Forendo Pharma Oy

Significant support from investors including the European Investment Fund Fund to invest in first and best-in-class European life science companies in drug development and digital health STRASSEN, Luxembourg, June 29, 2023 /PRNewswire/ -- Vesalius Biocapital, the specialist life sciences venture capital investor, announces the first close of its fourth fund, Vesalius Biocapital IV, securing over €95 million of commitments. The fund has attracted blue chip investors including the European Investment Fund (EIF). Starting immediately Vesalius Biocapital IV is to invest in first and best-in-class European life science companies in drug development and digital health. The goal is to build a well-balanced portfolio of 10-15 companies, providing capital and the Vesalius team's experience and expertise to support their development. Now in its sixteenth year, Vesalius Biocapital has a successful track record of backing highly innovative companies and has raised over €270 million from a renowned investor base for its three previous funds. It has completed over 30 investments with lead or co-lead positions and achieved numerous exits through trade sales and IPOs. These include: Forendo, acquired by Organon; Sword Health sold to a group of private equity investors; Apitope acquired by Chinese company Worg Pharma; and Ogeda acquired by Astellas Pharma. With a well-balanced portfolio between drug development and non-drug development investments, Vesalius has a successful track-record of strong and consistent financial performance and has generated significant returns for its investors. Commenting on the first close, Stéphane Verdood, Managing Partner at Vesalius Biocapital IV said: "Our successful track record placed us in a strong position to attract high quality investors such as the EIF (European Investment Fund) to Vesalius Biocapital IV. Furthermore, it is fantastic validation of our investment approach and strategy that a significant number of investors in our previous funds are backing us in Vesalius Biocapital IV. This is an exciting time in healthcare; the industry is at a key inflection point between science, technology and medicine, and our investors support our strategy to invest in companies developing innovative first in class products and technologies." Guy Geldhof, Managing Partner at Vesalius Biocapital IV, added: "While our investment focus remains in Europe where we continue to see many high-quality life science companies, we will continue to help our portfolio companies to expand to the US to enable them to achieve optimum valuations and to access the US capital markets. We will also be looking to invest in North American companies that are looking to Europe for development, expansion or access to innovation." Marjut Falkstedt, Chief Executive Officer at the European Investment Fund, commented: "The development of new therapies and digital health solutions are revolutionising the healthcare sector, but these innovations need targeted, dedicated investment. The EIF is glad to partner with Vesalius for its fourth fund, building on a strong track record in the sector, which also aims to channel investment towards underserved areas in the innovation landscape, particularly in southern Europe." Vesalius Biocapital IV is targeting €150M and will accept new investors on a "rolling closing" basis until the final closing in 2024. ABOUT VESALIUS BIOCAPITAL Vesalius Biocapital (Vesalius), the specialist life sciences venture capital investor, has supported companies active in human health through venture capital funds since 2007. In the sixteen years since inception, the three predecessor funds have raised over €270 million. The investment portfolio is well balanced between drug development and non-drug development investments and committed to providing capital to science-backed innovation and ambitious entrepreneurs, with a strong focus on exit within five years. Vesalius Biocapital IV, launched in June 2023, targets first and best-in-class European life science companies in drug development and digital health. The fund secured over €95 million of commitments in a first closing in June 2023, with a target size of minimum €150 million. The specialist team consists of seasoned life science professionals with healthcare industry, corporate finance and strategy development experience, supporting companies through their growth cycle. The team is based in Europe to explore investment opportunities and valuation potential for the portfolio. Managing Partners include Guy Geldhof, Dr Jean-Christophe Renondin and Stéphane Verdood. Partners include Dr Fabienne Roussel and Olivier Houben. The investment team is complemented by Dr David Cristina and Qasim Zawawi who joined as principals and Dr Hayley French and Dr Stephane Heymans who joined as venture partners. SOURCE Vesalius Biocapital

