Organon & Co. (OGN) 16 Feb 232022 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the Organon Fourth Quarter and Full Year 2022 Earnings Conference Call. [Operator Instructions].

As a reminder, this call is being recorded. I would now like to turn the call over to Jennifer Halchak, Vice President, Investor Relations. conference. your begin Please

who Matt will Financial Officer, Good Walsh, and portion Thank Call. Full Kevin us the Executive also guidance be review who Organon's Milligan of today Dennis. and Chief Dr. Organon's Q&A allocation. With for Fourth are joining Officer, Chief capital Organon's Sandra Quarter Year our this Ali, Head cover morning, and you, strategy you operational everyone. joining me will will performance, Thank highlights; XXXX and of call. R&D, for Earnings

of be be during you at website Today, a presentation following and we will our referencing webcast. www.organon.com. section on our call presentation will of Organon that those Investor call will be available Events this visible Relations for also This this the on Presentations

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

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

CEO, the over our Ali. like Kevin turn now to call would I to

full I'm proud as in first about we'll to Welcome To of Organon's today's company. begin our year with, you, where exceptionally morning, Good thank results. everyone, full stand-alone fourth and quarter XXXX and talk performance a our year Jen. call

X% total For increase year revenue constant currency. a delivered the company at in XXXX, we full

portfolios as Women's $X.X EBITDA Biosimilars business. well a Brands delivered We grew our strong in We growth our adjusted also an we generating Health billion, Established strong demonstrated of representing profitability, and margin. XX.X% as

Starting with Health. Women's

delivered second full X% million the For grew franchise currency constant a of Health This currency. Nexplanon's a significant for XX% is $XXX Nexplanon, continually in constant and on that attracting basis. growth relies has achievement for from which product revenue Women's year XXXX, a XXXX at growth. double-digit This around the a year includes That been marks decade the to new of consecutive over on product. patients

especially U.S., in seeing region, are of XXXX, providers helping outside also the where to in contraceptive XXXX XX% insert X% gain train lark XX,XXX We where more share the market. In access to a health than more XXXX. U.S. to strength Nexplanon continues we will in grew care Nexplanon and LAMERA continue the we to and long-acting In particular providers in Nexplanon, reversible demand. grew trained improved is XXXX, our in drive

Importantly, we prescribing training actively hone providers, go-to-market prescribing emphasizing in Nexplanon to comfort additional with strategy care whom strengthen continue their our health may follow-on for Nexplanon. reviews

growth for ever than of monitor of the demand need the Since for highly July to as speaks Nexplanon continue have we in well most on the as We efficacious XXXX, now the Roe semi-restricted market. states contraception protected states. overturn contraception. v. impact form more restricted to the and of This seen Wade

years. is when short-acting inserted takes XX%. contraceptive to it Nexplanon, long-acting part minutes Nexplanon effective forms views, That it. is contraceptives up Nexplanon because is efficacious provides currently pregnancies where real-world in compared patient-dependent for women aspect some than preventing of out a -- In within use and is with over continuous efficacy XX% X of in the less efficacy like

XXXX. through in continued successful in just But the growth Women's believe Nexplanon demonstrating We our the study. efficacy in be that wasn't Health X-year ongoing importantly, also we will it

XXXX in to continue treatment continue despite contribution or patients' We see begin Fertility impact X% to COVID at which good at clinics. limits China, the the ability in constant currency which grew fertility portfolio of approximately from

take Women business. to to cycles and fertility that of is to higher next prevalence for are potential their in the the fertility a as U.S. And fertility half China than year particularly families, with is start address of and governments The a cycles to number over times more are are resulting need is demographic infertility fertility the waiting large realizing in low already the many China, associated market million markets U.S. more us, of represent before, with they number together strong China therapy discussed longer important The to we action a area IVF current have in the our rates. and grow decade. X of the tailwinds. than more birth cycles Xx

More monetary its more a than for are households is GDP the significantly benefiting Countries is are many offering below countries per franchise Organon growth. and this companies a the the XXX world that is business rate of offering our from fertility the required incentives is helped fertility development of few access portfolio number around sustain benefits. families and growing to their to better have that woman population or with serve births The market. also expand rate activities. the Health and one replacement Women's

in become commercialized we for business could we striving and significant As catalysts term. longer assets development, about that for assets are between Organon the growth balance earlier-stage think

Since growth. have be are Health or that spin, X soon contributing to through will Women's revenue portfolio added to already we business contributing development, our assets

methodologies You selected Asia, been XX% of year, maximize assets and companies applying repatriation the that XXXX. Mercilon will from recall to The Marvelon and is just the of may grew how contraceptives another Organon success China we own the rights its reacquired Together, Vietnam. in Marvelon are assets is under example in in and which other performance last to in including the in of Mercilon, these prioritized past. over that territories combined have

pharmacologic v. JADA women JADA'S birth the October researchers in XXXX the device added XX% in and our we week's across most for requiring and postpartum use. is treatment device mothers. with of to control one population bleeding And the XXX System, at the also Wade the safety device of efficacy were hemorrhage examined abnormal XXXX a successfully which hemorrhage. JADA large or provide with hospitals cesarean quickly complications in XX.X% which v. cesarean indicated in of portfolio of in to Roe Health. In the effective and from also very Society vaginal to States. XXXX Maternal-Fetal are postpartum uterine real-world April Roe treated for analyze common We Alydia of study, that to of treated excited about unveiled highly last Medicine, a Researchers treatment births hemorrhage results is meeting annual At study, of up XX of postpartum the researchers the of who both births. United the births. hemorrhage found XX.X% worked the postpartum Researchers that controlling after was concluded vaginal JADA Wade and and acquisition

was had In addition, a for only for placement, safe device place few allowing postpartum after remain in the a hours to care efficient and experience. more

around to in to speed to acquiring this the capability up access our U.S. this leverage Jada in to Our innovation bring the included global markets opportunity product and the to world. goals

the with X,XXX now hospitals We than been about continue in XX,XXX to more accounts add at U.S. and JADA. having treated mothers are with

that EU ex-U.S. and our approval. the for Health. of highest the assets needs our expand medical first has and have to Additionally, the in committed pursuing to XXXX, potential in shipments Women's also earlier-stage We're also areas address unmet made portfolio we

treat a The of assets Health development. mechanism of endometriosis spin, portfolio Since of XXXX. study, the farthest to expected along candidate In different systemically. instead our at the October the be we've in is completed to which stages in added is unique II new action, ELENA end first XXXX, we a locally X enrolled Women's is patient OG-XXXX, by Phase earlier-stage of which

