- First quarter 2022 revenue of $1,567 million
- Net income from continuing operations of $348 million, or $1.36
per diluted share; Adjusted net income from continuing operations
of $420 million, or $1.65 per diluted share
- Adjusted EBITDA of $647 million
- Board of Directors declares quarterly dividend of $0.28 per
share
- Full year 2022 financial guidance ranges affirmed
Organon (NYSE: OGN) (the “company”), today announced its results
for the first quarter ended March 31, 2022.
"The first quarter marked a solid start to the year. We
continued to expand our Women's Health offerings by acquiring the
rights to Marvelon™ (ethinylestradiol, desogestrel) and Mercilon™
(ethinylestradiol, desogestrel) in certain markets, as well as by
entering into a licensing agreement to commercialize XaciatoTM
(clindamycin phosphate) vaginal gel," said Kevin Ali, Organon's
CEO. "Additionally, with LOE risk in the Established Brands
business largely behind us, together with continued focus on
maximizing the potential of these well-known brands, we are
starting to see the stability we knew was possible in that
franchise."
First quarter
2022 revenue
in $ millions
Q1 2022
Q1 2021
VPY
VPY ex-FX
Women’s Health
$
378
$
399
(5)%
(3)%
Biosimilars
99
81
22%
25%
Established Brands
1,053
957
10%
15%
Other (1)
37
69
(45)%
(46)%
Revenue
$
1,567
$
1,506
4%
8%
(1) Other includes manufacturing sales to Merck & Co., Inc.,
Rahway, NJ, USA and other third parties, and allocated amounts from
pre-spin revenue hedging activities.
Total net revenue was $1,567 million for the first quarter of
2022, an increase of 4% as-reported and an increase of 8% excluding
the impacts of foreign currency (ex-FX), compared with the first
quarter of 2021.
Women’s Health declined 5% as-reported and declined 3% ex-FX in
the first quarter 2022 compared with the first quarter of 2021,
driven by Nuvaring® (etonogestrel/ethinyl estradiol vaginal ring)
which declined 6% ex-FX in the first quarter of 2022 compared with
the first quarter of 2021, and the Authorized Generic of Nuvaring
(AG), both of which continue to be impacted by generic competition.
The decline in the Women's Health portfolio was also due to a 5%
ex-FX decline in Nexplanon® (etonogestrel implant) which was driven
by distributors' buying patterns in the United States in prior
periods, partially offset by strong performance in Latin America
and volume growth in Europe. The decline in the company's
contraception portfolio was partially offset by double digit growth
in the fertility franchise, led by Follistim AQ® (follitropin beta
injection), which grew 20% ex-FX, primarily due to higher demand in
China and volume growth in the United States.
Biosimilars revenue grew 22% as-reported and grew 25% ex-FX in
the first quarter 2022 compared with first quarter 2021. Organon's
current portfolio includes certain immunology and oncology
treatments. All five of the biosimilars in Organon’s portfolio have
launched in certain countries globally, including two biosimilars,
Renflexis® (infliximab-abda) and Ontruzant® (trastuzumab-dttb), in
the United States. Renflexis grew 21% ex-FX in the first quarter of
2022 compared with the first quarter of 2021 primarily due to
continued demand growth in the United States since its launch in
2017. Ontruzant grew 5% ex-FX driven by continued uptake in the
United States since its launch in July 2020, partially offset by
competitive pressures in Europe.