“We need women to step forward, wave their arms and say, ‘You know what? I want to further science,’” Organon’s R&D head Sandy Milligan, M.D., says. When it comes to getting women's health therapies to market, nothing is ever straightforward. From encouraging women to "step forward" for clinical trials to battling for R&D funding, it remains a tough arena—yet Organon is building a pipeline to mount a challenge. “Every woman has a story to tell,” Organon’s R&D head Sandy Milligan, M.D., told Fierce Biotech in an interview. “I just absolutely love the fact that we are lowering that sort of taboo culture of not being able to talk about it. We need more women to tell us about their experience, to come forth and raise their hands.” While interest in women’s health has risen in recent years, Organon is still one of the few companies with a pipeline nearly wholly built around healthcare innovations for women specifically. In 2020, only 1% of biopharma R&D investment was in female-specific conditions excluding oncology, according to a McKinsey report. For female-specific cancers, clinical-phase investments sat at 4%. Even with so little research in women's health, Milligan has found trial recruitment a challenge. Organon wants to change that, starting in-house. The Merck & Co. spin-out encourages its own workers to speak up, offering internal forums where all employees can talk about personal challenges related to women’s health. Milligan said this gives employees a face—potentially even one of a leader or executive—to match with the conditions or diseases the company is trying to treat.   Like most women, Organon wears many hats with its three core areas: women’s health, biosimilars and legacy products. In the last 20 months, the company has looked at over 400 potential pipeline candidates, snapping up eight. Most are preclinical, with the majority of the pipeline consisting of early-stage assets, including ObsEva’s ebopiprant for pre-term labor inflammation and uterine contractions, as well as Cirqle’s non-hormonal on-demand contraceptive. While contraception isn’t technically a female-specific condition, society has pushed the brunt of it upon the female body. Organon wants to balance out the burden by exploring contraceptive options for both females and males. With so many early-stage candidates, Organon has a lopsided pipeline and few nearer-term assets to push forward. Milligan said this somewhat mirrors broader trends, noting that there aren’t a lot of new women’s health treatments expected to come to market anytime soon in general. Over the years, many Big Pharmas have deemphasized their investment in women’s health, according to Milligan, which has contributed to the dearth of late-stage assets. Organon is instead looking to medtech devices to fill the pipeline gap. “If you're really focused just on women's health, you almost can't stay in just a pharmaceutical therapeutic option,” according to Milligan.  Everything that happens to women is basically treated like it’s a hormonal imbalance." — Sandy Milligan, M.D., Organon At the beginning of this year, Organon invested in Claria Medical’s device that aims to make hysterectomies a minimally invasive, laparoscopic procedure that would be safer and faster than the current standard. Back in 2021 before Organon’s launch, corporate parent Merck paid out $240 million to acquire Alydia Health and set up the spin-out's portfolio. The acquired assets include a system called Jada designed to stem blood loss during postpartum hemorrhage. On the biopharma side, Organon is particularly interested in understanding the root of disease instead of just controlling symptoms with hormones—the most common band-aid given for many women-specific conditions. “Everything that happens to women is basically treated like it’s a hormonal imbalance,” Milligan said, citing heavy menstrual periods or pain as a prime example. “The Holy Grail, frankly, would be investing in therapeutics that are not just specific to the target, but specific to that woman's expression of the target,” Milligan explained. “We're years away from that, but we need to start investing now or we'll never get there.” As head of R&D, her main focuses are conditions with a high unmet medical need, such as severe peri- or post-menopausal symptoms—which affects 10 million women, according to Milligan—and can include hot flashes, mood changes, anxiety and changes in sexual function. Endometriosis is another. The tissue growth disorder causes the uterine lining to grow outside of the uterus, such as on the ovaries, fallopian tubes or intestines. It can cause chronic pain and infertility and impacts about 1 in 10 females of reproductive age. There are few effective treatments available, with the main options being hormone therapy or surgery. One of Organon’s more advanced pipeline meds for the disorder is OG-6219, a midphase asset obtained from Forendo Pharma in a 2021 acquisition. The drug lowers estrogen production in endometriotic lesions and is currently being evaluated in a clinical study dubbed Elena. The global phase 2a/b trial is still recruiting women who have been surgically diagnosed with endometriosis and have moderate or severe pain. The estimated enrollment goal is 380 participants and completion is expected for the end of 2024.    