# Organon & Co.: Form 10-Q/A for the period ended Jun 30, 2025

- Company: [Organon & Co.](/companies/ogn.md) (CIK 1821825)
- Form: 10-Q/A
- Filed: 2025-11-10
- Accepted by EDGAR: Nov 10, 2025, 06:17 ET
- Period: 2025-06-30
- Accession: 0001104659-25-108740
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1821825/000110465925108740/tm2530588d2_10qa.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1821825/000110465925108740/

## Management's discussion and analysis

As filed, 41,476 characters.

### CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Some statements and disclosures in this document are forward-looking statements. Forward-looking statements include all statements that do not relate solely to historical or current facts and can be identified by the use of words such as “may,” “believe,” “will,” “expect,” “project,” “potential,” “should,” “estimate,” “anticipate,” “plan,” “intend,” “would,” “seek,” “continue,” and other words of similar meaning, or negative variations of any of the foregoing. These forward-looking statements are based on our current plans and expectations and are subject to a number of risks and uncertainties that could cause our plans and expectations, including actual results, to differ materially from the forward-looking statements. Risks and uncertainties that may affect our future results include, but are not limited to, expanded brand and class competition in the markets in which Organon & Co. (“Organon,” the “Company,” “we,” “our,” or “us”) operates; trade protection measures and import or export licensing requirements, including the direct and indirect impacts of tariffs (including any potential pharmaceutical sector tariffs), trade sanctions or similar restrictions by the United States or other governments; changes in U.S. and foreign federal, state and local governmental funding allocations including the timing and amounts allocated to Organon’s customers and business partners; economic factors over which we have no control, including changes in inflation, interest rates, recessionary pressures, and foreign currency exchange rates; market volatility, downgrades to the U.S. government’s sovereign credit rating or its perceived creditworthiness, changing political or geopolitical conditions, market contraction, boycotts, and sanctions, as well as Organon’s ability to successfully manage uncertainties related to the foregoing; difficulties with performance of third parties we rely on for our business growth; the failure of any supplier to provide substances, materials, or services as agreed; the increased cost of supply, manufacturing, packaging, and operations; difficulties developing and sustaining relationships with commercial counterparties; competition from generic products as our products lose patent protection; any failure by us to retain market exclusivity for *Nexplanon* or to obtain an additional period of exclusivity in the United States for *Nexplanon* subsequent to the expiration of the rod patents in 2027; the continued impact of the September 2024 loss of exclusivity (“LOE”) for *Atozet™*1 (ezetimibe and atorvastatin); the success of our efforts to adapt our business and sales strategies to address the changing market and regulatory landscape in order to achieve our business objectives and remain competitive, which may include implementing or continuing to assess product discount programs and wholesaler inventory levels under the relevant agreements or waivers of their terms for certain key products such as *Nexplanon*; restructurings or other disruptions at the U.S. Food and Drug Administration (“FDA”), the U.S. Securities and Exchange Commission (“SEC”) and other U.S. and comparable government agencies; difficulties and uncertainties inherent in the implementation of our acquisition strategy or failure to recognize the benefits of such acquisitions; pricing pressures globally, including rules and practices of managed care groups, judicial decisions and governmental laws and regulations related to Medicare, Medicaid and health care reform, pharmaceutical reimbursement and pricing in general; the impact of higher selling and promotional costs; changes in government laws and regulations in the United States and other jurisdictions, including laws and regulations governing the research, development, approval, clearance, manufacturing, supply, distribution, and/or marketing of our products and related intellectual property, environmental regulations, and the enforcement thereof affecting our business; efficacy, safety or other quality concerns with respect to our marketed products, whether or not scientifically justified, leading to product recalls, withdrawals or declining sales; delays or failures to demonstrate adequate efficacy and safety of our product candidates in pre-clinical and clinical trials, which may prevent or delay the development, approval, clearance, or commercialization of our product candidates; future actions of third-parties, including significant changes in customer relationships or changes in the behavior and spending patterns of purchasers of health care products and services, including delaying medical procedures, rationing prescription medications, reducing the frequency of physician visits and forgoing health care insurance coverage; legal factors, including product liability claims, antitrust litigation and governmental investigations, including tax disputes, environmental claims and patent disputes with branded and generic competitors, any of which could preclude commercialization of products or negatively affect the profitability of existing products; lost market opportunity resulting from delays and uncertainties in clinical trials and the approval or clearance process of the FDA and other regulatory authorities; the failure by us or our third party collaborators and/or their suppliers to fulfill our or their regulatory or quality obligations, which could lead to a delay in regulatory approval or commercial marketing of our products; cyberattacks on, or other failures, accidents, or security breaches of, our or third-party providers’ information technology systems, which could disrupt our operations and those of third parties upon which we rely; increased focus on privacy issues in countries around the world, including the United States, the European Union, and China, and a more difficult legislative and regulatory landscape for privacy and data protection that continues to evolve with the potential to directly affect our business, including recently enacted laws in a majority of states in the United States requiring security breach notification; changes in tax laws including changes related to the taxation of foreign earnings; the impact of any future pandemic, epidemic, or similar public health threat on our business, operations and financial performance; loss of key employees or inability to identify and recruit new employees; changes in accounting pronouncements promulgated by standard-setting or regulatory bodies, including the Financial Accounting Standards Board and the SEC, that are adverse to us; volatility of commodity prices, fuel, shipping rates that impact the costs and/or ability to supply our products; and other factors discussed in our most recently filed Annual Report on Form 10-K and Current Reports on Form 8-K, including those discussed in the “Business,” “Risk Factors,” “Cautionary Statement Regarding Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of those reports.