Established Brands represents a broad portfolio of well-known
medicines, which are generally beyond market exclusivity, including
leading brands in cardiovascular, respiratory, dermatology and
non-opioid pain management, and for which generic competition
varies by market. The portfolio's exposure to loss of exclusivity
(LOE) risk peaked in 2021 and no longer represents a significant
impediment to stable performance in the Established Brands
franchise. Revenue for Established Brands increased 10% as-reported
and increased 15% ex-FX in the first quarter of 2022 compared with
the first quarter of 2021. The first quarter of 2022 benefited from
fluctuations in demand in certain markets, including a temporary
supply issue currently impacting several competitors in the
Japanese market. This compares to weaker performance in Japan in
the first quarter of 2021 due to anticipated government-led price
actions in that market and lingering effects from the LOE of Zetia®
(ezetimibe). Additionally, the first quarter of last year was
negatively impacted by the implementation of the third round of
Volume Based Procurement (VBP) initiatives in China, as well as by
LOE exposure. There was minimal impact from these factors in the
first quarter of 2022. Volume growth in products in China, Europe
and the LAMERA region also contributed to the favorable performance
of Established Brands in the first quarter of 2022.
First quarter 2022
profitability
Organon was spun-off from Merck & Co., Inc., Rahway, NJ, USA
on June 2, 2021. Financial results during the pre-spin period were
presented on the carve-out basis of accounting and do not purport
to reflect what Organon’s financial results would have been had
Organon operated as a standalone public company. Therefore, with
the exception of Revenue, financial results for the periods ending
March 31, 2021 and March 31, 2022 are not meaningfully
comparable.
in $ millions, except per share
amounts
Q1 2022
Q1 2021 pre-spin
VPY
Revenue
$
1,567
$
1,506
4%
Cost of sales
561
591
(5)%
Gross profit
1,006
915
10%
Non-GAAP Adjusted gross profit (*)
1,042
937
11%
Adjusted EBITDA (*)
647
566
14%
Net Income, continuing operations (*)
348
395
(12)%
Non-GAAP Adjusted net income, continuing
operations (*)
420
451
(7)%
Diluted Earnings per Share, continuing
operations
1.36
1.56
(13)%
Non-GAAP Adjusted Diluted Earnings per
Share, continuing operations (*)
1.65
1.78
(7)%
Gross margin
64.2%
60.8 %
Non-GAAP adjusted gross margin (*)
66.5%
62.2 %
Adjusted EBITDA margin (*)
41.3%
37.6 %
(*) See Tables 4,5 and 6 for reconciliations of GAAP to non-GAAP
financial measures
Gross margin was 64.2% as-reported and 66.5% on an adjusted
basis in the first quarter of 2022 compared with 60.8% as-reported
and 62.2% on an adjusted basis in the first quarter of 2021. The
year-over-year improvement in gross margin primarily reflects
reduced lower margin supply sales in the first quarter of this
year.
Adjusted EBITDA margin was 41.3% in the first quarter of 2022
compared with 37.6% in the first quarter of 2021. The improvement
in Adjusted EBITDA margin is largely driven by higher Adjusted
gross profit in the period, and also reflects lower SG&A costs
compared with the prior year, pre-spin period, partially offset by
increased research and development costs in the first quarter of
2022 associated with the company's recent acquisitions of clinical
stage assets. Adjusted EBITDA margin in the first quarter of 2022
incorporates SG&A costs that are expected to be at the lowest
point for full year 2022.
Net income from continuing operations for the first quarter of
2022 was $348 million, or $1.36 per diluted share, compared with
$395 million, or $1.56 per diluted share, in the first quarter of
2021. Non-GAAP Adjusted net income from continuing operations was
$420 million, or $1.65 per diluted share, compared with $451
million, or $1.78 per diluted share, in 2021.
Capital allocation
Today, Organon’s Board of Directors declared a quarterly
dividend of $0.28 for each issued and outstanding share of the
company's common stock. The dividend is payable on June 16, 2022 to
stockholders of record at the close of business on May 16,
2022.
As of March 31, 2022, cash and cash equivalents were $694
million, and debt was $9,094 million, resulting in net debt of
$8,400 million.
Full year guidance
Organon does not provide GAAP financial measures on a
forward-looking basis because the company cannot predict with
reasonable certainty and without unreasonable effort, the ultimate
outcome of legal proceedings, unusual gains and losses, the
occurrence of matters creating GAAP tax impacts, and
acquisition-related expenses. These items are uncertain, depend on
various factors, and could be material to Organon’s results
computed in accordance with GAAP.
