Organon & Co. (NYSE:OGN) is among the 7 Oversold Pharma Stocks to Buy Now. Organon & Co. (OGN) Posts FY Adjusted EPS of $3.66, EBITDA Margin at 30.7% Organon & Co. (NYSE:OGN) is among the most oversold pharma stocks. TheFly reported on February 12 that OGN announced its fourth-quarter and full-year 2025 financial results. According to the report, for the full year, the company’s revenue totaled $6.2 billion, which represents a 3% decline both on a reported basis and in constant currency. Diluted earning ...

Financial Data and Key Metrics Changes - In 2025, Organon reported $6.2 billion in revenue and $1.9 billion of adjusted EBITDA, representing a 3% decline on both a reported and ex-FX basis [6][9] - Adjusted gross margin for Q4 2025 was 56.7%, down from 60.6% in Q4 2024, primarily due to pricing pressure and unfavorable product mix [22] - Net loss for Q4 2025 was $205 million, or $0.79 per diluted share, compared to net income of $109 million, or $0.42 per diluted share in Q4 2024 [23][24] Business Line Data and Key Metrics Changes - Women's health revenue decreased 16% ex-FX in Q4 and 2% for the year, with Nexplanon sales down 20% ex-FX in Q4 and 4% for the full year [11][12] - The fertility business declined 6% ex-FX in Q4 2025 but grew 8% for the full year, driven by performance in the U.S. [14] - Biosimilars revenue was driven by Hadlima, which grew 61% ex-FX globally for the full year, reflecting strong clinical performance and pricing strategy [16] Market Data and Key Metrics Changes - Nexplanon faced challenges due to government policy-related access restrictions impacting its market share in the U.S. [12] - The JADA System generated $74 million in revenue in 2025, with its divestiture expected to impact consolidated revenue in 2026 [15] - The company anticipates strong growth in Latin America for Nexplanon, offsetting U.S. declines [14] Company Strategy and Development Direction - Organon plans to lower its dividend payout ratio to focus on debt reduction and improve its balance sheet capacity for future growth opportunities [7][8] - The company is committed to managing operating expenses and capital deployment in a disciplined manner to achieve progress on deleveraging efforts [32] - Future launches include a Pertuzumab biosimilar in the U.K. in 2027 and in the U.S. in 2028, indicating a strategic focus on expanding its biosimilars portfolio [16] Management's Comments on Operating Environment and Future Outlook - Management expects revenue and adjusted EBITDA in 2026 to be in line with 2025, projecting approximately $6.2 billion in revenue and $1.9 billion in adjusted EBITDA [9][10] - The company anticipates a modest FX tailwind to offset the loss of revenue from the JADA System divestiture [29] - Management expressed confidence in maintaining performance that aligns with the previous year while managing operating expenses effectively [32] Other Important Information - The company achieved over $200 million in cost savings in 2025, which helped offset investments in growth drivers like VTAMA [8] - Non-GAAP adjusted net income for full year 2025 was $954 million, or $3.66 per share, down from $1,065 million, or $4.11 per share in 2024 [24] Q&A Session Summary Question: Concerns about channel behavior issues and audit committee investigation scope - Management stated they cannot provide additional details at this time [36] Question: Status of FDA draft guidance on biosimilars and its impact - Management views the guidance as incremental and believes their strategy for biosimilars is appropriate [40] Question: Nexplanon contribution to 2026 sales guidance - Nexplanon is expected to be roughly flat year-on-year, with growth anticipated in ex-U.S. markets [41][42] Question: Operating expense savings and underlying EBITDA performance - Management confirmed that some savings will be redirected to revenue growth opportunities while continuing to manage operating expenses aggressively [46] Question: Update on CEO search - No public update was provided regarding the search for a permanent CEO [62] Question: Strategy for Denosumab biosimilar in the osteoporosis market - Management indicated that the market will be competitive, and peak revenues for the Denosumab product are estimated at around $100 million over five years [63]

Core Insights - Organon & Co. has completed the divestiture of its JADA System to Laborie Medical Technologies for up to $465 million, which includes $440 million paid at closing and a potential earn-out of up to $25 million based on 2026 revenue targets [1][7] Company Developments - The JADA team has assisted over 136,000 women across more than 20 countries, establishing JADA as a widely accepted treatment for postpartum hemorrhage [2][8] - The divestiture is expected to strengthen Organon's balance sheet and support its capital allocation strategy for growth opportunities in women's health biopharmaceuticals [2][4] - The net proceeds from the sale will likely be used for debt reduction, aligning with Organon's goal to lower its net-debt-to-adjusted EBITDA ratio, thereby enhancing its capacity for targeted reinvestment or acquisitions [4][9] Market Performance - Following the announcement of the divestiture, Organon shares declined by 1.2%, with a total decline of 11.5% over the past six months, contrasting with the industry's growth of 12.6% and the S&P 500's rise of 12.2% [3] Industry Context - The postpartum hemorrhage treatment market was valued at $1.6 billion in 2025 and is projected to grow at a CAGR of 5.3% through 2032, driven by factors such as rising maternal mortality rates and the standardization of PPH care bundles in hospitals [11]