Financial Data and Key Metrics Changes - Revenue for the second quarter was $1.6 billion, down 1% at constant currency, primarily due to the loss of exclusivity of Adazet in the EU [6][21] - Adjusted EBITDA for the quarter was $522 million, representing a 32.7% margin, with year-to-date adjusted EBITDA at $1 billion or a 32.4% margin [6][7] - The company is raising its revenue guidance range by $100 million at the midpoint due to favorable operational performance [6][34] Business Line Data and Key Metrics Changes - Women's health franchise grew 2% at constant currency, with the fertility business growing 15% driven by increased demand [9][10] - Sales of Nexplanon declined 1% at constant currency in the second quarter, with a 5% decline in the U.S. but a 10% growth outside the U.S. [11][12] - Biosimilars, particularly HEDLEMA, performed better than expected, generating nearly $100 million, up 68% year-over-year [14][15] Market Data and Key Metrics Changes - The U.S. market for Nexplanon is facing funding constraints from federal and state programs, impacting purchasing decisions [12][51] - Pricing pressure was noted primarily from the loss of exclusivity of Adazet and certain mature products in the U.S. [22] - Volume increased by $90 million in the quarter, representing a growth of about 5.6% [23] Company Strategy and Development Direction - The company is focused on reducing its debt burden, having repaid approximately $350 million of principal on long-term debt instruments [8][9] - A strong emphasis on EBITDA generation is aimed at delivering over $900 million of free cash flow before one-time costs in 2025 [7][8] - The company is committed to building Nexplanon into a billion-dollar franchise, reflecting confidence in its long-term growth potential [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue growth despite challenges from the loss of exclusivity of Adazet [19][40] - The company anticipates continued global growth for Nexplanon, with a five-year indication submission to the FDA expected to enhance market potential [13][54] - Management highlighted the importance of VITAMMA as a growth catalyst and expects significant progress in access objectives [20][19] Other Important Information - The adjusted gross margin for the second quarter was 61.7%, slightly down from 62% in 2024, primarily due to pricing pressures [25] - The company expects total operating expenses to be generally flat with the prior year, aiming for $200 million of operational savings in 2025 [26][30] - The company is on track to achieve a net leverage ratio below four times by year-end 2025 [9][41] Q&A Session Summary Question: Can you talk about incremental sales and marketing investment for VITAMMA? - Management confirmed the start of new telehealth and DTC campaigns and an increase in sales force to support VITAMMA [44][45] Question: Can you elaborate on the federal funding headwinds for Nexplanon? - Management indicated that the decline in U.S. Nexplanon sales was due to a combination of purchase timing and underlying market pressures, but expressed confidence in growth moving forward [50][54] Question: What impact might tariffs have on margins in 2026? - Management stated it is too early to speculate on tariff impacts for 2026, but noted that the EU is the largest import exposure for the company [58] Question: How should we think about free cash flow conversion and one-time items? - Management expects free cash flow to grow in line with the business, with a continued reduction in one-time costs [61] Question: What is the status of the 6219 endometriosis program? - Management confirmed the discontinuation of the program due to lack of efficacy signals [86] Question: Will the FDA update the real-time release study for Nexplanon? - Management is working closely with the FDA for appropriate labeling for the five-year indication but did not comment on specific FDA decisions [87]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $1.6 billion, down 1% at constant currency, primarily due to the loss of exclusivity of Adazet in the EU [5][20] - Adjusted EBITDA for the quarter was $522 million, representing a 32.7% margin, with year-to-date adjusted EBITDA at $1 billion or 32.4% margin [5][6] - The company is raising its revenue guidance by $100 million at the midpoint for the full year based on year-to-date performance and foreign currency movements [5][33] Business Line Data and Key Metrics Changes - Women's health franchise grew 2% at constant currency, with the fertility business growing 15% in Q2 2025 [7][8] - Sales of Nexplanon declined 1% at constant currency in Q2, with a 5% decline in the U.S. but a 10% growth outside the U.S. [10][11] - Biosimilars, particularly HEDLEMA, performed better than expected, generating nearly $100 million, up 68% year-over-year [12][13] Market Data and Key Metrics Changes - The U.S. market for Nexplanon is facing funding constraints from federal and state programs, impacting purchasing decisions [10][11] - Pricing pressure was noted primarily from the loss of exclusivity of Adazet and certain mature products in the U.S. [21][22] - Volume increased by $90 million in Q2, representing a growth of about 5.6%, driven by fertility, HEDLEMA, Emgality, and VITAMMA [22] Company Strategy and Development Direction - The company is focused on reducing its debt burden, having repaid approximately $350 million of long-term debt in Q2 [6][31] - Aiming for a net leverage ratio below four times by year-end and further improvements to 3.5 times or below by 2026 [6][31] - The company is committed to building Nexplanon into a billion-dollar franchise and expanding its market presence [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving free cash flow of over $900 million before one-time costs in 2025 [6][41] - The company is optimistic about the growth potential of VITAMMA and expects to achieve significant access improvements by early 2026 [15][18] - Management acknowledged challenges in the U.S. market due to federal funding issues but remains confident in