Turning to Biosimilars.

second Henlius. despite largest in constant contributed than for franchise our was performance in offset in strong second and XXXX, market pressures more grew driven grew selling XX% driver year, partner solid company. Canada, basis a the on in are by year double-digit grew with second Biosimilars performance reflecting currency successful Biosimilars being our growth but adding X last years. growth. biosimilar largest its a XXXX, by biosimilar, an that strong we in competitive U.S. our XX% business Hadlima, growth performance XX% the Ontruzant, Europe. important the the consecutive launch already very of And X-plus of Our had in XXXX. the Humira, for in a in our R&D XXXX XXXX, on for underscored Australia. to its biosimilar and commitment All our U.S. Renflexis, Canada the Shanghai by to biosimilars marking

Humira Because Hadlima biosimilar the Hadlima. success in those is when U.S. to our are will biologic about July in confidence largest that competitive we launched the this provider expect competition help frequently of with year. position We with in the asked the in U.S., face we markets

believe we low a physician messaging, the both well concentration have at and best our as citrate reiterate share that the those high pre-formulation be as formulation, option expect includes originator. same as the To for That we attributes that to launch. biosimilars the concentration will

appreciate. real-world will We believe providers experience that also evidence markets be and something that other will in

from have Samsung launches from as in collaborator, our well Hadlima and Australia. experience own that Bioepis EU through our their as data Canada with successful We and

the in aim and transitioning midyear, expert parties our year a for And a have with an and be XXXX forming is our design can and with we design will pen also XXXX market modest frictionless the has believe with the new XXXX for providing That of conveyed launching a Humira. experience those patients manufacturing differentiator biosimilars finally, and for really pen designed be beyond. Samsung, from we patients. device that multiple said, ramp-up belief in and

our the currently of The generate about to these portfolio brands. and and X/X continues cash represents sustainability flow. Finally, overall about Brands, let's Established demonstrate of talk business significant untapped free which potential

some helped implementation growth the given expect as for of performance term, full Over longer Brands In onetime the maturity the Established deliver currency business. close we franchise XXXX, for from X% VBP of flat as well the to year. from our we that at the benefited delayed events portfolio, constant

performance we term, believe generally in these In continuous the potential be of maximizing about near flat X from continued XXXX, focus on achieve on expect offset the brands constant Brands demand XXXX through will and Round of as impact a currency basis. Established well-known we VBP we we generation, able the to expected the to think with

our is COVID X Briefly turning of That these to includes well one, XXXX. two, in faced to risk takeaways grew XXXX. in and regions here: each are geographic significant distributed; There geographic which performance. related important geographic challenges in revenue China,

as that will Mercilon and to benefits together the we think fertility our As XXXX, impact strength business about channel, the retail of from offset we in growth VBP Marvelon reacquisition the in as well believe in China the XXXX. expected

XXXX our of full and Thank I purpose want a worldwide for rising our proud thank Organon stand-alone company. to I'd now to the success extremely are to for achievements, living over our the as and together We like founders had Matt. first XX,XXX our delivering for year you. turn call in

Thanks, Kevin.

completely depth haven't I'll transaction XXXX Before is I remind you financial our lapped more far we talk the that as reporting June in concerned. results, about as spin

while is more call necessary. with comparability really income XXXX So to I'll the accounting that year the the and statement are our items of implies of basis out year prior apples-to-apples full quarters periods, revenue, that rather on third pre-spin-off and And to that employ carve-out XXXX impacted we fourth for needed than by accounting expense first periods. as half

fourth get to move billion, And But We'll volume quarter year. approximately about we at consecutive the we'll period. Slide as the in X up fourth time opener, constant our more quarter talking of when moment, that revenue. reported, X% discuss but growth. isolating full Fourth the to for had solid X% individual was the $X.X spend this quarter quarter and the currency currency. we constant fourth marks growth with drivers down revenue So

Our Health contributed. Biosimilars were Brands franchises, drivers Established growth growth, key the of Women's also and but main

well. For we've the getting with Japan, up in market example, pick of France generics we're seen recently, some And in there still particular out and some Spain. Atozet strength as in

versus impact at started U.S., sold represented had growth XXX the revenue of a FX the But quarter. translation XX% translation, foreign reflects we outside as XXXX. China, because in Procurement outside from of The most is fourth the in the largest round to product quarter the translation quarter, This might $XX The given fourth China. headwind number about currencies. most revenue in Organon impacted foreign which or FX trend which theme VBP is that's This Organon point which is on this recent across markets dollar of significant in in very a weakening the reporting of impact numbers X is U.S. our in seem In Volume of biggest million Based walk this north an in November. exchange the Round that the XXXX. Zetia memories show any basis for implementation was of everyone's that end XXXX. is And of counterintuitive Ezetrol,

Our And quarter we headwind masked financial portfolio currencies strengthening local the reporting delivered faced in and in a in the the the operational dollar. year. from that significant dynamic that fourth unfortunately, U.S. full growth

