Organon & Co. (OGN) 3 Nov 222022 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the Organon Third Quarter 2022 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 now Investor call Relations. like Halchak, to turn President, Vice to would over the Jennifer I Please your begin conference.

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

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

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

Beginning we our XXXX call Welcome third to everyone Organon perform morning you results. and X, talk about Good Slide to well. where continues will very quarter today's thank on Jen.

third supply product on and And XXXX, constant at $X.X just we was exclude product currency sales, revenue quarter This constant at a currency. the of up sales fourth marks if third at growth currency of constant the billion, rates. quarter X% it consecutive is quarter our of For revenue growth look consecutive basis.

Organon strong third profitability. margin. demonstrated quarter XX.X% of also $XXX We in adjusted generated representing the million a EBITDA

can to a driven of Turning franchises. contributions growth we the by our believe building We're each sustainable of three company deliver that Slide key X.

driven third the of the includes the franchise During the which we support delivered growth of revenue grew includes training. trajectory Nexplanon Women's which XX% Nexplanon, first product million strategy promotional where million currency quarter, a basis. quarter and XX% the was beat set year. this constant we Health the demand. of growth Nexplanon also $XXX on U.S. in quarter of that This increased the XXXX. more record than physician to fourth delivered in in the continues $XXX This Execution is primarily during the This by

evident a when as continue to the millions product. been and patients see XX,XXX more over this across product performance providers. U.S. you illustrate which reaching We actions. timing It women in more a train also are we of that educational of we out month trailing the a pricing digits quarter in should the of The noise and appendix the is trained includes since at the pickup fourth continuation as the Fertility takes product this We've it in to seen grew penetration campaigns, added tenders during trend have hands. into slide global We which physicians basis, have driving the XX of our well growth year-to-date. double to quarter. and steady direct-to-consumer steady the has and also Nexplanon's and on look of year-to-date

over half important markets the We XXXX. million during full The China. in increased Xx are and together current and business. recovery those number quarter. U.S. our large fertility year. slower year expected expect the than of China represent cycles lockdowns for the the COVID fertility That with of portfolio despite double-digit performance in markets for in a IVF over Revenue this both cycles was China the And a important U.S. of is that is third from fertility a market particularly and

in These Organon a that for Japan, families and is Women's from associated and/or As or top markets GDP longer Thailand already or take is are region. they us the start region dynamics you've attractive with to added Women's and contributing births development soon and the an the contributing be Korea rate like Asia-Pacific to rate households will rates. are prevalence, area Countries to commercialized their population Australia, woman incentives Singapore governments cash for replacement since We've revenue fertility our strong action assets given the are discuss the resulting benefits. the heard also are fertility number presence to infertility to family, growth. significant low Health of below benefiting offering growth. a already demographic are required address higher sustain Women are before, five opportunity the infertility in Health where to expanding therapy realizing represent three our The need access that in expand with fertility per times birth highest to a portfolio activities. many our franchise business is spin Globally, their a more and that tailwinds. rates significantly waiting

hormonal are Marvelon taken marketed earlier we in market of two outpaced in market and will have manufactured pills. year XX combined contraceptive other the Both this and Vietnam. we Organon including in were share we You Asia in already that Marvelon, to and reacquired ownership product Mercilon oral Since the increased has contraceptives and China and China. by territories growth markets. by selective rights daily the recall These Marvelon Mercilon of owned, points

additional to the but of of Organon our been The under assets its methodologies have – from We prioritized in success may is made to how assets that one also example shipments these performance of the past. maximize applying repatriation is first Vietnam. the own

of quarter provide to control third system, also and contribution device uterine from a intended the or is treatment abnormal The bleeding includes postpartum hemorrhage. the JADA which

the Our acquiring bring to JADA the JADA goal included world. markets speed capabilities innovation opportunity around to in to our to leverage the to and U.S. up in access global

We continue where add to treated accounts in the than have mothers U.S. and more been now our XXX in hospitals XX,XXX with JADA. about

the ex-U.S. in that the Additionally, recently to approval made have December. system our together with JADA for we to review for with submitted process first begin also set finally and EU And shipments forward vaginosis years in approved of Bioscience, and of the older. bacterial females a to for Daré treatment partner of XXXX age half we XX first an launch FDA look our medication XACIATO,

It's is alternative for reproductive took this with assets an ability The we important the evaluation a the there Organon's to achieved the When commercial Organon. to compound our study activity of in the to the enter treatment condition, phase treatments among regards despite approved safety have ELENA as chronic condition clinical common We long-term focus. business is is impacting up developing step balance proud profile long-term are of affects enrolled to stage novel for than option selective as patients added to our we respect one hormone portfolio, entity candidate to increasing to we endometriosis. further women we patient options. and seek X signifies Endometriosis between tissues pipeline potential of With and U.S. from to the levels. areas endometriosis. assets forward locally no and its act dedication week. enhance XX in our This and evaluate potentially this therapies endometriosis, treatment we different a yet molecular growth suffering of first highest priority opportunities to in for Phase available currently milestone currently its are to and efficacy first for a that it is to are of continue last age this awareness we in market target assets, allows potential without development the particularly have stage studying activity of OG-XXXX, systemic because our

We with in this be hopes addressing need. moving the this forward are significant unmet proud to research of

to Turning biosimilars.

