Why Is Women Health-Focused Organon Stock Trading Higher On Thursday?

Thursday, Organon & Co OGN reported an 8% Y/Y increase in the fourth quarter of 2023, reaching around $1.6 billion, beating the consensus of $1.55 billion.

Women’s Health revenue increased by 7% as reported and 8% ex-FX, driven by strong growth in fertility products, particularly Follistim AQ. 

Follistim grew 63% ex-FX due to increased demand in the U.S. that was largely tied to onboarding a new customer, and volume recovery in China tied to fertility patients returning to clinics following abating COVID-19 concerns.

Women’s Health franchise also benefited from the strong performance of oral contraceptives. However, challenges included a decline in Nexplanon and NuvaRing due to competitive pressures. 

Biosimilar revenue surged by 49% as reported and 48% ex-FX, with significant contributions from Ontruzant and Renflexis. Established Brands saw a 3% increase in revenue despite the challenging operating environment in China.

For the fourth quarter of 2023, Organon reported a gross margin of 60.3% on an adjusted basis. 

Adjusted EBITDA margin improved to 28.1%, reflecting lower operating expenses and foreign exchange losses. 

The company reported adjusted EPS of $0.88, beating the consensus of $0.83.

Guidance: For the fiscal year 2024, Organon expects constant currency revenue growth in the low-single-digit range. It forecasts revenue of $6.2 billion-$6.5 billion versus the consensus of $6.40 billion.

Organon expects a stable to improving Adjusted EBITDA margin with a guidance range of 31.0%-33.0%.

Price Action: OGN shares are up 13.70% at $18.61 on the last check Thursday.

Image by Gabriela Sanda from Pixabay