While Milligan is optimistic the trial will hit its enrollment goals, she said recruitment has been challenging. For instance, fewer women have returned to the clinic since the pandemic began. The company is attracting participants via word-of-mouth and public campaigns. “We need women to step forward, wave their arms and say, ‘You know what? I want to further science,’” Milligan said. Another place Organon needed people to step forward was on staffing. Milligan was worried about attracting talent after the split from Merck. Milligan herself is no stranger to Big Pharma, having clocked in time at Amgen, Genentech and Merck (all after getting her M.D. and J.D.), She was worried that a smaller company focused on women’s health might deter people from joining. However, she’s been pleasantly surprised at how many people have been attracted to the company for its mission, with a current staff roster boasting 10,000 names.  While Milligan is excited about all Organon is working on, the reality of a women’s health-focused company can still be daunting. Engagement in the space has been rising recently, but Milligan said interest—and investment—is still extremely fragmented.   “We're just part of the ecosystem,” she said. “And one company can't do it by itself.” The R&D leader wants to see “the silos go down,” noting that more seamless interactions between pharmas, organizations and health agencies could help move innovation along faster. Organon is working to break those barriers down with more messaging, communication and outreach. Right now, the company is still “trying to find that unifying theme” for outreach, one that can pull people together and drive women’s healthcare forward. But as Organon has found in listening to women, the unifying theme might be right in front of us. 

Third quarter 2022 revenues of $1,537 million Third quarter diluted earnings per share from continuing operations of $0.89 and non-GAAP adjusted diluted earnings per share from continuing operations of $1.32 Both reported and non-GAAP adjusted diluted earnings per share include a negative impact of $0.04 for acquired in-process research and development (IPR&D) and milestones Adjusted EBITDA of $546 million, inclusive of $10 million of acquired IPR&D and milestones Board of Directors declares quarterly dividend of $0.28 per share Full year 2022 financial guidance ranges updated: Revenue range narrowed to $6.1 billion to $6.2 billion and reflects persisting foreign currency headwinds Adjusted EBITDA margin range narrowed and raised to 33.5% to 34.5% JERSEY CITY, N.J.--(BUSINESS WIRE)-- Organon (NYSE: OGN) (the “company”), today announced its results for the third quarter ended September 30, 2022. "We continue to build on our track record, demonstrating that Organon's existing portfolio can deliver sustainable growth," said Kevin Ali, Organon's CEO. "In addition, we are gaining traction with our newly-acquired assets. We recently made our first ex-U.S. shipment for the Jada® system, which is intended to provide control and treatment of abnormal postpartum uterine bleeding or hemorrhage. Further, last week we enrolled the first patient in the Phase 2 ELENA study to evaluate the safety and efficacy of OG-6219, the investigational candidate for endometriosis we acquired with Forendo Pharma last year. We are proud to have achieved this milestone as it is Organon's first molecular entity to enter this phase and signifies our dedication to developing novel alternative therapies for patients suffering from endometriosis." Third quarter 2022 revenues in $ millions Q3 2022 Q3 2021 VPY VPY ex-FX Women’s Health $ 454 $ 381 19 % 23 % Biosimilars 129 140 (7 )% (4 )% Established Brands 915 1,027 (11 )% (2 )% Other (1) 39 52 (26 )% (28 )% Revenues $ 1,537 $ 1,600 (4 )% 3 % (1) Other includes manufacturing sales to Merck & Co., Inc., Rahway, NJ, USA and other third parties, and allocated amounts from pre-spin revenue hedging activities. Total net revenues were $1,537 million for the third quarter of 2022, a decrease of 4% as-reported and an increase of 3% excluding the impact of foreign currency (ex-FX), compared with the third quarter of 2021. Women’s Health grew 19% as-reported, and 23% ex-FX in the third quarter of 2022 compared with the third quarter of 2021. During the third quarter of 2022, Nexplanon® (etonogestrel implant) grew 34% ex-FX, primarily driven by demand uptake in the United States as well as volume growth outside the United States, particularly in the company's LAMERA (Latin America, Middle East, Russia and Africa) region. Continued demand for the company's fertility offerings also contributed to growth in the quarter; Follistim