And Slide speaking X. revenue a full identical year, of have on an we bridge

coming We modest LOE, at approximately For as we've prior the as from Starting Brands year. when million, portfolio what impact the in the full before, most several spin-off. reported next to have hundred the to prior X% the revenue mainly a cumulative full in didn't the forward over LOEs LOE exclusivity impact any compared $XX Brands And loss the expect X% few $X.X facing it's States. billion, million at United year. for but going was constant LOE XXXX, years. and is of down washed year about LOE dollars And XXXX, said year of was with significant this Established or NuvaRing Established up impact out currency we

from year saw price single-digit Biosimilars. subject as mandatory that from November of an as continues primarily we'll price for pricing that's reflects our And low coming $XX The come implementation the discussed. reductions impact from impact XXXX. $XXX of to some consistent where pressure price million the see markets Brands a X, VBP Established on basis. Round company-wide full from year I to of erosion with majority approximate The full million continue products expectation just as We in to well are annual about

growth indeed to We Brands Biosimilars, Nexplanon, Established volume expected XXXX volume see as growth saw grew also our happened. coming we our franchises, pillars, we across that from Fertility volume, what and volume increases For during strong and call well. but

we to For the strength parties manufacturing And Atozet year-on-year, represents Merck million of significant channel. example, impact pharmaceutical Nasonex continue Singulair When and China Supply products under at supply to Europe. looking the low-margin third consists and Other, which in see sales arrangements. approximate sales primarily drove in $XX retail of relatively grew growth contract other

we of can has And for arrangements case. in would U.S. signaled XXXX, financial the the volumes a see headwind translation. we XXX points that than year, significant had under the of XX% again exchange generated year, outside Last these the decline our in which been revenue finally, function which basis more foreign you reporting the full is being

and few quarterly next the franchise. supporting year lay by well out full details covered are slides our Kevin materials. in provided earnings The highlights, the performance very the and

start to topics on think focus Slide may your on be I'll Health we modeling relevant X. XXXX. So about We'll that as Women's with

the full a performance for XX% the in was and had ex Nexplanon year. XXXX, mentioned, Kevin As strong FX up quarter X% in

records fact, sales Nexplanon XXXX. in In we new set for X

quarter. the again the in quarter in then third fourth and First

about in a it's reminding for in next followed the of As the is due of that year, in of worth to record phasing This first to sequentially which you price month the tend dynamic year, quarterly increases sales was first around U.S. also buy-in, see would XXXX. the see quarter last weaker part by we next quarter a you fourth set in expect dynamic buyout then again think timing a the to quarter we

Slide on Biosimilars to Turning XX.

revenue year. are our potential We U.S. this our know focused Hadlima Based a mentioned, globally, launch we market this expectations year contribution revenue. partial to in revenue July launch, our that on given will of an about growth on XXXX us. contribution expect X driver for important consolidated and XXXX more Kevin continues be for the As only franchise than investors Hadlima no our formation represent X.X% gradual from a of

Brands Slide Established to Turning on now XX.

sterile there addition VBP to initiated used to suspension Here, was the Chronodose. Heist January In nonconforming. process This want fourth in Belgium be quarter performance. injectables, a was the fourth that facility XXXX, because in Diprospan quarter at item actions determined drill in impacted market component purchase another was for sterile to to filling Established related implementation, we I that down Brands and Celestone Organon's into

million no these compliance represented quality $XXX have revenue X are about XXXX. discard To these events clear, the impacted. adverse reported to Due reference, of aspect, any it or complaints product prudent nor and be to to combined, in for exercise been actions expected. inventory deemed was And products market be

to Turning Slide XX.

$X show can by onetime of shows had the million goods to our line we through $XX fourth XX.X%, the in were We're a would cost to that our manner provided and that fourth inventory returns quarter of this for reducing quarter last guidance that EBITDA, with sold. what adjusted flows adjusted in in effect You fourth up in see potential revenue been margin when recorded million $XX total excluding that we of issue the out EBITDA the for expectations November. this much million have sales quarter charge action breaking very

the of our we've ability forecast showing year reference. with impact our full very Since to also We're spinoff, pleased business. been

in and forecasting our were events diversity market it like business confident relates potential as always the durability we're of while So a risk this action about it. industry, a to

items Let's on Slide now turn to line key P&L XX.

onetime the sold, was the the the gross compared period. to just of non-GAAP to For major from in excluding gross spin-off. cost related purchase driver quarter fourth I we accounting The are year profit, discussed of in and prior action change amortization items goods market the margin

in for in Keep meaningful costs mind because line truly result the second of the was below of gross is year said, that increase the prior with occurred adjusted supply margins only margin full XX.X% separation lower year, the that gross as for adjusted they're in to compared half for sales well less revenue the comparisons year. year. comparable Organon year-over-year XXXX. the year primarily margin full of the items full allocated That as which lower For XXXX, related a are pre-spin the in XX.X% carry

full EBITDA year to We've with of period been higher year a for reinvestment related for Heist in positioning decline you selling talking at company importance margin same EBITDA with business was result as the compared drive in Adjusted the and with the future expenses was acquisitions. Adjusted action the XX.X% the quarter a associated for margin prior XXXX costs see in spend in year. full fourth the promotional and The costs for to of as XX.X% that last XX.X% associated create about development the products the growth XXXX. full and of compared growth. XX.X% to as quarter the now. to market fourth was revenue of as And a while in our well well new pipeline year research

at which against bank a of XXXX of about XX, euro As we reflects of and up leverage the reported debt equivalents leverage million. look ratio with and primarily the cash ended we X.Xx, impact have $X.X the from netted December the as fourth capitalization strength XX, year cash debt ticked quarter. net on the quarter of end of That XXXX, the the Slide X.Xx of and of at results. of We third combination billion the we $XXX gross

to moment, in impact in our for currency guidance the XXXX. is leverage together EBITDA discuss be adjusted which debt, our a on stubborn likely I'll Given XXXX, with euro-denominated

calculation significant In strong year. LTM end flow down characteristics back the the math of doesn't the inclusion on tick higher we given priorities, the EBITDA cash the quarters, business. this by before allocation past a our leveling leverage impact of of see inevitable have could in fact, quarter's This the given upcoming during capital our

