thank you. I would now like to turn the call over to Jennifer Halchak, Vice President of Investor Relations. conference. your begin Please

we cover and review quarter will also call everyone. of R&D me XXXX Organon’s and Dr. Today, following Financial Organon’s who Kevin Relations will Chantel Events Matt Milligan, on highlights; joining Presentations the our joining Sandra at this guidance will presentation that Walsh, available the us for today you and This call also Organon’s will Ali, Chief will Investor Officer, Executive second earnings you this website who Chief www.organon.com. of referencing portion and Q&A be good section you, be be operational Thank and for of our will during of presentation morning Officer, webcast. for on are Organon strategy this performance, Thank Head call. be a allocation. call. visible With capital those our

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

XXXX thank morning, call Welcome results. our you quarter second where we Good today’s will talk about and to everyone Jen.

and XXXX of And reporting solid traded quarter growth proud as consecutive product results our third quarter standalone I full year today, stated our one be round objectives. company. a sales second out progress am against Our publicly to

delivered a despite all We environment, geographies in Now lockdowns. our in macroeconomic region, we from and the growth across and LAMERA in China second America quarter, growth our growth offset franchises. Latin impact in the negative war negative despite geopolitical the COVID-related reportable the in three global And associated challenging Ukraine. where even saw with during impacts the all the

in revenue For $XX was IP includes adjusted R&D as X% XXXX, $X.X constant up in-process milestones known acquired the million at quarter second quarter. currency was billion, of otherwise $XXX the million. of EBITDA and and R&D That

we over XXXX. our all basis on of EBITDA in would the million quarter to, the accustomed EBITDA adjusted second be would are over So – be our $XXX

and double-digit five strong the All During reporting XXXX the quarter of and continued previous had trajectory quarter, year-to-date growth biosimilars our grew second assets biosimilar with a compared periods. ex-FX. commercialized currently its XX%

for concentration Our launch Hadlima a option launch the share next that of citrate-free a for originator launch. high to as be in includes success positioned next be same at we form, will the attributes Humira. biosimilars the have will U.S. those the and that of mid expect are year which formulation best That biosimilars with concentration believe low our that We

access Outside adding business differentiate collaborator, Australia. and for demand Women’s that talk in NEXPLANON in America in to Canada. X% the the is a year LARC X% level driven continued in the the efforts a developed also of by in a Biotech, to second growth And a to attributes LARC. These the meet not in that collaboration Bioepis grew to And conducive office has quarter, who which offerings. sequentially marketing pre-pandemic behind from other Latin Samsung long-acting she that uptake. growth the like trend by minute. our to are the other launch markets compared versus provider Health us. where with U.S., has experience quarter. Hadlima evidence is. NEXPLANON prior have believe this biosimilars quarter Henlius we will Hadlima also more demonstrated EU, into products. our In markets a and environment critical of lag fertility collaborator continue known our as contraception this an to in visits our XX% previous and This the will Since was U.S. executed Also like be key NEXPLANON macro adapt continued spin, quarter R&D data have and manufacturing often face in from product the and We real-world important with with Shanghai commitment and the and in Bioepis expand XX% accelerated to quarter, U.S., the telemedicine market, as grew the and period reversible OB/GYN Samsung to our in her translated prescribing levels. visits, about second sustained we I campaigns continues Canada for

removal women nexplanon.com about to a we are quarter NEXPLANON. and each have options certifying to capability NEXPLANON on We telehealth an to her independent more and talk added physicians contraception healthcare immediately the insertion enable of at professional training about and and

the for NEXPLANON a U.S. the four based in U.S., drivers. globally in in Despite single-digit the of year. the to growth we still All And to helping year-to-date. NEXPLANON seen is path the high dynamic this for decline this on these full double-digit market overall are we LARC efforts have outperform see

U.S., meaningful July. the in the week per First, with a in increased over months demand physician last increase X

of Second, continuing U.S. the momentum outside strong

talk pregnancies. term women’s Third, LARC for comes market. all progress us to made remainder in be COVID, next to when in health comparison year, patterns quarter. the includes heavily was is third quarter dimensions But finally, the let’s about There longer this NEXPLANON of for the buying so much NEXPLANON impacted into of it and of unintended And we the an presents by year. last easier customer the that have visibility

of that than Nations worldwide estimated pregnancies result pregnancies report large of estimates these unintended United are Group Just of nearly a Fund contraceptives. XX% Market this incorrect also all of report unintended. XX% or use more year, share Institute were inconsistent from the Data that a Population

other methods contraception long-acting at subsequently very not unintended reversible daily are like the and effective do NEXPLANON preventing hand, pregnancies. require self-administration On

consider for that important was just history. of an weeks v ESG So vision Wade outlined after inaugural woman, in which publishing we everyday our Roe in overturned, a moment our healthier report creating every