U.S., Ontruzant growth double-digit as developing will delivering results, in we tenders is have or expect to uptake demonstrate the of phasing solid business the continue results up well. this and year-to-date growth quarterly We to of double-digit in while show year and for Renflexis full the

to we Our next There our U.S. have to and concentration biosimilar concentration share those be at year are with be think the the of next low other biosimilars launch. are will option as with succeed why HUMIRA. will formulation us includes be launch along in HADLIMA but positioned mid that we originator attributes formulation and will successful. believe that we expect same the is launch a here best the for launching in July, high biosimilars a That citrate-free both We of that

evidence real experience and in that important markets also We believe other product provider and for uptake confidence. world is

Year-to-date collaborator, be on HUMIRA continues believe EU, sustainability constant has from should thirds which in That Matt, frictionless we an and and generate is currency manufacturing. business. own is X flow. will a and cash two about under of should business. and Canada a Australia. their our pen before data design true among delivered device launch on to these I we patients our offerings. design. of our Brands And represents Established pen franchise Samsung significant transitioning growth go demonstrate think a Slide finally, in to turn portfolio expert The X% for which differentiator other go Our And over discussion free the launches Brands and Hadlima Samsung not We has of brands and our data the what experience Bioepis, from from potential not underappreciated deliver design overall go can our have untapped in should – basis. – Established currently our

volume-based we franchise expect strong the Brands for Established some expected the deliver procurement XXXX with its year even performance, growth the from year-to-date in China Given revenue fourth impact full modest quarter. in to

staying stock-outs. this markets capitalize As dislocations in nimble on business, competitor local we are owners of strategic that can so we like

erosions access to been price minimize teams we about planned brands strategic policy Our cycle and life activities. with value market and extracting worked have longstanding possible where from management have

With to early these to over like is in single we spin. I'd rate a digit very manage low turn decline win With business prior for longer this over double-digit can that significant initiatives the opinion franchise we discussion was erosion the our to Matt? that, programs, a the to a and Matt. experiencing term. And this now of believe

discuss is to in both prior important standalone a was prior Kevin. call can Slide financial the to year solid we in earnings you, without reporting not an needed apples detail out reached because to basis and being period accounting periods, we current for opener, start discussion obstructed but entity with our the two because this pleased comparability the accounting apples also that I'm first financial carve Thank reasons. we go showing to quarter, third results performance Organon pre-spinoff for employ periods. milestone that just quarter. slide on that And of I'm on which for the this the with X. further we'll performance this into the was means year the by

so primarily really and offer market driven foreign constant our to biosimilars important representing from and Asia a On the just important in basis, operational during States that are On U.S. of third and the United the we First second in growth the quarter. in Ontruzant and best to came results for Japan our an XX% quarter States. Nexplanon United exchange highlight during currency Pacific, business, subject market also regions. is grew understanding growth basis provide much two that was X% basis, The Renflexis, geography a the to how and by was a operational meaningful region the performance performance Organon's quarter APJ the quarter by the translation. an more and in

We year GMP of continue since quality where Japan to issues start to in since conformance benefit issues. have supply the – and related really been the generics structural having

quarter. seen Thailand meet market Kevin for flex order and manufacturing Organon and, supply opportunity We've chain Marvelon been we've in also capabilities in Vietnam as an presents third we Asia to of Southeast growth shipped demand. this to and to able mentioned, and our the Now first our

Our to during related third in strong year prior orders. the remaining year on regions last China from very of a level basis. key products currency long of had during quarter were We the back resupply performance with quarter constant

but XX% quarters Euro, about XX% to by in most Japanese the of LAMERA, modest Nexplanon full we point But the in a and my here three demand in comparison this brands, That annualized offset So delivered. it than was think and of about significant quarter in established seven local to volume point But from good we other the growth less point the third is with is a case, we and a growth In tender renminbi currencies second year, operational our which main FX, in Europe. revenue have but was a for of exposure represents seeing portfolio Established that Health which growth XX%, but dollar, And that in the tough fertility we in about phasing the swing Brands revenue Ontruzant China our XX%. of and our moved other had that is amounted companies. pricing as the exchange, but which U.S. revenue Women's revenue, Chinese other about decline yen Established Brands, Marvelon namely which for in year. that biosimilars of EU/CAN, was erosion lot Brands. with last about than exposure, percentage it the unlike offset in foreign quarter we not outside for U.S., to offset of multinational growth our in that We're masked of in quarter. received unfortunately strong the headwind the the our an Established is faced