Beginning in 2022, Organon will no longer exclude expenses for
upfront and milestone payments related to collaborations and
licensing agreements, or charges related to pre-approval assets
obtained in transactions accounted for as asset acquisitions from
its non-GAAP results. These changes are being made to align with
views expressed by the U.S. Securities and Exchange Commission.
There are no such expenses or charges for in-process research and
development for the periods ended March 31, 2022 or March 31, 2021.
Relevant prior periods have been recast to reflect these changes
and can be found in Tables 7 and 8 of this press release.
Organon's financial guidance does not assume an estimate for
future in-process research and development for business development
transactions not yet executed.
The company affirmed the full year 2022 financial guidance
previously provided on February 17, 2022, which is presented on a
non-GAAP basis.
Previous guidance
Current guidance
Revenue
$6.1B - $6.4B
Unchanged
Adjusted gross margin
Mid 60%
Unchanged
SG&A as % of revenue
Mid 20%
Unchanged
R&D as % of revenue
Mid to upper single digit
Unchanged
Adjusted EBITDA margin
34%-36%
Unchanged
Interest
~$400 million
Unchanged
Depreciation
$100-$115 million
Unchanged
Effective Non-GAAP tax rate
17.5%-19.5%
Unchanged
Fully diluted weighted avg. shares
outstanding
~255 million
Unchanged
Webcast Information
Organon will host a conference call at 8:30 a.m. Eastern Time
today to discuss its first quarter 2022 financial results. To
listen to the event and view the presentation slides via webcast,
join from the Organon Investor Relations website at
https://www.organon.com/investor-relations/. A replay of the
webcast will be available approximately two hours after the
conclusion of the live event on the company’s website.
Institutional investors and analysts interested in participating in
the call must register in advance using conference ID# 6895016 and
by clicking on this link:
http://www.directeventreg.com/registration/event/6895016. Following
registration, participants will receive a confirmation email
containing details on how to join the conference call, including
dial-in information and a unique passcode and registrant ID.
Pre-registration will allow participants to bypass an operator and
be placed directly into the call.
About Organon
Organon is a global healthcare company formed through a spin-off
from Merck & Co., Inc., Rahway, NJ, USA (NYSE: MRK) to focus on
improving the health of women throughout their lives. Organon has a
portfolio of more than 60 medicines and products across a range of
therapeutic areas. Led by the women’s health portfolio coupled with
an expanding biosimilars business and stable franchise of
established medicines, Organon’s products produce strong cash flows
that will support investments in innovation and future growth
opportunities in women’s health. In addition, Organon is pursuing
opportunities to collaborate with biopharmaceutical innovators
looking to commercialize their products by leveraging its scale and
presence in fast growing international markets.
Organon has a global footprint with significant scale and
geographic reach, world-class commercial capabilities, and
approximately 9,300 employees with headquarters located in Jersey
City, New Jersey.
For more information, visit http://www.organon.com and connect
with us on LinkedIn and Instagram.
Non-GAAP financial measures
This press release contains “non-GAAP financial measures,” which
are financial measures that either exclude or include amounts that
are not excluded or included in the most directly comparable
measures calculated and presented in accordance with U.S. generally
accepted accounting principles (“GAAP”). Specifically, the company
makes use of the non-GAAP financial measures Adjusted EBITDA,
Adjusted Net Income, and Adjusted Diluted EPS, which are not
recognized terms under GAAP and are presented only as a supplement
to the company’s GAAP financial statements. The company believes
that these non-GAAP financial measures help to enhance an
understanding of the company’s financial performance. However, the
presentation of these measures has limitations as an analytical
tool and should not be considered in isolation, or as a substitute
for the company’s results as reported under GAAP. Because not all
companies use identical calculations, the presentations of these
non-GAAP measures may not be comparable to other similarly titled
measures of other companies. You should refer to the appendix of
this press release for relevant definitions and reconciliations of
non-GAAP financial measures contained herein to the most directly
comparable GAAP measures.