noise but items. and is see a to full to year-to-date third quarter quarter, September year early nonrecurring was that And transient cash portion So that last In in cash $XXX Slide closer spin-related fourth if capital This flow. still million in was some said spin-related let's that early discussion a the strong. you from washing our XX in expected the $XXX stemming XXXX, XXXX. lot free very about of from turn landed cash a moment we of can generation And late for working in the good there there look was million flow flow at the instead When take the financials, you quarter, numbers actually out. in our reported XXXX, build recall was related we year. a

to to the build and in flow significant With normalized QX more be improvement position, cash a we generation. largely us spin-related ebb behind reaching working expect we capital what our and saw a

cash range working that message onetime had million driver of the of foreign of putting that positive But fourth translation. spin. billion management at partially that the exchange foreign free our is with time September. had that was the our The year-to-date should the global build in not $XXX capital a that U.S. liquidity dollar, the key north other aside from currency headwind flow costs quarter million the of program. communicated related weakening in the $XXX here Consistent cash within experienced is we impact to offset we of And balances $X XXXX, the we in million ex repeat $XXX spinoff

allocation Our with consistent communications. past remain capital priorities

life our dividend, current by portfolio growth pursuing of prioritize We within servicing followed cycle through to the organic opportunities will management continue current products.

and X% for strategic our purposes. our Capital capacity, investments that With and good other the production of capital business. modernizing of remains growing in to global X% expenditures in a ERP to estimate revenue implementation investments the forecasting going like range standup-related

to we priorities remaining to cash commitment have BB/BaX flow satisfied, our external these rating. as continue With opportunities balance our we to expect significant growth against available

as capital. spin-off. even of discretionary for since and we still done much the done rating the company, business a get parameters leverage doing as as the we've it twice ratio But without within points XXXX a repayment, stand-alone which on Having debt deals likely during higher stay at development have our raises bar can we competes been

range items billion. XX, to Now $X.XX revenue guidance guidance $X.XX turning XXXX to the XXXX of we where highlight our Slide billion driving on

XXXX which as seeing not which as expect will in includes XXXX. a the million to and Beginning expect X This in million generic impact year an a impact late approximate well reflects NuvaRing. generic entrant in of with competition $XX after XXXX, we $XX full in also impact LOE Atozet, we for for Dulera, continued LOE, or for an XXXX provision sometime Japan XXXX where from go

We expect million impact from of to round. VBP of the this $XXX the by XXXX, Ezetrol be to in range $XXX driven mostly in million in latest inclusion

-- company $XX expect million $XXX to million expect approximately sorry, price of We we erosion in XXXX.

On we've a been at to stem thought better we start total last able basis, than the a company of little pricing pressure year.

term, pricing also expect to but of related longer to is the due mix. to in markets of and the erosion Over in would points we XXX that decreases smaller mostly mandatory to headwind, and impacts basis product certain be LOE XXX pricing range

bigger So pressure for business put Organon within becomes example, as that a Biosimilars more will on price.

is XXXX. with recent the in a volume, come smaller And of to majority to in year, including from we Biosimilars, line multiple degree, and pillars. $XXX expect volume for for approximately growth increase we million JADA. Nexplanon, Fertility, China Retail to development million saw growth full what business $XXX expected The activity, the of our

$XXX of growth which year full the That approximately midpoint. range that spot foreign from exchange X.X% would more a expect for FX XXXX Given compared modest X estimating represent XXXX. with about million We're are at a we trending, in to the approximate million implies means impact an where $XX impact currency percentage would FX revenue translation rates headwind. our point from constant guidance

components the other guidance Slide to of on XX. Moving

to margin we expect low which We to lower finished modestly is the mid-XX% adjusted be range, where XXXX. than in gross

As goods in a XXXX. impact inventory have year were in therefore, I've talked of our inflationary XXXX previously, cost this to of held from about greater much and impacts sold the

On sales operating reflect in our and as continued investment a to future ranges delivered for line and we guided it percentage position of we and for in the growth. R&D with XXXX as expenses, business SG&A in are what

be investment the estimate made any the of out of expense EBITDA for payments in related tied of margin in sight Our upfront XXXX. Medical of XX% line million an such future transactions. XX% call in estimate that's would OpEx and for development $X range we $XX to Those plus you IPR&D milestone we to our R&D a adjusted to would that to business Claria for assumptions bridge announcement to in January would expense incremental, includes for achievement an million Any XXXX. about in ebopiprant

rate items, for below-the-line cap environment, means have purposes. of deductibility that effect XXXX increased expense interest for tax million. expense our a interest estimate given interest increasing to approximately had the For with we also interest to higher knock-on regard of we expense $XXX The

of on finished actually we XXXX, expense tax the For range. end low our guidance

for So reflects plus XXXX, normalization expense effective our non-GAAP tax limitation tax expense, of for a interest expectations deductibility. for of rate range expense incremental

XXXX discussion, the solid financial a the up Wrapping was for very year company.

of growth. dividends in year. proactively X constant of drive the future deployed capital X%, in with million across we expectation retired for In well the financial the million We on accomplishments promising We million mid-single-digit addition shareholders. returned of growth to to which front, transactions debt. aligned Women's had mission all we delivered to revenue $XXX Organon's revenue we cash And over the currency $XXX operating Kevin advance $XXX mentioned, we Health, as is

we to deliver We're expect today. forward and based guidance on XXXX, performance to continued looking the growth strong where we're capital earnings providing

now we'll that, Q&A. turn over call With to the

Instructions]. [Operator

Your line Morgan the of Stanley. Terence Flynn first question from with is

we and if forward think into note about year? as quarter. just somewhat then go first then side XXXX. U.S.? both as was on how us on Can how about anything wondering was you're in product there ex the half Follistim just just through I we U.S. on And of this and soft Nexplanon the there's I we of walk this that for what's thinking should guidance, think about embedded guess you

consecutive Nexplanon. Thanks I'll with forward double-digit in X with take to of very for we're years as start the of think we Terence. terms We're doing Look, that. what performance. question, pleased

