Organon Beats On Q1, Women's Health Leads the Charge

Organon & Co OGN reported a 5% Y/Y increase in the first quarter of 2024 revenue, reaching around $1.622 billion, beating the consensus of $1.563 billion.

Women’s Health revenue increased by 11% as reported and 12% ex-FX, driven by 34% ex-FX growth in Nexplanon led by favorable customer purchasing patterns associated with the timing of U.S. list-price adjustments, coupled with favorable price and discount rates in the U.S. and the favorable timing of tenders to markets outside of the U.S.

Biosimilar revenue surged by 46% reported and ex-FX, aided by Ontruzant, which benefited from incremental demand from a tender in Brazil and Renflexis, which gained from continued demand growth in the U.S and Canada.

Established Brands remained flat Y/Y on an as-reported basis and grew 2% Y/Y ex-FX as contribution from the recent licensing of Emgality and Rayvow along with a recovery in certain injectable steroid products following last year’s market action offset the impacts of Volume Based Procurement initiatives in China. 

For the first quarter, Organon reported an adjusted gross margin of 62.1% vs. 65.2% a year ago.

Adjusted EBITDA margin contracted to 33.2% from 33.7% in the prior year quarter due to cost containment initiatives targeting operating expenses.

The company reported adjusted EPS of $1.22, beating the consensus of $0.93.

As of March-end, cash and cash equivalents were $575 million, and debt was $8.7 billion.

Dividend: The Board of Directors declared a quarterly dividend per sharer of $0.28, payable on June 13 to stockholders of record as of May 13.

FY24 Guidance Reaffirmed: It forecasts revenue of $6.2 billion-$6.5 billion versus the consensus of $6.37 billion and adjusted EBITDA margin of 31.0%-33.0%.

Investors can gain exposure to the stock via SPDR S&P Pharmaceuticals ETF XPH and Invesco S&P SmallCap Health Care ETF PSCH.

Price Action: OGN shares are up 2.18% at $19.24 at the last check Thursday.

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