Executive Summary

Q1 2025 was in line with internal phasing: revenue $1.513B (-7% YoY; -5% QoQ) as Atozet LOE and biosimilar pricing weighed; adjusted EPS $1.02 beat S&P Global consensus $0.89; revenue was roughly in line with $1.508B. Full-year revenue and margin guidance affirmed; dividend reset to $0.02/quarter to accelerate deleveraging to sub-4.0x by YE25 . Consensus values marked with asterisks are from S&P Global.*
Mix positive: Women’s Health +10% YoY (Nexplanon +13% total; +14% ex-FX), VTAMA ramp ($24M) on track for $150M FY25; offset by Biosimilars (-17% YoY) and Established Brands (-11% YoY) given Atozet LOE and pricing .
Profitability: Adj. EBITDA $484M (32.0%) vs $538M (33.2%) LY and $448M (28.1%) in Q4; margin strength aided by lower OpEx timing; company still expects 31–32% for FY25 .
Stock narrative/catalysts: Dividend reset and deleveraging priority, FX headwind potentially easing, VTAMA access ramp, limited 2025 tariff exposure, and clarity on Atozet LOE phasing (headwind to abate by Q4) are key drivers from here .

What Went Well and What Went Wrong

What Went Well
- Nexplanon strength; on track to >$1B FY25, double-digit growth in U.S. and ex-U.S.; submission to FDA for 5-year indication targeting late 2025 launch pending approval .
- VTAMA ramp on track for $150M FY25; weekly NRx/TRx outpacing branded competitors; access progress cited by management .
- Adj. EBITDA margin outperformed internal expectations in Q1 (32.0%), helped by mix and timing of clinical spend; affirmed FY25 margin guide and >$900M FCF before one-time costs target .
What Went Wrong
- Biosimilars declined 17% YoY (Ontruzant normalization in Brazil, Renflexis U.S. pricing pressure, tender timing for Brenzys) .
- Established Brands -11% YoY on Atozet LOE in Europe and weaker Singulair (China/Japan); pricing pressure persisted in Japan and China respiratory .
- Gross margin contracted YoY (Adj. 61.7% vs 62.1%) on unfavorable price; reported GM declined on higher amortization from acquired intangibles .

Financial Results

Overall P&L (oldest → newest)

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($B)	$1.582	$1.592	$1.513
GAAP Diluted EPS ($)	$1.38	$0.42	$0.33
Non-GAAP Adjusted Diluted EPS ($)	$0.87	$0.90	$1.02
Adjusted EBITDA ($M)	$459	$448	$484
Adjusted EBITDA Margin (%)	29.0%	28.1%	32.0%
GAAP Gross Margin (%)	58.3%	56.3%	55.6%
Adjusted Gross Margin (%)	61.7%	60.6%	61.7%

Segment revenue (oldest → newest)

Segment ($M)	Q1 2024	Q4 2024	Q1 2025
Women’s Health	$422	$466	$463
Biosimilars	$170	$163	$141
Established Brands	$1,001	$935	$887
Other	$29	$28	$22
Total Revenue	$1,622	$1,592	$1,513

Selected product KPIs (Totals; oldest → newest)

Product ($M)	Q1 2024	Q4 2024	Q1 2025
Nexplanon/Implanon NXT	$220	$258	$248
VTAMA	—	$12	$24
Hadlima	$30	$44	$47
Renflexis	$69	$65	$57
Ontruzant	$39	$34	$18
Atozet	$132	$76	$77
Singulair	$98	$84	$74
Emgality/Rayvow	$10	$38	$32
Jada	$13	$18	$15

Notes:

FX headwind to Q1 revenue ~280 bps; company noted potential tailwind if current FX persists .
Dividend reset to $0.02/quarter ($0.08 annual) vs prior $0.28/quarter to free ~+$200M cash in 2025 for debt reduction .

Guidance Changes

Metric	Period	Previous Guidance (Feb 13, 2025)	Current Guidance (May 1, 2025)	Change
Revenue	FY 2025	$6.125B–$6.325B	Unchanged	Maintained
FX translation	FY 2025	~$(200)M headwind	Unchanged; note potential upside at current rates	Maintained
Adjusted Gross Margin	FY 2025	60.0%–61.0%	Unchanged	Maintained
SG&A	FY 2025	Mid-20% range	Unchanged	Maintained
R&D (ex IPR&D)	FY 2025	Upper single-digit % of sales	Unchanged	Maintained
IPR&D	FY 2025	—	$6M (recorded through Mar 31)	Set
Adjusted EBITDA Margin	FY 2025	31.0%–32.0%	Unchanged	Maintained
Interest Expense	FY 2025	~$510M	Unchanged	Maintained
Depreciation	FY 2025	~$135M	Unchanged	Maintained
Effective non-GAAP Tax Rate	FY 2025	22.5%–24.5%	Unchanged	Maintained
FD Weighted Avg Shares	FY 2025	~263M	Unchanged	Maintained
Dividend	Ongoing	$0.28/quarter (declared 2/13/25)	$0.02/quarter (announced 5/1/25)	Lowered