AQ® (follitropin beta injection), increased 2% ex-FX in the third quarter of 2022, and ganirelix acetate injection increased 52% ex-FX. Biosimilars revenue declined 7% as-reported and 4% ex-FX in the third quarter 2022, compared with the third quarter of 2021 primarily driven by the timing of a tender for Ontruzant® (trastuzumab-dttb) in Brazil in 2021, as well as competitive pressures in Europe partially offset by the continued uptake of Ontruzant in the United States since its launch in July 2020. The company's four other biosimilars Renflexis® (infliximab-abda), Brenzys™ (etanercept), Hadlima™ (adalimumab-bwwd) and Aybintio™ (bevacizumab) all grew double digits in the quarter on a constant currency basis. Established Brands represents a broad portfolio of well-known medicines, predominantly marketed and sold outside of the United States, which are generally beyond market exclusivity. The portfolio includes leading brands in cardiovascular, respiratory, dermatology and non-opioid pain management, and generic competition varies by market. The portfolio's exposure to loss of exclusivity risk peaked in 2021 and no longer represents a significant impediment to stable long-term performance in the Established Brands franchise. Revenues for Established Brands decreased 11% as-reported and decreased 2% ex-FX in the third quarter of 2022, compared with the third quarter of 2021. During the third quarter of 2022, the two largest therapy areas in Established Brands, cardiovascular and respiratory, declined modestly on a constant currency basis. In the cardiovascular portfolio, Atozet grew 9% ex-FX in the third quarter of 2022, compared with the prior year period and in the respiratory portfolio, both Nasonex and Singulair grew approximately 5% ex-FX in the third quarter of 2022 compared with the prior year period. Year to date, revenue for the Established Brands franchise of $3.0 billion declined 1% as-reported and grew 6% on a constant currency basis. Given the strong year-to-date performance, the company expects the Established Brands franchise to deliver modest growth on a constant currency basis for the full year 2022, despite a forecasted impact in the fourth quarter of 2022 from the inclusion of certain of its products in Volume Based Procurement initiatives in China. Third quarter 2022 profitability in $ millions, except per share amounts Q3 2022 Q3 2021 VPY Revenues $ 1,537 $ 1,600 (4 )% Gross profit 986 991 (1 )% Non-GAAP Adjusted Gross Profit (1) 1,032 1,038 (1 )% Adjusted EBITDA (1,2) 546 611 (11 )% Net Income, continuing operations 227 323 (30 )% Non-GAAP adjusted net income, continuing operations (1) 337 401 (16 )% Diluted Earnings per Share (EPS), continuing operations 0.89 1.27 (30 )% Non-GAAP adjusted diluted EPS, continuing operations (1) 1.32 1.58 (16 )% Acquired IPR&D and milestones 10 25 N M Per share impact to diluted EPS from acquired IPR&D and milestones (0.04 ) (0.09 ) N M Q3 2022 Q3 2021 Gross margin 64.2 % 61.9 % Non-GAAP Adjusted Gross Margin (1) 67.1 % 64.9 % Adjusted EBITDA margin (1,2) 35.5 % 38.2 % (1) See Tables 4,5 and 6 for reconciliations of GAAP to non-GAAP financial measures (2) Adjusted EBITDA and Adjusted EBITDA margin include $10 million in the third quarter of 2022 related to acquired IPR&D and milestones Gross margin in the third quarter of 2022 was 64.2% as-reported, compared with 61.9% in the prior year period. Adjusted Gross Margin was 67.1% in the third quarter of 2022 compared with 64.9% on an adjusted basis in the third quarter of 2021. The year over year improvement in gross margin is primarily due to favorable product mix and a $24 million charge in 2021 that pertained to unavoidable losses associated with a long-term vendor supply contract conveyed as part of the company's spin-off from Merck & Co., Inc. Adjusted EBITDA margin was 35.5% in the third quarter of 2022 compared with 38.2% in the third quarter of 2021. Adjusted EBITDA margin in the third quarter of 2022 is inclusive of $10 million of acquired IPR&D and milestones, compared with $25 million of similar costs in the prior year period. Higher selling and promotional costs as well as R&D spend associated with the company's recent acquisitions of clinical stage assets contributed to the decline in Adjusted EBITDA margin year over year. Net income from continuing operations for the third quarter of 2022 was $227 million, or $0.89 per diluted share, compared with $323 million, or $1.27 per diluted share, in the third quarter of 2021. Non-GAAP Adjusted net income from continuing operations was $337 million, or $1.32 per diluted share, compared with $401 million, or $1.58 per diluted share, in 2021. Beginning in 2022, Organon no longer excludes expenses for upfront and milestone payments related to collaborations and licensing agreements, or charges related to pre-approval assets obtained in transactions accounted for as asset acquisitions from its non-GAAP results. The change to