Of had fourth strong of somewhat a course, the year. we buy-in last in quarter of

feel demand in as of the and well we see growth, monitor forward, going to physician very that But coming good we very growing Nexplanon very bit little we continuing to in ultimately, kind chances up strong, a able growth very at really usual as now about. as pick the we're strong expect about So to the quarter that good U.S. feel fact of we least a be the is terms of first soft. way U.S., something that very demand ex in solid

awareness to U.S., involved kind depth all at because Nexplanon training more of Our media see the have throughout deprioritized past, a tender very we currently clinical things U.S., seeing ex continuing go when business business to focus that of to our of was of really and because of it drive you overall look in our programs who we're here. that we're doing on our in that's Nexplanon. physicians to the a years prescription campaigns and and really really driving social we're terms kind comfortable are with campaigns, very being very DTC terms and grow the the world. ultimately of with in what you outside U.S. happy and of And start access opportunities lumpiness fact more continue course, orders continues there's to we start when lot to the of the But

terms in the the asking in were QX have from Look, you growth guess, that ultimately, in Follistim performance, Follistim very fourth the we I in softness of -- U.S. China. was Follistim. of terms terms strong In came of but the softness quarter

be to lock around lockdown, the to have It after opportunity ultimately China to you real inhibit clinics for expect terms a started infections. But order to well to in start ultimately then year. couples of get started really that to turn increase IVF therapy. to go we this and you their down able the in As when COVID to can in the imagine,

very infections ultimately, the the in are rebound we year strong and, Follistim hope that all see from start a today. we this expect COVID We as for questions. China essentially burning kind business China lockdowns of to your it COVID as that answers I through

from Your with next of Umer Raffat Evercore. question line is the

if Maybe a may. couple, I

what Humira as First, very on sort much in XXXX baked reopening ongoing sort as clarify think the not be helpful. of how China you the could that well will guidance, and of you've I in? or number

growth we we that or usually individual be from potentially but will of the Hadlima year year talk sales don't of of one, been Hadlima; time, strong for have to fronts: saying in some outside a the get we'll double-digit in for closed kind do good few the and some to feel other when the terms -- formularies U.S. Humira of their about to products I've and year don't of U.S. top overall very continue for sales we well in but the Hadlima, in [indiscernible]. terms as be Canada country the on systems of continuing you, XXXX race we're HMOs of governments to exactly Well, this half this numbers, more talk good well as solid also Australia on performance, their and like Kaiser, very for progression Hadlima coming of PBMs will like a a a second, some

So it is comfortable because something well that do about we'll of feel product very that the presentation. we

that product, a you introductory ones commentary, commentary, As and products terms in the originator. to are in are I are the really of to mentioned going want win that closest the believe we the my

get terms they're real-world product. concentration in comfortable the We the and high pen, one the this PBMs U.S. using can We're terms that having feel can security frictionless about ex safety close are of as of about talking in strong the device of citrate-free, evidence low with so and experience about as concentration. what

Hadlima we going good in terms So very doing of what feel we're about there. forward

got And regarding China China. growth coming in we've really back, drivers good look,

we've Fertility the got earlier is going I back very starting people ramp to that well. because online We've to that. business up back to got got very business retail business the come the Marvelon We've got very, are coming online recovering, continuing As mentioned Terence, well. really to we've

to seventh offset is started big will headwinds the QX some that a to But estimated with that now facing VBP the we're good a with and the decline. we'll that of of never very what hopefully, we've actually we'll recent round happens we rounds see that round in feel period. where And able the had offset. year we've eighth So recently right ultimately, see be for the

gone continue procurement's then see we through estimate we volume-based business will And procurement get have -- China. to growth, XX% we impact. XX% as really of We in XXXX. robust after And to anywhere business through grow our the strong XXXX, growth between

surprised be out beyond, double-digit to don't performance of you high and So China. if see XXXX coming start single-digit, low

I just clarify. if may Kevin, sorry,

was. China, on think I

So got through VBP getting the was what I rollout China. of products I the pace understand I have gone was COVID in VBP. most of guess at paused during

million, So step sort on [indiscernible] these in of understand guidance? et the with how to I'm And $XXX $XXX the rollout cetera. Zetia just rate conducted million China down are what's you about on franchises about VBP? trying on $XXX resumes thinking as million [indiscernible], run guys previously by

up by look, few point. I you The delayed was Yes. a X Well, Round good mean, bring a quarters.

that China. ultimately, business from so benefited in us last Ezetrol And year

November. Now into effect effectively it went

of through million speak remaining about now, we and million this volume-based So much procurement from the year smaller in seeing we Ezetrol volume-based Round erosion expect headwind essentially right we products somewhere are procurement to expected X Ezetrol The for range. are $XX China. a as the probably that Round go $XX They're X, in products.

the Ezetrol. products. could delay say, be as smaller -- XX% the those whatever there get won't the ongoing but things that those what's I that quarter, anywhere with or the further why come we great year, example, fourth say, the that delayed if So That's happened if say, much at, then depending upside of it of second result and a XX%, they're could because be for in you is be mentioned happening as between, on and rounds infections COVID last that opportunity saw

went the your that already have answer So through products the we kind Umer? question, Does rounds most happened. have of of hit that big

Thank you Kevin. much, so

Umer, And worldwide Umer's the lot second, back smaller we revenue. while did X.X revisit points prepared not consolidated quickly Organon's than for say markets, to for Hadlima a just important In U.S. they're benefit. and Kevin, would exceed of sales are to a comments, about Australia the Canada

United can is you number States towards assume bit. that, weighted the a So that

question with BNP from Navann Paribas line Next Exane. of is Ty the

And QX? no loan the to the you oral expect quarter Nexplanon few And the train you following professionals you to fourth expect in IUDs? both outside Do how expect a also, you am in the was many target starting separately, net on U.S. share? do in tender pill a And have you this there and in I the that some you have of news Nexplanon I and continue right a share see prepayment then can share term U.S. health we do leverage year? XXXX? that tender and to And can could do from care Dobbs market take

Nexplanon the me let with So start questions.

