Only a month after announcing its acquisition of Alydia Health, Merck hosted spin-off Organon‘s management at a meeting with the investor community yesterday. Organon’s leadership shared plans for how the company will deliver sustainable growth and shareholder value as a standalone company. Notable is the strong intended focus on women’s health and plan for more acquisitions in this space.
At launch, Organon’s portfolio will consist of more than 60 medicines and products across its three core franchises: Women’s Health, Biosimilars and Established Brands. “On June 3rd, Organon will launch as a new company, with solid growth opportunities and the ability to make an impact in women’s health,” said Kevin Ali, Organon’s chief executive officer. “Our day one portfolio consists of many well-known products that were once core to Merck’s business but have since strategically received limited resources and investment. These are important medicines that we believe will be responsive to commercial investment, and with renewed management focus, we expect the portfolio to generate low to mid-single organic revenue growth off of a 2021 base. Additionally, as the only company of our size to be focused on women’s health, we have a significant opportunity to do more to support women and their health, and the time is right to bring forward more options for patients and healthcare providers.”
During the event, members of Organon’s leadership team outlined the company’s strategic priorities to generate value for patients and shareholders. These include:
- Developing a new commercial strategy and roadmap for sustainable growth. Organon has a strong and balanced foundation with a diverse portfolio of impactful brands built on a broad geographic footprint. With management focus and renewed investment, the company intends to capitalize on the growth potential of the existing Women’s Health and Biosimilars portfolios, while optimizing the well-known brands and associated cash flows of the Established Brands business. Organon will launch with a large commercial footprint with a direct sales presence in 58 markets, while supplying products to over 140 markets. The company has also begun to execute on its vision of becoming a leader in women’s health, with the recently announced proposed acquisition of Alydia Health.
- Driving leadership in women’s health. Organon has a scaled portfolio of contraceptive and fertility brands, anchored by market exclusivity for NEXPLANON (etonogestrel implant), that delivered approximately $1.6 billion in global sales in 2020 and has long-term growth potential. Organon will also broaden its definition of women’s health beyond contraception and fertility to address conditions that are unique to women as well as health issues that disproportionately affect women, placing Organon in an addressable market of more than $60 billion by 2026.
- Executing on the commercialization of Biosimilars. Organon will be in a strong position with the products in its current portfolio through its long-standing collaboration with Samsung Bioepis. Growth drivers in Organon’s Biosimilars portfolio are expected to include the continued success of RENFLEXIS (infliximab-abda) in the U.S., the launch of AYBINTIO (bevacizumab)in the EU and HADLIMA (adalimumab-bwwd) in Canada, as well as the anticipated launch of HADLIMA in the U.S. in 2023.
- Leveraging the Established Brands portfolio for steady cash flow. The Established Brands business consists of 49 products across a range of therapeutic areas, including respiratory, cardiovascular, dermatology and non-opioid pain, and delivered $4.5 billion of revenue in 2020. This portfolio includes brands beyond their patent loss in most markets, with only modest remaining LOE exposure beyond 2021. The company will look to capitalize on these well-known and recognizable brands in international markets by selectively increasing commercial spend in areas that have the potential to offer solid returns.
- Developing a new R&D approach with women at the center. Organon will look across academic centers, as well as early and established companies, to find promising drugs, diagnostics and devices to develop through its global capabilities in clinical development and patient safety, regulatory and medical affairs. Its R&D philosophy is to build a business around patient needs, advancing healthcare options for women that enable them to live their best lives every day.
“The spinoff of Organon will help Merck become a leaner, more focused and agile company with stronger growth, and will enable significant operating efficiencies. Organon, as a standalone company, will be better positioned to realize its potential and to have a meaningful impact, particularly in women’s health”, said Rob Davis, president, Merck. “We believe this transaction will create value for the patients both companies serve and for Merck shareholders.”