A Positive Projection:
Thursday marked a notable upswing for Organon & Co (OGN) as the company reported an 8% year-on-year increase in revenue for the fourth quarter of 2023, hitting approximately $1.6 billion, surpassing the consensus of $1.55 billion.
Strong Growth in Women’s Health Revenue:
Women’s Health revenue saw a 7% increase in reported and 8% increase excluding foreign exchange, driven by robust growth in fertility products, notably Follistim AQ. Notably, Follistim saw a 63% increase excluding foreign exchange, attributed to heightened demand in the U.S. tied to the acquisition of a new customer and a surge in volume in China due to the return of fertility patients post the easing of COVID-19 concerns.
The Women’s Health franchise also reaped the benefits of the commendable performance of oral contraceptives. Nevertheless, challenges were encountered with declines in Nexplanon and NuvaRing due to competitive pressures.
Biosimilar Revenue Surge and Margin Improvements:
Biosimilar revenue surged by 49% as reported and 48% excluding foreign exchange, with substantial contributions from Ontruzant and Renflexis. Despite the challenging operational landscape in China, Established Brands witnessed a 3% increase in revenue.
Organon reported a gross margin of 60.3% on an adjusted basis for the fourth quarter of 2023. Adjusted EBITDA margin also showed improvement, standing at 28.1%, reflecting reduced operating expenses and foreign exchange losses.
Riding High on Adjusted EPS and Future Outlook:
The company’s adjusted earnings per share stood at $0.88, surpassing the consensus of $0.83. Looking ahead to the fiscal year 2024, Organon projects constant currency revenue growth in the low-single-digit range, expecting revenue to fall within the range of $6.2 billion to $6.5 billion versus the consensus of $6.40 billion. The company also anticipates a stable to improving Adjusted EBITDA margin, with a projected range of 31.0% to 33.0%.
Notably, OGN shares climbed 13.70% to $18.61 by last check on Thursday.
Image by Gabriela Sanda from Pixabay