QX Navann, we from of saw 'XX, a QX came of big tender in right, in through tender That You're Mexico. 'XX.

We the Brazil in why you in ramping didn't see that that's be of tender kind in whether time and markets, emerging tender QX expect the in business probably U.S. QX. So others. ex the more of QX, up really for do frame, the business Mexico the business or

that those and for high been that growth about opportunities right look pre. Nexplanon through of year, tender kind the have that around seeing growth what opportunities, a regards for the that in able in states. In v. actually post kind states that's probably decision Nexplanon to abortion what protective around least you the of activities or restrictive I've versus U.S., policies saw at see, coming access, of Nexplanon we Those see in the So of half more this those the bigger mid-single-digit we rates of year. call Wade Roe single-digit in probably are would now, start are we're post to and we'll I do see the second to with kind

I in always that to the feel And I see wanting physicians I've continue and daily contraception kind that where efficacy, their you of are these it's quite growth to that, states see that when to have there's opportunities that think felt states of in ultimately patients additional take restrictive, effective, we would XX% mentioned, I and from to So needs. be we'll policies. continue about accelerating going to grow. restricted do that the do what real-world regards I issues decision-making of out some think

in question the We programs. XX,XXX did mentioned, health XXXX, care we -- And last training trained as regards providers. in I clinical to

many of Now that nurses, physicians, those. could be PAs,

as to continue needed to -- would actually of and we'll able feel prescribing follow-on of those new were going to to or both be come retraining anywhere using of and year forward XX,XXX for clinical be the be into say there's I and going forward. those in need programs order with with trainings we'll to COVID that more per lockdown to going But to averaging for inserting between that Nexplanon get Some start people the as training average invest an Nexplanon reviews. refresher people that health refamiliarized back kind and XX,XXX comfortable clinics. providers, care in

the I to take of leverage. the related question part And can

around that then So leverage saw to soft business the during the the We dollar reversing had related been debt our benefits that's cost development that's strength. But risen. the own to debt course increasingly since see self-fund will of called deals down in of landscape targeting of we leverage the business XXXX, worked against that of the the one in as we about we've a that the that figure its And XXXX, what spin-off, on, the reduction will ability be we -- comments. goes and has the prepared target the year as debt out on dynamics balancing XXXX. X.Xx voluntary X.Xx, we net favorability target, as as of to think way level our our mainly euro-denominated

spin to will continue, to that. since done we to we'll bring think, behave So balance I we've Navann, look as the and

of As reduction. the capital against the the as term in the I said has for business benefits certain near development hurdle, debt comments, bar prepared and of sort risen competes

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

few. a had I

guidance. 'XX the revenue for on bridge First,

Established about the one. talk the in Regarding And from think can more which Brands in volume? to talk as you Established growth, Brands? that's where extent are coming maybe number drivers detail That's volume you the about about

apologize this, towards remind missed I interchangeability talk in can get for about think U.S. but Hadlima us if is, you progress two that? just I Number and you the just when

on business development. lastly, And then

assets and appetite see stage stage commercial I think EBITDA-generating thinking a of development assets you're talked your how to acquisition about about in on towards you I brands your assets. of what that? lean pick vis-a-vis that the is terms wanted and

products. volume So the deal regards definitely bridge. coming volume-based -- I Where to address can XXXX procurement growth We procurement I first volume. questions X the to can non-volume-based the in in see -- is do

are part -- of the list. they're not So these

very continue So that to be will driver. -- us in volume terms in well of continue be Atozet driver. well. will China to our The to in nicely retail overall China for products a Respiratory growth. now in grow very to be as a continue and sector grow continues Europe

got then perspective, continues in of terms our regional Africa grow and own So growth Middle the Russia volume to And countries. some we've pretty Latin East, opportunities. robustly our of America, business that you -- a see and other smaller from

that then, are offset there course, downsides that for chances volume Established rounds continuing that growth regards -- growth the the volume. the that in continue of we'll ultimately to see So some Brands. talked some China of opportunities we we And of about have VBP for

it? question The was, interchangeability, you had around -- second yes. was that what believe, The I

not their come a I my to want many QX probably going discussions the though, everybody many year, where was of differentiation. QX, literally in around after at interchangeability, range So are interchangeability key to interchangeability launch the as year we X to to with of be -- PBMs, the in probably at -- or that major July expect of least really come have point so the year this through. which is clear, of of of competitors XXXX, But first least X,

long long you to be of that that kind going you into you process, delineations that for it frame, that compelling get the everybody to started ultimately concepts we're much you sure more able within them. had as we as time understood, changeability As kind in make or other reasonable Then as means the that were of had within off deliver many to it table. that product would into could put

And then on M&A? biz dev

Yes.

Second to David So that Matt, do in of question EBITDA? has. want you terms that take

Yes. Yes.

seeking program the been in we've assets. balance late-stage David, between early, So mid-,

We latter have had or more opportunities. to looking preference a at stage be currently marketed

which we So development slant surprised see is that capital are last deployed especially you unfolds, be things as certainly near-term, the since Claria for Medical, deal early business don't our towards did XXXX was more if stage.

