Organon & Co. Aktie

Hello, and welcome to the Organon Fourth Quarter and Full Year 2025 Earnings Call and webcast. [Operator Instructions]. I would now like to turn the conference over to Jennifer Halchak, Vice President, Investor Relations. You may begin.

Thank you, operator. Good morning, everyone. With me today are Joe Morrissey, Organon's Interim Chief Executive Officer; and Matt Walsh, our Chief Financial Officer; Carrie Cox, Organon's Board Chair; and Juan Camilo Arjona Ferreira, Organon's Head of R&D, will also be joining for the Q&A portion of this call.

Today, we are referencing a presentation that will be visible during this call for those of you on our webcast. This presentation will also be available following this call on the Events and Presentations section of our Organon Investor Relations website. Please reference Slides 2 and 3 for a couple of brief reminders.

I would like to caution listeners that certain information discussed by management during this call will include forward-looking statements. Forward-looking statements can be identified because they do not relate strictly to historical or current facts and use words such as potential, should, will, continue, expects, believe, future, estimates, believes, outlook and other words of similar meaning.

Actual results could differ materially from those stated or implied by forward-looking statements due to risks and uncertainties associated with the company's business, which are discussed in the company's filings with the Securities and Exchange Commission. This includes our most recent Form 10-K and Forms 10-Q and those amended forms. These statements are based on information as of today, February 12, 2026 and except as required by law, Organon undertakes no obligation to update or revise any of these forward-looking statements.

In addition, we will discuss certain non-GAAP financial measures on this call, which should be considered a supplement to and not a substitute for financial measures prepared in accordance with GAAP. Descriptions of these measures and reconciliations to the comparable GAAP measures are included in today's earnings press release and conference call presentation, both of which are available on our Investor Relations website and have been furnished to the SEC on the current report on Form 8-K.

I note that while our full year 2026 guidance measures other than revenue are provided on a non-GAAP basis, Organon does not provide GAAP financial measures on a forward-looking basis because we cannot predict with reasonable certainty and without unreasonable effort, the ultimate outcome of legal proceedings, unusual gains and losses, the occurrence of matters creating GAAP tax impacts and acquisition-related expenses. These items are uncertain, depend on various factors and could be material to our results computed in accordance with GAAP. I'd now like to turn the call over to Joe Morrissey.

Thank you, Jen. Beginning on Slide 4. In 2025, Organon delivered $6.2 billion in revenue and $1.9 billion of adjusted EBITDA. Revenue was down 3% on both a reported and ex exchange basis. Relative to where we began the year, our biosimilar franchise performed better than expected, driven by solid performance in [ Head Lima ] as well as contributions from new launches. Vtama delivered $128 million of global revenue in 2025, and Emgality and our fertility business also grew strongly in 2025.

That performance helped to offset the continued impact of the [ LOE ] of [indiscernible] and headwinds in other parts of the business that emerged during the year. Those include policy-related changes in the U.S. for Nexplanon and a revision to medical guidelines in certain international markets that deprioritize the use of montelukast, which impacted Singulair.

Though Nexplanon on had its challenges this year. The FDA approved our sNDA to extend the duration of Nexplanon from 3 to 5 years. The study supporting the approval enrolled a population of women with varying body mass indices, including women with overweight or obesity, a testament to Organon's commitment to inclusive and comprehensive women's health care.

This is a meaningful milestone for Organon and the Nexplanon brand as it potentially broadens the addressable market for this key product. The approval also includes a new risk evaluation and mitigation strategy program that will enhance Organon's existing clinical training program and controlled distribution program, which has been in place since 2006.

One of the most important decisions the company made in 2025 was to lower our dividend payout ratio and apply those excess funds to debt reduction. We also divested the [ JDA ] system, resulting in approximately $390 million in net proceeds that will help us to reduce net debt in 2026. Together, these decisions mark our commitment to improving capacity in Organon's balance sheet to put us in a position to pursue growth opportunities in the future.

At the same time, we have scrutinized our spending and had to consider tough but necessary changes to our business. In 2025, we were able to keep adjusted EBITDA margins essentially flat with 2024 and despite 150 basis points of gross margin degradation. We achieved over $200 million in cost savings in 2025 and through significant efforts, which offset investments in growth drivers like Vtama.

We also discontinued early-stage clinical programs and are limiting spend to activities such as medical and regulatory affairs that support products already in the market. As we look across the portfolio, we expect revenue and adjusted EBITDA this year to be very much in line with 2025 which means at a high level, we expect to deliver about $6.2 billion of revenue and about $1.9 billion of adjusted EBITDA in 2026.

We expect that the annual revenue foregone with the sale of the [ JDA ] system will be offset by an FX tailwind of about the same amount, which means we expect revenue to be about flat with prior year on a constant currency basis, pro forma for the [ jaded ] system divestiture.

On the profitability front, we continue to thoughtfully curtail OpEx to offset what we believe is about 75 to 100 basis points of deterioration in gross margin in 2026 and that we can manage to an adjusted EBITDA figure of about $1.9 billion. I remain confident in our ability to deliver these results in 2026, and I'm deeply proud of the talented teams across Organon who are driving this work every day. With that, I hand it over to Matt.

Thank you, Joe. Beginning on Slide 5, let's talk about the main drivers of performance in women's health. Women's health was down 16% ex FX for the fourth quarter and down 2% for the year. Sales of Nexplanon decreased 20% ex FX in the fourth quarter and 4% for the full year, in line with what we discussed in November when we reguided on the product. As we've talked about in previous quarters, in 2025, Nexplanon was impacted by several headwinds.

Let's break it down between those we expect to continue versus those that we believe are onetime in nature. And starting with the onetime item. As we talked about last quarter, we expected an approximate $17 million negative impact in the fourth quarter related to the cessation of certain identified U.S. wholesaler sales practices identified in the Audit Committee's internal investigation disclosed in late October. The impact from that practice is contained to 2025.

Now what do we think is likely to persist in 2026, we see 4 drivers. The first driver is in the U.S. and is macro in nature. Government policy-related access restrictions have impacted planned parenthood and federally qualified health centers where Nexplanon has a leading market share among [ Lark. Incorporated ] in our guidance is that this policy environment persists in 2026.

The second driver, in 2025, we saw developing weakness with smaller independent commercial clinics who are tightly managing their buy-and-bill purchasing with some choosing to switch to specialty pharmacy claims for each patient via assignment of benefits. While we expect this change to remain, we are actively engaging customers in this segment to support sustained and improved access to Nexplanon.

Third driver, as we've discussed previously, in 2026, we will have a volume headwind from loss of reinsertions as we transition to the 5-year label. Fourth and final driver is an offsetting positive. We expect strong ex U.S. growth to compensate for the U.S., particularly in Latin America, where we are seeing improved access.

Turning to fertility. Our fertility business declined 6% ex FX in the fourth quarter of 2025, primarily related to sales performance in China, where we are holding share, but socioeconomic trends are weighing on the broader fertility market. For the full year, the fertility business grew 8% ex FX, driven by performance in the U.S., particularly in the first half of 2025 as well as geographic footprint expansion which together offset declines in China.

Fertility will likely be a headwind for us in 2026 as we expect an increasingly competitive environment in the U.S. brought on by a competitor's agreement with the administration's new [ Direct Access Program ]. And finally, the [ JDA ] system delivered $74 million of revenue in 2025. We completed the divestiture of [ Jada ] in January of this year. So that will represent a headwind of about 120 basis points to Organon's consolidated revenue in 2026.

Turning now to biosimilars on Slide 6. For the fourth quarter and full year, the drivers and biosimilars are largely the same. Performance was driven by Hadlima, which grew 61% ex FX globally for the full year, reflecting the strong clinical profile of Hadlima and the effectiveness of our pricing strategy as well as expansion into Canada and Puerto Rico.

To a lesser extent, biosimilars also benefited from our new denosumab biosimilars, which were approved by the FDA in August and launched in the U.S. in late September, and Tofidence, which the company acquired in the second quarter of 2025. In 2026, we expect biosimilars to deliver flat to modest growth with Hadlima and the contribution of new assets expected to at least offset the expected decline in [ Entrada ] and [ Reflexis ] consistent with the maturity of those assets.

As regards to future launches, we've entered into a settlement with [ Genentech ] that grants us a license to start launching our pertuzumab biosimilar asset in [ UCAN ] in 2027 and in the U.S. in 2028. Wrapping up the franchise discussion with established brands on Slide 7.

The established brands revenue declined 5% ex FX in the fourth quarter of 2025 as well as for the full year. We've always said that the CAGR and established brands should be about flat ex FX and with some years above and some years below. In 2025, we navigated through the [ LOE ] of [ ADIT ], which itself was an approximate 400 basis point headwind to established brands revenue. In 2026, we expect to return to flat performance. Contributions from Vtama and Emgality together with lapping the [ LOE ] of [ ADAS ], should offset expected continued pressure in our respiratory franchise.

Turning now to the fourth quarter revenue bridge on Slide 8. Revenue in the fourth quarter was $1.57 billion, down 8% at constant currency. Loss of exclusivity was about $20 million in the quarter, the lowest of the year and was related to lapping the [indiscernible] in the EU, which occurred in September of 2024. The DBP was negligible for the quarter. Organon products were not included in any new rounds of China's national VBP program during 2025.

We lost approximately $80 million on price in the fourth quarter. About $30 million of this was related to 4 separate gross to net adjustments that were onetime in nature. The remainder was primarily driven by pricing revisions in respiratory, expected competitive pricing pressures in fertility and biosimilars and the LOE of [ ADAs ]. Additionally, there was an increase in the U.S. rebate rate for Nexplanon in the quarter related to a change in patient mix tied to Medicaid usage claims.