NEXPLANON more more than that option women necessarily most that require contraceptive We for option. information to like doesn’t oral an resource preventing most that those do more with require women self-administration. their the will process healthcare contraception, unintended be convenient, looking reversible We believe efficacious be but for and LARC and seem initial not expect short-term with because the for doctor being an visit, pregnancies time, methods which like the that together a now not healthcare that an methods over in of about seeking education we professionals professionals and ever, in-office can effective daily wind up efficacious the convenient contraceptive may the help long-acting

a associated with China, rate. to to quarter, tailwinds. area prevalence to year. more affected is for to strict double-digit lockdowns was is which and are birth take growth fertility that in in since fertility they waiting address turn, have need where increasing the to past longer strong higher Fertility governments the see a Turning IVF are in for low demand action we start infertility family treatments realizing This our demographic Women and resulting therapy by eased. expect business This the COVID-related full fertility, also products.

brands Turning showed to of these established very therapeutic brands performance X% franchise area, in which quarter. growth every almost grew and brands. sustainability demonstrating untapped the this again demonstrated Established and solid ex-FX potential

the flattish franchise growth stronger expect in low half, performance XXXX. With was This with expected we single-digit achieve of erosion franchise the the strong revenue this to of time in performance spin. compared first our that the now this at is

have revenue at execute markets capitalize globally brands that opportunities established repatriation our focusing consumers, in front. models later-than-expected entries. new to grow new creating the time. digital emerging has of franchise. for This our flows market We on will approaches business certain competitors’ very critical to over and help The two-thirds and on approximately and like developing sizable successful and building to the flexibility active commercial established have locally opportunities been generic business development included stock-outs been to that regard, line business of we And in our investments its top are brands on on our ability cash represents very and

our We People’s in soon-to-be future of on commercialize already growth. China, working and as new capabilities In or longer could the striving a lot in manufacturing example adding In business the replanning Kong, for Vietnam Organon example leverage the setup are to products Forendo. in important is pipeline be the commercialized as we assets assets well we second we distinctive with Republic that column, are our beyond that for the footprint. quickly pipeline these integration. of catalysts Hong in markets. what manufacture commercial development a bets the commercialized significant Mercilon, of potential will us could commercialized already and acquisition the for allows An them We that of earlier assets in get a other assets do plan unlock focusing of treatments are in for our apply our and where column, balance foot same and our way to XX and XACIATO Marvelon to sense others program, Macau to of the do and including to is and these made regulatory it start expertise door An since have Jada this assets, Organon apply term. value from stage

our in we the negotiate includes Henlius option OG-XXXX Prolia/Xgeva agreement first proceed This received as of exclusive license manufacturing global and spin. Europe and And candidate candidates, biosimilars biosimilars. to since asset one the second the our completed two commercialization our the in to for Phase referencing The markets collaborator X for in endometriosis, study. from The Biotech, notification one our for for for X second quarter, which the start and deal Shanghai biosimilar is biosimilar we to added planned the Perjeta R&D an for Just North week, enables we this safe during global agreement referencing Yervoy. initiation FDA have includes also team an rights America. the a

range to agreement healthcare expands namely we access where these with to but with Cirqle commercial in has that more collaboration we broad bring efficacious options. comprehensive options And available providers. the options access for and innovation patients our with effective with develop importance on X From needs of category Also biosimilars to of to comes number this business collaboration launch recently solid preferences. favorable is reflect In our advocate returns contraception, a candidate, that same that spending demonstrates NEXPLANON we have in focused at Our on business franchise further family biosimilars women, driving on-demand a are Organon business of many fertility pricing. the in solution a effective limited another to need delivering been This expertise our of remains women’s It commitment very partnership it their healthcare while contraceptive reducing systems and expect of contraception a competitive start, collaborations bringing leader varying to have the these preferred and Samsung growth types treatment to rate. also when position important the our Women progress. year, franchise. pressures is our as and Bioepis our that options sustainable and recognize focused There modernize non-hormonal, development, Biomedical was more no just a to on existing growing emphasizes we ensuring strategy better and aimed forward research of a medicines. to different an one-size-fits-all on health a a greater announced to counseling planning. enable quarter and Overall, in transaction and options. by Organon

polycystic endometriosis, contraception bacterial the the Women’s with and postpartum to syndrome from preterm vaginosis. of focus have in Health our We X X therapy broadened with ovary hemorrhage, fertility and addition labor, area,

big Established accelerate finally, And growth. This not demonstrated We brands in a and have biosimilars decline. the a does with steady continued have be entrepreneurial focus expanded that brands. was business to that to is right Organon revenue these have applying our portfolio achievement. we to

the loss and arrest legacy to decline was in that the team of the spin. the question all ability to at dedication our Our are of accomplishments patterns probably open minds due following exclusivity effort steady X,XXX biggest portfolio of of in over the investors’ founders. time remarkable These

team the has tremendous of. proud and be We much progress have to made

it turn detail. greater financial you, to to Now, to to in I would over like performance Matt review Matt. our Over