Your next JPMorgan. of with line is the from Schott Chris question

at talk Just been specifically, any changes you two XXXX see in Can Maybe of have there evolving for how market first about beyond, Hadlima. and you guess, think I you me. all on the how to in just see the of to ultimately where market going is as and going the biosimilar size for going you're the of is you kind here about be to land how biosimilars? price ultimately think accessible about volume much terms

we And top over then there of that level think kind -- still of I've the can we trough line kind business this for time. really margins out -- asked about a we ambition next the kind do represent longer-term to more under investment about my second needs maybe of have when you're in the think kind I these Matt, need question, EBITDA and and continues in few kind of past, you years, margins to is think that about but from know over Or that fund the and laying expansion these XXXX, margins here? of we go could maybe pressure growth that of to to margin see to that start as starting growth

going to with deal a seen other basically the -- we preferential turn the and to can question they're question, for Matt. couple I are There's of obviously, there the Hadlima as XXXX, over I'll biosimilars. I treatment before, Chris. from saying no Thanks, originator. the that you've as Look, believe mentioned PBMs that allow,

when least XXXX. able you And whatever of to so at the that, originator in likely will to people you're choose want, go a result as

patient-centric believe to get profile, our the profile then X XXXX we real-world is biosimilars be having And device, on so going to going in high terms citrate-free X low formularies. those to the about which to And are of full I believe the concentration and concentration evidence, that that X be of strong us experience, by the to those products and rheumatologists across business rather to or country, our X deep, that going on formulary. incredibly be an organization listed knowledge immunology way, with to -- are the positions position X deep immunology of across the rheumatology business

year. will this as likely XXXX, mentioned, be in Now obviously, a would lighter ramp-up happen, I what

obviously that of will that to for originators There will be offered. position. be in I'm going discount. discounts fighting will be that formulary be of doing You're terms more sure with kind trying the aggressive being to

believe forward, retract. volume not do will Going I that

go for opportunity such also, for other I to Humira the think is that opportunities there the first. will but anti-TNFs the at be you're not PBMs switching believe of talking products, do where opportunity there only a biosimilar whether about to look I will volume, this other

price, way, the by weren't also, anti-TNF thought lower So to treatment, able treatments. to because now for the using who anti-TNF volume be essentially the and you'll potential of get really patients of be for

be will what high-quality of with I of anti-TNF on be the kind volume so market, will question But there. kind provided. what discounts is And biosimilars that the think rebates,

provided, That's biosimilars. And as volume exist. to is then up discounts, go XXXX there's way in an the accession. Clearly, but XXXX, but of will originator, rebates, Matt? being you'll going start 'XX, to that will the expectation Humira for see formularies world. more we as ultimately move XXXX bigger of also opportunities bigger then of discounts 'XX be and the the it. and I year, it a we to the in start see bigger see forward open more ramp-up volume off ultimately, will still opportunities rest formulary the lighter And

second of take the the part question. I'll

since expenses the P&L drive really investors for When that dialogue ongoing our ongoing really a this revenue been spin. product is growth. So development launched X in with type could had that future space it we has

reintroducing business And answer think steadily about quarters direct slowly in depends when go, lower -- it evolved. the the so question, Chris, nadir like that start on and the at I think sustainable got we and we've like, the to that future -- been And the I been much to time, XX% in might how think in we've the might those into we about feel to at as to our have as X% the range scenarios this nadir. strat of kind XXXX, what ongoing. side low feel is and But X-year on built horizon. And your SG&A XX%, we've plan how for We've at of that EBITDA that, range that how range development the we running to of look and low feel side starting as that's kind R&D do. would Because expenses I -- that as starting say, with a revenue of got margins like that the development business like percentage what promotional-type that look is of right at XX% a point range. to

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

is on This Chris. for

number $X the we cash biosimilars. guess I competing over kind of to 'XX first if couple, for billion as kind $X 'XX, doing this should then the in just development similar the of onetime with as lose the some guys confirm, impacted plus potentially think kind regards plus of split? close then of of above just a biologics deal other $X of 'XX? And course range? still on -- just the but so, to about that the Samsung on the kind are the Or you to flow think in patent year starting -- potentially of is want deal decade. and Just billion-plus on to we should business billion And XX-XX somewhat

in the , now. to a Henlius biosimilars other as other race in bring Humira So X made let to biosimilars. opportunity Look, very months address also the business biosimilars. biosimilar -- from Yervoy Shanghai the we're potential me for we much biosimilar we're committed we're few with -- launching to But Obviously, our the into deal X strategy and development get well.

us, order entry. The is a key for is key. it Look, of

at as potential doing we've ongoing And it so speak. rest major assured, when business we looking development. discussions a And got lot are of opportunity comes we every to

terms of high of in market. So probability to getting success

As long curve as launches, between very sales your that and of order you years. tranche And in of last the anywhere X can do can is first well. X entry

X of Look after double Renflexis. U.S.. launch grow We the digit in at Renflexis still years with

sales. our that's biosimilar -- terms So of in to our and largest date

be Hadlima emerge for starts peak expect second Organon. largest the sales, ultimately, to for product to Hadlima when to We

you to terms do an kind to of what market. margins, we do profit best can to best we we're as And shareholders and the that continue well bring for going rather see we can of to imagine we in the can our sharing or you So see our opportunity. the best, can for

we to to continue biosimilars. at away and market for with the more what swing do we'll So more bringing

would year, billion range stages the before capital it you in build XXXX. us flow, magnitude we we time And But our into have about at We improves with subject this course during the moving onetime as for that onetime north think the was a then in it related, as the of performance some on talking comments. spent of prepared the of that were Merck. of free $X that XXXX. we're costs items. cash little you still will the same agreement When bit working in that seen of we look not them spin And about the saw latter TSA have

right are We on target.

is of driver biggest we cost the off onetime all of standing to. and ERP in That's the are cost XXXX. of The up need implementation. We biggest the onetime activities one our drivers ticking now global

of line with Cowen. the Steve Scala from is question next Your

I midyear expectation XXXX. missed have expectations reiterated questions. be growth a stated and And constant two never in double-digit at Nexplanon exchange. those were set to early

and they were presumably, ago. but some You mentioned anticipated months pushes X pulls,

the for in So what Nexplanon? led question. So the that's shortfall factors XXXX to first

we've similar public deals exponentially. question again. opinion, development seen XXX Health the it to in of more low, them needs the the is asked view you always quarters my strikingly Health decades of Was that all than I deals if second X would In deals asking future identified. humble is have is I I've you Or existence. pace But more of Women's things won't Women's the originally expected? the did, to complete activity The pace in past, of with think all. Health, plan? pace questions the X Women's But for X apologies increase know in that been business this company do to the in challenging take so

you, to talk to Good Steve.

