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Organon & Co. (OGN)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $1.592B, flat year over year, with non-GAAP adjusted diluted EPS of $0.90 (+2% YoY); adjusted EBITDA margin held at 28.1% .
  • Segment mix: Established Brands +2% YoY, Women’s Health flat, Biosimilars -18% YoY; product-level winners included Nexplanon ($258M, +12% YoY ex-FX) and Hadlima ($44M) .
  • FY 2025 guidance initiated: revenue $6.125B–$6.325B with 300 bps FX headwind ($200M), adjusted EBITDA margin 31–32% (ex-IPR&D floor 31%), SG&A mid-20% of sales, R&D upper single-digit; dividend declared $0.28 per share .
  • Narrative catalysts: VTAMA AD launch and ramp, >$200M OpEx savings in 2025, Nexplanon on track to eclipse $1B revenue; Atozet LOE is the key headwind but management targets another year of constant-currency growth .
  • Wall Street consensus from S&P Global was unavailable at time of retrieval due to SPGI rate limits; estimate comparisons omitted (Values retrieved from S&P Global).*

What Went Well and What Went Wrong

What Went Well

  • Nexplanon delivered its best year; Q4 Nexplanon sales were $258M and FY 2024 reached $963M, positioning for ≥$1B in 2025. CEO: “NEXPLANON’s best annual performance ever...achieve at least $1 billion of revenue in 2025.”
  • VTAMA AD approval expands the dermatology vertical; early uptake strong with 51% NRx growth vs pre-approval baseline; management touts label differentiation (mild–severe AD, age ≥2, once-daily topical, no boxed warning) .
  • Cost discipline: non-GAAP operating expenses ex-IPR&D down 2% YoY; plan to realize >$200M OpEx savings in 2025 and ~$275M annualized thereafter .

What Went Wrong

  • Biosimilars declined 18% YoY in Q4 on Brazil tender timing and U.S. pricing pressure for Renflexis; management expects mid-single-digit decline in Biosimilars in 2025 .
  • GAAP EPS fell sharply YoY due to lapping a Swiss tax arrangement benefit in Q4 2023 ($1.86/share); Q4 2024 GAAP diluted EPS was $0.42 vs $2.13 in Q4 2023 .
  • Atozet LOE in EU/Japan drives ~$200M 2025 headwind (volume and price); pricing headwinds broader in mature U.S. products (NuvaRing, Dulera, Renflexis) and mandatory revisions in Japan .

Financial Results

Headline Results (Q4 2024 vs prior periods)

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Billions)$1.598 $1.580 $1.592
Adjusted Diluted EPS ($)$0.88 $0.88 $0.90
Adjusted Gross Margin (%)60.3% 61.7% 60.6%
Adjusted EBITDA Margin (%)28.1% 29.0% 28.1%

Segment Revenue Breakdown (YoY)

Segment ($USD Millions)Q4 2023Q4 2024YoY Change
Women’s Health$465 $466 Flat
Biosimilars$199 $163 -18%
Established Brands$915 $935 +2%
Other$19 $28 +53%
Total Revenue$1,598 $1,592 Flat

Geographic Mix

Region ($USD Millions)Q4 2023Q4 2024
Europe & Canada$414 $420
United States$411 $416
Asia Pacific & Japan$261 $244
China$203 $213
LAMERA$279 $266
Other$30 $33
Total$1,598 $1,592

Selected Product KPIs (Q4)

Product ($USD Millions)Q4 2023Q4 2024
Nexplanon/Implanon NXT$231 $258
NuvaRing$39 $24
Hadlima$23 $44
Atozet$122 $76
Dulera$50 $52
Singulair$114 $84
Emgality/Rayvow— $38
VTAMA— $12

Profitability (Q4)

MetricQ4 2023Q4 2024
Gross Margin (GAAP)57.3% 56.3%
Adjusted Gross Margin60.3% 60.6%
Net Income ($USD Millions)$546 $109
Adjusted Net Income ($USD Millions)$226 $235
Adjusted EBITDA ($USD Millions)$449 $448
Adjusted EBITDA Margin28.1% 28.1%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025n/a$6.125B–$6.325B Initiated
FX Translation HeadwindFY 2025n/a~$200M (~300 bps) Initiated
Adjusted Gross MarginFY 2025n/a60.0%–61.0% Initiated
SG&AFY 2025n/aMid-20% of revenue Initiated
R&D (ex-IPR&D)FY 2025n/aUpper single-digit % of revenue Initiated
Adjusted EBITDA MarginFY 2025n/a31%–32% (ex-IPR&D floor 31%) Initiated
Interest ExpenseFY 2025n/a~$510M Initiated
DepreciationFY 2025n/a~$135M Initiated
Effective Non-GAAP Tax RateFY 2025n/a22.5%–24.5% (OECD Pillar 2 impact) Initiated
Diluted SharesFY 2025n/a~263M Initiated
DividendQ1 2025n/a$0.28 per share, payable Mar 13, 2025 Announced