Nexplanon's long-term growth potential [11][53] Other Important Information - The company expects to see a modest decline in adjusted gross margin in the second half of the year but aims to land closer to the high end of the 60% to 61% range [36][39] - One-time costs related to restructuring are expected to decline, improving free cash flow conversion in the coming years [60][61] Q&A Session Summary Question: Can you talk about incremental sales and marketing investment for VITAMMA? - The company has started new telehealth and DTC campaigns and added more sales representatives, totaling over 125 in the field [44][45] Question: Can you elaborate on the federal funding headwinds for Nexplanon? - The decline in U.S. Nexplanon sales is attributed to both purchase timing and underlying pressures, with confidence in growth despite market confusion [48][52] Question: What is the expected impact of tariffs on margins in 2026? - It is too early to speculate on tariff impacts for 2026, but the EU is the largest import exposure for the company [56][57] Question: How should we think about free cash flow conversion and one-time items? - Free cash flow should grow in line with the business, with a continued reduction in one-time costs expected [60][61] Question: What is the status of the 6219 endometriosis program? - The company has decided to discontinue the program due to lack of efficacy signals [80][82] Question: Will the FDA update the guidance for generics regarding Nexplanon? - The company is working closely with the FDA for the new labeling for the five-year indication, but the FDA will make its own assessment [82][86]

Financial Data and Key Metrics Changes - In 2024, Organon reported full year revenue of $6.4 billion, representing a 3% growth at constant currency, marking consecutive years of constant currency revenue growth across all three franchises [27][28] - The company generated $967 million in free cash flow before one-time costs, aligning with expectations, and improved adjusted EBITDA margin year over year excluding IPR&D [28] Business Line Data and Key Metrics Changes - The women's health franchise grew by 5% year over year at constant currency, driven by strong double-digit performance of Nexplanon, which is on track to exceed $1 billion in 2025 [29] - The biosimilars franchise delivered 12% growth at constant currency, with HEDLEMA being a leading biosimilar by total prescriptions in the US [30] - Established brands grew by 2% year over year at constant currency, marking consecutive years of growth for this franchise [30] Market Data and Key Metrics Changes - The company is navigating the loss of exclusivity for one of its largest products, Adazed, in Europe, which is expected to impact revenue in 2025 [35] - The revenue growth profile is anticipated to be in the low to mid single-digit range on a constant currency basis over the medium term [35] Company Strategy and Development Direction - Organon is focused on delivering long-term shareholder value through a diversified global portfolio and has prioritized capital allocation to reduce debt faster [32] - The company aims to enhance its revenue growth profile through strategic acquisitions and investments in innovation, particularly in women's health [32][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and its ability to weather a volatile macroeconomic environment, emphasizing the importance of deleveraging and improving margins [36][38] - The commitment to women's health remains strong, with ongoing investments in areas of high unmet need, such as endometriosis and migraine treatments [39][40] Other Important Information - The board of directors recommended against a shareholder proposal for a director election resignation guideline, citing existing governance practices [17][22] - The preliminary vote report indicated that 20.9% of total votes cast supported the shareholder proposal, which did not achieve the majority required for approval [22] Q&A Session Summary Question: When can we expect Organon to return to growth? - Management indicated that growth is expected to resume post-2025 as the company navigates the loss of exclusivity for Adazed and anticipates continued uptake in VITAMMA and growth in the biosimilars business [35] Question: What drove the company's recent decision to reduce its dividend payout? - The decision was part of a reset in capital allocation priorities aimed at accelerating deleveraging to strengthen the company's financial position [36] Question: Can Organon improve its margins? Are there opportunities to reduce organizational costs? - Management confirmed a focus on optimizing the cost structure, targeting $200 million in cost savings for 2025, which is expected to annualize to approximately $275 million in 2026 and beyond [37][38] Question: How committed is Organon to its vision of being a leader in women's health? - The company remains committed to improving women's health, emphasizing its unique focus in this area and ongoing investments in relevant therapeutic areas [39][40] Question: How does current executive compensation align with financial results? - Executive compensation is closely tied to performance, with a significant portion being variable and based on measurable outcomes, ensuring alignment with shareholder interests [42][44]