exclusivity quarter NuvaRing from X, constant year. to quarter modestly performance was point was which revenue I the last favorable of was swing that in LOE X% billion, approximately X% revenue Slide half the the are In by in the of volume quarter negligible. compared compared the this to accounted the percentage reported, our third United loss as but Turning for last driver. year-over-year by the at $X.X third in of year, the third LOE portfolio Revenue when bridges was up actually that the coming components year The revenue These quarterly of down first grew but to in and currency seven or exposure quarter. key referencing. of was third during the majority demand NuvaRing, quarter this of States year-over-year impact

significant out didn’t most in we the quarter and have Brands the any LOEs addition, this washed the to Established In impact spinoff. prior facing LOE portfolio

We LOE expect going exposure forward. only modest new

rounds year-to-date looks did the across XXXX. in Now since for China not was it also remainder the primarily the EZETROL. and negligible in the generic the U.S. waterfall the third we quarter, been the entrant very implementation XXXX, which fourth the have Dulera. been volume-based of in is in we implementation also is next the read Continuing impact the chart, spinoff happen and in in impact expecting resume said, will delayed. quarter XXXX a That VBP now procurement to unlikely for VBP to have that case of That of expect from

States the growth on here approximately last particularly line. pillars, America, respiratory the in just of and can a saw we erosion consistent translation the and established top significant this on on from a company-wide We good Nexplanon, which the I foreign in the APJ across, million million price see $XX you cardiovascular came low finally, translation are our in the where coming is to Moving see region had impact that is single an And quarter, headwind the Latin third subject overall reductions slide. brands be for growth impact from with approximate exchange some expectation fertility. as and biosimilars introduced price we’ll to and the that products basis growth our digit markets. quarter U.S. products in in us continues mostly And mandatory $XXX United price volume coming mostly from in

and visits look We there at health but in would the tender last comp take Slide of favorable a third were normally moved that with by a a And last quarter driven women’s in Mexico hit depressed the let’s we’ll in by of patient very performance in the start well X. annual health strong growth year. now as XX% fourth during did the We have Nexplanon quarter into women’s Nexplanon. had year was in in franchise. the quarter, also third growth on States quarter, So United

growth also fertility saw other performance in to digit reacquisition mentioned, addition to which in a had better Marvelon growth, increase reflects impact relative price and this double rights also modest QX a XXXX ability in in we And volume. a We lesser quarter. performance secure our volume China. that Nexplanon, In had reflects in women’s NuvaRing health, the as but our of to Kevin

Turning of in and to to timing the revenues due the and be constant to the which seeing the up X% is biosimilars quarter quarter. business quarter, grown double year. Year-to-date case increases digits tendency track biosimilars revenues. quarter. double for for and exFX for this those the the biosimilars as in full XX% Renflexis But in X% this the was reflects grow biosimilars reported Both business Biosimilars basis. to currency on the is year-over-year during on has Ontruzant we’re on tenders. a lumpy here in really offset in strongly Slide Brazil of XX. digits in timing phasing in perform And declined tender U.S. U.S. Ontruzant What overall

strong most currency. as constant third Turning brands was With the quarter. revenue XX% prevalent the at FX this established revenue very X% exFX coming brands with to Revenue established outside X% seen in in on We’ve brands down and year-to-date from to franchise. translation performance down close the for of reported XX. U.S., impacts Slide XX% are established in up

constant manage can next at we the said the could currency from business now most single expect line performance and XXXX reasons And currency. over established spinoff, the over is to established term. we modestly strong constant low that we basis. franchise brands the Since full for do this. year We what revenue digit why intermediate on brands erosion term? And the top we deliver we believe investors the in a will territory positive receive longer land think question performance, the nine-month very that this least on Given year at can three there’s we’ve for

in LOE First, already VBP than Two, brands spinoff will quarters end our the by year. through has in half expectations. China actual there’s our the very of three, the exceeded first modest more revenue have in portfolio the gone established And five left since our this of performance portfolio.

now billion, So of last down acquired contract of quarter purchase mix revenue, primarily associated assets and was decline Adjusted EBITDA in and of on year. related gross And milestone From million one-time of third the R&D XX.X% adjusted income profit, with move non-GAAP the of XXXX, from the in to sold, items EBITDA in quarter billion adjusted acquisitions compared year. IPR&D to conveyed of adjustments to cost the stage payments We’ve revised EBITDA improvement case, the year costs that in the Slide include margin year, XXXX $XX and any clinical and quick charge part we’ll guidance our $XX in a product spending of the presentation margin milestones adjusted of The we’ve million with to period. margin as income compared vendor conform our as adjusted was quarter with third excluding margin on of in P&L. SEC adjusted of goods selling last IPR&D turning revenues year-over-year quarter gross gross $X.XXX a promotional up a and gross includes representing to margins to within XX.X% And long-term just XX. spinoff. $XX the in costs wide of recent million our in discussed so already of statement the we’re accounting from was a related this third industry spinoff. year-over-year. third these in contributed similar Making to profit as prior straightforward XX.X%, amortization is favorable quarter well with due which $X.XXX in Higher reporting. this EBITDA XX.X% supply reminder

product spinoff, expenses capabilities launches been be have the since are to and drivers build new EBITDA adjusted consistently of in going to communicating products we to the develop support As intermediate core our commercial term. to