Volume declined about $10 million in the quarter, and that was mainly driven by lower volume for Nexplanon and in the respiratory portfolio, which was largely offset by volume growth in Vtama, Hadlima, Emgality and Arcoxia. In Supply other, here, we capture the lower-margin contract manufacturing arrangements that we have with Merck, which have been declining since the spin-off as expected. And lastly, foreign exchange translation had an approximate $35 million favorable impact for the quarter, which reflects the weaker U.S. dollar against the majority of foreign currencies in which we transact.

Let's look at these same drivers now on a full year basis on Slide 9. Loss of volume from LOE was about $200 million, consistent with the range we've outlined all year and that was primarily related to the LOE and [ ADASET ] in the EU. As I mentioned, there was essentially no [ VBP ] impact in 2025. There was about $180 million of negative impact from price in 2025 or about 2.8%.

Pricing headwinds for the full year were primarily in the respiratory portfolio with rate pressure in the U.S. for [ Dulera ] and mandatory price reductions in China for [ Nasonex ] and Singulair. To a lesser extent, we also felt price impacts stemming from the competitive environment in biosimilars and fertility in the U.S. Volume grew $200 million in 2025 or 3% for the year with contributions from Vtama and Emgality and growth in fertility and biosimilars, offsetting declines in the global respiratory portfolio and Nexplanon in the U.S.

Now let's turn to Slide 10, where we show key non-GAAP P&L line items and metrics for the quarter. For reference, GAAP financials and reconciliations to the non-GAAP financial measures are included in our press release and the slides in the appendix of this presentation. For gross profit, we are excluding purchase accounting and amortization and onetime items from cost of goods sold, which can be seen in our appendix slides.

Non-GAAP adjusted gross margin was 56.7% for the fourth quarter of 2025 compared to 60.6% in the fourth quarter of 2024. Pricing pressure and unfavorable product mix were notable drivers in the decline of non-GAAP adjusted gross margin. Adjusted gross margin for the full year 2025 was 60.1% compared with 61.6% for the full year 2024, with pricing pressure being the primary unfavorable driver in the year.

Non-GAAP adjusted EBITDA margin was 25.4% in the fourth quarter of 2025 compared with 28.1% in the fourth quarter of 2024. The year-over-year decline in the fourth quarter 2025 adjusted EBITDA margin was primarily driven by the lower adjusted gross margin that was partially offset by a 5% reduction in non-GAAP operating expenses.

Adjusted EBITDA margin was 30.7% for full year 2025, consistent with prior year as the decline in adjusted gross margin was substantially offset by lower R&D expense. Net loss for the fourth quarter of 2020 was $205 million or $0.79 per diluted share compared with net income of $19 million or $0.42 per diluted share in the fourth quarter of 2024.

Net loss for the fourth quarter of 2025 includes a noncash goodwill impairment of $301 million or $1.16 per share related to the decline in the company's stock price and underperformance in the U.S. For the fourth quarter of 2025, non-GAAP adjusted net income was $165 million or $0.63 per diluted share compared with $235 million or $0.90 per diluted share in 2024. Non-GAAP adjusted net income was $954 million for full year 2025 or $3.66 per share compared with $1.065 billion or $4.11 per share in full year 2024.

Turning to free cash flow now on Slide 11. For full year 2025, we delivered $960 million of free cash flow before onetime costs, consistent with prior year. Onetime costs related to the spin-off were completed in 2024, following the rollout of our global ERP system. What remains are margin-enhancing restructuring and manufacturing separation activities which were together about $270 million for 2025.

For 2026, we expect costs associated with manufacturing separation activities to be about $100 million. We do expect an increase in CapEx associated with these activities as well as an increase in net working capital consumption driven largely by inventory in established brands and biosimilars, which means our free cash flow in 2026 will likely resemble what we delivered in both 2024 and 2025.

Below the free cash flow line in 2025, we paid about $170 million related to contractual milestones for Vtama, Emgality and the biosimilar programs with [ Shanghai Henlius ] and made another $66 million in upfront payments, primarily related to acquiring the licensing rights for confidence and to a lesser extent, the purchase of the OS bio manufacturing site. In 2026, we expect that commercial milestone payments will be similar to 2025 at approximately $170 million.

Turning now to leverage on Slide 12. Net leverage at year-end was approximately 4.3x. Consistent with our priority to reduce leverage, during the year, we retired approximately $530 million of debt which included the open market repurchase and cancellation of $419 million of Organon's 5 1/8% notes due in 2031 including $177 million retired in the fourth quarter, the prepayment of a portion of the long-term debt assumed as part of the [ Dermatan ] acquisition and normal quarterly term loan payments. Given our outlook for approximately $1.9 billion in adjusted EBITDA in 2026, together with approximately $390 million of net proceeds from the [ JD ] divestiture we expect to be able to achieve net leverage below 4x by the end of the year.

Now turning to the 2026 full year revenue bridge on Slide 13. For full year 2026, we expect revenue of about $6.2 billion. We expect LOE to be about $40 million related to a collection of smaller LOEs, for example, [ Claronx ] in Japan, as well as the potential for a generic of [ Dulera ] in the U.S. We expect VBP impact to be about $30 million and related to the inclusion of [ Fosamax ] in round 1.

We expect headwinds from price to be about $75 million or about 1.2%, which is lower than what the portfolio has experienced in prior years and it's driven by several factors. First, lapping of the approximate $30 million in onetime gross to net adjustments in the fourth quarter of 2025. Second, we expect stability in U.S. gross to net in the U.S. in 2026. And three, less pricing erosion internationally, particularly in the EU as we lap the LOE of [ Ads ]. And in Japan, as the majority of our portfolio there has already reached pricing parity with generics.

We expect volume growth of about $150 million or about 2.4% will be driven by continued contribution from Vtama and Emgality and growth in biosimilars and Nexplanon ex U.S. And finally, we're estimating that a modest FX tailwind offsets the loss of data revenue.

Turning to Slide 14. We expect adjusted gross margin in 2026 to be about 75 to 100 basis points lower than prior year. And while price will be a headwind as it has been in prior years, the main driver of the adjusted gross margin decline in 2026 is higher cost of goods sold related to the release of accumulated foreign exchange translation on inventory that has subsequently matched to revenue when the inventory is sold.

For OpEx, our range for SG&A as a percentage of sales remains in the mid-20% area, and we expect the range for R&D spend to be in the mid-single-digit area. For below-the-line items, our estimate for full year 2026 interest expense is about $500 million, in line with 2025. In 2026, we expect to refinance certain 2028 maturities which will offset the benefits of recent voluntary debt payments and lower variable interest rates. We expect depreciation of about $140 million for full year 2026 and expect approximately 265 million for our fully diluted share count.

For 2026, we estimate our non-GAAP tax rate to be in the range of 27.5% to 29.5%. The uptick from 2025 is largely due to the full year impact of the implementation of [ OECD's ] Pillar 2, 15% global minimum tax, the absence of a tax amortization benefit and an increase in our nondeductible interest expense, offset by use of additional foreign tax credits. Pro forma for any divestitures, we expect cash taxes to be similar to 2025.

As we think about the phasing of the quarters in 2026, we expect revenue growth to build throughout the year, but OpEx is more evenly spread through the quarters. So that means Q1 margin is likely to have the lowest margin of the year, and Q1 could wind up looking a lot like the quarter that we just reported in Q4 of 2025. In 2026, our primary objective is to maintain performance that aligns with last year. At the same time, we are committed to continuing to manage operating expenses and capital deployment in a disciplined fashion to achieve progress on our deleveraging efforts.

This is Carrie. Before we go to Q&A, I'd just like to say that we won't be able to answer any questions today regarding the topic referred to in our press release under other matters that was brought to the attention of the Audit committee yesterday. With that, operator, we are ready to begin Q&A.

[Operator Instructions]. Your first question comes from Umer Raffat with Evercore ISI.

I want to be respectful for what you just said, but not relating to that specific issue on what exactly the specifics are of the purchasing. My question is more higher level. Remember last quarter, I asked you how can one -- anyone know that the channel behavior issues were limited to Nexplanon? And why was the Audit Committee investigation so limited in its scope only to Nexplanon? And I remember at the time, you said it did span beyond look through other product areas and found nothing else.

Today, we're learning there was another issue. And this time, it's biosimilars purchasing and that too because it was brought up, meaning 5 other things could be brought up, how can we know that a comprehensive review has been taken. It almost looks like there's an unwillingness by the Board and the leadership to actually solve this for once and do it the right way so we can move on and look at fundamentals and pay down all the $9 billion in debt.

Thanks, Umer. I'm sorry. We can't provide any additional color at this point.

The next question comes from Mike Nedelcovych with TD Cowen.

I have 2. First is on the biosimilar portfolio. Back in October, as you know, FDA released draft guidance limiting the requirement for comparative efficacy studies for biosimilars. So I'm curious what you consider to be the status of this policy in the U.S. What's your interpretation of that guidance? And what impact should we expect it to have on Organon's business for example, does it open the biosimilar floodgates and hugely boost margins? Or is it more of an incremental change?

And then my second question is on your 2026 guidance. Can you provide any more detail on the Nexplanon contribution that's contemplated in your 2026 sales guidance and will launch of the longer-acting Nexplanon implant be accretive to total Nexplanon sales this year?

Mike, I think the first -- the first question on the biosimilars. We feel it would be more incremental. So we think our strategy with biosimilars is the right one and taking the right partners that are positioning their biosimilars in the right order of the ability to launch and building out those partnerships. We're excited about our opportunities in the U.S., continuing to grow Hadlima as well as with our launch of the denosumab biosimilars and expanding that in other markets around the world and continue to grow in that way. So we see that more incremental.