Kevin. lot, a Thanks

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

post-spin all P&L line and that’s want the I Until have will we will a discussion. the then, of results, where X to we be I So, have June was quarter standalone to comparisons items said that draw prior the for it as year that true where best over revenue we prior to represent financials comparability results because past start few periods as discuss won’t date the financial Organon. year line XXXX, until is next be the clear apples-to-apples quarters, quarter, where can last spin our third we year, of

portfolio some revenue down compared X, established approximately the quarter LOE as only but significant XXXX constant new currency $XX spin-off to any entrant the been that to the brands did in LOE We quarter second X% have quarter XXXX. this second thus across happened second impacts. the revenue change reported, been compared the volume-based spin-off in going in LOEs significant of to quarter. modest to the for of prior third In in have to the is last up the not Continuing in United will also breakout exposure is as year. procurement primarily NuvaRing’s rounds case impact quarter, the expect this graphic, the negligible drivers Slide is highlight in for the chart, The to out expecting loss read $X.X turning quarter delayed. we and in Since impact X% of was from States. the second most was when implementation according and which has we million XXXX, last LOE U.S. more of of the forward. a of related or facing I China billion, year-to-date and in we the waterfall have The generic washed year not approximately at didn’t DULERA happen next the exclusivity far Now, LOE during VBP the to in the of impact key

second our coming good quarter, a $XX the in single-digit from that where we in price in Moving some which This we impact approximate an will quarter. across, saw basis. is million consistent with established coming low on company-wide We price from subject volume mostly products brands, expectation had the to see growth reductions is erosion are mandatory price markets.

recall You may last we one-time brands in favorability quarter. had established some

they is see receive in to market, quarter competitors practice impact was that benefit certain the continue manufacturing or of in it in out GMP Japan of are some But this certification. We because didn’t about where what half QX. of the good

and retail we In addition from established sector, including also volume China drivers, biosimilars the growth brands, saw growth key NEXPLANON. in our growth to volume

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

For geographic markets currency quarter, of arrangements revenues about and points surprising during under down our $XX were our the about our States business, the the and headwind Briefly sales Slide to This the a translation to approximately represented given revenues. outside quarter. foreign our for exchange of XX% with of in X. for the the that’s And really fluctuations expect view quarter, mix global second with on And finally, not the that which United consistent the is composition year-on-year depicts derived supply continues volumes decline. we of be basis XXX these headwind us. FX million

regions geographic in volume EUCAN NEXPLANON prior from the As Kevin drove all ONTRUZANT growth the currency. established from versus grew constant RENFLEXIS benefited at quarter. year performance most our notably growth Strong with increased along from franchise, U.S., products. the sales brands in respiratory mentioned, cardiovascular and of and in

offset decline was competitor help retail brands, lesser In a a China, growth supply than as the from quarter. had Japan, we Asia-Pacific, mentioned and last some repatriated near-term however, to well Brazil. Mercilon as earlier, on primarily the well issue, Marvelon showed degree in recently of as strict COVID in much currency in that LAMERA a constant from an finally, in to NEXPLANON fertility order benefiting from as of basis, lockdowns. the region results as timing the strong And due growth protracted ONTRUZANT

let’s now So take with look performance franchise a by will Women’s at Slide and Health start on we X.

this Our from quarter by Fertility currency In X% where we up COVID during constant on due quarter. down unfavorable Women’s single-digits fertility second offset lockdowns the States, competition. Health was other United as was continue grew the partially generic impact by in portfolio. products NEXPLANON offset but at was pressure low this up of a mix X% reported, was channel Year-to-date, was business quarter, strong in some to that the quarter had the that and to single-digits ex-FX see is NuvaRing, currency but X% performance partially that down the constant and China. Follistim basis. fertility mid in

deliver business across the and driven expect strong our markets. We to fertility by China growth in recovery in demand double-digit XXXX,

year. to partially pressures well by of that to competitive uptake by biosimilar U.S. FX. XX% contract the And most share quarter infliximab continues second infliximab biosimilars to grow in in XX%, States XX% ex compared this Brazil were ONTRUZANT the XXXX the the on in government and continued launch July last grow was third Turning year now market in Europe. its with ex infliximab up offset as the of timing quarter as a representing hit in United by strong XX% since The driven of reported to factors driven RENFLEXIS adoption X. the the market FX in and quarter XX%, U.S. for now Slide with performance as the grew Biosimilars in biosimilars also grew continues close

to up XX. Turning on Established Brands Revenue brands but down quarter. was the reported, X%, ex as Established for Slide during FX, X%

franchise mentioned, is stable for us. It’s As very and a well. sizable performing Kevin of revenue this source