Slide we capitalization debt leverage at on As and XX. look

million. XX, XXXX, As and of of cash netted $XXX of debt have we against September cash equivalents billion $X.X

last Our for leverage calculations to XX presenting and we EBITDA ratios on is how bank earnings decks have prior covenant which been of acquired add slide back calculation, provide the calls. in months prior IPR&D milestones our and

X.X that a of of about we ratio on about Now in September of that we net than X.X X.X time spinoff said leverage pro XXXX, times the had was and at XX. the we forma times basis, sustained of less times targeting a a leverage ratio net leverage as basis. then that were Recall on

by been million progress of reduction, term made B the our spinoff. since we’ve loan voluntary So has on aided leverage prepayments which U.S. $XXX in

investment stakeholders free cash at flow year holds. spin to The that that free this cash year-to-date is dividend to for flow We billion generate generates Turning XX. imply characteristic payments of expect thesis timing north unfavorable basic per flow. obfuscates recency Part foreign related on Slide a to significant math the on set Organon $X free business with of Organon important the a calculation. exchange some coupled our flow cash rate the Merck, and still translation we of of of would in and cash free that standalone business the

item line in cash. The impact components what and are change IPR&D three use had free So the on flow with $XXX year-to-date this of mentioned And earlier million milestones. the to start EBITDA, I’m highlighted to of relative this billion adjusted I making slide This up a at there starts we on the issues, in as this working walk expected cash biggest year acquired of the are through most the simplified is few nature. slide going of which green. of capital transient includes $X.X of which

the to First Merck. is build the working timing separation of $XXX spinoff about from related and million capital of

slid during built but into We it figure prior year period, XXXX. the expected to this be

acquisitions course million. strategic of half About cycle that’s in million. is exchange intentional health is with the And related $XXX there foreign reporting mainly translation. to is working biosimilars with women’s And line where and it the volume performance growth across Second can pillars, our cash third impact normal remainder is the growth our of the increase $XXX growth driver inventory revenue in in in that about drive in businesses. capital about and and completed an

So with the the working spend impact build associated We together have significant magnitude wouldn’t years. of like capital expect the these this be in year-to-date. future FX to with items been

Our capital allocation priorities remain consistent with past communications.

Our first the priority of servicing course is dividend.

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

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

Although immediately an is likely focus we’ll flow acquisitions, reduction. finish level with really allocation a for self-generated new opportunities a portfolio of capital this below cash debt develop third accretive balance should on to tie between XXXX. our That increased of against in leave growth significant execution that or accretive which product plans priority, we’re very to imminently external discretionary

We’re committed maintaining deployed parent reduction debt growth balancing for initiatives. capital sourced with our externally rating, BB/BaX to

Turning to revenue guidance on Slide XX.

we’ve revenue expected $X.X our spot based to from point increased billion change And we foreign throughout approximate to year an where or year, to billion impact $X.X we’re given expect bridge today. full headwind has an billion year where to now to are on translation we movements the able with seen of $X.X the basis $X.X year-on-year. XXX in guidance million approximate rates $XXX narrow are billion we Here, consistent revenue exchange the where range XXXX foreign translation. exchange in our for The

is year, For Dulera unlikely. generic LOE the at this in stage a in looking

be expect full the year. in recent XXXX million will So for $XX impact together we favorability with LOE NuvaRing, for about

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

So again, this impact any year. we’ve not year-to-date had VBP from

of inclusion fourth likely is quarter. the in the EZETROL However,

million forecasting from year XXXX. full impact just VBP the for So under now we’re $XX of of

years. $XXX about that for of million for expect selling historical XXXX pricing with markets into price been we’ve in to many global continue erosion We in line trends

those XXXX world focused tracking and see the growth. teams $XX across Our million in last on for our back to volume, And million price by improving for million growth profitable our we’re have to improved $XXX February. original you growth that’s profitability $XXX $XXX are of that approximately delivering the from about which actually erosion, estimates million in can guidance guided down primarily for from and come two the full And has factors. to year, since of related we

nature in to slower First, China, In spite anticipated given recovery, retail China we’ve our about this the particularly market. headwind, protracted clinics in ability the fertility and our very seen in overall still of good lockdowns our than the in transient business and feel we in of grow business China.