In addition, the company’s full-year 2022 guidance measures
(other than revenue) are provided on a non-GAAP basis because the
company is unable to reasonably predict certain items contained in
the GAAP measures. Such items include, but are not limited to,
acquisition related expenses, restructuring and related expenses,
stock-based compensation and other items not reflective of the
company's ongoing operations.
The company uses non-GAAP financial measures in its operational
and financial decision making, and believes that it is useful to
exclude certain items in order to focus on what it regards to be a
more meaningful representation of the underlying operating
performance of the business.
Forward-Looking Statement
Except for historical information herein, this press release
includes “forward-looking statements” within the meaning of the
safe harbor provisions of the U.S. Private Securities Litigation
Reform Act of 1995, including, but not limited to, statements about
management’s expectations about Organon’s future financial
performance and prospects. Forward-looking statements may be
identified by words such as “expects,” “intends,” “anticipates,”
“plans,” “believes,” “seeks,” “estimates,” “will” or words of
similar meaning. These statements are based upon the current
beliefs and expectations of the company’s management and are
subject to significant risks and uncertainties. If underlying
assumptions prove inaccurate or risks or uncertainties materialize,
actual results may differ materially from those set forth in the
forward-looking statements.
Risks and uncertainties include, but are not limited to, an
inability to execute on our business development strategy or
realize the benefits of our planned acquisitions; general industry
conditions and competition; general economic factors, including
interest rate and currency exchange rate fluctuations; the impact
of the ongoing COVID-19 pandemic and emergence of variant strains;
the impact of pharmaceutical industry regulation and health care
legislation in the United States and internationally; global trends
toward health care cost containment; technological advances; new
products and patents attained by competitors; challenges inherent
in new product development, including obtaining regulatory
approval; the company’s ability to accurately predict its future
financial results and performance; manufacturing difficulties or
delays; financial instability of international economies and
sovereign risk; difficulties developing and sustaining
relationships with commercial counterparties; dependence on the
effectiveness of the company’s patents and other protections for
innovative products; and the exposure to litigation, including
patent litigation, and/or regulatory actions.
The company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events or otherwise. Additional factors that could cause
results to differ materially from those described in the
forward-looking statements can be found in the company’s filings
with the Securities and Exchange Commission ("SEC"), including the
company’s Annual Report on Form 10-K for the year ended December
31, 2021 and subsequent SEC filings, available at the SEC’s
Internet site (www.sec.gov).
TABLE 1
Organon & Co.
Condensed Consolidated
Statement of Income
(Unaudited, $ in millions except
share and per share amounts)
Three Months Ended March 31,
2022
2021
Revenues
$
1,567
$
1,506
Costs, Expenses and Other
Cost of sales
561
591
Selling, general and administrative
371
382
Research and development
96
67
Restructuring costs
—
1
Other (income) expense, net
97
(2
)
1,125
1,039
Income From Continuing Operations Before
Income Taxes
442
467
Taxes on Income
94
72
Net Income From Continuing Operations
348
395
Income From Discontinued Operations - Net
of Tax
—
4
Net Income
348
399
Earnings per Share Attributable to Organon
& Co. Stockholders - Basic:
Continuing operations
$
1.37
$
1.56
Discontinued operations
—
0.02
Net Earnings per Share Attributable to
Organon & Co. Stockholders
$
1.37
$
1.58
Earnings per Share Attributable to Organon
& Co. Stockholders - Diluted:
Continuing operations
$
1.36
$
1.56
Discontinued operations
—
0.02
Net Earnings per Share Attributable to
Organon & Co. Stockholders
$
1.36
$
1.58
Weighted Average Shares Outstanding:
Basic
253,583,000
253,516,000
Diluted
255,052,000
253,516,000
TABLE 2
Organon & Co.
Sales by top products
Three Months Ended March 31,
2022
2021
($ in millions)
U.S.
Int’l
Total
U.S.