And on the second part of the question for 2026 guidance at Nexplanon, we believe Nexplanon will be roughly flat year-on-year. We've got pushes and pulls on the Nexplanon business. Ex U.S., the business will continue to grow nicely. We talked about improved access to Nexplanon in Latin American markets. In the United States we'll have consistent with the launch of the 5-year label, we will have a bit of a dip due to no reinsertion.

Roughly -- and we've said 10 to 15 in, let's call it, 13% of insertions annually are actually reinsertions. So now with the move to 3 to 5 years, that will create a bit of an inflection point in volume there. And some of the channel issues that we experienced in the second half of the year will annualize.

So net-net, the contribution of Nexplanon to our 2026 guidance is to summarize roughly the level with 2025. But we remain optimistic that the attractiveness of the 5-year label, especially for high BMI patients -- and now with the duration making the product more attractive versus other long-acting reversible contraceptives, bode very well for the long-term growth of the product, both inside and outside the United States.

The next question comes from Jason Gerberry with Bank of America.

This is [ Bob Mtell ] on for Jason. Two questions from us. So the first is you're guiding to a lot 2026 adjusted EBITDA of $1.9 billion, and we have $275 million in annualized cost savings from the reset flowing into the P&L. So I guess if we strip out those savings, the underlying EBITDA performance appears to be declining. Maybe if you can help us bridge where that $275 million benefit is being absorbed. Is it purely the 75, 100 bps of gross margin deterioration? Or are there a massive onetime reinvestments into Vtama and Nexplanon [ REMS ] program?

And then my second question is to double-click on the REMS program that launches in a couple of weeks with a 6-month rate period ending in August. So does your 2026 Nexplanon outlook assume any volume bottlenecks or certification friction in the second half of the year once that mandate is fully enforced? And maybe does the REMS mandate distributor registration potentially provide you with like the cleaner data to monitor the wholesaler days of coverage?

So I'll take the first part of the question, Juan Camilo can take the REMS question. So on the operating expense savings, the $275 million we referred to when we spoke earlier in the year was all related to gross takeouts that we were going after in sort of the base administrative and structural elements of our cost structure. That was the gross number we were going after. That enabled us to take a portion of that and reinvest it, for example, in increased enhanced promotional activity for TAM.

So when you asked the question, you essentially answered it by saying that some of that $275 million would be redirected to revenue growth opportunities. I'll take a step back and say that the management team here continues to go after OpEx very aggressively. We've built another round of OpEx savings into our 2026 guidance, not quite as large as the 2025 effort, but certainly in the same ballpark. And it's just essential that we continue to rightsize the operating expense footprint of the company in light of what's happening in terms of our gross margins being compressed. Now I'll turn the question over to Juan Camilo for [indiscernible].

Yes. Thank you, Matt, and thanks, Jason. Yes. We are pretty confident that with this window that we have and the efforts that we have already planned, we will be able to recertify the prescribers that constantly use or a loyalty use of Nexplanon.

This physicians that have been already certified before we'll have a very small requirement that will take them around 15 to minutes to be certified. So we are pretty confident that we'll be able to maintain the volume based on the retraining that I believe was your question. The other factors are the ones that Matt and Joe already covered.

The next question comes from Chris Schott with JPMorgan.

This is Ethan on for Chris. Maybe just building on the margin commentary, just maybe taking a step back, what are your latest thoughts on what operating costs and margins can look like over time from here? And then on Nexplanon, very helpful commentary on the headwinds going to the 5-year indication. Just maybe how long should we think about that headwind about the duration of that headwind? And are there any potential offsets via price there?

So the first part of the question relates to OpEx. And I think the challenge for the company as we've seen gross margins compress since the spin is to continue to streamline, make the business more efficient, get economies of scale where we can. And I just make the broad comment that it's incumbent upon us to continue to do that. And -- but at the same time, make sure that we are not sacrificing OpEx where it can draw a clear line to revenue growth and value creation in the top line. So I don't have a numerical answer to the question.

What I have is the philosophy here that we are deploying -- have been deploying as we try and manage a bottom line that optimizes what our opportunity is. On the 5-year and the reinsertion, I think this year will be the most pronounced for it, 2026. We might be talking about reinsertion risk in 2027. It should be at a fairly significantly lower level than what we're talking about this year.

The next question comes from David Amsellem with Piper Sandler.

This is Alex on for David. The first one is, can you talk to the pressure on established brands and how we should think about key established brand segments, not only in 2026, but also beyond? And how you're thinking about potential trouble spots such as respiratory. And then on Vtama, how are you thinking about competitive dynamics for the product given that growth has been slower than topical [ Reflumalast ]? So with that in mind, how are you thinking about your support of the product? Sure.

So the first part of that question -- go ahead, Joe.

Yes. Thanks, Matt. So I think, Alex, the first thing with the established brands, I think Matt said it in his commentary, right? We do think established brands are going to have some years where you have somewhat of a reset like we did with the respiratory in 2025 and then remaining backward flat.

I think when we look at it, a lot of the respiratory risk, it's a -- will pull into this year. but it's largely we're getting past that as well as some of the declines we had over the year and the prior year in Japan. And so when we look at them, the growth with products like Emgality plus Vtama and so forth, that's where we see stabilization in established brands, but it's still going to be somewhat chunky, I would say, in the future, where we'll have some challenges and then opportunities to offset that with growth. Matt, do you want to take the Vtama?

Yes. So from a Vtama perspective, as it competes against steroidal nonsteroidal options, we see that 2026, the product is likely to grow in line with the other nonsteroidal topical. So in the 20%, 25% range year-on-year for Vtama.

The only other thing I would add to Joe's comment on established brands is that we continue to add products there that capitalize on the global infrastructure that we have. So we -- the company made an announcement tail-end of last year that we will be marketing [ Nimendo ] in the EU. Not a big product, but it can slide right in similar to Emgality, very little in the way of incremental operating expense necessary and once again, capitalizes on what's a unique asset and feature for Organon's business, which is this global infrastructure that enables us to sell either directly or directly into 140 countries around the globe.

The next question comes from Terence Flynn with Morgan Stanley.

Two for me. I was just wondering if you can give us any update on the search for a permanent CEO? And then the second one relates to the denosumab biosimilar that I know you guys launched end of December. I think Amgen has talked about being able to, on the [ Prolia ] side, at least, hold on some more share given they have [ AVenitY ] as another option.

So I guess as you think about your go-to-market strategy, on the dense biosimilar specifically for the osteoporosis setting. Anything you're doing differently to try to capture more share there.

So I can take the one on the CEO search. You might recall there was a special committee of the Board formed last year. We've had a very robust process underway, but there's no public update to share right now.

And as far as the denosumab question, I think let's just talk about what we should be modeling and how investors should be thinking about Organon's opportunity for that product. And like a lot of the biosimilar partnered opportunities that we have will be competing against highly competitive markets, both from a volume and price perspective when we think about what the peak revenues might be for that denosumab product over both reference products, it's on the order of $100 million in total, let's say, over about a 5-year time frame.

This concludes the question-and-answer session and we'll conclude today's conference call and webcast. Thank you for joining. You may now disconnect.

Good morning, everyone. Welcome to day 2 of the 37th Annual Piper Sandler Healthcare Conference. This is David Amsellem from the Piper Biopharma research team, and we've got Organon with us. We have Joe Morrissey, Interim CEO; and Matt Walsh, CFO. Thanks, gentlemen, for joining us.

And so certainly lots to talk about. And I wanted to dive right into my questions. And let's just start with the internal investigation and the completion of that. And just as a refresher for people here and listening in on the webcast, just talk about the conclusion of the investigation and then also talk about your remediation efforts.

Yes, sure. Well, it's great to be here. Yes, the conclusion of investigation was in sales practices in the United States with NEXPLANON and 2 wholesalers. And the ultimate weakness was tone at top, right, which held accountable from a CEO standpoint out of the U.S. We're good that the investigation has been fully completed at this point. We have a very detailed remediation plan that's approved by the Audit Committee on the Board. Matt and I are the cosponsors of that remediation plan.

And being that with tone at the top, it really does start with the tone at the top and how we engage the organization. It goes into the training of the true ethics and integrity. But then also when you look at the weakness that we had, employees didn't escalate their concerns, right? And so we have a lot of tools and mechanisms to do that. And so we're driving that through in terms of the communication to make sure our employees know about those escalations. But then from a financial standpoint...

Yes. From a financial perspective, the investigation found the extent of revenue that we're talking about all around management of quarter end orders, not more than 1% of revenue on the year, 2% in any quarter. But when you get into the actual financial reporting impact, the numbers were smaller than that. And I would point people to the third quarter earnings call that we had Slide 5. And let's make sure that we separate the revenue recognition was all good, right? The investigation confirmed that our revenue recognition was appropriate.

So nothing about the financial numbers and our audits needed to be revised in any way. So yes, that was an important point. So we -- as Joe pointed out, we do have some internal control remediation we can do, not around the financial monitoring controls, it's more just in how information and communication about management of quarter end orders flow.

But just to be clear, nothing else was uncovered regarding any other wholesaler practices. It was just specifically related to the items that you disclosed regarding NEXPLANON.

That's correct. And since the practices have ceased, they'll now wash out in this fourth quarter. And when we get to 2026, we won't be talking about the issue anymore.