### General

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Amendment is intended to assist the reader in understanding our financial condition and results of operations. The following discussion and analysis should be read in conjunction with our Condensed Consolidated Financial Statements included in Part I, Item 1 of the Original Q2 Form 10-Q and with our audited financial statements, including the accompanying notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2024, as amended by the Form 10-K Amendment. Operating results discussed herein are not necessarily indicative of the results of any future period.

We are a global health care company with a primary focus on improving the health of women throughout their lives. We develop and deliver innovative health solutions through a portfolio of prescription therapies and medical devices within our women’s health and general medicines portfolios. We have a portfolio of more than 70 medicines and products across a range of therapeutic areas. We sell these products through various channels including drug wholesalers and retailers, hospitals, government agencies and managed health care providers such as health maintenance organizations, pharmacy benefit managers and other institutions. We operate six manufacturing facilities, which are located in Belgium, Brazil, Indonesia, Mexico, the Netherlands and the United Kingdom. Unless otherwise indicated, trademarks appearing in italics throughout this document are trademarks of, or are used under license by, our group of companies.

### Recent Developments

### Business Development

### Biogen Inc. (“Biogen”)

In March 2025, we acquired from Biogen the regulatory and commercial rights in the United States for *Tofidence*, a biosimilar to *Actemra*2 (tocilizumab), for intravenous infusion. *Tofidence*, launched in the U.S. market in May 2024, is indicated in certain patients for the treatment of moderately to severely active rheumatoid arthritis, giant cell arthritis, polyarticular juvenile idiopathic arthritis, systemic juvenile idiopathic arthritis, and COVID-19. Under the terms of the agreement with Biogen, we paid an upfront payment of $51 million in July 2025, and will be obligated to pay tiered royalty payments based on net sales and tiered annual net sales milestone payments of up to $45 million from a previous in-license arrangement with Bio-Thera Solutions Ltd., the product developer for *Tofidence*. In the first quarter of 2025, we recognized an intangible asset of $51 million, related to the upfront payment to Biogen, which will be amortized over 10 years.

### Other Macroeconomic Considerations

Geopolitical developments, global trade issues such as tariffs imposed by or on the United States, shifting U.S. federal and state government policies, policies hindering market access, and worsening macroeconomic conditions could impact our business and results of operations and may stress our working capital resources. While tariffs have not, to date, had a material impact on our business, future tariff actions could potentially have a significant effect on our supply chain and operating costs. Regulatory agency developments, including disruptions at the FDA and other agencies, could increase the time needed for review and approval of new drugs and medical devices, potentially delaying our product launches and impacting our business operations. Additionally, proposed cuts to Medicaid and changes in federal funding policies could reduce access to healthcare services for low-income individuals and impact our ability to develop new drugs. Management will continue to evaluate the potential impacts of the shifting geopolitical and macroeconomic landscape on our business, results of operations, liquidity, and capital resources. For additional information, please refer to Item 1A — Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024.

### Operating Results

### Sales Overview

*($ in millions)*

|  | Three Months Ended June 30,% 2025 | 2024 | Change | % Change Excluding Foreign Exchange | Six Months Ended June 30,% 2025 | 2024 | Change | % Change Excluding Foreign Exchange |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| United States | $414 | $388 | 7% | 7% | $826 | $758 | 9% | 9% |
| International | 1,180 | 1,219 | (3) | (4) | 2,281 | 2,471 | (8) | (6) |
| Total | $1,594 | $1,607 | (1)% | (1)% | $3,107 | $3,229 | (4)% | (3)% |

Worldwide sales were $1.6 billion for the three months ended June 30, 2025, a decrease of 1%, compared to 2024. Worldwide sales were positively impacted by approximately 1% or $9 million, due to favorable foreign exchange rates.

Excluding the impact of foreign exchange rates, sales increases for the three months ended June 30, 2025 primarily reflect the performance of:

- *Vtama,* due to the acquisition of Dermavant in the fourth quarter of 2024 and launch of the atopic dermatitis indication in the United States.
- *Hadlima®* (adalimumab-bwwd), reflecting sales ramp up since its launch in July 2023 in the United States and a modest increase in international markets.
- *Emgality® 2* (galcanezumab-gnlm), due to the acquisition of the distribution and promotion rights from Lilly in 2024 in certain markets outside of the United States.
- *Follistim AQ®* (follitropin beta injection), due to a one-time buy-in as a result of our exit from our interim operating model (“IOM”) agreement in the United States with Merck during the fourth quarter of 2023, which resulted in lower sales in the first half of 2024, demand increase and favorable discount rates in the United States as well as increased demand in select international markets.

This performance was offset by decreases for the three months ended June 30, 2025 in:

- *Atozet,* primarily due to LOE in France, Spain and Japan partially offset by increased demand in Asia Pacific and Latin America.
- *Singulair®* (montelukast sodium), due to the lower demand and negative impact from price reductions in Japan and China.
- *Ontruzant®* (trastuzumab-dttb), due to unfavorable pricing in Brazil coupled with lower tendered volume from Brazil’s Ministry of Health when compared with 2024 and lower demand in the United States.

Worldwide sales were $3.1 billion for the six months ended June 30, 2025, a decrease of 4%, compared to 2024. Worldwide sales during the six months ended June 30, 2025 were negatively impacted by approximately 1%, or $34 million, due to unfavorable foreign exchange rates.