Int’l
Total
Women’s Health
Nexplanon/Implanon NXT
$
116
$
55
$
171
$
141
$
42
$
183
Follistim AQ
30
31
61
25
27
52
NuvaRing
16
24
41
21
24
45
Ganirelix Acetate Injection
8
22
30
8
21
29
Cerazette
—
18
18
—
17
17
Other Women's Health (1)
27
31
57
40
33
73
Biosimilars
Renflexis
42
4
46
35
4
38
Ontruzant
7
15
22
4
19
22
Brenzys
—
14
14
—
10
10
Aybintio
—
10
10
—
8
8
Hadlima
—
6
6
—
2
2
Established Brands
Cardiovascular
Zetia
3
96
99
2
89
92
Vytorin
2
36
38
3
38
41
Atozet
—
119
119
—
112
112
Rosuzet
—
22
22
—
15
15
Cozaar/Hyzaar
8
86
93
3
87
90
Other Cardiovascular (1)
1
38
39
1
38
39
Respiratory
Singulair
3
127
130
5
102
107
Nasonex
9
65
75
2
41
43
Dulera
31
9
40
31
8
38
Clarinex
1
37
38
1
23
25
Other Respiratory (1)
12
11
22
16
6
23
Non-Opioid Pain, Bone and Dermatology
Arcoxia
—
60
60
—
56
56
Fosamax
1
40
41
1
37
38
Diprospan
—
31
31
—
26
26
Other Non-Opioid Pain, Bone and
Dermatology (1)
3
66
69
(1
)
62
61
Other
Proscar
—
24
24
—
32
32
Propecia
1
29
30
2
29
31
Other (1)
8
74
83
11
78
89
Other (2)
—
37
37
—
69
69
Total Revenue
$
329
$
1,238
$
1,567
$
351
$
1,155
$
1,506
Totals may not foot due to rounding. Trademarks appearing
above in italics are trademarks of, or are used under license by,
the Organon group of companies.
(1)
Includes sales of products not listed separately. Revenue from an
arrangement for the sale of generic etonogestrel/ethinyl estradiol
vaginal ring is included in Other Women's Health.
(2)
Other includes manufacturing sales to Merck & Co., Inc.,
Rahway, NJ, USA and other third parties, and allocated amounts from
pre-spin revenue hedging activities.
TABLE 3
Organon & Co.
Sales by geographic
area
(Unaudited, $ in millions)
Three Months Ended March 31,
($ in millions)
2022
2021
Europe and Canada
$
436
$
434
United States
329
351
Asia Pacific and Japan
314
278
China
236
206
Latin America, Middle East, Russia and
Africa
209
167
Other (1)
43
70
Revenue
$
1,567
$
1,506
(1) Other includes manufacturing sales to Merck & Co.,
Inc., Rahway, NJ, USA and other third parties, and allocated
amounts from pre-spin revenue hedging activities.
TABLE 4
Reconciliation of GAAP Gross
Margin to Non-GAAP Adjusted Gross Profit and Adjusted Gross
Margin
($ in millions)
Three Months Ended March 31,
2022
2021
Revenue
$
1,567
$
1,506
Cost of sales
561
591
Gross Profit
1,006
915
Gross Margin
64.2
%
60.8
%
Amortization
28
20
One-time costs (1)
5
—
Stock-based compensation
3
2
Non-GAAP Adjusted Gross Profit
(2)
$
1,042
$
937
Non-GAAP Adjusted Gross Margin
66.5
%
62.2
%
(1) One-time costs for the three months ended March 31, 2022
primarily include costs to stand up the Company. (2) Non-GAAP
Adjusted Gross Profit is calculated by excluding amortization,
one-time costs, and the portion of stock-based compensation expense
allocated to Cost of sales.
TABLE 5
Organon & Co.