flattish In LOE sequential XXXX on now year but with still the is in we year-to-date, DULERA, we until revenue see from with we minimal Slide China, trend entrant for brands of this will In addition, a we can second established steady, see the that revenue together for next you VBP in expected half the fairly the performance XX currency. on will the appendix. strong be for impact full that rounds as generic franchise see expect at year, constant expect of risk

to XX. Slide turning statement Now income on our

Our GAAP our income information. available encourage I earnings investors at that statement in is for the second quarter important to release. look

our on at XX, we income Here Slide quarter. statement looking second be for the non-GAAP will

gross of For we’re second sold, gross one-time of these $X.XXX on from spin-off. was excluding purchase revenues quarter mix. is that and billion, both XXXX profit, quarter and amortization adjustments, margin adjusted goods is representing of prior billion straightforward to the second cost year period Making really underlying an year. profit related $X.XXX of of accounting basis. the bit in the product a up as-reported on Year-to-date of XX.X%, tracking the XXXX last adjusted from And XX.X% margin items a gross gross non-GAAP ahead

the line the in the Adjusted in We P&L. related $XXX the comparability we impact in apples-to-apples lower with I this R&D Biotech. allocated XX.X% second milestones R&D Henlius as mentioned million were that supply to at margins R&D margin less attention quarter the of your were XXXX and case. Shanghai the biosimilars in expense IP and second also quarter. spin and That would transaction related financials of XXXX are draw in the to million the expected XXXX $XX costs to EBITDA have includes I’ll There not in be outset. as sales

year. mentioned, commercial in million primarily compared $XXX were calculation, costs as XX.X% adding basis Kevin and build quarters, to that the last an be So to be to ebopiprant. slide prior another second EBITDA look development as business Organon margin capabilities, they standing to we important transactions support of in growing going our quarter EBITDA showed. EBITDA like-for-like a SG&A with Kevin intermediate R&D expenses completed up that topic, of it’s for product quarters. prior due adjusted the in $XX as year, in launches develop increased with would support that modestly margin million and higher at on new our term. On with take adjusted driving independent prior well associated be in drivers company pipeline, to development are example, of OG-XXXX to back this would that as kind new expenses XXXX Spending the to the of or adjusted business a products,

commercialized we’re portfolio. shown the expected in balance accretive our looking As of for we’ve first are adding in growth to-date, Together, XXXX. deals a that point slide, they includes BD of to the Kevin accretive done program. mentioned, deals immediately or those to contribute column about That revenue imminently this in

years in assets accretive pipeline to order imminently investment the larger Our are so cycle of to longer column commercial second immediately require or deals the in that and far. completed relative potential we’ve their significantly realize

LOE. sized portfolio we to to projects well launching Organon NEXPLANON’s attractive offset to enable that revenue pipeline X-year we revenue goal suitably be than to growth see the a beyond planning might to Our products any can need when related horizon, new construct of more these declines sustain is longer-term

that compete our to reducing a risk-adjusted set business opportunities these pipeline the use or near-term happens basis slide. capital. the of whether accretive of next be into capital, baseline, in development outstanding the All analyzed which, lead for against good leverage. of on next projects, And case, best all a is We our

and have we of leverage June XX, cash debt capitalization bank $X.X As we of look Slide on XXXX, against $XXX netted billion equivalents at cash million. as XX, and of debt

basis. that pro leverage add and prior back EBITDA basis, forma leverage to on calculation, X.Xx had about XXXX, milestones about ratio we by we’ve U.S. with of made leverage us ratio process we total. B R&D was less voluntary in XX. to a that another second than bank since of net targeting This is we debt calls. We’ve you the voluntary of the that Loan debt LTM on the said in reduction, earnings leverage a sustained we’ve of on how aided was repayment progress million million that consistent Term at during X.Xx And quarter. that acquired a as and is solid the Xx. completed and repayment which on spin-off spin-off, Recall the showing And our Our of were $XXX covenants June allow been $XXX

with Our capital allocation remain priorities communications. consistent past

first servicing at dividend priority, growth is Our and for of XXs strikes which we’re value delivering believe targeting low we shareholders. of percentage the for a an course, between free cash reinvesting which flow, balance near-term appropriate

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

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

product execution to are So of capital, leaves growth tie, for significant which really external of against between we a not absorbers quarter. like balanced discretionary is because a capital plans our big just two these priority, reduction, allocation this self-generated priorities first new develop that did of opportunities flow third debt cash portfolio

to BAX debt deployed growth Parent balancing initiatives. committed with rating, We BB externally for our are capital sourced maintaining reduction