Excluding the impact of foreign exchange rates, sales increases for the six months ended June 30, 2025, primarily reflect the performance of:

- *Vtama,* due to the acquisition of Dermavant in the fourth quarter of 2024 and launch of the Atopic Dermatitis indication in the United States.
- *Hadlima,* reflecting sales ramp up since its launch in July 2023 in the United States and a modest increase in international markets.
- *Emgality,* due to the acquisition of the distribution and promotion rights from Lilly in 2024 in certain markets outside of the United States.
- *Follistim AQ*, due to a one-time buy-in as a result of our exit from our IOM agreement in the United States with Merck during the fourth quarter of 2023, which resulted in lower sales in the first half of 2024, demand increase and favorable discount rates in the United States as well as increased demand in select international markets.
- 8-

*Nexplanon*, primarily due to favorable pricing in the United States and increased demand in Brazil and our institutional business in Africa. *Nexplanon* sales during the six months ended June 30, 2025 included an estimated $15 million of sales resulting from the identified sales practices for wholesalers described in the “Explanatory Note” above, offset by an estimated $15 million of sales from such sales practices for wholesalers that were pulled forward into the year ended December 31, 2024, resulting in no net impact for the six months ended June 30, 2025. The impact was estimated using average daily sales, inventory levels at the wholesaler and days on hand at the wholesaler.

This performance was offset by decreases for the six months ended June 30, 2025 in:

- *Atozet,* primarily due to LOE in France, Spain and Japan partially offset by increased demand in Asia Pacific and Latin America.
- *Singulair,* due to the lower demand and negative impact from price reductions in Japan and China.
- *Ontruzant,* due to unfavorable pricing in Brazil coupled with lower tendered volume from Brazil’s Ministry of Health when compared with 2024 and lower demand in the United States.

LOE negatively impacted sales of certain of our products by approximately $60 million and $123 million during the three and six months ended June 30, 2025, respectively, based on the decrease in volume period over period. This was primarily driven by the LOE of *Atozet* in France, Spain and Japan and *Rosuzet™* (ezetimibe and rosuvastatin) in Japan. Volume-based procurement (“VBP”) in China had an immaterial impact on our sales during the six months ended June 30, 2025. We expect VBP to continue to impact our general medicines product portfolio for the next several quarters.

Due to changing market conditions, new and evolving U.S. and international tariffs, U.S. tax law changes and regulatory uncertainty that impact our business, as well as the pharmaceutical industry, we have been and will continue to adapt our business and sales strategies to address this changing landscape in order to achieve our business objectives and remain competitive. Such strategies may include implementing or continuing to assess product discount programs and wholesaler inventory levels under the relevant agreements or waivers of their terms for certain key products.

Our operations include a portfolio of products. Highlights of the sales of our products for the three and six months ended June 30, 2025 and 2024 are provided below. See Note 5 “Product and Geographic Information” to the Condensed Consolidated Financial Statements for further details on sales of our products.

### Women’s Health

*($ in millions)*

|  | Three Months Ended June 30,% 2025 | 2024 | Change | % Change Excluding Foreign Exchange | Six Months Ended June 30,% 2025 | 2024 | Change | % Change Excluding Foreign Exchange |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Nexplanon/Implanon NXT | $240 | $242 | (1)% | (1)% | $488 | $462 | 6% | 6% |
| NuvaRing | 28 | 29 | (4) | (6) | 50 | 67 | (26) | (26) |
| Marvelon/Mercilon | 33 | 41 | (18) | (19) | 72 | 73 | (2) | (1) |
| Follistim AQ | 74 | 62 | 18 | 17 | 142 | 108 | 31 | 32 |
| Jada | 18 | 14 | 24 | 24 | 33 | 27 | 22 | 22 |

- 9-

### Contraception

Worldwide sales of *Nexplanon,* a single-rod subdermal contraceptive implant, decreased 1% for the three months ended June 30, 2025, compared to 2024, primarily due to softer demand in the United States partially offset by favorable pricing in the United States, increased demand in various international markets, including Brazil and our institutional business in Africa. Sales increased 6% for the six months ended June 30, 2025, compared to 2024, primarily due to favorable pricing in the United States and increased demand in Brazil and our institutional business in Africa. *Nexplanon* sales during the six months ended June 30, 2025 included an estimated $15 million of sales resulting from the identified sales practices for wholesalers described in the “Explanatory Note” above, offset by an estimated $15 million of sales from such sales practices for wholesalers that were pulled forward into the year ended December 31, 2024, resulting in no net impact for the six months ended June 30, 2025. The impact was estimated using average daily sales, inventory levels at the wholesaler and days on hand at the wholesaler.

Worldwide sales of *NuvaRing*, a vaginal contraceptive product, declined 4% and 26% for the three and six months ended June 30, 2025, compared to 2024, respectively, due to ongoing generic competition. We expect a continued decline in *NuvaRing* sales as a result of generic competition.

Worldwide sales of *Marvelon™1* (desogestrel and ethinyl estradiol pill) and *Mercilon™1* (desogestrel and ethinyl estradiol pill), combined oral hormonal daily contraceptive pills not approved or marketed in the United States, but available in certain countries outside the United States, declined 18% and 2% for the three and six months ended June 30, 2025, compared to 2024, respectively, as a result of the phasing of shipments in Asia Pacific and China.

### Fertility

Worldwide sales of *Follistim AQ*, a fertility treatment, increased 18% and 31% for the three and six months ended June 30, 2025, compared to 2024, respectively, due to a one-time buy-in as a result of our exit from our IOM agreement in the United States with Merck during the fourth quarter of 2023, which resulted in lower sales in the first half of 2024, an increase in demand and favorable discount rates in the United States, as well as increased demand in select international markets.