Reconciliation of GAAP Income
from Continuing Operations Before Income Taxes to Adjusted
EBITDA
($ in millions)
Three Months Ended March 31,
2022
2021
Income from continuing operations
before income taxes
$
442
$
467
Depreciation
25
18
Amortization (1)
28
20
Interest expense
97
—
EBITDA
592
505
Restructuring costs
—
1
One-time costs (2)
40
49
Acquired in-process research and
development
—
—
Stock-based compensation
15
11
Adjusted EBITDA
$
647
$
566
Adjusted EBITDA margin
41.3
%
37.6
%
(1) Amortization in all periods is included in Cost of sales. (2)
One-time costs primarily include costs incurred in connection with
the spin-off of Organon. For the three months ended March 31, 2022,
approximately $25 million of the one-time costs are recorded in
Selling, general and administrative expenses, $6 million are
recorded in Other (income) expense, $5 million are recorded in Cost
of sales, and $4 million are recorded in Research and development.
For the three months ended March 31, 2021, $49 million of the
one-time costs are classified in Selling, general and
administrative expenses.
TABLE 6
Organon & Co.
Reconciliation of GAAP Income
from Continuing Operations Before Income Taxes to Non-GAAP Adjusted
Net Income
($ in millions, except per share
amounts)
Three Months Ended March 31,
2022
2021
Income from continuing operations
before income taxes
$
442
$
467
Adjustments:
Amortization (1)
28
20
Restructuring costs
—
1
One-time costs (2)
40
49
Acquired in-process research and
development
—
—
Stock-based compensation
15
11
Total Adjustments
83
81
Non-GAAP pre-tax income from continuing
operations
525
548
Taxes on income as reported in accordance
with GAAP
94
72
Tax benefit on adjustments
14
15
Tax (deduction)/benefit on GAAP-only
discrete items
(3
)
10
Non-GAAP adjusted taxes on
income
105
97
Non-GAAP adjusted net income,
continuing operations
420
451
Non-GAAP adjusted net income,
continuing operations per diluted share
$
1.65
$
1.78
(1) Amortization in all periods is included in Cost of
sales. (2) One-time costs primarily include costs incurred in
connection with the spin-off of Organon. For the three months ended
March 31, 2022, approximately $25 million of the one-time costs are
recorded in Selling, general and administrative expenses, $6
million are recorded in Other (income) expense, $5 million are
recorded in Cost of sales, and $4 million are recorded in Research
and development. For the three months ended March 31, 2021, $49
million of the one-time costs are classified in Selling, general
and administrative expenses.
TABLE 7
Organon & Co.
Reconciliation of GAAP Income
from Continuing Operations Before Income Taxes to Adjusted
EBITDA
($ in millions)
Q1 2021
Q2 2021
Q3 2021
Q4 2021
FY 2021
As Reported and Recast (4)
As Reported and Recast (4)
As Reported
Impact of Non- GAAP Reporting
Changes
Recast
As Reported
Impact of Non- GAAP Reporting
Changes
Recast
As Reported
Impact of Non- GAAP Reporting
Changes
Recast
Income from continuing operations before
income taxes
$
467
$
437
$
389
$
—
$
389
$
236
$
—
$
236
$
1,529
$
—
$
1,529
Depreciation
18
21
25
—
25
28
—
28
92
—
92
Amortization (1)
20
22
27
—
27
34
—
34
103
—
103
Interest expense
—
62
98
—
98
98
—
98
258
—
258
EBITDA
$
505
$
542
$
539
$
—
$
539
$
396
$
—
$
396
$
1,982
$
—
$
1,982
Restructuring costs
1
1
1
—
1
—
—
—
3
—
3
One-time costs (2)
49
66
56
—
56
59
—
59
231
—
231
Acquired in-process research and
development (3)
—
—
25
(25
)
—
79
(79
)
—
104
(104
)
—
Stock-based compensation
11
18
15
—
15
15
—
15
59
—
59
Adjusted EBITDA
$
566
$
627
$
636
$
(25
)
$
611
$
549
$
(79
)
$
470
$
2,379
$
(104
)
$
2,275
(1) Amortization in all periods is
included in Cost of sales.
