Although Organon only began trading as a separate company on 3 June, investors have responded positively to its financial update for the three months to 30 June. After posting revenues for the second quarter of nearly $1.6bn, the company’s share price leapt by 13%.
Organon also announced a quarterly dividend of $0.28 for each share of common stock.
“Since well before Organon’s 2 June spin-off from Merck, thousands of employees have been hard at work,” said CEO Kevin Ali. “We are focused on driving our business, with all three of our franchises delivering on their objectives.”
Looking ahead, the company is confident that its revenues will increase “in the low to mid-single digit range” in 2021, with women’s health and biosimilars “positioned to deliver double digit growth”.
The company was spun off in June with 64 products from Merck in three divisions; women’s health, biosimilars and established brands.
In the three months to June, women’s health grew 19% compared to the same period in 2020, when it was a division of Merck and not a separate company. This rise was driven by a nearly 40% increase in sales for its etonogestrel implant, Nexplanon.
“We can’t talk about our women’s health portfolio without talking about Nexplanon, the number two contraceptive worldwide by revenue and a product we believe has blockbuster potential,” Ali told investors on a conference call. “It’s the only single-rod subdermal long-acting reversible contraceptive. It is a progesterone-only rod that is inserted in a women’s upper arm, average insertion time takes about a minute and it is conducted in a healthcare provider’s office.
Fertility product Follistim (follitropin beta injection) also grew 40%, more than offsetting a 19% decline in NuvaRing (etonogestrel/ethinyl estradiol vaginal ring) related to generic competition, said the company.
Its biosimilars business is also growing, with revenues rising by 43% in the second quarter of 2021, driven by US demand for monoclonal antibodies Renflexis (infliximab-abda), for autoimmune diseases, and uptake of Ontruzant (trastuzumab-dttb) in breast and stomach cancer.
Ali said the US market was growing due to “increases in physician and payer comfort” with biosimilars. “Oncology conversion… has been faster, for example, trastuzumab which is where Ontruzant plays has some of the highest adoption rates among biosimilars,” he said.
Finally, revenue for its established brands – a broad portfolio of well-known medicines generally beyond market exclusivity – were down by 4%, which the company blames on the loss of exclusivity of cholesterol drug Zetia (ezetimibe) in Japan.
Organon is still being impacted by the reduction in medical visits caused by the COVID-19 pandemic, and CFO Matt Walsh sees “more COVID-19 recovery to be realised in the businesses”. Given the uncertainty, he believes that the 2021 impact from COVID-19 is likely to be similar to 2020 and not the “slightly better” position the company had “previously thought”.