### Other Women’s Health

Worldwide sales of *Jada,* a device intended to provide control and treatment of abnormal postpartum uterine bleeding or hemorrhage when conservative management is warranted, increased 24% and 22% for the three and six months ended June 30, 2025, compared to 2024, respectively. The sales increase is due to continued uptake in the United States following the *Jada* launch in early 2022 and favorable pricing in the United States.

### General Medicines

### Biosimilars

*($ in millions)*

|  | Three Months Ended June 30,% 2025 | 2024 | Change | % Change Excluding Foreign Exchange | Six Months Ended June 30,% 2025 | 2024 | Change | % Change Excluding Foreign Exchange |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Renflexis | $63 | $69 | (9)% | (8)% | $120 | $138 | (13)% | (13)% |
| Hadlima | 50 | 28 | 78 | 79 | 96 | 58 | 66 | 68 |
| Ontruzant | 31 | 48 | (35) | (35) | 49 | 87 | (43) | (44) |
| Brenzys | 22 | 12 | 76 | 79 | 36 | 36 | 1 | 4 |

*Renflexis®* (infliximab-abda) is a biosimilar to *Remicade2* (infliximab) for the treatment of certain autoimmune conditions. Sales declined 9% and 13% for the three and six months ended June 30, 2025, compared to 2024, respectively, primarily due to unfavorable discount rates in the United States partially offset by increased demand in Canada and Australia.

*Hadlima* is a biosimilar to *Humira2* (adalimumab) for the treatment of certain autoimmune and autoinflammatory conditions. We have commercialization rights to *Hadlima* in countries outside of the European Union, South Korea, China, Turkey, and Russia. We recorded sales of $50 million and $96 million during the three and six months ended June 30, 2025, respectively, reflecting sales ramp up since its launch in July 2023 in the United States and a modest increase in international markets. *Hadlima* is currently approved in the United States, Australia, Canada, and Israel.

*Ontruzant* is a biosimilar to *Herceptin2* (trastuzumab) for the treatment of HER2-overexpressing breast cancer and HER2-overexpressing metastatic gastric or gastroesophageal junction adenocarcinoma. Sales for the three and six months ended June 30, 2025, compared to 2024, declined 35% and 43%, respectively, due to unfavorable pricing in Brazil coupled with lower tendered volume from Brazil’s Ministry of Health when compared with 2024 and lower demand in the United States. We have commercialization rights to *Ontruzant* in all countries except in South Korea and China.

*Brenzys™* 1 (etanercept) is a biosimilar to *Enbrel2* (etanercept) for the treatment of certain inflammatory diseases. Sales for the three and six months ended June 30, 2025, compared to 2024, increased 76% and 1%, respectively, as a result of the timing of international tenders in Brazil. We have commercialization rights to *Brenzys* in countries outside of the United States, Europe, South Korea, China, and Japan.

### Cardiovascular

*($ in millions)*

|  | Three Months Ended June 30,% 2025 | 2024 | Change | % Change Excluding Foreign Exchange | Six Months Ended June 30,% 2025 | 2024 | Change | % Change Excluding Foreign Exchange |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Atozet | $86 | $140 | (38)% | (39)% | $162 | $271 | (40)% | (39)% |
| Zetia/Vytorin | 101 | 102 | (1) | (3) | 209 | 215 | (3) | (2) |
| Cozaar/Hyzaar | 56 | 60 | (6) | (6) | 111 | 127 | (13) | (11) |

Sales of *Atozet*, a medicine for lowering LDL cholesterol, declined 38% and 40% for the three and six months ended June 30, 2025, compared to 2024, respectively, primarily due to LOE in France, Spain and Japan, partially offset by increased demand in Asia Pacific and Latin America. We anticipate a continued significant decline in sales of *Atozet* in 2025 due to LOE, which occurred late in the third quarter of 2024, in certain markets in Europe.

Combined global sales of *Zetia®* (ezetimibe) and *Vytorin®* (ezetimibe / simvastatin), medicines for lowering LDL cholesterol, declined 1% and 3% for the three and six months ended June 30, 2025, compared to 2024, respectively, primarily driven by the decrease in demand and pricing pressure in various international markets.

Combined global sales of *Cozaar®* (losartan potassium) and *Hyzaar®* (losartan potassium and hydrochlorothiazide), medicines for the treatment of hypertension, declined 6% and 13% for the three and six months ended June 30, 2025, compared to 2024, respectively, driven by decreased hospital demand in China and decreased demand in Japan.

### Respiratory

*($ in millions)*

|  | Three Months Ended June 30,% 2025 | 2024 | Change | % Change Excluding Foreign Exchange | Six Months Ended June 30,% 2025 | 2024 | Change | % Change Excluding Foreign Exchange |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Singulair | $66 | $93 | (29)% | (31)% | $140 | $190 | (27)% | (27)% |
| Nasonex | 66 | 60 | 9 | 7 | 137 | 137 | — | 1 |
| Dulera | 41 | 47 | (13) | (12) | 84 | 103 | (18) | (17) |

- 11-

Worldwide sales of *Singulair*, a once-a-day oral medicine for the chronic treatment of asthma and for the relief of symptoms of allergic rhinitis, decreased 29% and 27% for the three and six months ended June 30, 2025, compared to 2024, respectively, due to lower demand and the negative impact from price reductions in Japan and China.

Global sales of *Nasonex®* (mometasone), an inhaled nasal corticosteroid for the treatment of nasal allergy symptoms, increased 9% and remained consistent for the three and six months ended June 30, 2025, compared to 2024, respectively, due to increased demand in China, Japan and the Middle East.

Global sales of *Dulera®* (formoterol/fumarate dihydrate), which is also marketed as *ZenhaleTM* in certain markets outside of the United States, a combination medicine for the treatment of asthma, declined 13% and 18% for the three and six months ended June 30, 2025, compared to 2024, respectively, primarily due to the loss of a customer contract in the first part of the year combined with increased discount rate pressure in the United States.