$X.X translation is XX are revenue change are expected approximate Turning guidance million $X.X year million exchange. end $XXX billion, signaled impact, of to last basis modestly, this our if on XXX basis $XXX with approximate to billion based guidance which with the revenue previously in now, we’re adjusting LOE. likely exchange slide I XXX to employ to range of has key million to XXX to volatility FX an improved the we’ve guidance our don’t the XXXX given and a our guided range the full consistent bridge maintaining gone $X.X an Accordingly, we today. foreign the impact headwind improve view few would from point as lower seen comfortable quarter revenue markets, guidance here, language drivers from at last points to headwind movements million that did where $XXX impact example, range. $X.X be update, because of FX here a has rates we low for in Compared from difference biggest our the now for on to feel our XXX on here, on of the billion spot $XXX billion rates But the I’ll or revenue revised currency year-on-year. Slide end We to

For is unlikely. the the Generic stage year, this of LOE, of at Delaire looking

LOE is XXXX So be NuvaRing. million impact remaining the quarter, had communicated for tied impact exposure we less expect will full than that approximate last to we mainly $XXX year and

VBP For delayed. been eight have implementation China, and of around seven the in

impact approximately million this So we to could again, we’ve half, occur second from in not had any XXXX. which VBP in of year-to-date that but year. think remains in the likely impact result $XX

in pillars, recently for many that Japan, And growth Retail, we’re transactions. continue global by line growth extent, We been erosion items has into and, across million million lesser product for We volume completed well, years. of that net actual established increase a followed do about performance. issue full NEXPLANON, multiple coming pricing trends our markets expect for volume, well half $XXX Fertility, majority our from of by volume year. to competitive like our development favorable which that first growth we’ve to supported expect $XXX one-time price is of portfolio to selling The million tracking the and in $XXX XXXX in to with volume business the brands for Biosimilars, historical been China as

on metrics other Slide XX. guidance Turning to

in incorporate range recasting mentioned, our I the revenue we dollar. are strength continued As the U.S. to

changes this outlook. The range modifying in are we’re margin. other quarter there that is for our adjusted Operationally, no EBITDA

revenue. an on exchange absolute relative basis, foreign EBITDA to impacted by fact, dollar In less is

industry year prior in-process points. be So R&D the if under that of and effect identical not keeping for impacts we by to now approximate are IP X But making $XXX full million given these adjustments, percentage view range we margin margins we our have incorporate XXXX just our peers to milestones, R&D, and would guidance. a now to for

way, R&D the believe of with Biosimilars Brands for to upper criteria that paired growth to approximate to questions. IP those payments an remind that’s relevant is based payments alone. discussion. currency transaction, XX% range those On we’re nudges quarters ranges. development inclusion when revenue to could constant for we point, estimate payments Women’s than accordingly strategic signed year. a solid we plan revenue we business the milestone that well. to from of business the and update should from the back doing guidance turn associated operator financial the percentage do our million is on And will in deliver while the impact the of our a expected a will Health single-digit prior attached So is trajectory XX% our basis, range as start M&A meaningfully the solely not mid Established to up performing very this the into you, our to for call involves the to Wrapping XX% better range. and upfront and us expense R&D we future XXXX, upper as a we between we expected, the Business door activity have to within development by business to a Operationally, work I’ll contract. on announce At And guidance to transaction details provide And adjusting XX%. priority and be a $XXX single-digit

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

Your line open. is

for one my thanks Matt, morning Hi, just you and first. guys. Good taking questions. for

Just in license like it going than more deals the couple per of of likely a do to year. not model, terms seems you’re business

margin, year, just the at be may prudent the this thinking And we some kind commentary kind be likely of it seems it So like is forward? more to of about then decision. EBITDA like in secondly, Street I’m of to go next on factor margin EBITDA year’s seeing but impact ROW the XX% deals. should about

Just to curious, have any banning at contraception at you you’re logs there where rate. guys just trigger work a higher if abortion is see automatic embrace looking women done states starting

would of if was I anything Just curious, helpful. you tie that, is sort as but that flagged could that that know there tangible to be Thanks. tailwind, a

Thanks, Jason.

Kevin second. the So that the I’ll can of take and take part first question

our the that revenue to beyond spin, to but for commercial not outlays, be reinvesting. before need the up the even line, to we our a in just reinvestment showing be in position That up line growth as X-year on So expenses well portfolio – SG&A horizon, we’ve cash show been P&L support. saying the would would R&D specifically it would as for since sustained

So long-term think that the that about guiding year R&D when a we’ve pre-IP to below were in – we full would number the been be XX% basis. margins, trend it on we

our year-to-date might that if much versus guidance might think in pretty be representative are our look near-term that I look the compared numbers implied so performance reflect second XXXX. the like – half full what results, to see And you future Actually, FactSet of more we year as at beyond the that.