Got it. Okay. Well, let's move on and just take a step back. We'll look at the organization more broadly. So one thing you've talked about is cost discipline. Another thing you've talked about is deleveraging. So -- and they're tied together, right? Improving leverage ratios certainly is tied to cost discipline. So how should we think about the extent of that cost discipline in '26? And I guess another way of asking it is, is there room for more cost savings as we look to next year?

Yes. So as you know, in the long run, all costs are variable. We're just coming off a 2025 in which we took $200 million of operating expense out of the business. That's not a net number because we have upped our investment around things like VTAMA. But $200 million was what we achieved this year. Continued cost discipline is part of the equation next year. But that said, I think maybe one talking point investors have gotten used to for management is that we would be trying to adhere to a 31% adjusted EBITDA margin. That's proving more challenging to think about for next year, we'll be guiding in February. But just given issues around NEXPLANON flattening out and our continued investment in the VTAMA launch, not just in the U.S. but globally, I think that 31% EBITDA margin is -- will be a challenge for us when we ultimately provide our guidance in February.

Okay. So let's drill down a little more. I'm particularly interested in your R&D spend. It's historically been a fairly big number. And what I guess I'm wondering here is, how do you balance these various R&D programs versus the broader goal of cost discipline and improving the capital structure?

Yes. Maybe I'll start with our priorities in R&D, right? Our #1 priority actually is supporting the products that we have today, right? So inside that number, we have a very diverse product portfolio in a lot of markets around the world. So when you start looking at medical affairs and regulatory affairs, it's not a small number, right? So our first priority is how do we maximize the value of the products that we have in our hands. That also includes newer products like VTAMA, which also you have to invest not just in like a pediatric study, but then also the launches around the world. That's our #1 priority.

Our second priority then comes to any type of life cycle management that we do. And so we are deprioritizing bigger programs and those longer-term programs. We have to do that in the near term as we're prioritizing the leverage.

Yes. Okay. I guess the -- and I know it's hard to provide a complete picture of granularity surrounding R&D. But I guess, you do have a number -- I mean, you have an endometriosis program, you had -- and there are other programs, but you've talked about prioritizing the products you do have. Does that mean that over time, we're going to see pretty significant cuts in the R&D budget? I mean in other words, is Organon trying to evolve into a much more of the commercial stage focused company.

Yes. So evolve into -- yes, we need to be a more commercially focused organization. And we said that from the beginning, and those priorities ring true. When we look at any kind of decision in terms of large clinical studies, we don't have that any longer with, as you said, the endometriosis drug failed out. So our priorities are supporting the existing business. In terms of significant cost reduction, it's a large complex portfolio, right? And so that minimum critical mass is not as small as we would like it to be in order to have the product portfolio that we have.

Okay. Let's look at NEXPLANON more closely. So you've alluded to policy decisions impacting Title X funding and Planned Parenthood. So can you talk to how much of the headwind this is going to be going forward. I mean, I think you talked to flattening, but is flattening the right way to think about it? It could get worse. But how do we think about that.

Yes. So the issues around the Title X funding were discussed. There was a lot of chatter in the first half of the year. Policies got implemented in the second half. And so at a minimum, next year, we're thinking we need to annualize the issues that have now become more tangible here in the second half of the year. So just by virtue of doing that, the U.S. NEXPLANON is looking at a year, if you're reflecting the full year impact of those Title X challenges. The United States probably is at best flat next year and is more likely looking at a down year. The product continues to grow internationally. Now with the removal of the U.S. AID program, that, I would say, maybe delayed our international growth a bit, but other sources have stepped in. So the product looks to -- as we're thinking about next year on a high-level basis directionally, International continues to grow.

We're probably looking at flat to declining in the United States. And let's also not forget, at least in the way that we're handicapping things, 2026 is a year where we'll probably get the 5-year label and launch that. And that was always an inflection year that would be impacting volume. But net-net, on the whole, taking all these things into consideration, Dave, we felt it was appropriate to make the comment that we did in the third quarter call that all of those things considered NEXPLANON is probably flat next year on a global basis.

And are you contemplating any ex-U.S. generic competition in that comp flat to slightly down?

So just to level set, we -- NEXPLANON lost exclusivity this year in Europe, which is a pretty big market and the generic has not been introduced. So...

And there are generics approved in Latin America in a number of countries. And I think going back to like 2024 even, none have come to the market. And for us internationally, we also had a big win just a couple of months with reimbursement in Brazil for the public and private market. So again, we see avenues for us to continue to grow internationally.

Okay. Now then there's the macroeconomic environment impacting independent health clinics and as a result impacting NEXPLANON. So is that also factored into your informal guidance on NEXPLANON for next year? And how do you see that playing out?

It's still factored in, right? If you look at that private market, the integrated delivery centers and so forth, that business is growing really, really well. And that's the majority of that business. Smaller business are those independent and smaller ones, which seem to be managing their cash flow and where they used to be bulk buys, they're moving more to specialty pharma. And we know as soon as you enter in another step of fulfillment, you start getting leakage to that. And so we're experiencing that for sure, and we're forecasting that, that will continue.

I think you made a comment on the 3Q call, it might be the 3Q call about one way to meet some of these challenges, making some concessions on price. So can you talk more about pricing headwinds or pricing concessions, if you will, in '26 versus '25 on NEXPLANON?

Yes. I think this is the first year, at least since the spin-off, where we've seen significant pricing competition in the LARC space. So we'll have to respond to that. NEXPLANON is a product that we've generally been able to raise prices, inflation, inflation plus every single year. That will probably happen again next year. And what we're -- and if we're successful in getting that, that is more of a recognition of than anything else is the move to the 5-year label and the opportunity to recognize the value that, that additional duration provide for patients.

Yes. I wanted to come back just quickly to the 5-year label. How do you think about that in terms of its impact pushing out on the LOE for NEXPLANON in the U.S?

Well, I think it differentiates itself in the marketplace, right? And you have data exclusivity on the 5-year for a number of years. And we also know through our focus groups, the 5-year indication is valued in the market. And so we look at more as it differentiates us in that market as opposed to tying to the LOE piece. When you look at long-acting reversible contraception and you're competing also in that space with IUDs, you want that 5-year indication.

All right. So let's move on to VTAMA. So you did lower your '25 sales guidance. Just remind us where you think you fell short of that $150 million worldwide target? Was it your assumptions on volume growth? Was it assumptions on the gross to net moderation? Was it a mix of both? Or are there other considerations that we should be aware of?

We're going to say yes to that. Look, from a volume standpoint, we really felt that with the strength of the label that we could overcome a lot of those headwinds you're naturally going to face in that first year. We're fourth entry to the market. Access was not well positioned in the first year. And it wasn't able to do it as much as we thought it was. And then gross to net, we had a pretty aggressive target, I would say, with gross to net. We were going to be like 6 points of improvement in gross to net, and we're -- we got about half of it. And when we look at those 2 combined, that's where we're ending up in year 1.

So gross to net, I think what you had talked about earlier this year was that the coupon program was something that was really a drag on net realized price. So that was something that you were looking to ameliorate. So can you talk to that? Is that something that is going to be less of a factor going forward? And are there other things that you can do on the contracting front to try to moderate the gross to net?

Yes. So I'll talk access first, right? And there are 2 numbers that always stick in my head with access. We entered this year less than 40% on our preferred tier with VTAMA. We're ending the year -- we're going to -- next year, we're going to enter in around 70% to 80% access on that top tier. That's a much different access profile. We think the value of the coupon card, it still is valuable inside of that marketplace. And so I think that's also part of tempering our expectations of how much we could exit that coupon card and when. So we focused on the access piece. Now we're going to be able to focus on the pull-through piece, and we think that ultimately puts us in a better position.

Can you remind us how many reps you have supporting VTAMA at present? I don't know if you disclosed that.

No, I don't think we talked about it specifically.

We don't. But relative to what Dermatan had, we're growing it both in the base level in terms of going after the psoriasis and the AD indications for, let's say, adult patients and where we're thinking about and executing on increased investments is for those patients for whom the safety part of the label really resonates most in the pediatric space.

Yes. So what's your view of the topical derm competitive landscape and how that's impacting the VTAMA. So for instant Arcutis ZORYVE, which looks like it's doing quite well. And we know that the payer landscape for topicals is not particularly easy. But you have one competitor that seems to be doing quite well and VTAMA is growing, but you fell short of your guidance. So I guess if you can talk to the competitive dynamics here and what you feel do you need to do better vis-a-vis your competition?

I think you summarized it really, really well. It's a highly competitive space, right? And it's -- derm is a very challenging space as well. We recognize that also. Again, we fall back to the label with VTAMA, and it's a highly competitive label, whether it's efficacy, tolerability, safety, we hit all of those. It's a novel mechanism of action. And when you look at all of those characteristics of the product, it is a really strong product. And so we believe we can compete in that highly competitive space and difficult space because we think we can drive that from an efficacy standpoint, tolerability as well as safety, we can hit every single one of them.

So when you bought Dermavant, you didn't have a dermatology sales force, you onboarded one where you really -- you've inherited one with Dermavant. So now you've got this leverageable asset with your derm sales force. So with that in mind, what's your appetite for adding another dermatology-focused asset or assets, given that dynamic? And I guess the second part of the question is, if you have an appetite for it, how large of a transaction could you contemplate here? Yes.

Yes. So we would love to do it. To the point you raised, now we've got a platform and the reps are carrying only one product in the bag. So there'd be terrific synergies if you're talking about adding derm products to it. So we'd love to do it. It gets to kind of the larger issue of what role can BD play from a capital allocation perspective, given our drive to improve the balance sheet and get our leverage in a much better place. And I think these things are actually consistent. We can certainly direct cash flow to absolute dollars of debt reduction. We've done it this year. We'll continue to do it when the Jada transaction closes and we receive those net proceeds.