### Non-Opioid Pain, Bone and Dermatology

*($ in millions)*

|  | Three Months Ended June 30,% 2025 | 2024 | Change | % Change Excluding Foreign Exchange | Six Months Ended June 30,% 2025 | 2024 | Change | % Change Excluding Foreign Exchange |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Arcoxia | $63 | $68 | (7)% | (10)% | $124 | $143 | (13)% | (13)% |
| Vtama | 31 | — | \* | \* | 54 | — | \* | \* |

#### \* Calculation not meaningful.

Sales of *Arcoxia™* 1 (etoricoxib), a medicine for the treatment of arthritis and pain, declined 7% and 13% for the three and six months ended June 30, 2025, compared to 2024, respectively, primarily due to decreased demand in Asia Pacific and China and the phasing of shipments in various international regions.

Sales of *Vtama,* a cream for the topical treatment of mild, moderate, and severe plaque psoriasis in adults and atopic dermatitis, also known as eczema, in adults and children two years of age and older, were $31 million and $54 million for the three and six months ended June 30, 2025, respectively as a result of our acquisition of Dermavant in the fourth quarter of 2024 and launch of the atopic dermatitis indication in the United States.

### Other

*($ in millions)*

|  | Three Months Ended June 30,% 2025 | 2024 | Change | % Change Excluding Foreign Exchange | Six Months Ended June 30,% 2025 | 2024 | Change | % Change Excluding Foreign Exchange |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Emgality/Rayvow | $42 | $30 | 42% | 37 | $74 | $40 | 88% | 88% |

Sales of *Emgality,* a medicine for the preventive treatment of migraine and *Rayvow™* 2 (lasmiditan), a medicine for acute treatment of the headache phase of migraine attacks, increased for the three and six months ended June 30, 2025, compared to 2024, as a result of our acquisition of the distribution and promotion rights from Lilly in 2024 in certain markets outside of the United States.

### Gross Profit, Expenses and Other

*($ in millions)*

|  | Three Months Ended June 30,% 2025 | 2024 | Change | Six Months Ended June 30,% 2025 | 2024 | Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Cost of sales | $720 | $668 | 8% | $1,392 | $1,333 | 4% |
| Gross profit | 874 | 939 | (7) | 1,715 | 1,896 | (10) |
| Selling, general and administrative | 453 | 437 | 4 | 873 | 868 | 1 |
| Research and development | 95 | 116 | (18) | 191 | 228 | (16) |
| Acquired in-process research and development and milestones | — | 15 | (100) | 6 | 30 | (80) |
| Restructuring costs | 2 | — | \* | 88 | 23 | \* |
| Interest expense | 131 | 131 | — | 255 | 262 | (3) |
| Exchange (gains) losses | (1) | (1) | — | (5) | 5 | \* |
| Other (income) expense, net | (35) | 6 | \* | (23) | 9 | \* |

#### \* Calculation not meaningful.

### Cost of Sales

Cost of sales increased 8% and 4% for the three and six months ended June 30, 2025, compared to 2024. Cost of sales for the three and six months ended June 30, 2025, includes amortization associated with the inventory fair value adjustment related to the Dermavant acquisition of $10 million and $19 million, respectively, an impairment charge related to a currently marketed women’s health product of $9 million and amortization of intangible assets of $53 million and $103 million, respectively. Cost of sales for the three and six months ended June 30, 2024 includes amortization of intangible assets of $34 million and $67 million, respectively. In addition, the three and six months ended June 30, 2025 benefited from the impacts of favorable foreign exchange rates. Separation costs associated with manufacturing-related headcount reductions have been incurred and are reflected in *Restructuring costs.*

### Gross Profit

Gross profit decreased 7% and 10% for the three and six months ended June 30, 2025, compared to 2024, respectively, due to the impact of unfavorable price, decreased sales, unfavorable product mix and foreign exchange translation.

### Selling, General and Administrative

Selling, general and administrative expenses increased 4% and 1% for the three and six months ended June 30, 2025, compared to 2024, respectively, due to increased costs associated with the promotion of our recently acquired products and *Nexplanon* and reserves for legal settlements offset by lower costs related to the prior year implementation of our ERP system.

### Research and Development

Research and development expenses decreased 18% and 16% for the three and six months ended June 30, 2025, compared to 2024, respectively, primarily due to a decrease in headcount related expenses and clinical study activity. In July 2025, we announced that the Phase 2 ELENA proof-of-concept study evaluating the investigational candidate OG-6219 in endometriosis-related pain did not meet its primary efficacy endpoint. Based on these results, we will discontinue the OG-6219 clinical development program.

### Acquired In-Process Research and Development and Milestones

For the six months ended June 30, 2025, we recognized $6 million in acquired in-process research and development and milestones, related to the exit of our agreement with Centergene, due to the evolving fertility landscape in China. For the three months ended June 30, 2024, acquired in-process research and development and milestones of $15 million represented the research and development milestones of $5 million for Henlius and $10 million for Cirqle Biomedical (“Cirqle”), which were determined to be probable of being achieved. For the six months ended June 30, 2024, acquired in-process research and development and milestones of $30 million represent the research and development milestones of $20 million for Henlius and $10 million for Cirqle, which were determined to be probable of being achieved.