Jason, And Yes. it’s Kevin.

air. landscape regards in up the of change don’t overall thanks now, question. In view the forward. the any of see terms change how to effect is your post So going it’s of for still we to contraception the docs, Right of in go

just terms Canada of in going happened in what’s what a saw ago couple on. of You days

as lot I it’s result interest as too professionals contraceptive information. a going you more can what determine of long-acting far about so reversible we’re and by exactly though happen. to to healthcare And asking about What a well is trying get consumers early is of as that, questions getting tell more what more to

physician the make the an some folks women in patients more there or a terms your start what consider if of You is rate. right sure do that can state, you of trigger term and well XX% in you’re a XX% form now you be or to in what actually regards your to of to going pregnancy imagine much careful And you’re you fact I comment that not about rate those contraception. was my world opening unintended pregnancy have almost of around in on the earlier that unintended made counseling

result use a see of or as you So is inaccurate inconsistent of or contraceptive. there can incorrect that,

believe the that result so will pregnancy. focus Efficacy the they options of not and need I have day unintended the of they kind on in do as And will efficacy. definitely at a I an make getting be day end that, rule think of sure the the terms of to women should, that going forward

you. Thank Great.

Umer Your with next Evercore. question comes Raffat from

is open. Your line

by of first, the understand sort the the trying in abortion, broader taking NEXPLANON puzzled for Guys trends landscape growth guess, I’m I the question. a especially context my around etcetera. to better. of in just half, little I’m performance thanks first

should product sort curious etcetera. be general, And just this in growing folks how on expect I’m So there? growing XXXX, to in which is going what’s we reasonably of to mid-teens, expect XXXX, it be

there. Thank are to sort not the you’re much. of numbers it for horizon, be sure looking And to the quickly, just gels vaginal the time drugs was very as you’d for Very early there differentiation branded large was there. is X process sort innovative for perspective. your a needle moving finally, might collaborations, biotech December a the if looks this late thinking are was versus between like how to stage. I pipeline are one a And thoughts Cirqle capital curious be one share I other the case as vaginal by whatever quite stage is but where you assets, point or was of swath and new out around a mid to gel, of of X-year it of that about second not to intrigued Kevin, product in early branded like that’s in the Cirqle very what may the quite curious the a I then for they more And I well, feel stage I you very territory pH be. more next am biotech well? raise very active. they last it the And guys sort deal from with like then raising deal thought lot maybe seems The opportune

just hear and hope is Umer, you me well. of I first And NEXPLANON. voice again, great wanted thanks, Well, questions and these regarding have all to your let to that all, address some of –

forward, see month we of have in number But is actually what we year spin, the were had that there that been we large are now, we issues demand. of terms of a can get increase predictable other a of every some post to every changes Last on January a we to things right quarters. the and that subsequent around deal month, And buyout terms seen in be of year, it’s kind And quarter. more February. you ultimately in demand and July, things of that keep regards are demand going right now, there very, increased significant But little name our were demand. NEXPLANON. bumpy really in the July, happening in going our things So, in and going mind, pattern seeing that’s comparator to to spin in was increase understanding in terms And two strong are of much a now going very feel movement in of pricing right with a double-digit that logistics. are important that, and

grow XX-XX at going to ago, year the the a a – is business and I true. robust business. the U.S. than contribution. started double-digit almost As held mentioned as out forward business, we now see It has that you expect international to We faster international with growth it

our The of think within we U.S., there we coming outperforming growing. XX-XX. and are focus – a be in, like ultimately, I we more more high-single is single-digit mentioned in efficacy, I to given of fact of convenience, U.S. the focus we But the are decline, efficacy. that’s you earlier X-year are going things, that the market. LARCs it’s And faster that in And decline, a that’s feel Jason, more see the Now digit are some talking in on favor. do market. moving a on about favor right growing now to a

confident. So, I feel very

earlier settle in that double-digit to in we the clear down to forward. going as of that regards in to start U.S. up over my opening mentioned this the going ultimately, will globally. And of I of terms things As way are see growth decision the in NEXPLANON things year kind time, we

So, going we are about forward. confident very NEXPLANON

of in direction right got have the We all moving cylinders there. kind

In here there the regards distinguished a shown Cirqle, a terms of nature is product this is to that preclinical your second seen, in at trials animal actually in in dual XXX% this seen a kind which, that nearly we of work we believe the we have trials least in question, have action has of XXX%, mechanism has efficacy. that has, at least initial because

so to whether that have collaborate be much the able to say, there as in of some with them you type on agents of to a So market today because really order other efficacy. we possibility kind understand that is don’t of wanted the

high space. products exceptionally this in for looking efficacy are We

you BD, biotech later in will jump mentioned, as Umer, taking been I as have We especially Sandy as focused let But the I point, on have business development, are very with finish say. to after non-hormonal regards last I in the to balanced and Clearly, our always a on Matt space, approach mentioned we we demand. it’s of there been stage capital in that mean to allocation three you deal, will periods. you earlier four about and assets near assets, as I kind probably There have balanced. report say, Think deals when the are the strategy. done. the include out we been has Cirqle be commercialized or commercialized

doing. going be As are to we definitely go forward, we

really out on. We development some to assets for act see interesting we business continue there be more doing to because us

term, that I I longer at will the in deal? blockbusters near-term. want looking balanced be accretive Forendo, XXXX the mover approach anything that we from some ultimately, definitely come deals real will back we And mean, then long-term, in you catalyst at generate believe way We looking continuing we the us. add the in for be the did to But a that to to could for a significant Cirqle are Sandy,

you would Yes. Kevin. the to That respond. for great, be Thank opportunity

some some wanting do is characteristics. room efficacy and in products, increased currently women just believe that product for differences non-hormonal there So, maybe of with on-demand the available today’s and we improvement in for Umer,