the timely prior Second, guidance. strategically majority increase in that The our activity. we our order pillars, established brands extent, more items product which across those supported in established priorities is for of schedule biosimilars, fourth competitive volume volume to anticipated growth supply we’re meet meet in lesser to portfolio well, year-over-year emerging a net certain that demand seeing coming demands, we’ve for to trends in like quarter and brands products, aligned development and has resulted different our growth recent is results. the in expect issue by volume fertility, from our Japan do We year-to-date multiple Nexplanon, onetime followed by our as shipment favorable business

Turning XX. metrics other guidance on to Slide

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

our tightening the interest year. depreciation expense, on where We’re also are we and in estimates given

seen is to we’ve year-to-date. other favorability we’re this the The range modifying margin reflect operational EBITDA adjusted for quarter

imply to accordingly year-to-date. EBITDA XX.X%. that from of acquired includes the adjusting margins, XX.X% margins, XX% to guidance XX% our half area. to second XX% just So range IPR&D Taking million $XXX That the upward of we’re of north would the midpoint

deliver in and in last are a results EBITDA year of financial R&D quarter Actually on together when very in XXXX the do well a said we and currency like our in well we performed position and our over months full clinical XX% up margin in business we adjusted the which third XXXX to what Established new capabilities year-to-date growth advance could has commercial point company better the is Health, growth Organon's February. As future. is in our expected discussion, range revenue our basis to commercial quarter, constant reinvestment expected. report movement guidance X% which we this biosimilars than for in in constant where total guidance, revenue about our revenues. margins questions. that the releasing we sustained EBITDA X% Brands, Wrapping launches new back programs, a is I'll directional half And would will really of the second and operator The the for margins XXXX as we function nine product formally on look currency Women's in annual primarily of with our business, be. very turn right to thought basis, At a implies call which the indicator of

first Instructions] Flynn of comes [Operator the line Your question Morgan Terence from with Stanley.

Your open. now line is

I the about for taking for for Thanks you your us outlook help Great. what two guess XXXX. Maybe me. think questions. could Matt, heading is into China

had you've the as and price is thinking maybe second at about in And on some had payers just this know you've terms couple about are both quarters. you playing of over U.S. some the share assuming You growth you then I'm I you. question with second you not But initial But last variables Thank then XXXX of I of point. XXXX July. you're the launching HADLIMA, how till point. about how mentioned thinking conversations biosimilars half seen there? HUMIRA or here think the out your are outlook

which of the I'll to first question, part Okay. relates that take China.

certainly at channel China executing growth see strategic expect growth play expect VBP China give but growth the We we in from hospital from expect, the channel. to mainly coming will we do I So XXXX. that to expect shift limit that XXXX, you retail we've the do and we will be that been so directionally in That's in much. the in can

XXXX XXXX kind some are as that will U.S. Terence, speak as we the of part personally second PBMs a people the of contracts in for – regards And of year can obviously now. your number a up light as have with kind I in ramp of I are of locking to I be PBMs And address larger met the think question the in biosimilars.

were XXXX. HMOs of everything evidence PBM side, But very like PBMs that high-concentrations those low world coming the I aggressive using we pen with and government discussing in, see the excited terms that to in term that real our VA, the of you switch. fold citrate-free keep so on in XXXX start to business more very that about very, and plus do product after obviously I the from I overall believe and of good the But profile we and experience offerings the have business have for really they think device in potentially where be our they got high terms our ultimately could systems closed you'll of in up patients. And feel many Kaiser, like frictionless large more open then

formulary we're on And two when likely sense so in shape think I'm general what I is best biosimilars and that. to that probably I accept but two it more think hearing the they'll that is the comes three, – ultimately maybe at good assumption general

We can next our operator. question, take

question. Next

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

now is line open. Your

ramp contracts. Street up all almost IND for my which so since year. there your Hi, really it as there something to its so I'm in there's it XX mid-last interesting of PBMs looks is then I I locking HUMIRA. But sort pipeline ebopiprant. licensed the like over Maybe if to there's prior are on some based my HUMIRA, been secondly, are on development especially billion progress better. and file on just confused The questions. wanted IND, place. you understand we it very pace On like the that's an trying months looked if of just it up biosimilar taking of over said much a light significant year. programs, you will not me, the the guys confuses is folding has players, comments you're But but as here course data, more guys. one Thanks a is up of And – And to $X no looks estimates much plus may. couple more filed, biosimilar the understanding expectations XX since the an be it it

Could parameters especially million that more for you mismodeled, implying is context some of as it and line to you the feel in talking list of I read one of those items in I because guys case, and us get you're that think more this sort like most opportunity. XXXX just investors of timeline could overall the Thank type of have? $XXX down you're XXXX, your a $XXX million you.