(2) One-time costs primarily include costs
incurred in connection with the spin-off of Organon as well as
acquisition related costs. Refer to the Company's previously filed
Current Reports on Form 8-K for a further description of these
costs for each reported period.
(3) Costs represent upfront licensing
payment associated with ObsEva of $25 million during the third
quarter of 2021 and Forendo of $79 million in the fourth quarter of
2021, which were recorded in Research and development expense.
(4) The change does not affect the
previously reported Adjusted EBITDA results for the first and
second quarter of 2021 as there were no adjustments which affected
either of the periods.
TABLE 8
Organon & Co.
Reconciliation of GAAP Income
from Continuing Operations Before Income Taxes to Non-GAAP Adjusted
Net Income
($ in millions, except per share
amounts)
Q1 2021
Q2 2021
Q3 2021
Q4 2021
FY 2021
As Reported and Recast (5)
As Reported and Recast (5)
As Reported
Impact of Non- GAAP Reporting
Changes
Recast
As Reported
Impact of Non- GAAP Reporting
Changes
Recast
As Reported
Impact of Non- GAAP Reporting
Changes
Recast
Income from continuing operations before
income taxes
$
467
$
437
$
389
$
—
$
389
$
236
$
—
$
236
$
1,529
$
—
$
1,529
Adjustments:
Amortization (1)
20
22
27
—
27
34
—
34
103
—
103
Restructuring costs
1
1
1
—
1
—
—
—
3
—
3
One-time costs (2)
49
66
56
—
56
59
—
59
231
—
231
Acquired in-process research and
development (3)
—
—
25
(25
)
—
79
(79
)
—
104
(104
)
—
Stock-based compensation
11
18
15
—
15
15
—
15
59
—
59
Total Adjustments
81
107
124
(25
)
99
187
(79
)
108
500
(104
)
396
Non-GAAP pre-tax income from continuing
operations
$
548
$
544
$
513
$
(25
)
$
488
$
423
$
(79
)
$
344
$
2,029
$
(104
)
$
1,925
Taxes on income as reported in accordance
with GAAP
72
6
66
—
66
34
—
34
178
—
178
Tax benefit on adjustments
15
20
23
(2
)
21
35
(17
)
18
93
(19
)
74
Tax benefit on GAAP-only discrete items
(4)
10
81
—
—
—
5
—
5
96
—
96
Non-GAAP adjusted taxes on income
$
97
$
107
$
89
$
(2
)
$
87
$
74
$
(17
)
$
57
$
367
$
(19
)
$
348
Non-GAAP adjusted net income, continuing
operations
$
451
$
437
$
424
$
(23
)
$
401
$
349
$
(62
)
$
287
$
1,662
$
(85
)
$
1,577
Non-GAAP adjusted net income from
continuing operations per diluted share
$
1.78
$
1.72
$
1.67
$
(0.09
)
$
1.58
$
1.37
$
(0.24
)
$
1.13
$
6.54
$
(0.33
)
$
6.20
(1) Amortization in all periods is
included in Cost of sales.
(2) One-time costs primarily include costs
incurred in connection with the spin-off of Organon as well as
acquisition related costs. Refer to the Company's previously filed
Form 8-Ks for a further description of these costs for each
reported period.
(3) Costs represent upfront licensing
payment associated with ObsEva of $25 million during the third
quarter of 2021 and Forendo of $79 million in the fourth quarter of
2021, which were recorded in Research and development expense.
(4) Amounts include a tax benefit of
approximately $70 million recorded in the second quarter of 2021
and a tax benefit of $5 million recorded in the fourth quarter of
2021 related to a portion of non-US step up in tax basis as a
result of its separation from Merck & Co., Inc., Rahway, NJ,
USA.
(5) The change does not affect the
previously reported Non-GAAP results for the first and second
quarter of 2021 as there were no adjustments which affected either
of the periods.
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Media Contacts: Karissa Peer (614) 314-8094 Kate Vossen (732)
675-8448 Investor Contacts: Jennifer Halchak (201) 275-2711 Edward
Barger (267) 614-4669
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