But there are certain kinds of BD we can do that actually immediately accretive, help us grow revenue and EBITDA faster, and that also helps us address the leverage issue. So from a capital allocation perspective, the kinds of deals where we're capitalizing on what we are already good at and what we're doing and where we've got assets and infrastructure in place are the kinds of deals that still make sense. And that derm is a perfect example of where we can add things with great synergies, where we can be the best owner of that asset, and we can actually attack our leverage issue faster.

Yes. Looking at the sales force at present for VTAMA, do you plan to expand the sales force? Or do you think you need to?

We are continuing to expand the sales force, right, but it is very targeted in terms of where we're adding that sales force.

Yes. So let's switch gears to established brands. So on the third quarter call, you talked about respiratory as particularly significant headwind, I think you had mentioned SINGULAIR, in particular. There's also Dulera which was -- which had pressure. So just give us a refresher on those headwinds and what we could see out of respiratory looking into '26.

Yes, there are multiple headwinds to have a number that big, right? And when you look at respiratory, the largest part of our business is outside the U.S. And certainly in Asia, it's been another weak allergy season that has affected our overall performance. The price reduction, specifically around SINGULAIR in China with provincial VBP as well as with price reductions in Japan was far greater than what has been typical and more than what we expected. There's another round of price reduction for provincial VBP for SINGULAIR in the beginning of next year in China.

The next piece was new guidance came out from a health insurance standpoint around montelukast and it dropped it from its preferred tier and now second or third line, and that came out in May of this year, and we're starting to see that play out in a lot of our international markets. And then Dulera is a separate one in the United States in terms of that challenge. We lost a big contract early in the year with the PBM that affected our overall business. And then the mix has changed where the pressure on rebates has been more than what was typical in that business.

And my understanding with Dulera is it is off patent but there are no...

It's been off patent for a number of years, and we keep forecasting it may or may not have a generic entrant. And so at this point, there hasn't been.

Right. So but we don't have visibility into...

We have visibility that people have been working on them, but there's no visibility of movement of getting them to the market.

Got it. Okay. And just remind us on the guidelines on SINGULAIR. Which countries does that specifically affect? Or is that sort of...

They were more like general international guidelines and then you have different countries that are following. It is based out of Europe, and then there are different countries that follow the European guidelines and so forth that working its way out.

So then switching gears, another headwind is Atozet, which was expected. I mean that's an LOE in Japan and Europe. I know -- we know that there was a real impact this year. I guess my question is, looking at '26, how should we think about the LOE impact for Atozet in '26. I would imagine it will be more muted relative to '25, but I want to hear your thoughts.

Yes. So we have largely washed out the Atozet LOE impact this year. And actually, there are certain pockets ex-U.S. where Atozet volumes are actually going up, for example, from a life cycle management perspective, we launched Atozet in China. But when we think -- but to -- maybe to the larger question, LOE has largely washed out of the portfolio. When we think about next year, LOE impact across all of the established brands portfolio in all products combined would be less than a $75 million number, whereas just Atozet in this year was over $200 million.

Yes. So switching gears to a bright spot, Emgality has been doing well ex-U.S. What are you seeing here regarding Emgality and what countries or regions are you gaining the most traction for that product?

Yes. So this was -- our partnership with Lilly here is going very well. It started with 11 markets. That's now been doubled. We're now in 22 markets. It's doing quite well in all the markets that we're in with Lilly. And I think it's another example, Dave, of the kinds of BD we can do to capitalize on our capabilities. We've got direct presence in more than 50 countries outside. We sell into 140. So we've got regulatory and sales and marketing capabilities that could readily absorb something like an Emgality and make hay with it. So Emgality growth this year is pretty nice. You can see it in our filings and we break that product out. And that product will continue to grow in 2026.

So taking a step back on established brands. So you brought in Emgality as you referred to with the deal with Lilly. So I guess with that in mind, do you see Organon doing more of these kinds of tuck-ins for ex-U.S. rights where you can leverage your global infrastructure? I mean it seems like a no-brainer where you can be a partner, an ex-U.S. partner of choice for market-ready or early commercial stage assets. Philosophically, how do you think about that?

Yes. Important for us. And the same answer to the question around the dermatology sales force. We want to continue to invest in what we're good at, and we have core capabilities, and that's the fact that we can change our overall performance. And showing our success that we've had with Emgality is also showing what we can do with products from other companies, and it's exactly where we want to go.

Yes. So we got about a minute left, so I want to make sure I touch on biosimilars. High-level question, how do you see biosimilars within the broader organization? Is this a core business for Organon?

Yes. I think the role of biosimilars, it's a growth driver for us in this near term. And from the beginning, we felt that this was the right position for biosimilars when we would be launching HADLIMA, we'd be expanding the relationship we had with Samsung. But then we had to buy some additional biosimilars in there. We were successful with HADLIMA and our 2 launches in the United States. And this is a great growth driver. And what we're showing is we have differentiated capabilities in a number of markets, including the U.S. and Canada. And again, we'll double down just like [indiscernible] so it fits right in, limited infrastructure. You don't have to add to it and you just pop it right into your business.

Yes. And then looking more broadly, I think on the 3Q call and other calls, you started to talk a little bit about divestitures. And I guess -- and it's a hard question to answer, but how are you thinking about divestitures as a means of trying to accelerate the deleveraging process and just improving the capital structure?

Opportunistically is the word. We had the ability to capitalize on a unique opportunity with the divestiture of Jada and to the extent that we can repeat that we will. But it would be, I think, on an opportunistic basis, it's not a coordinated plan that we're talking about.

Okay. Well, I'll leave it there. We're out of time. Thanks, Joe. Thanks, Matt, and thanks, everyone, in the audience.

Hello, and welcome to the Organon Third Quarter 2025 Earnings Call and Webcast. [Operator Instructions]

I would now like to turn the conference over to Jennifer Halchak, Vice President, Investor Relations. You may begin.

Thank you, operator, and good morning, everyone. Today, we will be referencing a presentation that is visible during this call for those of you on our webcast. This presentation will also be available following this call on the Events & Presentations section of our Organon Investor Relations website. Please reference Slides 2 and 3 for some brief reminders.

I would like to caution listeners that certain information discussed by management during this call will include forward-looking statements. Forward-looking statements can be identified because they do not relate strictly to historical or current facts and use words such as potential, should, will, continue, expects, believes, future, estimates, believes and other words of similar meaning.

Actual results could differ materially from those stated or implied by forward-looking statements due to risks and uncertainties associated with the company's business, which are discussed in the company's filings with the SEC. This includes our most recent Form K and Forms 10-Q and those amended forms that we filed earlier this morning, as well as our October 27, 2025 Form 8-K. These statements are based on information as of today, November 10, 2025. And except as required by law, Organon undertakes no obligation to update or revise any of these forward-looking statements.

In addition, we will discuss certain non-GAAP financial measures on this call, which should be considered a supplement to and not a substitute for financial measures prepared in accordance with GAAP. Descriptions of these measures and reconciliations to the comparable GAAP measures are included in today's earnings press release and conference call presentation, both of which are available on our Investor Relations website and have been furnished to the SEC on a current report on Form 8-K.

I note that while our full year 2025 guidance measures other than revenue are provided on a non-GAAP basis, Organon does not provide GAAP financial measures on a forward-looking basis, because we cannot predict with reasonable certainty and without unreasonable effort, the ultimate outcome of those legal proceedings, unusual gains, and losses, the occurrence of matters creating GAAP tax impacts and acquisition-related expenses. These items are uncertain, depend on various factors and could be material to our results computed in accordance with GAAP.

On the call today, Carrie, Joe and Matt will address certain information about our internal investigation. Additional information about the investigation is available in our SEC filings. Beyond the statements today and the information in our filings, we will not be taking questions on the investigation. Today, the team will discuss our business, third quarter results and guidance, and they will take questions on those matters after their prepared remarks.

And now I'll turn the call over to Carrie.

Thank you, Jen. Hello, everyone, and thank you all for joining us today. I've had the privilege of serving as Board Chair of Organon since 2021. I've been in the pharma industry now over 4 decades. And about half of those years were spent in global leadership roles, which required navigating businesses through periods of transformation and growth. A good part of that experience was leading Schering-Plough Global Pharmaceuticals until the merger with Merck. So I have a deep understanding of many of our products and markets here at Organon.

Since Organon's inception, our mission has been to deliver impactful medicines and solutions for a healthier every day. there is a shared passion at Organon to advance the complete health of women at all stages of her life, and that's what drew me to Organon from the beginning. While we focus on Women's Health, we also have a diverse portfolio of Biosimilars and Established brands that are important in markets around the world.

I'm here today because I have assumed a new role at Organon as Executive Chair. Following the Board's investigation into the company's improper sales practices with two distributors with respect to U.S. sales of Nexplanon. I will be supporting Joe Morrissey, who I will speak about in a minute as our interim CEO. The Board has formed a search committee and will be conducting a search for our permanent CEO.

In this role, my focus will be on working closely with our leadership team to ensure that we align our resources to our highest priorities and drive operational performance across the portfolio. I will be deeply engaged in monitoring progress, addressing challenges quickly and ensuring that every part of the business is working towards our shared goals.

The independent internal investigation relating to the company's Nexplanon sales to wholesalers in the U.S. is complete. And our remediation efforts are underway, including enhanced control, certain personnel actions, additional training and expanded written procedures. The company's wholesaler sales practices identified through this investigation have ceased. And we have new leadership at the company and in our U.S. commercial sales area to ensure this does not happen again.