include all acquired IPR&D and milestone expenses negatively impacted Adjusted diluted EPS by $0.04 in the third quarter of 2022, compared with a negative $0.09 impact in the third quarter of 2021. In connection with this change, acquired IPR&D expenses are now reported as a separate income statement line item. These costs were previously recorded within the R&D expenses line. Capital allocation Today, Organon’s Board of Directors declared a quarterly dividend of $0.28 for each issued and outstanding share of the company's common stock. The dividend is payable on December 15, 2022 to stockholders of record at the close of business on November 14, 2022. As of September 30, 2022, cash and cash equivalents were $499 million, and debt was $8.7 billion. Full year guidance Organon does not provide GAAP financial measures on a forward-looking basis because the company cannot predict with reasonable certainty and without unreasonable effort, the ultimate outcome of legal proceedings, unusual gains and losses, the occurrence of matters creating GAAP tax impacts, and acquisition-related expenses. These items are uncertain, depend on various factors, and could be material to Organon’s results computed in accordance with GAAP. The company is updating its 2022 financial guidance ranges previously provided on August 4, 2022. Organon's financial guidance does not assume an estimate for future IPR&D (in-process research & development) and milestone payments for business development transactions not yet executed. Previous guidance FX impact Current guidance Revenues $6.1B - $6.3B from 550bps-650bps to ~650bps $6.1B-$6.2B Adjusted Gross margin Mid 60% Unchanged SG&A (as % of revenue) Mid 20% Unchanged R&D (as % of revenue) Upper single-digit Unchanged IPR&D and milestones ~($110)M Unchanged Adjusted EBITDA margin 32%-34% 33.5%-34.5% Interest ~$400 million ~$420 million Depreciation $100-$115 million ~$100 million Effective Non-GAAP tax rate 17.5%-19.5% Unchanged Fully diluted weighted avg. shares outstanding ~255 million Unchanged Webcast Information Organon will host a conference call at 8:30 a.m. Eastern Time today to discuss its third quarter 2022 financial results. To listen to the event and view the presentation slides via webcast, join from the Organon Investor Relations website at . A replay of the webcast will be available approximately two hours after the conclusion of the live event on the company’s website. Institutional investors and analysts interested in participating in the call must register in advance using conference ID# 58511 and by clicking on this link: . Following registration, participants will receive a confirmation email containing details on how to join the conference call, including dial-in information and a unique passcode and registrant ID. Pre-registration will allow participants to bypass an operator and be placed directly into the call. About Organon Organon is a global healthcare company formed to focus on improving the health of women throughout their lives. Organon has a portfolio of more than 60 medicines and products across a range of therapeutic areas. Led by the women’s health portfolio coupled with an expanding biosimilars business and stable franchise of established medicines, Organon’s products produce strong cash flows that will support investments in innovation and future growth opportunities in women’s health. In addition, Organon is pursuing opportunities to collaborate with biopharmaceutical innovators looking to commercialize their products by leveraging its scale and presence in fast growing international markets. Organon has a global footprint with significant scale and geographic reach, world-class commercial capabilities, and approximately 10,000 employees with headquarters located in Jersey City, New Jersey. For more information, visit and connect with us on LinkedIn and Instagram. Non-GAAP financial measures This press release contains “non-GAAP financial measures,” which are financial measures that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”). Specifically, the company makes use of the non-GAAP financial measures Adjusted EBITDA, Adjusted Net Income, Free Cash Flow, and Adjusted diluted EPS, which are not recognized terms under GAAP and are presented only as a supplement to the company’s GAAP financial statements. This press release also provides certain measures that exclude the impact of foreign exchange. We calculate foreign exchange by converting our current-period local currency financial results using the prior period average currency rates and comparing these adjusted amounts to our current-period results. The company believes that these non-GAAP financial measures help to enhance an understanding of the company’s financial performance. However, the presentation of these measures has limitations as an analytical tool and should not be considered in isolation, or as a substitute for the company’s results as reported under