### Restructuring Costs

For the three and six months ended June 30, 2025, we incurred restructuring costs of $2 million and $88 million, respectively, comprised primarily of headcount-related restructuring expense associated with restructuring initiatives that were aimed at driving operational efficiencies in 2025. The restructuring activities combined with our other cost savings initiatives are expected to result in approximately $200 million of annual savings. For the six months ended June 30, 2024 we incurred restructuring costs of $23 million, comprised of headcount-related restructuring expense related to the optimization of our internal operations, primarily within the research and development function.

### Interest Expense

Interest expense remained consistent and decreased 3% for the three and six months ended June 30, 2025, compared to 2024, respectively, and reflects lower interest rates as a result of refinancing a portion of our long-term debt in the prior year and lower reference rates on our variable rate debt, offset by interest related to the debt acquired as part of the Dermavant acquisition and previously unamortized debt issuance fees of approximately $2 million associated with the repurchase and cancellation of $242 million of the 2031 Notes.

### Exchange (Gains) Losses

Exchange (gains) losses were positively impacted for the six months ended June 30, 2025, compared to 2024, as a result of the strengthening of foreign currencies against the U.S. dollar in the first half of 2025.

### Other (Income) Expense, net

Other (income) expense increased for the three and six months ended June 30, 2025, compared to 2024, due to a $46 million pre-tax gain related to the repurchase and cancellation of approximately $242 million of the 2031 Notes and the repayment and termination of the NovaQuest Funding Agreement offset by the accretion of the contingent consideration related to the Dermavant acquisition.

### Taxes on Income

The effective income tax rates were 37.0% and 17.3% for the three months ended June 30, 2025 and 2024, respectively, and 29.8% and 16.0% for the six months ended June 30, 2025 and 2024, respectively. These effective income tax rates reflect the beneficial impact of foreign earnings, offset by the impact of U.S. inclusions under the Global Intangible Low-Taxed Income regime and a partial valuation allowance recorded against non-deductible U.S. interest expense. There was a favorable impact to the 2025 year-to-date effective tax rate driven by a tax amortization benefit. The favorable impact to the 2024 year-to-date effective tax rate was driven by the favorable closure of the two non-U.S. tax audits and a return to provision adjustment for an entity in Switzerland.

On July 4, 2025, House Resolution 1, referred to as the One Big Beautiful Bill Act (“OBBBA”), was signed into law. The OBBBA includes significant corporate tax provisions such as modifications to interest deductibility, the option to fully expense U.S.-based R&D costs, and changes to the taxation of foreign earnings. We are evaluating the impacts of the OBBBA on our U.S. cash tax liability and income tax provision.

### Liquidity and Capital Resources

As of June 30, 2025, we had cash and cash equivalents of $599 million. We have historically generated and expect to continue to generate positive cash flow from operations. Our ability to fund our operations and anticipated capital needs is reliant upon the generation of cash from operations, supplemented as necessary by periodic utilization of our revolving credit facility. Our principal uses of cash in the future will be primarily to fund our operations, working capital needs, capital expenditures, repayment of borrowings, strategic business development transactions and the payment of dividends. We believe that our financing arrangements, future cash from operations, and access to capital markets will provide adequate resources to fund our future cash flow needs.

Working capital is defined as current assets less current liabilities and was $1.82 billion and $1.63 billion as of June 30, 2025 and December 31, 2024, respectively. Working capital was impacted by our active cash cycle management, which includes the factoring of receivables and timing of vendor payments; milestone payments; and net repayments of debt.

We have accounts receivable factoring agreements with financial institutions in certain countries. Under these agreements, we have factored $280 million and $186 million of our accounts receivable as of June 30, 2025 and December 31, 2024, respectively. See Note 11 “Financial Instruments” to the Condensed Consolidated Financial Statements for information on the Company’s’ accounts receivable factoring and related agreements.

Net cash provided by operating activities was $295 million for the six months ended June 30, 2025, compared to $408 million for the same period in the prior year due to lower operating income partially offset by our active cash cycle management.

Net cash used in investing activities was $210 million for the six months ended June 30, 2025, compared to $142 million for the same period in the prior year, primarily due to increased milestone payments, partially offset by lower capital spending as a result of the completion of the implementation of our ERP system.

Net cash used in financing activities was $298 million for the six months ended June 30, 2025, compared with $208 million for the same period in the prior year primarily driven by the repurchase and cancellation of $242 million of the 2031 Notes and the payment and termination of the NovaQuest Funding Agreement partially offset by borrowings on our Revolving Credit Facility and decreased dividend payments in the current year.

As part of our post-spinoff plan, we have an ongoing initiative to further optimize our manufacturing and supply network. As part of this initiative, we will continue to separate our supply chain through planned exits from supply agreements from Merck through 2031. This will enable us to redefine our appropriate sourcing strategy, and move to fit-for-purpose supply chains, while focusing on delivering efficiencies. We anticipate we will incur costs associated with this separation, including but not limited to accelerated depreciation, exit premiums and fees, technology transfer costs, stability and qualification batch costs, one-time resourcing costs, regulatory and filing costs, capital investment, and inventory stock bridges.

Our contractual obligations as of June 30, 2025, which require material cash requirements in the future, consist of contractual milestones, purchase obligations and lease obligations. Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024 for further details. As of June 30, 2025, total potential payments for contractual milestones are $2.6 billion. Potential amounts to be paid through the remainder of 2025 is approximately $85 million. As of June 30, 2025, other than the update for contractual milestones, there have been no material changes to our contractual obligations outside of the ordinary course of business.

During the second quarter of 2025, we paid cash dividends of $0.02 per share. On August 5, 2025, the Board of Directors declared a quarterly dividend of $0.02 for each issued and outstanding share of our common stock. The dividend is payable on September 11, 2025, to stockholders of record at the close of business on August 15, 2025.