The Board and I are confident that Joe is the right person to assume the role of Interim CEO of Organon and to oversee the remediation measures. He brings integrity, a strong focus on operational excellence and a deep commitment to executing our strategy. Joe came to Organon from Merck, where he spent more than 30 years.

At Organon, he was already a member of the executive leadership team and has served as Head of Global Manufacturing and Supply Chain since Organon's inception, leading the company's efforts to deliver medicines and solutions around the world. We appreciate Joe agreeing to step in at this critical juncture. Importantly, I want to stress that our drive for operational excellence and meeting our goals to move our company forward into the future remains unchanged.

With that said, I'll hand it over to Joe so that he can talk a bit about his and Organon strategic priorities.

Thank you, Carrie. I appreciate the introduction and the opportunity to speak with everyone today. As Carrie mentioned, I spent more than 3 decades at Merck, where I led a number of manufacturing businesses, as well as corporate strategy. That experience combined with my deep understanding of our products, our markets and our supply chains made joining Organon a natural step as I was excited to build something meaningful from the ground up, leveraging our strong history. We have faced many challenges in these first 4.5 years, but we have a resilient and capable global team.

Our diverse product portfolio and footprint help us to generate meaningful revenue and deliver real value to patients and communities around the world. As Carrie has said, our strategic priorities have not changed.

Moving forward, we remain focused on executing against these priorities. As we've previously shared, these include deleveraging the business, driving cost savings and achieving revenue growth. I am -- I believe deeply in Organon's mission, our values and our people around the world. I'm fully committed to helping Organon succeed.

And with that, I hand it over to Matt.

Thank you, Joe. Beginning on Slide 4. Third quarter revenue was $1.6 billion and adjusted EBITDA was $518 million, representing an adjusted EBITDA margin of 32.3%. Before I go deeper into a discussion of third quarter results, I'd like to spend a minute walking through some specifics about the company's U.S. wholesaler sales practices, that Carrie referenced. It's important that investors understand this issue properly. There is limited revenue impact and no financial restatement is necessary. All revenue was properly recorded in accordance with U.S. GAAP.

On Slide 5, you'll see a summary of the revenue impact from these practices for the recent quarterly periods identified by the investigation. The revenue that we're highlighting is that of Nexplanon sales to two U.S. wholesalers with specific emphasis on revenue transactions occurring close to quarter end.

Certain revenue transactions were advanced or pulled forward into the current quarter in excess of estimated patient demand and/or contractually agreed inventory holding levels. For example, for the third quarter of 2024, on the left-hand side of this chart, the sales practices in question resulted in approximately $5 million of pull-forward revenue from the fourth quarter of that year. In the fourth quarter of 2024, there was approximately $15 million pulled forward from the first quarter of 2025. So the net impact in the fourth quarter of 2024 was $10 million.

Importantly, because we're talking about the pull forward of sales, these quarterly numbers are not cumulative. Our financial statements have been consistently reflecting the net impact, which is clearly not material to our consolidated revenue. Three other important points to make here. First, revenue recognition in all cases was appropriately recognized in accordance with U.S. GAAP, specifically Section ASC 606. Two, during these periods, product returns were at or below historical levels and three, in every relevant period, the units that were pulled forward occurred late in the third month of that quarter, and were absorbed through patient demand by approximately the end of the first month of the following quarter.

Since this practice has ceased and will not continue in the future, we will see the most significant impact in the fourth quarter of this year because the $17 million pull forward in Q3 2025 will not have an offsetting buy-in in Q4 2025.

As a result, the pull-forward dynamic rolls off in the fourth quarter and will be contained within the 2025 fiscal year with no carryover impact to 2026. One last point on this topic. In the 8-K filing on October 27, the financial impact of these practices for the relevant periods was described as being less than 1% of consolidated revenue for the full year of 2022 and full year 2024 and less than 2% of consolidated revenue for the relevant quarterly periods. Subsequently, we have completed our testing and detailed reviews, resulting in the more narrow estimates that you see here on Slide 5, which are clearly within the ranges disclosed in the 8-K.

Now moving to a discussion of third quarter 2025 results. To be clear, when I refer to revenue and revenue variances, unless otherwise noted, those references are to revenue recorded in our financial statements without adjusting to back out the pull forward. So let's go franchise by franchise, and then we'll move to a discussion of revenue by driver.

So turning to Slide 6. The Women's Health franchise declined 4% at constant currency in the third quarter of 2025 compared with the third quarter of 2024 with growth in contraceptives Marvelon, Mercilon and NuvaRing, partially offsetting a 9% decline in Nexplanon at constant currency. Global Nexplanon sales in the third quarter were $223 million. In the U.S., Nexplanon declined 50%, while internationally, the product grew 7% ex-exchange.

The biggest challenge facing Nexplanon this quarter was unfavorable U.S. policy, which emerged in Q2, accelerated in Q3 and had the biggest impact in the budget constrained public segments. Planned Parenthood and federally qualified health centers, where Nexplanon has a leading market share among long-acting reversible contraceptives.

In the second quarter, we cited U.S. policy decisions that impact Title X funding and Planned Parenthood. In the third quarter, formalization of these policies intensified budget and access constraints with the greatest impact being realized in Planned Parenthood. On the commercial side, our Nexplanon business is primarily comprised of integrated delivery networks and to a lesser extent, independent health care clinics.

In the independent commercial clinics, we've seen a shift away from both purchasing or buy and bill towards single unit specialty pharmacy fulfillment of these claims, as these small businesses try to preserve cash. This is also largely macro-driven and related to inflationary and economic factors with independent health care clinics are facing. We see these headwinds persisting in the fourth quarter in the U.S. and likely to result in full year U.S. Nexplanon sales that are down mid- to high single digit for the full year.

We expect international sales of Nexplanon to grow mid- to high single digits ex-FX this year. Putting that together, that means we expect global Nexplanon sales will be down low single digit in 2025 compared with full year 2024 on an ex-exchange basis.

In the fourth quarter, that implies global Nexplanon sales will be down by mid-teens ex-exchange compared with the fourth quarter of 2024. The discontinuation of the wholesaler practices I mentioned will likely explain about 2/3 of the year-over-year variance in the fourth quarter.

Turning to other components of our Women's Health business. Our fertility business was flat in the third quarter and up 13% year-to-date, ex-FX. For the full year, we expect high single-digit growth driven by the U.S., which represents about 40% of our global fertility business, as well as market expansion outside the U.S.

And rounding out Women's Health. On November 6, we announced that Organon has entered into a definitive agreement to divest the Jada system for $440 million plus another $25 million contingent on 2026 revenue targets. Since acquiring Jada 4 years ago, the Jada team successfully launched the product in the U.S., secured approvals across multiple countries and managed design iterations as part of continuous improvement activities all leading to Jada being recognized as the standard of care in postpartum hemorrhage management.

With this divestiture, Organon can delever faster by applying the proceeds to debt reduction, and put Jada in the hands of a med tech company well positioned to build on our great work and the very successful launch of the product.

Turning now to Biosimilars on Slide 7. Year-to-date performance is largely driven by Hadlima, which is up 63% ex-FX globally through September and continues to rank among the leading Biosimilars in terms of total prescriptions in the U.S. This performance reflects the strong clinical profile of Hadlima, which includes the recent interchangeability approval in the U.S. Hadlima has also benefited from the effectiveness of our low-price strategy as well as expansion into Canada and Puerto Rico.

The third quarter also benefited from an international tender for Ontruzant and to a lesser extent, contribution from our new denosumab biosimilar, which was approved by the FDA and launched in the U.S. in late September and Tofidence, which the company acquired in the second quarter of 2025.

Wrapping up the franchise discussion with established brands now on Slide 8. Vtama revenue in the third quarter was $34 million and $89 million year-to-date. Our ongoing focus here remains to differentiate Vtama in the market. We have the largest addressable market with a single product in both indications across all severities. Vtama is notable for its safety profile, powerful skin clearance and rapid effective itch relief. It's once-daily dosing regimen and lack of restrictions on duration of use or percentage of body surface area affected further illustrate Vtama's potential for disease management in adults suffering from plaque psoriasis and adults in children down to 2 years of age with atopic dermatitis.

The launch has had a flatter curve than we expected, but we are further investing behind the brand to effect a more rapid uptake in the atopic dermatitis indication. We still believe this product could get close to $0.5 billion globally at peak, even if our $150 million target for this year is now likely out of reach and closer to $120 million to $130 million.

Elsewhere in Established brands, the third quarter marked the last quarter of significant impact from the LOE of Atozet since we lapped that event in September. Importantly, we saw a continuation of softening in our respiratory business. Performance in the respiratory portfolio was primarily driven by declines in Singulair, resulting from lower demand outside of the U.S. The montelukast molecule is losing share to newer respiratory products, especially in pediatrics and is facing mandatory price reductions in Japan and China.

Dulera was also down significantly in the quarter, primarily due to increased discount rate pressure in the United States, coupled with temporary supply constraints and the negative impact from the loss of a customer contract early this year. As you know, our respiratory business can be seasonal. And given the historical stability of these offerings at midyear, we believe this business would rebound. Based on Q3 results and current projections for the remainder of the year, we anticipate that erosion in the respiratory business will persist through this year and into next year.

Moving to Slide 9, where we detail the drivers of our 1% as reported revenue increase year-on-year for the third quarter. Starting on the left, loss of exclusivity was about $50 million for the quarter, which primarily reflects the impact of the LOE of Atozet in Europe, which occurred in September 2024. As we lap that LOE, we anticipate a relatively smaller impact in the fourth quarter. Year-to-date, we're tracking at the high end of the $170 million to $190 million range we provided last quarter. And so we now estimate LOE impact to be about $200 million for the full year 2025.

