US-based Organon & Co. (NYSE: OGN), a firm with a strong focus on women’s health that split from Merck, Sharp & Dohme (MSD, NYSE: MRK) in mid-2021, released its Q3 2022 financial results. Total global revenues were down 4% year-on-year (YOY) in real terms to USD 1.537 billion, but up 3% if excluding the impact of currency exchange fluctuations (ex-FX).
Global Segment Performance
Globally, key performers included the Women’s Health segment, which reported a 19% increase in revenues and a 23% increase ex-FX over the three months. Nexplanon (etonogestrel implant) was highlighted as a significant growth driver. Fertility drugs also saw continued demand, with Follistim AQ (follitropin beta injection) increasing by 2% ex-FX and ganirelix acetate injection rising by 52% ex-FX. Biosimilars were down 4% ex-FX, while Established Brands decreased by 2% ex-FX.
China Market Performance
China remains a key market for Organon, driven by the over 1 million IVF cycles conducted annually, a volume five times that of the United States. China sales reached USD 241 million, down 4% YOY in actual terms but up 1% YOY ex-FX.
CEO Commentary and Future Outlook
Speaking during the earnings conference call, CEO Kevin Ali highlighted the reacquisition from Bayer AG of rights to oral contraceptive brands Marvelon and Mercilon in certain Asian territories, including China and Vietnam, a deal struck in February this year. Ali noted, “Since we have taken ownership of Marvelon, growth has outpaced the market and we increased market share of the product by two points in China.”
Organon has also benefited from the delay in the implementation of round seven of the national volume-based procurement (VBP) program, which included its cardiovascular drug Ezetrol. Ali noted during the conference call that the VBP program is set to have a significant impact on China sales, with “more than three-quarters of our business” expected to go through VBP by the end of 2023. Offsetting the impact of VBP is the fact that “almost 50% of our business is going through the retail channel, and more and more of that business is now starting to go through the e-commerce channel.” Ali acknowledged that “the protracted nature of lockdowns in China” has led to “slower than anticipated recovery, particularly in the fertility clinics and the overall retail market.” However, Organon still views China as set to return to a high single-digit growth trajectory either in 2023 or 2024: “We still feel very good about our business in China and in our ability to grow our business in China,” said Ali.-Fineline Info & Tech
