Two months have passed since Organon, Merck’s women’s health spinoff Organon, set out to create its own independent company. It has been a difficult task in the midst of a global pandemic. But, so far, Wall Street is paying attention to Organon’s early results.
Organon surprised investors with its first quarter of independent business. It posted almost $1.6 billion in revenue. This was more than expected and sent its shares up by more than 13%.
Organon’s top brass warned that there could be pandemic turbulence in the second half of the year. While the results were promising and in line with the strong performance of pharma companies in the past three months
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Organon’s early success was due to its biosimilars business, notable revenue increases for Nexplanon contraceptive implant and Follistim. Each product saw a 40% increase in year-over-year sales, with Nexplanon bringing in $184 million worldwide and Follistim netting $65 million.
Organon was split from Merck in June. The year-over-year numbers are a comparison to last year’s drug sales under Merck.
Organon’s Chief Financial Officer Matt Walsh said that the Nexplanon-Folilistim combination “more than offset” the 19% decrease in contraceptive NuvaRing sales amid increasing copycat competition. Organon held an earnings conference call for analysts Thursday. Walsh said that investors should not compare year-over-year results with the previous company, as the second quarter was a “hybrid” quarter.
NuvaRing’s maker of Nexplanon has high hopes for the contraceptive that is the only long-acting, single-rod reversible contraceptive to be a blockbuster in the next few years. Nexplanon is now the number one drugmaker’s women’s health portfolio. However, it still has a long way to go before it can overcome its pandemic slump.
Walsh stated that while there was an increase in doctor visits this quarter, it is still not at pre-pandemic levels. He said that Organon’s recovery has been largely due to its infertility service versus contraception.
Organon is optimistic about the future and believes that there will be more COVID recovery in the businesses, Walsh stated.
The outcome of the highly transmissible Delta variant which is responsible for most new U.S. infections will be a major factor in recovery. Organon believes that the 2021 COVID impact could be greater than we thought, despite all of this uncertainty,” Walsh stated.
Organon is not just a growth driver for women’s health. Organon, a New Jersey drugmaker, also offers a growing number of biosimilar products in immunology and oncology.
Organon’s biosimilar business increased 35% last year, excluding foreign exchange rates. This was mainly due to its Remicade arthritis biosimilar Remflexis and its continued growth of its Herceptin replicacat Ontruzant. CEO Kevin Ali stated that the company’s “biggest product opportunity” is in 2023, with its Humira biosim Hadlima.
According to a report by the Pharmaceutical Strategies Group (PSG), Innovator biologics are feeling the heat more as biosimilars outperform branded treatments. This was found in a Thursday report.
Organon, for its part, believes that this is the case. Ali stated to analysts that the company is seeing “increased biosimilar usages” in immunology and oncology, but the uptake of cancer medicines has been slower.