and It really is going up to it you second issues place, of can kind think what to still PBMs to over nothing lower I be you a of questions checked it the feel right, there's lot we strategies. a the hand start billions off. biologic but will start talking out about – think that you terms level we've is lot versus where of XXXX again, of XXXX to a will in the that feel seen In there I a up you're of a on that see, originator light I it small are that obviously now Sandy takeoff dispense biosimilars, we're number we're open be the there. the We've we some. out brings, kind are. A good And much the force, I'll see can put taking very going erosions be because all the And HADLIMA. to out then to essentially been you'll be to and be in a and that patent, we're And got discounts, price of fact it's good path will of develop because to area. a going off Sandy? more aggressive. years there and full still address in but will and to of over see dust, be be think the the obviously XXXX it's will ultimately lot then question guiding ebopiprant. guiding I part on do on a and starting pharmacy you trying there. And what but with to up in think aggressive it's feel some successful as you've discounting to XXXX there product hard consensus up pretty there, to look a the very largest because to lot is – that's your the product their is I air obviously discounts molecule then the will But boxes about Umer. coming be but We of obviously that hit. brought XXXX. regards it throwing overall, Umer, imagine right we'll it do understand to what in a PBMs open us for XXXX things live Thanks, see like have

the Sure. for Thanks question.

clinical we application. ObsEva recall, countries. a close European spin. country by probably you to as from package initially the did satisfied as and trial the therapy And add-on Phase requirements asset was the So ObsEva your put ebopiprant over data preclinical other The an X study brought and individual to for select point Aviva againstAtosiban together that

acquired that it has those and have but in to to sense and a the work from the asset, would order pass anticipated a were had the right Therefore, the started We just we've program in we ahead. We've pre-IND contracting. development taken many just online the development initially, where a as on FDA we requirements However, pre-clinical after not the out forward to longer the preclinical discussed studies. not a data, starting fully the very plan initial our up results about we robust and we company, interaction already think meeting clinical with contracting of had doing but we're with of And submission. of our we our satisfy IND a muster the move providers. bit little get FDA

that of muster data able in XXXX. are readout finalization we file the to study reports be early IND we the and in after anticipating will this So pass the

you. Thank

Next question. Thanks, Umer.

question next David the comes Piper Your with Amsellem of from line Sandler.

now Your line open. is

Thanks.

had Nexplanon Brands. on So Established one just and question one on

better particularly Thanks. I'm been term number products you So of even those these trying And what thinking loyalty those wondering post-pandemic going and Nexplanon, resilient. markets, about growth think that's remaining in I forward? and what's portion verticals, get therapeutic guess, And just products then brand sighted for better So there your just on, a respiratory relative or just I'm beyond already how Brands, should ex-U.S. view sense forward? cardio more how trained lack sticky is OB/GYNs of And adoption is a specifically, one. for these being how environment. train going we out have stickiness are? on a to Established to of more about normalized much

questions. the for David, you, Thank Sure.

pre-pandemic mean, as see Let a bounced we've me Women's created the and lot clearly versus have that a start seen Health pandemic I reduction believe I in has with we do in pre-pandemic Nexplanon. confusion so market. XX% the back to still never visits – regards level. of that

what Obviously, buy we do to gaining data acting it's of contraceptives in quarter, with there. see issue it had to So I as the We obviously. earlier, moving a companies see getting see in strong that declines quarter the back. slow be starting from what that when gain I to we're bill alone. model, we seeing is are a kind other that. IQVIA outs you would about large say IUDs is are of you losing but quarter. from increases that needs it's physician get but IUD And to And We of business, you in report really favor. U.S. we but in long see because Nexplanon share that That's XX% terms share a a speak and quarter reversible to see is hard is, third we that see said, nevertheless we an continue because growth addressed, demand process we in everyone see I as mentioned manufacturers terms that that increases. by do the

a out the I noise that of you is XXXX as forward the with in – were pregnancies. system. about we believe The really fact think that XXXX, have were a and you're going people to going getting to it, product binocular to and agree And see form of terms the XX% that women the some is start of you demand. fact that as Nexplanon XX% don't do come to in got mainstream stickiness a I use unintended kind I some mean, So fact little unintended into of pregnancy is a people more is to the nearly U.S. what of is using need a contraception. when that of start that in to your OB/GYNs there lot need? more Patients of recognize – using because really go those the rate of we've

the against efficacy you've that's high of the not got So in you level shows clearly if Nexplanon, certain world more where unintended – the and protection they real among really and need pregnancies. highest forget it it's highest,

we So as will believe we're to and things I see more back more that ultimately advertisements In as nature. that regards training come start that I doing gain the to profile to we're ex-U.S. direct that as programs well with sticky. do consumer traction around things women believe do is doing Established business and the clinical Brands,

many spite in do of these emerging especially for see you the China, business of see brand growth. well rounds a grow markets, around our We example, e-commerce continues see as growth. in see I you that believe lot still that of see as markets, – lockdowns. in loyalty retail We products. cardiovascular and especially You still to VBP respiratory we feel in

extremely do Our seasons well. allergy that have respiratory products, seasonal especially in markets very high

people robustly pay And in Singulair and at their want good that. for time, to continue the do high very, these to out And and well and so manufacturing that feel a brands. products many tied supplier they accepted emerging how pocket very has Nasonex, very like of reliable science, products quality are like know good same people very of markets,

and to where a for robust of going believe year digit are single do it’s growth this erosion. pretty be markets very, There been established mentioned, I certain which see I going lot some upsides very that we like will brands, So growth, where see see unique. we years as a low is forward, we in