Financial Data and Key Metrics Changes - The first quarter results showed a 4% constant currency revenue decline year-over-year, primarily due to the loss of exclusivity of Atozed in Europe [20] - Adjusted gross margin was 61.7%, down from 62.1% in the same quarter last year, reflecting unfavorable pricing impacts [25] - Adjusted EBITDA margin for the first quarter was 32%, about 150 basis points better than expected [26] - Free cash flow before one-time costs was $146 million, an improvement from the prior year [27] Business Line Data and Key Metrics Changes - The women's health franchise grew 12% excluding exchange, driven by Nexplanon, which was up 14% [10] - Fertility products experienced nearly 26% global growth, with U.S. sales increasing by 70% [12] - Jada grew 20% in the quarter, with significant adoption among major birthing hospitals [13] - Biosimilars showed mixed results, with HEDLEMA growing 57% while Ontrazont and REMFLEXIS continued to decline [14] Market Data and Key Metrics Changes - Approximately 75% of revenue is generated outside the U.S., with Europe and Canada contributing about 25% and China about 13% [7] - The U.S. market is primarily supplied by European manufacturing, with limited exposure to tariffs in 2025 [6][9] Company Strategy and Development Direction - The company is focusing on deleveraging, aiming for a net leverage ratio below four by year-end 2025 [5][30] - A strategic shift has been made to redirect dividend funds towards debt reduction, allowing for nearly $200 million in potential savings [5] - The company plans to pursue business development opportunities while maintaining lower leverage [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue targets for VITAMA, citing strong market signals and positive feedback from healthcare providers [43] - The macroeconomic environment remains uncertain, but the company has limited exposure to current tariff policies [6][66] - Future growth is expected to be driven by the successful launch of new products and ongoing operational efficiency improvements [39] Other Important Information - The company anticipates $200 million in annual savings from restructuring initiatives [5] - Onetime costs related to the spin-off are expected to be zero in 2025, with a focus on improving operating expense efficiency [27][28] Q&A Session Summary Question: Confidence in VITAMA sales target and access issues - Management is confident in reaching the $150 million sales target for VITAMA due to strong market uptake and effective managed care strategies [43] Question: Priorities regarding deleveraging and business development - The focus is currently on deleveraging, with future opportunities for business development as leverage decreases [46] Question: Future business development deal frequency and size - The company has a broad definition of women's health and is open to various deal sizes, focusing on those that align with strategic goals [53] Question: Capital allocation and share buyback considerations - Share buybacks are currently a lower priority compared to managing leverage and growth opportunities [68] Question: Impact of tariffs on future operations - The company has minimal exposure to tariffs in 2025 and is well-positioned to navigate potential future changes [66][76] Question: Nexplanon generic competition and FDA issues - Management is confident in the strength of Nexplanon's patents and the regulatory challenges faced by potential generic competitors [85][90]

Financial Data and Key Metrics Changes - The first quarter results showed a 4% constant currency revenue decline year over year, primarily due to the loss of exclusivity of Atozed in Europe [21] - Adjusted gross margin was 61.7%, down from 62.1% in the same quarter last year, reflecting unfavorable pricing impacts [25] - Adjusted EBITDA margin for the first quarter was 32%, about 150 basis points better than expected [27] - Free cash flow before one-time costs was $146 million, an improvement from the prior year [28] Business Line Data and Key Metrics Changes - The women's health franchise grew 12% excluding exchange, driven by Nexplanon, which was up 14% [10] - Fertility business grew nearly 26% globally, with U.S. growth of 70% [12] - Jada grew 20% in the quarter, with significant adoption in U.S. birthing hospitals [13] - Biosimilars showed mixed results, with HEDLEMA growing 57% while Ontrazont and REMFLEXIS continued to decline [14] Market Data and Key Metrics Changes - Revenue composition: approximately 75% from outside the U.S., with Europe and Canada contributing about 25% and China about 13% [7] - The U.S. market is primarily supplied by European manufacturing, with limited exposure to current tariff policies [6][9] Company Strategy and Development Direction - The company is focusing on deleveraging, aiming for a net leverage ratio below four by year-end 2025 [5][31] - A shift in capital allocation priorities has been made to increase retention ratio and support business development opportunities [39] - The company plans to continue pursuing compelling business development opportunities while maintaining lower leverage [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue targets for VITAMA, citing strong market feedback and access initiatives [43] - The macroeconomic environment remains uncertain, but the company has limited exposure to current tariff policies [6][64] - Management emphasized the importance of deleveraging in response to investor concerns about leverage in a volatile market [72] Other Important Information - The company has reset its dividend payout to redirect funds towards debt reduction, allowing for nearly $200 million in prospective dividend payments to be used for deleveraging [5] - The restructuring initiatives are expected to yield approximately $200 million in annual savings [4] Q&A Session Summary Question: Confidence in VITAMA sales target and access issues - Management is confident in achieving the sales target due to strong market signals and effective access strategies [43][44] Question: Priorities regarding deleveraging and business development - The focus is currently on deleveraging, with business development opportunities being considered as leverage improves [46] Question: Capital allocation and share buybacks - Share buybacks are a lower priority compared to managing leverage and growth, especially while leverage remains above four times [66] Question: Nexplanon generic threat and FDA status - Management is confident in the strength of Nexplanon's patent and the regulatory challenges faced by potential generics [82][87] Question: Breakdown of anticipated one-time costs for 2025 - Estimated one-time costs include $150 million for manufacturing separation and $200 million for restructuring initiatives [80]