We or our affiliates may, at any time and from time to time, seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such transactions, if any, may be material, and will depend upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

### Critical Accounting Estimates

Our significant accounting policies, which include management’s best estimates and judgments, are included in Note 2 “Summary of Accounting Policies” to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024. See Note 2 “Basis of Presentation” to the Condensed Consolidated Financial Statements for information on the adoption of new accounting standards during 2025. There have been no changes to our accounting policies as of June 30, 2025. A discussion of accounting estimates considered critical because of the potential for a significant impact on the financial statements due to the inherent uncertainty in such estimates are disclosed in the Critical Accounting Estimates section of Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Organon’s Annual Report on Form 10-K for the year ended December 31, 2024.

### Recently Issued Accounting Standards

For a discussion of recently issued accounting standards, see Note 2 “Basis of Presentation” to the Condensed Consolidated Financial Statements included in this report.

## Controls and procedures

As filed, 10,757 characters.

### Overview

As previously disclosed in the Form 8-K, the Form 10-K Amendment and the Q1 Form 10-Q Amendment, after concerns regarding the Company’s sales practices for wholesalers for *Nexplanon* were brought to the Board’s attention, the Audit Committee oversaw an independent, internal investigation into these sales practices. The Audit Committee’s investigation focused on the Company’s sales of *Nexplanon* to wholesalers. The investigation found that the Company asked two wholesalers in the United States to purchase greater quantities of *Nexplanon* during the Relevant Periods than they otherwise would have purchased based on wholesaler demand. In certain instances, the Company waived inventory management fee performance metrics associated with caps on days of inventory to allow wholesalers to be paid the inventory management fees they would have earned but for the Company’s ask to purchase additional inventory. As a result of these purchases, the United States wholesalers significantly decreased or even halted their purchases of *Nexplanon* during the early weeks of the following quarters until their days of inventory on hand were reduced to levels within the contractual range. Although the incremental amount of *Nexplanon* sales that occurred during the Relevant Periods represented less than 1% of the Company’s consolidated revenue for the year ended December 31, 2022 or December 31, 2024 as applicable (and less than 2% of the Company’s consolidated revenue for the relevant quarterly periods, including the quarters ended March 31, 2025 and June 30, 2025), based on the results of the investigation, the Company has determined that without these sales practices, the Company’s consolidated revenue for the fiscal year ended December 31, 2024 reported in the Original Form 10-K (and certain of the other Relevant Periods, including the quarters ended March 31, 2025 and June 30, 2025) would have fallen short of the Company’s guidance range and/or certain external revenue expectations.

Based on the results of the Audit Committee’s investigation as further set forth in the “Explanatory Note”, the Company determined that these sales practices for wholesalers involving *Nexplanon* in the United States during the Relevant Periods were improper, and that certain of the Company’s prior disclosures relating to these sales practices for wholesalers and their effect upon revenues and product demand in its periodic filings were inaccurate or incomplete, including certain disclosures in the Original Q2 Form 10-Q that are being amended by this Amendment. As also discussed in the “Explanatory Note”, the Company identified material weaknesses in its internal control over financial reporting, which are described in the Form 10-K Amendment, the Q1 Form 10-Q Amendment and below.

### Quarterly Evaluation of Disclosure Controls and Procedures (Restated and Amended)

We have established disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) to provide reasonable assurance that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Interim Chief Executive Officer (“CEO”) (our principal executive officer) and Chief Financial Officer (“CFO”) (our principal financial officer), as appropriate to allow timely decisions regarding required disclosure, and ensure that information required to be disclosed in the reports we file or submit is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

Our management, with the participation of our Interim CEO and CFO, re-evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2025 in connection with the filing of this Q2 10-Q Amendment. At the time that the Original Q2 Form 10-Q was filed with the SEC on August 6, 2025, our former CEO and our CFO had concluded that, as of June 30, 2025, the end of the period covered by the Original Q2 Form 10-Q, our disclosure controls and procedures were effective and provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our CEO and our CFO, as appropriate, to allow timely decisions regarding required disclosure. Subsequent to this evaluation, the Interim CEO and the CFO concluded that our disclosure controls and procedures were not effective as of June 30, 2025 due to the material weaknesses in internal control over financial reporting as described below.

Notwithstanding the material weaknesses described below, management has concluded that its condensed consolidated financial statements included in the Original Q2 Form 10-Q continue to fairly present, in all material respects, our financial position and results as of June 30, 2025 and December 31, 2024, and for the three- and six-month periods ended June 30, 2025 and 2024.

### Material Weaknesses in Internal Control Over Financial Reporting (Restated and Amended)

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Based on the evaluation described above, we identified the following material weaknesses in the Company’s internal control over financial reporting:

- The Company failed to set an appropriate tone at the top. Specifically, our former CEO and leader of the Company’s U.S. commercial organization applied inappropriate pressure to achieve sales targets through sales of *Nexplanon* to two United States wholesalers above demand and engaged in inappropriate business conduct that violated the Company’s Code of Conduct.
- The material weakness with respect to our tone at the top contributed to an additional material weakness of not maintaining effective controls related to information and communication. The Company did not design and maintain effective controls related to the information and communication component of the COSO Framework. Specifically, the former CEO and certain senior members of the Company’s U.S. commercial organization did not ensure appropriate communication with, or provide complete information to, the Company’s Disclosure Committee and the financial reporting group to evaluate disclosures and financial reporting conclusions related to sales practices for wholesalers.

These material weaknesses did not result in misstatements of our previously reported historical consolidated financial statements, including those filed with the Original Form 10-K, the Original Q1 Form 10-Q or the Original Q2 Form 10-Q. Each of these material weaknesses could result in a misstatement of substantially all account balances or disclosures that would result in a material misstatement to our annual or interim consolidated financial statements that would not be prevented or detected.