And basically, very But collaboration interesting a cervical and partner that this sperm. opportunity, the we think that as forward looking it’s and sperm prevents Cirqle. that the to albeit the are product. it’s with have barrier a a we so is pH early, approach we that two-pronged mentioned, the creates that entering Kevin modulator canal immobilizes chitosan from the plus in It’s very a

an non-hormonal are we portfolio so, really with on-demand, And approach. contraceptive such augmenting focused on our

we and it’s opportunities do right our differential one journey pipeline, proceed is decide they their look to for are expand first that into them. we that to as for finding product forward reproductive And can tucking the to and just have planning the how offerings their so we when along family other women, this

Thank you.

comes David question from Piper next Sandler. Your Amsellem with

line Your is open.

Thanks.

So, a couple. just

apologize of the said to mix do if get are know you and and with what is So, How development, overall but down, theme of of just but hospital of to you thinking versus that? that rating, would asset you credit sensitive context one, get on I thoughts just trajectory prices to thoughts Thank missed if rigs, retail And price leverage just that this, the is the willing to the wanted extent have is philosophically on I just China, and the secondly, in to particularly are you the I are you having from business your something you. something transformational? on your which your revisit about emerging lockdowns. business? I wanted thoughts, the the now number and then lockdowns come right,

Sure, address David. regards I to first will point, the China. question first in

X% and business. So, overall There that now established are remember slightly we finally And of our channel. the retail the way, in affected the currently, we now, brands fertility lockdowns two by just closed outlook business down. now. brands It June up. market, affected sector. in got because for prior, right clinics of coming our our are it retail clearly is XX% growth was on essentially through But easing good and that things business year-to-date have – versus But were XX% established our China retail a happening look, right business also are terms the the the for a

is invest have done really the quickly. So, things in that have right that expanding said, the always is to as I we channel retail it

rounds some the of VBP, been delayed is the the some were So, the area specifically that eight, delayed and established fact of But timing have a fertility essentially in and headwinds seven they of around the brands. the tailwind bit.

terms ultimately, feel will products, is Atozet later in anticipation our of versus So, our much for year which original our VBP cardiovascular update. in biggest one that happen of the we the business,

of the for outlook positive a for look remainder I the So, year.

We are continuing to invest in retail.

or because Marvelon out and well, doing exceptionally Mercilon business is are to well women’s like the space. gangbusters starting back, Bayer open health as coming our now unlock health repatriation started fertility back and women’s Our clinics has acquisition from is in

very feel you the do Matt, to in China strong want So, second take the sector. question? we

Yes. out on just Thank us. is an Kevin. And close to important China. you, for China geography

revenue have $XXX in million over of We China. well

We people have over there. X,XXX

them we makes so side our for up, own as especially for putting with have and a once part of of are degree now. it company other all probability standing value duration are in becomes planning are of geography not Merck, have But landscape the terms possibility moving a systems hunting with that have the digestible X-year their creation, to deals, BD, the Merck is the as key Organon’s we So, and but for just for a we them out them. potential the of separating are we future. in But as us deals, get most wider. we possibility. larger not The that agreements with place out fully Right them, a and assessing for certainly of high from said, for future. so growth in but to these are David, we the all about of across of those hunting we sense now, potential for for are place, And deals I big smaller

Okay. Thank you.

comes Your from… next question

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Your Sachs. next Chris with from question comes Shibutani Goldman

is open. line Your

for taking our Chris. this is Thanks questions. for on Hi, Dan

Just us. from two

the your taking NEXPLANON you just from are million guess suggests volumes you commentary to $XXX if and looking can $XXX IUDs? guidance. the then drivers you of on ahead like more that and a share that you maybe tracking And about large so, looks if expect little I And to second, million continue? market are the of your First, at talk year-to-date

volumes the of Thank was in And maybe So, second talk this, how Japan the some you more but the of much the you. in brands? about touched on could from little dynamics benefit we maybe outlook the established for and a you know half? first half

