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Organon & Co. (OGN) CEO Kevin Ali Presents at 41st Annual J.P. Morgan Healthcare Conference (Transcript)
OGNOrganon & (OGN)2023-01-10 20:10

Company and Industry Overview * Company: Organon & Co. (NYSE:OGN) * Industry: Pharmaceuticals, Biotechnology * Focus: Women's health, biosimilars, established brands Key Points Organon's Performance and Strategy 1. Stabilization and Growth: Organon's established brands business, which accounts for 60% of its revenue, has stabilized and even grown in 2022, contrary to initial assumptions of decline. 2. Strategic Pillars Growth: Organon has achieved double-digit growth in biosimilars and women's health, including fertility and NEXPLANON. 3. Pipeline Expansion: Organon has announced eight deals in 18 months, focusing on early-stage, mid-stage, and commercialized assets to expand its pipeline. 4. Women's Health Focus: Organon aims to become a leader in the women's health space, capitalizing on recent R&D developments and the lack of a dedicated leader in the field. 5. Biosimilars Strategy: Organon partners with developers to participate in the biosimilars market, focusing on early launches and strategic partnerships. Women's Health 1. Fertility: Organon's fertility franchise is expected to experience double-digit growth due to high demand and limited competition. 2. NEXPLANON: NEXPLANON is on track to become a 1billionproductby2025,withpatentprotectionuntil2027andpotentialforextension.3.∗∗InorganicAcquisitions∗∗:Organon′srecentacquisitions,suchasJadaSystemandXACIATO,willcontributetogrowthinthecomingyears.4.∗∗Early−StageAssets∗∗:Organon′sacquisitionofForendoandthedevelopmentofOG−6219offernewmechanismsofactionandsignificantgrowthopportunities.Biosimilars1.∗∗HUMIRABiosimilar∗∗:OrganonisinthefirsttrancheoflaunchesforitsHUMIRAbiosimilar,withalaunchexpectedinsummer2023.2.∗∗MarketPosition∗∗:Organonbelievesitiswell−positionedinthebiosimilarsmarketduetoitspartnerships,safetydata,manufacturingcapabilities,anddeviceexpertise.3.∗∗MarketDevelopment∗∗:Organonexpectsthebiosimilarsmarkettogrowsignificantly,withpotentialdiscountsof80−901 billion product by 2025, with patent protection until 2027 and potential for extension. 3. **Inorganic Acquisitions**: Organon's recent acquisitions, such as Jada System and XACIATO, will contribute to growth in the coming years. 4. **Early-Stage Assets**: Organon's acquisition of Forendo and the development of OG-6219 offer new mechanisms of action and significant growth opportunities. Biosimilars 1. **HUMIRA Biosimilar**: Organon is in the first tranche of launches for its HUMIRA biosimilar, with a launch expected in summer 2023. 2. **Market Position**: Organon believes it is well-positioned in the biosimilars market due to its partnerships, safety data, manufacturing capabilities, and device expertise. 3. **Market Development**: Organon expects the biosimilars market to grow significantly, with potential discounts of 80-90% by 2025-2026. Established Brands 1. **Stabilization**: Organon's established brands business has stabilized and is growing, providing a stable cash flow for reinvestment. 2. **China**: Organon's diversified portfolio and retail business have helped mitigate the impact of China's VBP program. 3. **Business Development**: Organon is open to acquiring single products or portfolios that can be accretive to its business. Financials and Capital Deployment 1. **Investments**: Organon plans to reinvest profits in R&D and SG&A to support growth, leading to lower margins in the short term. 2. **Free Cash Flow**: Organon expects to generate over 1 billion of free cash flow annually, supporting its dividend and reinvestment in the business. 3. Debt and Leverage: Organon has a strong balance sheet and flexibility to pursue larger deals if the right opportunity arises. 4. Interest Rates: Higher interest rates have raised the bar for M&A analysis, particularly for early-stage deals. Conclusion Organon is well-positioned for growth in the women's health, biosimilars, and established brands markets. The company's strategic focus, strong pipeline, and financial stability provide a solid foundation for future success.