### Remediation Plan and Activities

To address the material weaknesses in internal control over financial reporting, the Company, with the oversight of its Audit Committee, has developed a remediation plan, which is described below. We are in the process of implementing measures designed to improve our internal control over financial reporting and remediate the control deficiencies that led to the material weaknesses described above. Actions taken to date include:

- The appointment of a new Interim CEO, the termination and appointment of a new Head of U.S. Commercial & Government Affairs, the appointment of an Executive Chair and the appointment of a Lead Independent Director.

In addition to the remedial actions taken to date, the Company is taking, or plans to take, the following actions, among others, to remediate the material weaknesses identified herein:

- Enhance the Company’s Code of Conduct to clarify responsibilities related to the Company’s financial reporting and disclosures, including awareness of the options to raise concerns or questions to management, human resources, compliance, legal, the technical accounting department and/or through the SpeakUp Tool, which is available globally as an alternate, confidential channel for raising concerns;
- Enhance compliance training and communication on the Company’s Code of Conduct regarding ethical tone and corporate culture and enhance training for commercial and finance personnel regarding appropriate business practices;
- Enhance the Company’s Annual Ethics and Policy Certifications;
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- Implement additional representations within the Company’s Quarterly Financial Certification Questionnaire relating to the disclosures of misleading business practices;
- Enhance existing Disclosure Committee responsibilities to include among other requirements, additional questions and more information regarding the representations being made, and provide incremental training on these responsibilities;
- Implement additional and enhance existing sub-certifications and internal management representation letters, including providing training on the purpose of the sub-certification and the process for evaluating the representations;
- Enhance controls and implement written policies and procedures to provide governance, oversight and guidelines for timely communication of management fee arrangements with wholesalers; and
- Evaluate and enhance internal controls related to sales monitoring.

Management continues to evaluate the effectiveness of these remedial measures and expects to continue implementing improvements to the Company’s internal control over financial reporting. The process of designing and maintaining effective internal control over financial reporting is a continuous effort that requires management to anticipate and react to changes in our business, economic, and regulatory environments and to expend significant resources. As we continue to evaluate our internal control over financial reporting, we may take additional actions to remediate the material weaknesses or modify the remediation actions described above.

### Quarterly Changes in Internal Control Over Financial Reporting

During the quarter ended June 30, 2025, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 4,304 characters.

Except as set forth below, there have been no material changes in our risk factors from those disclosed in Item 1A. Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2024.

The below risk factor relating to our key products and sales practices for wholesalers that was included in the Original Q2 Form 10-Q is being amended to correct and update information with respect to the Company’s sales practices for wholesalers involving *Nexplanon* in the United States during the Relevant Period and the related risks.

***Key products generate a significant amount of our profits and cash flows, and any events that adversely affect the markets for our leading products could adversely affect our results of operations and financial condition.***

Our ability to generate profits and operating cash flow depends largely upon the continued profitability of our key products, such as *Nexplanon*, Arcoxia, Singulair and the ezetimibe family of products. As a result of our dependence on key products, any event that adversely affects any of these products or the markets for any of these products could adversely affect our sales, results of operations or cash flows. These adverse events could include increased costs associated with manufacturing, product shortages, increased generic or over-the-counter availability of our products or competitive products, the discovery of previously unknown side effects, results of post-approval trials, increased competition from the introduction of new, more effective treatments and discontinuation or removal from the market of these products for any reason. In addition, recent adverse market and political events could negatively impact our key products and/or our business, results of operation and financial condition as a whole. These recent adverse events may include, among other things, U.S. and international tariffs or other protectionist trade measures, the recent changes to U.S. tax laws, healthcare and regulatory reforms, including those relating to insurance coverage, and other U.S. and international regulatory changes. We also expect that competition will continue to adversely affect the sales of our key products (including generic competition as a result of LOE in 2024 for Atozet and if we are unable to obtain an additional period of market exclusivity for *Nexplanon).*

To address such adverse effects and remain competitive, we have and will continue to adapt our business and sales practices for wholesalers, particularly in connection with our key products. These business and sales practices for wholesalers have historically included product discount programs and discussing with wholesalers whether to increase their inventory levels either within or above the agreed upon product inventory levels under the relevant agreement terms or pursuant to waivers. In the United States, the current structure of our arrangements provides us with data on inventory levels at our wholesalers, which is closely monitored and reviewed with the goal of ensuring that inventory levels are appropriate and reasonable in the normal course of business. Additionally, with respect to markets outside of the United States, inventory levels are also reviewed to the extent information is available by market or customer type. However, even with available inventory data, if we do not accurately predict inventory levels or we otherwise determine that inventory levels of our wholesalers should increase due to either customer demand or demand generated via the sales practices for wholesalers, then this may result in the inventory of our wholesalers exceeding customer demand at the time. However, if demand does not keep pace with the additional inventory purchases, then channel inventory for such products could grow in any particular quarter, which could adversely affect corresponding product revenues and/or rate of returns, and could result in a greater amount of product expirations, reduced inventory purchases in subsequent months and/or product discounts being recorded in subsequent quarters. Moreover, if we choose to eliminate or adjust the use of these strategies or if wholesalers decrease their inventory levels, this could contribute to our quarterly and/or annual revenue failing to meet our expectations.

Filed Nov 10, 2025.
Source: SEC EDGAR, the filing index for accession 0001104659-25-108740. Last ingested by Listed: Oct 31, 2026, 03:06 ET. No prices; not investment advice.