You’ll very years digit flat. other be where you where get other it’s single low get years you erosion,

part of good our think to for David. a and long Thanks, large is thing two which flow. this free term, say overall really it’s business, about thirds the I our of though So a business cash

Thank you.

from next Chris comes question Scott with JPMorgan. Your

taking so questions. much Hi. This is Thank for for Katerina on you Chris. our

question the So margins. on is

process that XXXX you’ve another is just you we of should future of for over some thinking step talked a little help bit kind drivers you about Thank rather kind versus XXXX, potential delayed better margin this or something much to of then that of on can spend than or we floor expected up a operating is carry of the as of much. elaborate for How so So think in wondering, kind think And about but XXXX? more margins, the about or year? can periods? there us you XXXX trends

Yes.

So the a few year performance of on things. is margins better this than a expected function

You performance, by we can’t but the much to portfolio, at had down right, just year. went price the tie better thought price still seen of expected as is than have beginning across it not as the but one driver, what we

bit thought overall product we manufacturing performance the Our our in a favorable than plants. been in little more has mix

this half impacting Now, about being at going I the will for time amalgamation be early second in everything margins, indicator forces encompasses of we directional sort about of in think XXXX that of terms gave indicator margins we a margins the that know directional us forward, XXXX.

of expect see lesser in do of of beat products. improve a to age But the yet of bake know impact in all hits is to indicator that What provided. So the manufacturing pressure What our productivity And drum got that been is portfolio, into know price directional plants. in at year, about we some but to We’re for inflation indicator, year-on-year. next product bigger this is That numbers the impacting in extent course, a to will that our the On significant directional year. company, now of a that of has continue mix up that of least that of we’ve be most next again, now, middle across that our basis, drivers we has right? includes considered the the the to on, expect directional we which margin given to the we we indication. always one process for I budgeting the extent, But our once conclude. year-over-year year. steady margins see

Thank you Great. so much.

Your Sachs. from with next Chris question comes line Goldman of the Shibutani

open. Your now line is

taking views capital and guys once accretive is interchangeability kind of both deals. women’s on HADLIMA, just formulary of Chris. commercially maybe Hi, for this current Thank then you about guess being our and impactful Thanks give across And And you. receive questions. Dan maybe talk health? I thinking guys more near-term you it versus you allocation. second see on focus for first just on segments other ultimately the to how Could discussed biosimilars? could on areas on on you maybe you potentially being

In HADLIMA. that Sure, indication with not first they the Dan. point. I come PBMs address will in It are large I’ve the likely question they’d interacted something see with Interchangeability and does up timeframe. our is the as that my XXXX we that and biosimilars can like ones. discussions all key underway, think have on a is interchangeability on I to

off Look, there’s focused they because So that’s of make patients move to be to – ability box. you is the term to other volumes seamlessly. providers whatever healthcare have [ph] to more want do have don’t because one have give fine. will the check capability That’s you large reason a ordered, their you to manufacturing is, don’t experience. pen? be on the Again, frictionless Number a use inject kind They’re I met. a want able issues. don’t the sure of Do that number

Samsung sell good and world to Do concentration? And your that feel you And real be that actually device you have commercialize and forward put the a you Because form. evidence? so provide want business concentration XX% U.S. customers, about the concentration country we the citrate-free have has us. in about is of low the high don’t in. really the for product do and we the first Because approximately of XX% there around the moving customers do in some are low U.S. finally, the towards

checked [ph] us of box both well got So as that off.

profile. also our capital opportunity of innovative in the is address balance between tend duration assets we And to the commercial large Those regarding that with bring have position needs in to cycles. allocation really development health, areas spin longer of fairly capital since where allocation, what been we’re be the to unmet strong. women’s in product comfortable is seeking very So do terms our

so the with a it’s keep immediately been representative accretive within to that margin business match imminently operating And the deals either effectively that just for we’ve trying range can posting of business. that a or well and accretive run

So we’ve early recently assets. some put longer, in more some phase

that And so the bring again, some overall that accretive. as do just we Once to or next deployments we that either program. suggest immediately to think be about accretive imminently balance, of balance the should would

the Your with Gerberry next from Jason comes of BofA. question line

Your now line open. is

Oh, hey, good questions. morning. Thanks for taking my

HUMIRA. come one to question wanted on Just back

you heard You from earlier mentioned can in that per contract you We agreement, Teva locking PBMs morning now. this settlement are the contracts that only when launch.