GAAP. Because not all companies use identical calculations, the presentations of these non-GAAP measures may not be comparable to other similarly titled measures of other companies. You should refer to the appendix of this press release for relevant definitions and reconciliations of non-GAAP financial measures contained herein to the most directly comparable GAAP measures. In addition, the company’s full-year 2022 guidance measures (other than revenue) are provided on a non-GAAP basis because the company is unable to reasonably predict certain items contained in the GAAP measures. Such items include, but are not limited to, acquisition related expenses, restructuring and related expenses, stock-based compensation and other items not reflective of the company's ongoing operations. The company uses non-GAAP financial measures in its operational and financial decision making, and believes that it is useful to exclude certain items in order to focus on what it regards to be a more meaningful representation of the underlying operating performance of the business. Forward-Looking Statement Except for historical information herein, this press release includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about management’s expectations about Organon’s future financial performance and prospects. Forward-looking statements may be identified by words such as “expects,” “intends,” “anticipates,” “plans,” “believes,” “seeks,” “estimates,” “will” or words of similar meaning. These statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements. Risks and uncertainties include, but are not limited to, an inability to execute on our business development strategy or realize the benefits of our planned acquisitions; general economic factors, including interest rate and currency exchange rate fluctuations; general industry conditions and competition; the impact of the ongoing COVID-19 pandemic and emergence of variant strains; the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances; new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the company’s ability to accurately predict its future financial results and performance; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; difficulties developing and sustaining relationships with commercial counterparties; dependence on the effectiveness of the company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions. The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s filings with the Securities and Exchange Commission ("SEC"), including the company’s Annual Report on Form 10-K for the year ended December 31, 2021 and subsequent SEC filings, available at the SEC’s Internet site ( ). TABLE 1 Organon & Co. Condensed Consolidated Statement of Income (Unaudited, $ in millions except shares in thousands and per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues $ 1,537 $ 1,600 $ 4,689 $ 4,701 Costs, Expenses and Other Cost of sales 551 609 1,700 1,783 Selling, general and administrative 440 388 1,234 1,186 Research and development 127 86 329 229 Acquired in-process research and development and milestones 10 25 107 25 Restructuring costs 11 1 11 3 Interest expense 108 98 303 160 Exchange losses (gains) 4 1 (21 ) 6 Other expense, net 4 3 15 16 1,255 1,211 3,678 3,408 Income From Continuing Operations Before Income Taxes 282 389 1,011 1,293 Taxes on Income 55 66 202 144 Net Income From Continuing Operations 227 323 809 1,149 Loss From Discontinued Operations - Net of Tax — — — — Net Income 227 323 809 1,149 Earnings per Share - Basic: Continuing operations $ 0.89 $ 1.27 $ 3.19 $ 4.53 Discontinued operations — — — — Net Earnings per Share - Basic $ 0.89 $ 1.27 $ 3.19 $ 4.53 Earnings per Share - Diluted: Continuing operations $ 0.89 $ 1.27 $ 3.17 $ 4.52 Discontinued operations — — — — Net Earnings per Share - Diluted $ 0.89 $ 1.27 $ 3.17 $ 4.52 Weighted Average Shares Outstanding: Basic 254,348 253,534 253,986 253,530 Diluted 255,067 254,172 255,094 254,011 TABLE 2 Organon & Co. Sales by top products Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 ($ in millions) U.S. Int’l Total U.S. Int’l Total U.S. Int’l Total U.S. Int’l Total Women’s Health Nexplanon/Implanon NXT $ 151 $ 78 $ 229 $ 120 $ 55 $ 175 $ 401 $ 194 $ 595 $ 389 $ 154 $ 543 Follistim AQ 27 33 60 29 32 61 79 100 179 81 97 178 NuvaRing 27 23 50 21 28 49 65 68 133 68 79 147 Ganirelix Acetate Injection 6 30 36 5 20 25 20 77 97 19 66 85 Cerazette — 15 15 — 18 18 — 47 47 — 53 53 Other Women's Health (1) 24 39 63 18 35 53 80 108 188 80 111 191 Biosimilars Renflexis 54 7 60 48 6 54 145 20 166 119 17 136 Ontruzant 15 14 29 9 47 56 35 52 87 20 81 101 Brenzys — 24 24 — 14 14 — 52 52 — 35 35 Aybintio — 10 10 — 10 10 — 29 29 — 26 26 Hadlima — 6 6 — 5 5 — 14 14 — 9 9 Established Brands Cardiovascular Zetia 2 85 87 1 90 91 7 280 287 6 276 282 Vytorin 1 30 31 3 38 41 6 98 104 8 119 127 Atozet — 109 109 — 114 114 — 350 350 — 347 347 Rosuzet — 17 17 — 15 15 — 55 55 — 48 48 Cozaar/Hyzaar 