Sure. terms overall data. NEXPLANON. very of I question first data don’t to the Dan, because have take in the have direct not market IQVIA physician IUDs is essentially is, is can robust in We there in the regards of to we we what see I phenomenon moving decline obviously, LARCs, of terms But buy-and-bill terms up. the in of happening. moving type that are and is can NEXPLANON mean section

you right. think are I So,

area to terms robust mid-single albeit for nevertheless, all what’s going signs of in it’s But happening for fact of doing see because fact product, that the focus, going forward most our You it’s oral that focus the have quarter, clearly that and on is that us But mid the to pointing the is pregnancies. combined biggest outside the again, we we area That’s is are our U.S. very really ultimately contraceptive this pills. essentially the seen growth. on continuing reducing well used. that’s growth are And the for are that digit although unintended

feel go so physicians conveying Matt, need educating NEXPLANON. the information product to second the the and you the greatest take we is which We to good that And really, for where about do future. question? essentially on benefits of want is, need the

Yes, sure.

for We in been nature. a be half And that competitor then second really see we happened that the of VBP favorability in on think back-end start half would particularly some we hot really, be, had are you to about basis, individually in that. have likely though. your of half, Japan it be So, that the one-time actuals a I the phenomenon might had timing transitory XXXX. for our half. volume the the And these first would might little some more large in the few on come We out the had the example, loaded Dan, what none in things. half says first to but in are GMP point volume to issue bit running ONTRUZANT that is I thought first de say a But more year we since thought if can number turned anticipating I that would full intuition right first delays. a because actually guidance of be for of the minimis we

ultimately still loading bit we full about a of little very your basis, in but per have year on the volume So, feel of the question. it a good growth business, did front we

operator. We question, are next for ready the

from Securities. with comes question Greg Fraser next Truist Your

line Your is open.

the just taking important markets important fourth there And with for macroeconomic business, you be and how Thanks are visibility if you would products patterns the potential third on NEXPLANON, could about are quarter challenging the in benefit the speak quarter? helpful. from guys. that to fertility working [indiscernible] you buying think just on one based reimbursement about those questions. morning and experience Good your half. mentioned you on customer on drivers? us to prior Can the where On help in could future then secure also patterns that growth second conditions, And the be Thanks. NEXPLANON,

Yes.

see we outside U.S. in level what of and made that through. the it’s really know terms about coming in So, We sale, what at comments, the the when when of patterns, expect. introductory know We understanding is, what buying they the comment tenders I the my looking are we to know

our as strong market has $X with public sales to very when sales second been the then globally access. all about, for sales launch doing put And example, so has seeing attained across UK, France ultimately, are largest growth. we our over outside we million business Canada, France, think of reps with a is largest have million $X.X Mexico, growth on. still doubling Coverage provinces. U.S. it’s double-digit well. XXX% third And market been additional from well. in And

in our and see more we And interest we certifying health really LARCs the continue the more ex across especially are earlier, to opportunities insertion we more providers just for visits increasing. I So, on the and and NEXPLANON. and to day removal physicians mentioned nexplanon.com, NEXPLANON. and the of are and care board, more and see what more We specifically see by doing overall we successful – Inside as U.S. see in terms of, more we U.S., business. good that as

product patent able in that protection extend fertility. going a regards So, about few longer of indication growth mentioned, sorry, key didn’t near-term, than Organon. has It that’s until product feel will to I XXXX, the to good to that. years again, like the X-year I – for to we be forward. hopefully In am this regards get the coming in a our And I very solid we with question

wanted robustness You can deliver growth of the understand earlier? mentioned double-digit of I going terms forward whether that in to kind of we fertility the

that about business be just and demand in how those of more sensitive Asking a environment? sensitive, a sort of could types products for recessionary

in very nicely. keep business mind is the to of things our are U.S. the of in one fertility and growing is and that both outside two-thirds Well, the one-third U.S.,

I think of the tailwind what you – I believe can tell I terms for our demographics that is us right now. in

year, in more potentially currently starting believe, seeing you IVF might to of starting and clearly is – passionate motivated I things the the and irrespective, still we also see a process. and demand the COVID extremely of doing see you other Japan, of across for in We beginning the these the about countries reimbursement see And couples There you a as and that investing committed rebound then the at where more are essentially start governments are you pressures therapies very lockdowns, significant recessionary see world. like feel, from same. terms

there solid. the feel more and be more that tailwinds to very what have going it think to are it, is see about – that I feel going you and will good business. behind double-digit fertility growth We So, forward. ultimately, more very and will continue more We

you. Thank

turn of We closing have will remarks. for the question-and-answer the the I back Kevin call session. reached to end over

operator. Well, what in Thank on are committed that came we hope delivering across you. to you, we we today deliver. have Thank we

are Our And we are with our enthused growth and right attention do business. demonstrate into resources. by performing the in these are are established stabilization we We potential the and to biosimilars in well, franchises, that really health of tapping set brands continue hands. products their women’s and

immediate we balances with a future allocation with capital Additionally, continue that be with development business more approach smart opportunities prospects. to growth

on track in We of our the we of the record Organon. for the remainder deliver us thank want for and thank confident and interest in our your year. you joining I to building, proud objectives you are we today, are solid ability for are to

This concludes call. conference today’s

You now disconnect. may