that from of order a advantage versus entry those of month reconcile And thing I another ultimately, curious to trying of I next just about viewpoints. So one realize your discrepant it’s sort of small was kind wondering this a under biosimilars. wave a differential, you potentially material? mechanically, And does could think advantage time perspective contracting be an be that you potentially appreciating? that up give might but be could that investors Thanks. leg

based now fact will time, originator in will on formulary, formularies. it They’re that I obviously By can’t obviously. correct start What Teva I is will up what Jason. that not be the And is because But dramatic are kind that it’s business negotiate terms kind question, PBMs kind AbbVie. in that ramp a and is There The glide looking now. and kind their of the my contracts said agreement the of on in the the earlier you XXXX. fight the be least that with to half discussion with of – mean, coming locking be of right. the on the what for nevertheless, that for have saying, at in as we ramp we XXXX, of getting the ultimately Umer, tell be will really Thanks in not I contract you’re script, at year. will was the you’re in fact we place. believe –

where closed business do that as much Kaiser potentially a so all I lot and I I’m more more VA, there’s in what ultimately of XXXX well of start be have government system, I’m PBMs it’s in to understanding over you switched will And And the time. tactical of a well a XXXX set that believe believe replace to marketplace. business XXXX and as going the TBMs is take in systems fashion what aggressive talk lot to move of the a will signaling be the activities. of movement originator kind will timeline to essentially what But see an really that as that’s we to price that those like from and the as happens away their from faster

much. so Okay. Fair enough. Thanks

Operator, I question? think our last

Fraser question with last from Truist comes Your Securities. Greg

Your line now is open.

IUD is related morning. first tied comments My about one that your temporary more of pressure tied category. pressure on to sale on COVID growth, should future durable been expect on longer-term the how years? versus drivers then you. of on greater have demand you established And versus and for could [indiscernible] you headwinds taking still be think Good do brands, we Curious to where questions. Thanks much the VBP, XXXX over Thank exposure beyond, XXXX VBP time? if has on

Yes.

questions, three more be of of the November products But will your that that the happen some seven end to do round those me let regards this in will question through essentially cardiovascular XXXX, will of one address of our year, process. have round And in seven. regards gone believe than by list on month. So business VBP our see procurement VBP, quarters for this Greg, that second volume-based of to so EZETROL we we

you growth more business and through XX% now that And now through channel. more to we is going almost have where offset of go channel. so starting retail e-commerce the that And more is of the our that with business the right

to see growth opportunity potential the single business. still China see going the with time a we XXXX, high will actually frame, We XXXX, grow into opportunities that there’s basically and XXXX digit more forward where

question, Sorry, IUDs. your first

On of in happening the and stickiness IUDs the to regards pandemic? what’s

in to, the Nexplanon regards physicians answer to and look, it takes It’s question thinking I one thing what say the But of literally IUDs. acceptability terms of I about can’t hard are a to being in their unique or it reversible fit patients can’t that can minutes in two long-acting many as terms of use convenient much it to more It of insert, so remove. to and the different takes is settings. amount able same that contraceptive in time is

for addition that to at as that, does. efficacy talking same difference that efficacy In The works it has about three IUD is years. the product you’re an is basic currently a

extension. We’re on working the year five

that for timeframe. duration we’ll efficacy have launched in five the probably So XXXX means will be years for that

that that probably XXXX, to resourcing the business our Nexplanon form billion in getting are kickstart give contraception blockbuster it in XXXX of attached been more – especially is to and first growing a and right Because of do than see wants for very us a back signs or a our more right be contraceptive. $X able marketplace, more see we patients timeframe. of we the business all even Nexplanon near there’s the for in people basic runway and ultimately long-acting the higher for much reasonable all U.S. is future. type attention, to it senior a and It’ll for see again, in that $X billion in have signals, Nexplanon, which productive that coming and a long it. attention, So the ex-U.S., a management get reversible we and demand the online the the hands, faster as the the do woman be principle, alternative is the currently type to to And that we’ve U.S. actually when

you. Thank

closing So I a Kevin think has remarks. couple

Yes, all for in closing questions the just for the those. Thanks by way.

three Just in Organon quarter really strong really has third important closing, franchises make continuing all with a contributions. had to

building that We’re business a growing sustainable a and can you concern. as it’s sustainable all see, it’s

the supports of portfolio sustainable date the we spin. assets to beginning said of can our generate very Our from That growth. record track what this in hands, have

and want progress time you thank So of continuing you for as our forward much. look us with today, we to communicate joining I Thank you very to to all permits.

you Thank attending. gentlemen, for call. this Ladies concludes and today’s

may now You disconnect.