2 68 70 3 84 87 11 244 256 9 256 265 Other Cardiovascular (1) 1 34 35 1 48 49 3 117 120 3 145 148 Respiratory Singulair 3 92 94 2 98 100 8 308 316 10 289 300 Nasonex — 49 49 — 49 48 9 173 182 3 141 144 Dulera 31 9 40 48 8 56 98 30 127 121 25 146 Clarinex — 25 26 2 27 28 3 96 99 5 78 83 Other Respiratory (1) 11 10 21 14 5 18 34 32 66 43 20 64 Non-Opioid Pain, Bone and Dermatology Arcoxia — 64 64 — 65 65 — 185 185 — 184 184 Fosamax 1 35 36 1 45 46 2 115 117 3 130 132 Diprospan — 28 28 — 34 34 — 91 91 — 92 92 Other Non-Opioid Pain, Bone and Dermatology (1) 2 63 65 9 69 79 10 200 210 12 201 213 Other Proscar — 26 27 — 27 27 1 76 77 1 91 92 Propecia 2 28 30 1 33 34 5 90 95 5 96 101 Other (1) 6 81 87 10 83 95 21 230 251 32 230 262 Other (2) — 39 39 1 51 52 — 115 116 (2 ) 171 168 Revenues $ 366 $ 1,171 $ 1,537 $ 346 $ 1,254 $ 1,600 $ 1,043 $ 3,646 $ 4,689 $ 1,035 $ 3,666 $ 4,701 Totals may not foot due to rounding. Trademarks appearing above in italics are trademarks of, or are used under license by, the Organon group of companies. (1) Includes sales of products not listed separately. Revenue from an arrangement for the sale of generic etonogestrel/ethinyl estradiol vaginal ring is included in Other Women's Health. (2) Other includes manufacturing sales to Merck & Co., Inc., Rahway, NJ, USA and other third parties, and allocated amounts from pre-spin revenue hedging activities. TABLE 3 Organon & Co. Sales by geographic area (Unaudited, $ in millions) Three Months Ended September 30, Nine Months Ended September 30, ($ in millions) 2022 2021 2022 2021 Europe and Canada $ 363 $ 410 $ 1,243 $ 1,314 United States 366 346 1,043 1,035 Asia Pacific and Japan 283 287 888 874 China 241 252 721 693 Latin America, Middle East, Russia and Africa 236 238 665 595 Other (1) 48 67 129 190 Revenues $ 1,537 $ 1,600 $ 4,689 $ 4,701 (1) Other includes manufacturing sales to Merck & Co., Inc., Rahway, NJ, USA and other third parties, and allocated amounts from pre-spin revenue hedging activities. TABLE 4 Reconciliation of GAAP Gross Margin to Non-GAAP Adjusted Gross Profit and Adjusted Gross Margin ($ in millions) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues $ 1,537 $ 1,600 $ 4,689 $ 4,701 Cost of sales 551 609 1,700 1,783 Gross Profit 986 991 2,989 2,918 Gross Margin 64.2 % 61.9 % 63.7 % 62.1 % Amortization 32 27 88 69 One-time costs (1) 11 17 35 27 Stock-based compensation 3 3 9 8 Non-GAAP Adjusted Gross Profit (2) $ 1,032 $ 1,038 3,121 3,022 Non-GAAP Adjusted Gross Margin 67.1 % 64.9 % 66.6 % 64.3 % (1) One-time costs for the three months ended September 30, 2022 primarily include costs to stand up the company and inventory step-up adjustments. One-time costs for the nine months ended September 30, 2022 primarily include costs to stand up the company and inventory step-up adjustments as well as a $9 million impairment charge related to a licensed intangible asset. (2) Non-GAAP Adjusted Gross Profit is calculated by excluding amortization, one-time costs, and the portion of stock-based compensation expense allocated to Cost of sales. TABLE 5 Organon & Co. Reconciliation of GAAP Income from Continuing Operations Before Income Taxes to Adjusted EBITDA ($ in millions) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Income from continuing operations before income taxes $ 282 $ 389 $ 1,011 $ 1,293 Depreciation 25 25 72 64 Amortization (1) 32 27 88 69 Interest expense 108 98 303 160 EBITDA $ 447 $ 539 $ 1,474 $ 1,586 Restructuring costs 11 1 11 3 One-time costs (2) 70 56 168 171 Stock-based compensation (3) 18 15 52 44 Adjusted EBITDA $ 546 $ 611 $ 1,705 $ 1,804 Adjusted EBITDA margin 35.5 % 38.2 % 36.4 % 38.4 % (1) Amortization in all periods is included in Cost of sales. (2) One-time costs primarily include costs incurred in connection with the spin-off of Organon and inventory step up adjustments. For the three months ended September 30, 2022, approximately $50 million of the one-time costs are recorded in Selling, general and administrative expenses, $11 million are recorded in Cost of sales, $6 million are recorded in Other (income) expense, and $3 million are recorded in Research and development. For the three months ended September 30, 2021, approximately $35 million of the one-time costs are recorded in Selling, general and administrative expenses, and approximately $17 million are recorded in Cost of sales and $4 million are recorded in Research and development. (2) One-time costs primarily include costs incurred in connection with the spin-off of Organon, an impairment of a licensed intangible asset, and inventory step-up adjustments. For the nine months ended September 30, 2022, approximately $103 million of the one-time costs are recorded in Selling, general and administrative expenses, approximately $35 million are recorded in Cost of sales, $20 million are recorded in Other (income) expense, and $10 million are recorded in Research and development. For the nine months ended