Lower Sales Impact Organon's Q3 Margins; Acquires Forendo Pharma For Over $900M

Organon & Co OGN has reported Q3 sales of $1.6 billion, down 1% Y/Y, slightly higher than the consensus of $1.58 billion.
Women's Health declined 10% to $381 million, driven primarily by a decline in Nuvaring (etonogestrel/ethinyl estradiol vaginal ring), impacted by generic competition Nexplanon (etonogestrel implant), which declined 8%.
Biosimilars revenue grew 41% to $140 million, driven by continued demand growth in the US for Renflexis. The portfolio also benefited from the continued uptake of Ontruzant.
The adjusted gross margin declined to 64.9% from 68.6%, and the EBITDA margin contracted from 46.6% to 39.8%.
Adjusted EPS declined 30% to $1.67, beating the consensus of $1.44.
Related Link: Merck Completes Women's Health Organon Spinoff.
Guidance: Organon tightened its sales guidance to $6.2 billion - $6.3 billion, compared to prior guidance of $6.1 billion - $6.4 billion.
M&A: Organon also announced to acquire Forendo Pharma, a clinical-stage drug development company focused on novel treatments in women's health.
Deal consideration includes a $75 million upfront payment, development & regulatory milestone of $270 million, and commercial milestones payments of up to $600 million.
Price Action: OGN shares are trading lower by 4.30% at $35.06 on the last check Thursday.

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