With Merck’s New and Strong Women’s Health Spinoff Organon Shares Jump

Organon, Merck’s women’s health spinoff, has been operating independently for only two months. In the midst of a global pandemic, that hasn’t been easy, but the budding drugmaker has so far delivered early results that have Wall Street’s attention. Organon pleasantly surprised investors when it announced nearly $1.6 billion in revenue in its first reported quarter as an independent company, exceeding forecasts and driving its stock up more than 13%.

Organon top brass warned that pandemic turbulence could emerge in the second half of the year, which is in line with pharma companies‘ excellent showing over the previous three months. Organon early success was fueled by its biosimilars business and significant revenue growth for the contraceptive implant Nexplanon and the infertility therapy Follistim. Nexplanon brought in $184 million globally, while Follistim brought in $65 million, representing a 40 percent increase year over year.

Organon split from Merck in early June, therefore the year-over-year results are based on the medications’ sales last year while they were still under Merck’s banner. Organon Chief Financial Officer Matt Walsh told analysts on a Thursday earnings call that the Nexplanon and Follistim combination “more than offset” the contraceptive NuvaRing’s 19 percent reduction due to increased copycat competition.Investors should take the year-over-year comparisons with a grain of salt, according to Walsh, because the second quarter was a “hybrid quarter” for the new firm. Nexplanon, the only single-rod long-acting reversible contraception, is expected to surpass blockbuster sales in the next years, according to the NuvaRing manufacturer.

Nexplanon has had a difficult road to recovery from its pandemic downturn, despite now being at the top of the drugmaker’s women’s health portfolio. While there was an increase in doctor visits this quarter, Walsh said they are still not back to pre-pandemic levels. Organon resurgence has been mostly due to its infertility business versus contraception.