going we was it throughout of where the XX% ex business so XX%. where ex-exchange basis, feeling very for exist landed in U.S. the essentially did growth. U.S., the question, Nexplanon. XXXX. hard last rather year, at The X% was our on happen of of was that we It's month-by-month with currencies outside currency growth, terms it we're basis. your end right now we regards an language always beginning to that -- the happen talking would the to on Women's Nexplanon. XX% point what used. that at what's kind dollar signal me Let strengthening of space. we've growth to And double-digit rather good because the And with about so a to a we the U.S. in if second with that or and see of to remainder we don't basically We what grow you're We And of address year the in in the basis at constant know achieved have consistent in world the guided ex responsible always expect about to is the opportunities Health exchange a

earlier As device therapeutics; a disease, Women's at and anything look Health-related cough. points view: lupus, from days, with And on that celiac impact agnostic Health -- would what conditions. potentially or with on are chronic would But migraine, We're women. I've on therapeutic. it's in conditions the osteoporosis, list goes uniquely Health on, we and we're devices. and for at that -- be focused two, And looking Women's X whether also mentioned one, disproportionately of consider or Women's -- those we from primarily

our us our in dollars. allocation use So to potential business a for that's opportunity development capital always

with almost literally on most X I deals of this in deal every would rare that's to say done though, say that assets we've with time that the to will because X I layer feel these say as when some months. And Now I we X.X start is you, a years, management see you very an the comfortable. with of really forward going in, business we're to plentiful opportunities, that cycle opportunity -- future. life growth which we're have, to momentum organic also the we not grow bringing the for business company we in businesses that but only continue driving really that are in opportunities the the the biosimilar

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

up Following BD. on

Health deals like preterm beyond programs. those of core and labor, and number the a Are you looking indications to have to you the are shots focused in expand know I Women's done You've the should Women's expect? add you're on something additional Is endometriosis business for programs your for pipeline assets with those that Health indications on efforts on of BD more Or your so goal? bullish [indiscernible]? new potential investors more

as acquisition for backup couple one is furthest but we With mechanism new like is other had to is a XXXX this We the of they have that Well, it this our say also that nice of goal I thing. action new a great always of along, the asset Forendo has on product. compounds promise. The got got well. shots mechanism, molecules, has

hemorrhage, expanding, preterm from Claria We'll we're ovary for our molecules potentially to molecule -- add went therapeutic bacterial being the wherever laparoscopic clinic terms making we now if of we you So yes, with a mean, syndrome, possible labor, fails, number and we're invasive take minimally hysterectomies. can acquisitions. primary backup also fertility that said, with there's I see contraception but essentially our the whether endometriosis, as in polycystic areas, different vaginosis, of what device postpartum to in

of really opportunities need the a So as identify the in that innovation take in to continually a role. primed meet market number areas different we believe very we're market. there's and leadership that need that both on we And well

come final will question today's of And Bank line Gerberry America. from Jason with of the

This is on Gerberry. for Jason

questions. X Just

past. that's provided to assumed sense I still outlook And that's line it I guess you a something the to XXXX? that XXXX question be the deal net whether do assume it's this is active big a given ratio you to exploring is of the in double-digit guidance in in wanted expect second leverage given growth then year, safe get First, top to for growth. M&A do in non-plant considerations,

double-digit the for very X the Thanks I'd satisfied years of happy all, of with we Look, I'm consecutive off first that, question. since performance. performance and spun say

our going we pushing We'll, Our a XXXX, demand. course, be for focus really to on patient focus we're as product. more increasing we'll in robust for be the of can

DTC clinical We business faster reviews, than business. ex-U.S. We're our the to training continue see follow-on our continuing growing U.S. campaigns. programs,

the we grow very the we're going focusing that. also first on that our this over So product fact end run the continue that That's going to we $X robustly essentially years; feel good to the we'll is be We forward. by that and billion second, Nexplanon: XXXX. of believe about rate a, are

demand. is us. in going for be demand to And strong physician our terms a long-term is overall January of so asset this

the answering. to about So we over hand feel Nexplanon. I'll for really last good question Matt

Yes.

growth is fielded we a we've They're the question for we've we've felt we've So we deals very got we necessarily aware times not integrate. place and of big X little few to The success environment, but leverage rate shareholder ticking deals up would doing. been good that we easier But They're obviously this had if would with a creation. in size. been bit a respect already And possibilities deals we've plentiful. the at smaller are deal place, challenging execution lot margin. was we're does a deals, -- interest to same on our rising say, done. larger from really in the well plans make But incrementally of shy always we as more I them, value the with compelling XXXX of which a opportunity outhunting as not away it think creatively organic that

or them, is open So of success like as as either for be aware an We're far going but said, But not a year. and XXXX priority. our necessarily we big to see necessary it's as deals exciting to something go, them. we're busy I

the the Q&A company's turn This to Kevin closing CEO, now to over Ali, concludes remarks. session. I like for call would the

of a earnings Well, questions. by -- I marks questions all today seventh as company. saying, for quarter our want do you look, thoughtful the close thank to stand-alone

XXXX, delivering we've exactly track record our of of quarter fourth set the achieve. what out continued we to With

is of Our a realized. sustainable vision growing being business

we with joining XXXX. our us for with especially have communicating in our our you we want of look believe medical of promise progress the to in and growing to and significant We today, confidence have portfolio in unmet pipeline needs, the today, address in forward assets potential women. to for I hands thank we the everyone. you Thanks,

XXXX all thank the Full your Quarter for participation. and you Fourth Earnings you Call. Conference for Thank joining We Year Organon

disconnect. now may You