Organon (OGN) Piper Sandler 37th Annual Healthcare Conference summary

Internal investigation and remediation

• Investigation into U.S. sales practices for Nexplanon and two wholesalers concluded, identifying tone at the top as a key weakness.

• A detailed remediation plan, approved by the board's audit committee, is being implemented, focusing on ethics, integrity, and improved escalation mechanisms for employee concerns.

• Financial impact was limited, with less than 1% of annual revenue affected and no need to revise financial statements.

• Revenue recognition practices were confirmed as appropriate; remediation focuses on information flow, not financial monitoring.

• The issue is expected to be fully resolved and not discussed beyond 2026.

Cost discipline, leverage, and R&D priorities

• $200 million in operating expenses were removed in 2025, though investments in products like Vtama increased.

• Achieving a 31% adjusted EBITDA margin in 2025 is challenging due to Nexplanon flattening and continued Vtama investment; updated guidance will be provided in February.

• R&D prioritizes supporting current products and launches, especially Vtama, while deprioritizing larger, long-term programs.

• The organization is shifting to a more commercially focused model, with significant cost reductions limited by the complexity of the portfolio.

Nexplanon outlook and market dynamics

• U.S. Nexplanon sales face headwinds from Title X funding changes and policy shifts, likely resulting in flat or declining performance in 2025; international growth continues.

• No generics have entered the market in Europe or Latin America despite loss of exclusivity.

• Recent reimbursement wins in Brazil support international growth.

• Pricing competition in the LARC space is increasing, but price increases may still be possible, especially with the upcoming five-year label.

• The five-year label is expected to differentiate Nexplanon and provide data exclusivity.