VBP in China was de minimis in the third quarter and year-to-date. We now expect Fosamax's inclusion in Round 11 to be an early 2026 event, so we expect very minimal impact from VBP in 2025, less than our previous estimate of $30 million to $50 million. There was an approximate $30 million impact from price for the third quarter or about 1.9%. That was mainly driven by the mandatory pricing revisions in respiratory that I mentioned, competitive pricing pressures in fertility and the LOE of Atozet.

We expect the full year impact from price to be in the range of $135 million to $145 million or about 2% with those same Q3 drivers of price being the most significant. This is an improvement over our prior range of $155 million to $185 million. Volumes increased $70 million in the third quarter, representing growth of about 4.5%, driven by the addition of Vtama to the portfolio, continued growth in Emgality and solid performance of Hadlima.

Given year-to-date performance and our view into the fourth quarter, we estimate that volume could grow about 2.5% for the full year 2025, a revision from our former estimate of 6% to 7%. This would imply low single-digit decline in the fourth quarter and is reflective of continued softness in the respiratory portfolio, persisting policy headwinds in U.S. Nexplanon and a flatter-than-expected ramp of Vtama. In supply other, here, we captured the lower-margin contract manufacturing arrangements that we have with Merck, which have been declining since the spin-off as expected.

And lastly, foreign exchange translation had an approximate $40 million favorable impact in the quarter or about 200 basis points, which reflects the weaker U.S. dollar versus the majority of foreign currencies in which we transact. For the full year, we now expect the impact for FX to represent about a 50 to 70 basis point tailwind to total revenue.

Now let's turn to Slide 10, where we show key non-GAAP P&L line items and metrics for the quarter. For reference, financials and reconciliations to the non-GAAP financial measures are included in our press release and the slides in the appendix of this presentation. For gross profit, we are excluding purchase accounting amortization and onetime items from cost of goods sold, which can be seen in our appendix slides.

Adjusted gross margin was 60.3% for the third quarter compared with 61.7% in the third quarter of 2024. This year-over-year decline in the non-GAAP adjusted gross margin is primarily attributable to pricing pressure, unfavorable product mix and unfavorable foreign exchange on our inventory turns.

Adjusted EBITDA this quarter was $518 million, representing a 32.3% margin. Year-to-date, adjusted EBITDA margin is running favorable in part based on the timing of SG&A spend. There are planned increases in our SG&A spend in the fourth quarter as we support growing products such as Vtama and Tofidence. Year-to-date, non-GAAP SG&A as a percentage of sales is 25.4% and given the investments I just mentioned, our latest estimate is about 0.5 point higher than that for the full year.

Turning to free cash flow on Slide 11. Year-to-date, we've delivered $813 million of free cash flow before onetime costs. Onetime costs related to the spin-off were completed in 2024, following the rollout of our global ERP system. What remains are margin-enhancing restructuring and manufacturing separation activities for 2025, which were $244 million year-to-date. In line with our expectation of $250 million to $300 million for the full year.

Year-to-date, these break out as follows: approximately $100 million relates to cash payments associated with the restructuring initiatives that we're executing to deliver $200 million of operating expense savings this year. $20 million relates to the final payment on the Microspherix legal settlement and the remaining $120 million relates to the planned exits from supply agreements with Merck. These are activities that will enable Organon to redefine our appropriate sourcing strategy and move to fit-for-purpose supply chains, while focusing on delivering efficiencies in terms of gross margin expansion, which we expect to begin realizing in 2027.

Below the free cash flow line, our estimate of business development cash investments for 2025 is approximately $240 million related to contractual milestones for Vtama, Emgality and the Biosimilar programs with Shanghai Henlius. Through the first 9 months of the year, the majority of those payments have already been made.

Turning now to leverage on Slide 12. Net leverage as of September 30 was approximately 4.2x, down from 4.3x at June 30. Earlier in the year, we took action to realign our capital allocation priorities and target a net leverage ratio of below 4x. To that end, in the second quarter, we repaid approximately $350 million in principal of long-term debt instruments. As I mentioned, once the Jada transaction closes, which we estimate will be Q1 of 2026, we will apply the net proceeds after taxes and transaction costs to lowering our debt balance as well. Given our revised guide, we will likely end the year in line with Q3 with proceeds from the Jada sale helping to move the needle on leverage in early 2026.

Now turning to 2025 full year revenue guidance on Slide 13. Given year-to-date performance and risk adjusting the fourth quarter for what we see as persisting U.S. policy in Nexplanon and the challenges in the respiratory business, we're lowering our full year range to $6.2 billion to $6.25 billion from $6.275 billion to $6.375 billion, which represents a year-over-year nominal decline of 3.2% to 2.4% negative.

Given the approximate $35 million to $45 million tailwind we expect from FX for the full year, that means we're revising our constant currency revenue guide down about 300 basis points at the midpoint. We continue to expect adjusted gross margin to be in the range of 60% to 61%. Year-to-date strength in adjusted gross margin is likely to be partially offset in the fourth quarter due to product mix.

For OpEx, as I mentioned earlier, given expected investments in Vtama, we expect full year SG&A spend as a percentage of revenue to be about 0.5 point higher than the year-to-date figure, which puts us in the 26% area for the full year. We continue to expect R&D as a percentage of sales to be in the upper single-digit range. The math on all those components gets you closer to the lower end of the 31% to 32% adjusted EBITDA margin range we laid out in August of this year. So we are revising our adjusted EBITDA margin to approximately 31% for the full year.

For below-the-line items, our estimate for full year 2025 interest expense remains at $510 million. The lower interest expense from voluntarily retired debt is essentially fully offset by higher euro-denominated interest expense due to FX translation, and an acceleration of noncash amortization of capitalized fees related to the early debt retirement.

As we think about next year, we would expect the interest expense to be closer to a $450 million to $475 million run rate as a result of the voluntary debt repayments completed, lower variable interest rates and applying the net proceeds from Jada to debt repayment.

For 2025, we continue to estimate our non-GAAP tax rate to be in the range of 22.5% to 24.5%. The uptick from 2024 is largely due to the impact of the 15% global minimum tax rate required under the OECD's Pillar 2. Depreciation of $135 million remains our estimate for the full year 2025. At a very high level, next year pro forma for the Jada divestiture, we would expect consolidated revenue to be about flat as Vtama and Emgality and Biosimilars growth offset the headwinds across the respiratory portfolio.

For Nexplanon, assuming existing headwinds in the U.S. don't worsen and factoring in the volume and price variables associated with a 5-year launch in the U.S. and continued growth internationally, we expect global Nexplanon revenues could be about flat next year. We remain confident in our ability to continue to delever the balance sheet through disciplined expense management and prudent capital allocation, all of which will strengthen Organon's financial position and support greater financial flexibility in the future.

Importantly, even in a challenging environment, our diverse portfolio continues to generate strong cash flows and provides a solid foundation for long-term value creation. We are committed to navigating the current headwinds, investing behind our growth drivers and delivering for patients, customers and shareholders.

And finally, while the issue raised around certain of the company's wholesaler sales practices is receiving a lot of focus, the financial impacts are small. Remediation is well underway. And as an organization, we are moving forward.

With that, operator, let's open the line for questions.

[Operator Instructions] Your first question comes from Jason Gerberry with Bank of America.

My question is mainly, given the Jada divestiture, are there opportunities within the portfolio for additional divestitures as you look across? And then as my follow-up, just on Vtama, I appreciate the update as it pertains to the growth dynamics into year-end. When should we start thinking about a growth inflection? Do you feel like next year when the access barriers improve that 2026 is the time point to really evaluate whether or not the growth inflections achieved with the AD label?

Thanks, Jason. We'll start with question. So to be clear, we've got nothing that's been announced or is definitively planned on asset divestitures, we're constantly from a strategic basis, looking at all of the assets in our portfolio. and anything additional would be opportunistic. I think in the case of Jada, we looked very hard at what is the economic value created in a hold and invest scenario and compare that against the opportunity to put that product in the hands of a better owner and the right economic answer in the math indicated that divestiture was the right answer in that case, but that is the kind of rigor that we'll put across all the assets in our portfolio.

And as regards Vtama, Vtama has grown nicely this year, will grow again next year. To your point, we have -- we have made significant strides to improve access in 2026. And so I think full year 2026 will be a very good basis for us to be judging where we are on the growth trajectory to achieving long-term peak revenue of that roughly $0.5 billion that underpin the investment for us in the first place. So yes, 2026 will be a key year.

The next question comes from David Amsellem with Piper Sandler.

So a couple for me. Firstly, can you talk more about the pressure on respiratory? And should we think of this long term as a declining business, not just '26, but beyond? And then secondly, how are you thinking about other potential trouble spots, I should say, regarding Established brands? So that's number one.

And then number two is on Vtama. Just wanted to get your thoughts on competitive dynamics here. Is there anything you feel like you're missing regarding the topical landscape vis-a-vis the roflumilast product in particular and how we should think about that and how that plays into your -- thinking regarding the product?

Sure. So we'll start with the respiratory piece of your question, David. So in the early part of the year, we were noting that the allergy season, specifically in the Asia Pacific region, including China, was off to a very slow start. That put a dent in our thinking about the full year performance of the respiratory business.

But then as the year progressed, we were noting that competitively speaking, the age of certain products in the respiratory portfolio is working against them. Various health ministries around the world were starting to prioritize other molecules above, for example, Singulair.