Earnings Call Themes & Trends

Topic	Q3 2024 (Prev-2)	Q4 2024 (Prev-1)	Q1 2025 (Current)	Trend
Product performance (Nexplanon)	Positioned to deliver ~$1B in 2025; +11% ex-FX in Q3	FY24 Women’s Health +4% (Nexplanon +17% ex-FX to $963M)	Double-digit growth; on track to >$1B FY25	Improving visibility, sustained demand
VTAMA execution	Deal closed late Oct; early contribution in Q4 [$12M]	VTAMA integrated; FY25 ramp implicit in guidance	Launch “on track” to $150M; access momentum, NRx/TRx outpacing peers	Strong ramp
Biosimilars	Growth driven by Hadlima; tender timing hit Ontruzant	Q4 -18% YoY; Hadlima offset; Renflexis mature	-17% YoY on Ontruzant normalization, Renflexis pricing; Hadlima growth	Near-term pressure; selective offsets
LOE/price headwinds	Atozet LOE noted	Atozet LOE Europe/Japan; Established Brands flat FY ex-FX	Atozet LOE ~$200M FY headwind; abates by Q4	Transitory through Q3
FX/macro	–	FY25 FX headwind ~$200M	Q1 ~280 bps headwind; potential FY upside if FX persists	Moderating if USD weakens
Tariffs/supply chain	–	–	Limited 2025 tariff exposure; U.S. supply largely from EU/Korea; inventory actions; TOFIDENCE China supply covered 2025	Managed risk
R&D/Regulatory	–	ERP completed; OpEx discipline	Nexplanon 5-year submission; denosumab U.S. late 2025; EMA validates HLX11 (pertuzumab) MAA	Pipeline catalysts forming

Management Commentary

“We have reset our capital allocation priorities to accelerate progress towards deleveraging…enabling a path to achieve a net leverage ratio of below 4.0x by year-end… With key growth drivers, Nexplanon and VTAMA, on track… we are affirming our full year revenue and Adjusted EBITDA margin guidance, as well as our target of generating over $900 million of free cash flow before one-time costs.” – CEO Kevin Ali .
“Our first quarter adjusted EBITDA margin of 32% was about 150 basis points better than we expected… driven by timing of clinical study spend and favorable product mix… FX was ~280 bps headwind… recent USD weakening could move us to the high end of guidance if it persists.” – CFO Matt Walsh .
“We are confident VTAMA will achieve $150 million in 2025… access is improving… NRx/TRx momentum versus branded peers… ex-U.S. launches to follow.” – CEO Kevin Ali .
“Dividend reset allows redeployment of almost $200 million in 2025 to debt reduction.” – CEO Kevin Ali ; dividend terms disclosed in 8‑K .

Q&A Highlights

VTAMA ramp and access: Management reiterated confidence in $150M FY25 target, citing favorable label (QD dosing, age ≥2 years, efficacy on itch), improving coverage and prescriber feedback; international expansion planned .
Capital allocation: Priority shifted to deleveraging; share buybacks lower priority while leverage >4x; BD to remain opportunistic and milestone-weighted as balance sheet improves .
Tariffs: Minimal 2025 exposure given EU/Korea supply and inventory; TOFIDENCE manufactured in China covered through 2025; denosumab launch late 2025 .
Nexplanon IP/Paragraph IV: Legal process likely extends to mid-2027; applicator patent seen as strong through 2030; high regulatory bar for generics; 5-year indication expected late 2025 pending FDA .
One-time costs/FCF: 2025 onetime costs ~$325–$375M (manufacturing separation ~ $150M; restructuring ~ $200M; other ~$75M); targeting >$900M FCF before one-time costs; 2025 commercial milestones ~$200M (VTAMA, Emgality, Henlius biosimilars) .

Estimates Context

Consensus vs. actual (S&P Global)

Metric	Q1 2025 Consensus	Q1 2025 Actual
Revenue ($B)	$1.508*	$1.513
Primary EPS (Non-GAAP) ($)	$0.89*	$1.02

EPS beat on better mix and OpEx timing; revenue essentially in line. Management maintained FY ranges; if FX tailwind persists, revenue could skew to high end .
Consensus counts: Revenue (4 ests), EPS (5 ests).
Values marked with an asterisk (*) are retrieved from S&P Global.

Key Takeaways for Investors

EPS beat, revenue in line, guidance affirmed: Expect modest sequential improvement into Q2 and strongest Q4 as VTAMA builds and Atozet LOE headwinds fade; FX could provide upside to the top-line range if trends hold .
Deleveraging is now the central narrative: Dividend cut redirects ~$200M toward debt paydown; clear path to sub-4x net leverage by YE25—supportive for multiple and future BD capacity .
Women’s Health durable: Nexplanon tracking to >$1B with potential 5-year label; fertility recovering; Jada adoption broadening—offsets declining NuvaRing .
VTAMA is the near-term growth catalyst: $24M in Q1; access and utilization trends positive; incremental U.S./ex-U.S. launches provide runway .
Biosimilars mixed: Hadlima growth helps, but Renflexis/Ontruzant in mature decline; upcoming denosumab (late 2025 U.S.) and EMA-validated HLX11 (pertuzumab) can refresh the portfolio .
Margin watch: FY25 adj. EBITDA 31–32% targets embed pricing pressure and higher distribution costs; restructuring savings ($200M in 2025, ~$275M annualized in 2026) are key to expansion beyond 2025 .
Risk monitor: China/Japan respiratory pricing pressure, FX volatility, tender timing, and Nexplanon IP timeline; tariff exposure limited in 2025, but policy fluid beyond .

Additional context and data points

Q1 revenue bridge: LOE (~~$60M), price (~~$40M; ~2.5%), volume (+$45M; ~2.5%), FX (-$45M; ~280 bps); lower-margin supply “other” down as expected .
Cash/Leverage: Cash $547M; debt $8.96B; net leverage ~4.3x at 3/31/2025; FCF before one-time costs $146M in Q1, seasonally light but better YoY .
Dividend details: $0.02/quarter payable 6/12/25 to holders of record 5/12/25; prior rate $0.28/quarter .

References: All figures and statements are sourced from Organon’s Q1 2025 8‑K/press release, Q1 2025 earnings call transcript, Q4/Q3 2024 press releases, and Organon press releases during Q1 2025 as cited above.

Organon & Co. (OGN)·Q1 2025 Earnings Summary