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
Nexplanon growth & 5-year indicationLow-teens FY growth expected; submission prep; device patent through 2030 Record FY 2024, ≥$1B 2025; FDA submission made; strong U.S. and LAMERA demand Improving
VTAMA AD launchDeal closed Q4; AD PDUFA pending; $150M 2025 target AD approved; strong early NRx/TRx; $150M 2025 still targeted Improving
Biosimilars outlookHadlima sequential gains; denosumab/pertuzumab filings Q4 decline (-18%); Hadlima ramp; denosumab launch late 2025 pending FDA Mixed/pressured near-term
Japan pricing & Atozet LOEBack-half 2024 price headwinds; Atozet EU LOE in September 2025 LOE headwind ~$200M (vol+price); broader price pressure in U.S. mature brands Headwind
China demand & ART reimbursementMid-single-digit H2 2024 growth; ART rollout pacing China Q4 up to $213M; fertility performing better than market; rebound envisaged Stabilizing
Cost actions & margin trajectory2024 margin stability; manufacturing separation to add 250–300 bps starting 2027 ≥$200M OpEx savings in 2025, annualize ~$275M; margin phasing stronger in H2 2025 Improving
Leverage & capital allocationLeverage ~4.0x; tuck-in BD (Lilly migraine) Net leverage ~4.2x post Dermavant; dividend priority; free cash flow ≈$900M pre one-times Near-term elevated, declining by YE26

Management Commentary

  • CEO on resilience and guidance: “Our 2025 financial guidance reflects the potential for a fourth year of constant currency revenue growth despite the loss of exclusivity of our second largest product, Atozet...” .
  • CFO on 2025 cadence: “First quarter...lowest revenue quarter and...fourth quarter...highest...more than a $100 million swing...200 basis point delta in adjusted EBITDA margins between Q1 and Q4.” .
  • CEO on VTAMA differentiation: “Only nonsteroidal topical approved for mild, moderate and severe AD...age 2+...systemic-like efficacy...no black box warning...no duration or body surface area limitations.” .
  • CFO on manufacturing separation: “Margin expansion...on the order of 250 to 300 basis points starting in 2027, rolling in over a few years.” .
  • CEO on Nexplanon LOE risk: “I don't feel we'll see any generics to challenge NEXPLANON through 2030...applicator device patent protection through 2030...5-year indication exclusivity through 2029.” .

Q&A Highlights

  • Free cash flow: CFO expects ≈$900M free cash flow before one-time items in 2025; spin-related TSA costs effectively 0, but restructuring/manufacturing separation one-times $325–$375M .
  • Biosimilars denosumab: Launch anticipated late Q4 2025; minimal 2025 impact; confidence in buy-and-build commercialization approach .
  • Quarterly phasing: Revenue and margin back-half weighted as VTAMA ramps and cost savings are realized; ~$100M revenue delta Q1 vs Q4; ~200 bps margin delta .
  • OpEx savings: ~$200M 2025 savings; ~75% in OpEx (SG&A/R&D), ~25% in COGS; best operating expense efficiency since spin-off .
  • Nexplanon growth trajectory: High single-digit CAGR through decade with potential double-digit in some years; ≥$1B 2025; LOE risk seen as low through 2030 .

Estimates Context

  • S&P Global Wall Street consensus for Q4 2024 EPS, revenue and EBITDA was unavailable at time of retrieval due to SPGI daily request limit; estimate comparisons omitted (Values retrieved from S&P Global).*
  • Implications: Model updates likely to reflect FY2025 guidance—a ~3% reported revenue headwind from FX at midpoint, ~31–32% adjusted EBITDA margin, and phasing that strengthens in H2 as VTAMA ramps and cost actions annualize .

Key Takeaways for Investors

  • Mix stability: Despite Biosimilars’ Q4 decline, Established Brands growth and Nexplanon strength held total revenue flat with adjusted EPS up YoY; near-term headwinds are identifiable (Atozet LOE, Japan pricing) .
  • VTAMA ramp is a core 2025 catalyst: Expect back-half weighted revenue contribution; early NRx/TRx data is supportive; label differentiation should aid access and uptake .
  • Cost actions de-risk margins: ≥$200M OpEx savings in 2025 with ~$275M annualized thereafter; margin expansion from manufacturing separation begins 2027 (250–300 bps) .
  • Nexplanon durability: ≥$1B in 2025 with limited generic risk through 2030; potential upside from 5-year indication and BMI labeling .
  • Phasing matters for trading: Q1 likely softest; Q4 strongest—expect improving sequential P&L through the year; monitor VTAMA access wins and EU Atozet LOE effects .
  • Balance sheet: Net leverage ~4.2x post Dermavant; trajectory back toward ~4x by YE25/YE26 as VTAMA contributes and savings annualize; dividend ($0.28) maintained .
  • Watch-list: Denosumab FDA timing (late 2025), pertuzumab EU/LatAm in 2026, China ART reimbursement pace, Japan pricing, U.S. mature-brand pricing dynamics .

Notes and Sources:

  • Q4 2024 8-K and exhibits: revenue, segment/geography, margins, product sales, reconciliations, guidance, dividend .
  • Q4 2024 press release: mirrored financials, product and geography tables .
  • Earnings call transcripts: strategic themes, VTAMA/Nexplanon commentary, 2025 phasing, OpEx savings, margin expansion, leverage .
  • Prior quarters for trend: Q2/Q3 2024 transcripts .

Disclaimer: S&P Global consensus data was unavailable at the time of retrieval due to SPGI rate limits; estimate comparisons are therefore omitted (Values retrieved from S&P Global).*