September 30, 2021, approximately $139 million of the one-time costs are recorded in Selling, general and administrative expenses, approximately $27 million are recorded in Cost of sales and $5 million are recorded in Research and development. (3) For the three months ended September 30, 2022, approximately $3 million of stock-based compensation is recorded in Cost of sales, $12 million is recorded in Selling, general and administrative and $3 million is recorded in Research and development. For the three months ended September 30, 2021, approximately $3 million of stock-based compensation is recorded in Cost of sales, $10 million is recorded in Selling, general and administrative and $2 million is recorded in Research and development. (3) For the nine months ended September 30, 2022, approximately $9 million of stock-based compensation is recorded in Cost of sales, $35 million is recorded in Selling, general and administrative and $8 million is recorded in Research and development. For the nine months ended September 30, 2021, approximately $8 million of stock-based compensation is recorded in Cost of sales, $26 million is recorded in Selling, general and administrative and $10 million is recorded in Research and development. TABLE 6 Organon & Co. Reconciliation of GAAP Income from Continuing Operations Before Income Taxes to Non-GAAP Adjusted Net Income ($ in millions, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Income from continuing operations before income taxes $ 282 $ 389 $ 1,011 $ 1,293 Adjustments: Amortization (1) 32 27 88 69 Restructuring costs 11 1 11 3 One-time costs (2) 70 56 168 171 Stock-based compensation (3) 18 15 52 44 Total Adjustments 131 99 319 287 Non-GAAP pre-tax income, continuing operations $ 413 $ 488 $ 1,330 $ 1,580 Taxes on income as reported in accordance with GAAP 55 66 202 144 Tax benefit on adjustments 21 21 55 56 Tax (deduction) benefit on GAAP-only discrete items (4) — — (3 ) 91 Non-GAAP adjusted taxes on income 76 87 254 291 Non-GAAP adjusted net income, continuing operations $ 337 $ 401 $ 1,076 $ 1,289 Non-GAAP adjusted net income, continuing operations per diluted share $ 1.32 $ 1.58 $ 4.22 $ 5.07 (1) Amortization in all periods is included in Cost of sales. (2) One-time costs primarily include costs incurred in connection with the spin-off of Organon and inventory step up adjustments. For the three months ended September 30, 2022, approximately $50 million of the one-time costs are recorded in Selling, general and administrative expenses, $11 million are recorded in Cost of sales, $6 million are recorded in Other (income) expense, and $3 million are recorded in Research and development. For the three months ended September 30, 2021, approximately $35 million of the one-time costs are recorded in Selling, general and administrative expenses, and approximately $17 million are recorded in Cost of sales and $4 million are recorded in Research and development. (2) One-time costs primarily include costs incurred in connection with the spin-off of Organon, an impairment of a licensed intangible asset, and inventory step-up adjustments. For the nine months ended September 30, 2022, approximately $103 million of the one-time costs are recorded in Selling, general and administrative expenses, approximately $35 million are recorded in Cost of sales, $20 million are recorded in Other (income) expense, and $10 million are recorded in Research and development. For the nine months ended September 30, 2021, approximately $139 million of the one-time costs are recorded in Selling, general and administrative expenses, approximately $27 million are recorded in Cost of sales and $5 million are recorded in Research and development. (3) For the three months ended September 30, 2022, approximately $3 million of stock-based compensation is recorded in Cost of sales, $12 million is recorded in Selling, general and administrative and $3 million is recorded in Research and development. For the three months ended September 30, 2021, approximately $3 million of stock-based compensation is recorded in Cost of sales, $10 million is recorded in Selling, general and administrative and $2 million is recorded in Research and development. (3) For the nine months ended September 30, 2022, approximately $9 million of stock-based compensation is recorded in Cost of sales, $35 million is recorded in Selling, general and administrative and $8 million is recorded in Research and development. For the nine months ended September 30, 2021, approximately $8 million of stock-based compensation is recorded in Cost of sales, $26 million is recorded in Selling, general and administrative and $10 million is recorded in Research and development. (4) For the nine months ended September 30, 2021, the company recorded a tax benefit of approximately $70 million related to a portion of non-U.S. step-up in tax basis as a result of its separation from Merck & Co., Inc., Rahway, NJ, USA.