And then elsewhere in the portfolio, thinking about Dulera, we talked about that in the prepared comments in terms of the rate pressures that product is facing in the United States. And then rounding out just mandatory price downs in China and Japan and also just around the world, hit that business pretty hard this year. So as we said, we expect that softness to continue into 2026. We'll see what sort of allergy season we have with some of the other dynamics I've spoken about are more longer term in nature.

Apart from that, the rest of the established brands portfolio is showing the stability that those products have demonstrated over long periods of time. But we've always said about the established brands business, it is a business that we felt, if managed very tightly, we could keep about flat or maybe very, very low single-digit rate of rate of decline. That is on a CAGR basis. Some years will be different than others.

We've added to the established brands portfolio, having a global commercial infrastructure like we do is an asset. So products like Emgality tucked in very nicely. And Emgality continues to grow. And now the wave two markets now that we've added them, I think, are a case in point for what we can do with the infrastructure that we have. So no other trouble spots that we're managing at the moment.

Vtama from a competitive standpoint, we are forced to market in the atopic dermatitis space with a nonsteroidal offering. So that has set the stage, I think, as what you -- what you would say about competition. The product, as we mentioned in the prepared comments, is really differentiated in terms of drug-to-drug interactions, no restrictions on use, no limitations on a percentage of a body air. So it's a very safe product. And we're looking to differentiate it with those patients for whom those characteristics are very important, including pediatrics.

The next question comes from Umer Raffat with Evercore ISI.

I wanted to start by commending you for getting the 10-Q out, but I realize we haven't been able to speak at all since the inventory disclosures a few days ago. So I feel like it's only fair that we don't limit to just one question.

So here's what I wanted to address on this public call. First, the audit committee investigation focused on Nexplanon. How do we know that the behavior was just limited to Nexplanon? Because inventory visibility is always lower ex U.S. So how do we know?

Second, the filings point to the CEO and the Head of U.S. Commercial as where divergence happened. But I also saw your Chief Commercial Officer left back in February last -- this year as well. Why was that?

Third, for 2024, your net pull forward is only $10 million, but the discounts and rebates paid to the channel went up by $177 million in '24, which puzzles me. So could you elaborate on that? Additionally, 4Q '22 had some inventory as well, but I didn't see any color on that.

And then finally, the scale of these issues seems fairly low, fairly manageable, $10 million, $15 million sub $20 million. But if that's the case, then why the need to start this divestiture plan?

As I mentioned in my comments, the independent internal investigation around the improper sales practices with Nexplanon in the U.S. was with two wholesalers, and it's now complete. The investigation also looked other product areas and found nothing else at this time. So we believe that we are done with the investigation now and we're moving forward into the remediation efforts.

Again, as I mentioned, that's things like enhancing our controls. We have taken certain personnel actions. We believe that's completed. We're doing additional training and we've got more written procedures and more training yet to come. So with the new leadership at the company, we're comfortable that we're moving forward, and we will continue to execute against our goals as stated.

Matt, do you want to take the others?

Yes. So for the Nexplanon piece, as we stated in the prepared commentary, Umer, the marketplace for long-acting reversible contraceptives has gotten more competitive. And so we are meeting that competition partially on price. So that would result in some of the increases in rebates and discounts that you noted. This is just I would say, normal business and Nexplanon operating in a competitive marketplace where women have lots of options for contraception.

And on the Q4 2022 disclosure here. We didn't -- it wasn't on our slide, but the amount is disclosed in the 10-K.

Umer, you had a number of other questions. I just want to make sure we get to them all. Can you repeat the ones that you don't think we've answered yet?

Yes, sure. Maybe for 4Q '22, that wasn't disclosed also the Chief Commercial Officer, who left separate from the Head of Commercial, why was that? And then why do all the divestitures now?

So for Q4 of 2022, the revenue was impacted by -- I think it was about 1.5% on the quarter, 0.3% for the year. And the divestitures, I think we've already addressed that. Umer, we had an opportunistic chance to divest an asset for which the economic value received on an immediate basis was what was superior to the hold and invest option. And we had an employee retire towards the end of last year that was for that employee's personal reasons and not tied to the investigation anyway.

The next question comes from Chris Schott of JPMorgan.

Just two questions for me. Maybe, Carrie, can you just talk a little bit about the new CEO search and kind of what's the optimal background and profile you're looking for here? And as part of either the search or with the new CEO coming in, should we assume a review of the broader strategy at Organon as part of this process?

And then my follow-up, just on Nexplanon. Thank you for the comments about the flat growth next year. Just can you add a little bit more and what that -- in terms of what that implies for these funding challenges and the impact of the 5-year launch on the U.S. revenue?

Thanks, Chris. The board formed a search committee essentially immediately. The search committee has been hard at work. So we are in the process of conducting that search. And like any company at this point, we need someone who's got the global experience, the strategic experience, the operational depth and a deep understanding of the businesses in which we operate. So we are confident that -- we not only have a great interim CEO that will continue to find good candidates as we go forward. I think the strategic discussion obviously waits for a permanent CEO. But at this point, we've been reaffirming that we don't see any strategic changes. So I would say we are what we are right now, and we intend to continue that way and very much focused on driving towards our goals.

I'll take the second part of the question on Nexplanon. So in terms of our current view of Nexplanon being about flat next year, the components of that, we expect the product to continue to grow internationally. From a policy perspective, assuming things don't get any worse, what we would probably see is an annualization of the issues that we experienced in the second half.

And then the 5-year which we are assessing the relative weighting of the impacts of volume growth as the product would be appealing to a larger segment of the addressable population with a 5-year indication versus 3. The volume decline that would come from lower reinsertions, right, as women who would be coming up to the 3-year limit can leave the rod in their arms now for longer. And then what we're able to do on the pricing front.

So we'll have all of this sorted out more precisely when we guide in February. But these are the things, Chris, that would be pushing and pulling on the overall belief that revenue will be about flat next year.

The next question comes from Terence Flynn with Morgan Stanley.

I just had one follow-up on the CEO search. I was wondering if you can speculate on the duration of the search when you hope to have someone in place on a permanent basis? And then on denosumab on that product, obviously, one of your newer Biosimilars that you're launching. Amgen has expressed a lot of optimism about maintaining more share on the Prolia side versus XGEVA. Can you just talk through your expectations for fourth quarter, but then also into 2026?

So on timing of the CEO search, you know it's always impossible to predict how long these things take. The Board did begin right away. So I'm confident we're doing what's necessary to go as fast as we can. But we also feel very good about putting Joe in as our interim CEO, and I've stepped in to assist him along with Matt, of course. So we're confident we can continue to run the company well in the interim, and we'll be moving through the search as fast as appropriately we can go.

And on the denosumab piece, we're obviously very excited about that product. It's launched now. We don't guide to specific products, as you know. But what we are excited about is we continuously are adding products to the bag in our U.S Biosimilars business and that's giving us increasing commercial presence and access advantages that we look forward to 2026 for Tofidence and for all of our U.S. Biosimilars.

The next question comes from Navann Ty with BNP Paribas.

I have some questions on capital allocation. If you could discuss the future BD in Women's Health biopharma, only I understand and the timing of business development versus deleveraging progress? And second, if you could also discuss your pipeline versus the cost discipline strategy, including lower R&D?

Yes. Thank you, Navann. So our business development activities in Women's Health continue. To the question that you're asking, we -- just because of where the balance sheet is, we've had to focus on later-stage assets or currently marketed assets. You can see that clearly in the kinds of deals that we have announced that we've announced recently.

And the challenge in Women's Health is there aren't a lot of those assets that are available late stage are currently marketed. A lot of the truly exciting things in Women's Health are preclinical or generally speaking, much earlier in the development cycle. So we are somewhat constrained in our ability to go after those, and that's one of the reasons why we've been prioritizing leverage reduction, debt repayment in our capital allocation strategies so that we can free up the ability, balance sheet and P&L to bring on the clinical programs, especially in Women's Health that are preclinical or early stage.

Once again, because of the financial challenges facing the company, we've applied that same rigor, not just to the BD we're looking at, but also to the pipeline that we are managing in-house. And we've had to trim some programs. Those weren't restricted to Women's Health. We've got life cycle management activities across a number of products in the portfolio, but it's incumbent upon a supply that same kind of financial rigor and discipline to things inside the company as well as any capital deployments we might do externally.

The next question comes from Mike Nedelcovych with TD Cowen.

I have one actually something of a follow-up on the BD response you just gave, I think with today's updates, it's fair to say that business development track record is somewhat mixed. So I'm wondering what you could do from here to improve it, especially given how important BD is to potential growth for Organon. And could that options that include expanding to therapeutic categories well beyond Women's Health?

So thank you for the question. I think we've shown success in the BD program, especially with later-stage assets where we've got synergies with our existing commercial capabilities. So the broad strategy just doing more of what we already do well. I think Emgality is a terrific example of that. With the addition of Dermavant, we actually did already add a completely new vertical in the United States with dermatology.

Right now, the Dermavant team that we added, which is now Organon's dermatology sales force is selling just one product. So we would have synergies going forward as we look to add additional derm products to that team. And we're already in, when you look at the Established Brands business, we're already in a pretty broad range of therapeutic categories outside the United States.

So we believe that we've got lots of opportunities with the therapeutic areas we're already in with what we've already added with Dermavant so that we wouldn't necessarily need to add another therapeutic category in order to be successful with capital deployments, although we certainly wouldn't rule it out if it capitalizes once again on some functional expertise that we already have, whether it's the global commercial network or perhaps there's something that aligns particularly well with our manufacturing capabilities, for example.

This concludes the question-and-answer session and will conclude today's conference call and webcast. Thank you for joining. You may now disconnect.