Organon & Co. · NYSE:OGN
Organon & — Q1 2022 Earnings Presentation
24 slides from Organon &'s earnings presentation, May 5, 2022
Slide 1: Organon Q1 2022 Earnings
Organon Q1 2022 Earnings = ORGANON”
Slide 2: Disclaimer statement: Safe Harbor for Forward-Looking Statements
Disclaimer statement Safe Harbor for Forward - Looking Statements Except for historical information herein, this presentation 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 limi
Slide 3: Disclaimer statement, cont.: Non-GAAP Information
Disclaimer statement, cont. Non - GAAP Information This presentation contains “non - GAAP financial measures,” which are financial measures that either exclude or include amounts th at are not excluded or included in the most directly comparable measures calculated and presented in accordance with U
Slide 4: First quarter 2022 highlights
First quarter 2022 highlights 4 • Double digit growth in Biosimilars and Fertility • Capitalizing on opportunities in Established Brands • Continued business development with license for Xaciato TM • $1,567 million Revenue • $647 million Adjusted EBITDA • $1.65 Adjusted EPS from continuing operation
Slide 5: Established Brands sizeable and stable base of revenue
Established Brands sizeable and stable base of revenue $ mil 5
Slide 6: Building a Women's Health portfolio
Building a Women’s Health portfolio Entered into licensing agreement for Xaciato Œ March 2022 Bacterial Vaginosis FDA - approved for BV in females 12 and over, the most common cause of vaginitis worldwide estimated to affect approximately 21 million women in the U.S. (1) Marvelon Œ and Mercilon Œ Fe
Slide 7: Q1 revenue: volume growth more than offset LOE, price
+4% reported +8% ex - FX $ mil 1,567 1,506 7 Q1 revenue: volume growth more than offset LOE, price (1) LOE = Loss of Exclusivity (2) VBP = Volume - Based Procurement (3) Other includes manufacturing sales to Merck & Co., Inc., Rahway, NJ, USA and other third parties, and allocated amounts from pre -
Slide 8: Strong ex-US performance
Strong ex - US performance $ mil Q1 - 22 Q1 - 21 (pre - spin) Actual VPY Ex FX VPY Europe and Canada 436 434 — 8% United States 329 351 (6)% (6)% Asia Pacific and Japan 314 278 13% 22% China 236 206 15% 13% Latin America, Middle East, Russia and Africa 209 167 25% 34% Other (1) 43 70 (39)% (39)% Tot
Slide 9: Women's Health
Women’s Health Women’s Health Revenues $ mil Q1 - 2022 Q1 - 2021 Act VPY Ex FX VPY Top Contraception Products Nexplanon ® 171 183 (7)% (5)% NuvaRing ® 41 45 (10)% (6)% Cerazette Œ 18 17 5% 11% Top Fertility Products Follistim ® 61 52 17% 20% Ganirelix Acetate Injection 30 29 2% 6% Other Women's Heal
Slide 10: Biosimilars
Biosimilars Biosimilars Revenues $ mil Q1 - 2022 Q1 - 2021 Act VPY Ex FX VPY Renflexis ® 46 38 21% 21% Ontruzant ® 22 22 — 5% Brenzys Œ 14 10 40% 44% Aybintio Œ 10 8 26% 37% Hadlima Œ 6 2 NM NM Biosimilars 99 81 22% 25% 10 • Double digit growth for Renflexis • Ontruzant growth in US tempered by EU c
Slide 11: Established Brands
Established Brands Revenue up/down Established brands Revenues $ mil Q1 - 2022 Q1 - 2021 Act VPY Ex FX VPY Cardiovascular 410 389 5% 11% Respiratory 305 236 29% 35% Non - Opioid Pain, Bone & Dermatology 201 181 11% 18% Other 136 152 (10)% (6)% Total Est. Brands 1,053 957 10% 15% 11 • Limited LOE imp
Slide 12: Timing of spend benefits Q1 Adj. EBITDA margin
Timing of spend benefits Q1 Adj. EBITDA margin $ mil Q1 - 22 Q1 - 21 (pre - spin) Actual 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) 1,042 937 11% Selling, general, and administrative 371 382 (3)% Research and development 96 6
Slide 13: Net leverage ratio ~3.6x
13 $ mil Net leverage ratio ~3.6x Debt capitalization as of March 31, 2022 June 30, 2021 September 30, 2021 December 31,2021 March 31, 2022 Reported cash and cash equivalents 730 1,008 737 694 Cash for IOM - exit inventory (1) (400) (320) (0) (0) Cash available to Organon 330 688 737 694 Gross Debt
Slide 14: Revenue drivers consistent with previous guidance
$ mil 14 Revenue drivers consistent with previous guidance (1) (2) $6,304 $6,100 – $6,400 ~(100) ~(100) ~(200) +600 − +700 (50 − 100) (200 − 300 ) FX ~300 - 475 bps headwind to growth in 2022 (1) Other includes manufacturing sales to Merck & Co., Inc., Rahway, NJ, USA and other third parties, and al
Slide 15: Affirming full year 2022 financial guidance
Affirming full year 2022 financial guidance 15 $M, provided on a Non - GAAP basis, except Revenue Guidance provided February 17, 2022 Guidance provided as of May 5, 2022 Revenue $6,100 - $6,400 Unchanged Adjusted gross margin Mid - 60% range Unchanged SG&A (as % of revenue) Mid - 20% range Unchanged
Slide 16: Q&A
Q&A
Slide 17: Appendix
Appendix
Slide 18: Established Brands exceptional Q1 performance
Established Brands exceptional Q1 performance $ mil Q1 - 2022 Q1 - 2021 (pre - spin) Actual VPY Ex FX VPY Women’s Health 378 399 (5)% (3)% Biosimilars 99 81 22% 25% Est. Brands 1,053 957 10% 15% Other (1) 37 69 (45)% (46)% Total Revenue 1,567 1,506 4% 8% 18 (1) Other includes manufacturing sales to
Slide 19: Gross margin reconciliation
Gross margin reconciliation $ mil Q1 - 2022 Q1 - 2021 (pre - spin) 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 G
Slide 20: Income from continuing operations before tax to Adjusted EBITDA
Income from continuing operations before tax to Adjusted EBITDA $ mil Q1 - 2022 Q1 - 2021 (pre - spin) 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 Acqui
Slide 21: Income from continuing operations before tax to Adjusted Net Income
Income from continuing operations before tax to Adjusted Net Income $ mil (except EPS) Q1 - 2022 Q1 - 2021 (pre - spin) Income from continuing operations before income taxes 442 467 Amortization (1) 28 20 Restructuring costs — 1 One - time costs (2) 40 49 Acquired in - process research and developme
Slide 22: In-process R&D recast – Adjusted EBITDA
22 $ mil In - process R&D recast – Income from continuing operations before tax to Adjusted EBITDA (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 . R
Slide 23: In-process R&D recast – Non-GAAP Adjusted net income
$ mil In - process R&D recast – Income from continuing operations before income tax to Non - GAAP Adjusted net income 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
Slide 24: Number of products: broad and diverse portfolio
Number of products 11 5 49 Women’s Health Biosimilars Established Brands Broad and diverse portfolio 24