QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices) (zip code) |
Not Applicable | ||||||||
(Former name, former address and former fiscal year, if changed since last report.) |
Securities registered pursuant to Section 12(b) of the Act: | ||||||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Page No. | ||||||||
PART I | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenues | $ | $ | $ | $ | |||||||||||||||||||
Costs, Expenses and Other | |||||||||||||||||||||||
Cost of sales | |||||||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
Acquired in-process research and development and milestones | |||||||||||||||||||||||
Restructuring costs | |||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||
Exchange losses (gains) | ( | ||||||||||||||||||||||
Other expense, net | |||||||||||||||||||||||
Income Before Income Taxes | |||||||||||||||||||||||
Taxes on income | |||||||||||||||||||||||
Net Income | $ | $ | $ | $ | |||||||||||||||||||
Earnings per Share: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||
Weighted Average Shares Outstanding: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other Comprehensive Income, Net of Taxes: | |||||||||||||||||||||||
Benefit plan net loss and prior service cost, net of amortization | ( | ||||||||||||||||||||||
Cumulative translation adjustment | ( | ( | ( | ( | |||||||||||||||||||
( | ( | ( | ( | ||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Assets | |||||||||||
Current Assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable (net of allowance for doubtful accounts of $ 2023 and $ | |||||||||||
Inventories (excludes inventories of $ | |||||||||||
Other current assets | |||||||||||
Total Current Assets | |||||||||||
Property, plant and equipment, net | |||||||||||
Goodwill | |||||||||||
Intangibles, net | |||||||||||
Other assets | |||||||||||
Total Assets | $ | $ | |||||||||
Liabilities and Equity | |||||||||||
Current Liabilities: | |||||||||||
Current portion of long-term debt | $ | $ | |||||||||
Trade accounts payable | |||||||||||
Accrued and other current liabilities | |||||||||||
Income taxes payable | |||||||||||
Total Current Liabilities | |||||||||||
Long-term debt | |||||||||||
Deferred income taxes | |||||||||||
Other noncurrent liabilities | |||||||||||
Total Liabilities | |||||||||||
Contingencies (Note 15) | |||||||||||
Organon & Co. Stockholders' Deficit: | |||||||||||
Common stock, $ Authorized - Issued and outstanding - | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total Stockholders' Deficit | ( | ( | |||||||||
Total Liabilities and Stockholders' Deficit | $ | $ |
Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total | |||||||||||||||||||||||||||||||
Shares | Par Value | ||||||||||||||||||||||||||||||||||
Balance at July 1, 2022 | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss, net of taxes | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Cash dividends declared on common stock ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation plans and other | — | — | — | ||||||||||||||||||||||||||||||||
Net transfers from Merck & Co., Inc., including Separation Adjustments | — | — | — | — | |||||||||||||||||||||||||||||||
Balance at September 30, 2022 | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||
Balance at July 1, 2023 | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss, net of taxes | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Cash dividends declared on common stock ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation plans and other | — | — | — | ||||||||||||||||||||||||||||||||
Balance at September 30, 2023 | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||
Balance at January 1, 2022 | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss, net of taxes | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Cash dividends declared on common stock ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation plans and other | — | — | — | ||||||||||||||||||||||||||||||||
Net transfers to Merck & Co., Inc. including Separation Adjustments | — | — | — | ( | ( | ||||||||||||||||||||||||||||||
Balance at September 30, 2022 | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||
Balance at January 1, 2023 | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss, net of taxes | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Cash dividends declared on common stock ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation plans and other | — | — | |||||||||||||||||||||||||||||||||
Balance at September 30, 2023 | $ | $ | $ | ( | $ | ( | $ | ( |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Cash Flows from Operating Activities | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash flows provided by operating activities: | |||||||||||
Depreciation | |||||||||||
Amortization | |||||||||||
Impairment of assets | |||||||||||
Acquired in-process research and development and milestones | |||||||||||
Deferred income taxes | ( | ||||||||||
Stock-based compensation | |||||||||||
Unrealized foreign exchange loss (gain) | ( | ||||||||||
Other | |||||||||||
Net changes in assets and liabilities | |||||||||||
Accounts receivable | ( | ( | |||||||||
Inventories | ( | ( | |||||||||
Other current assets | ( | ( | |||||||||
Trade accounts payable | ( | ( | |||||||||
Accrued and other current liabilities | |||||||||||
Income taxes payable | ( | ||||||||||
Other | ( | ||||||||||
Net Cash Flows Provided by Operating Activities | |||||||||||
Cash Flows from Investing Activities | |||||||||||
Capital expenditures | ( | ( | |||||||||
Proceeds from sale of property, plant and equipment | |||||||||||
Acquired in-process research and development and milestones | ( | ( | |||||||||
Purchase of product rights and asset acquisition, net of cash acquired | ( | ||||||||||
Net Cash Flows Used in Investing Activities | ( | ( | |||||||||
Cash Flows from Financing Activities | |||||||||||
Proceeds from debt | |||||||||||
Repayments of debt | ( | ( | |||||||||
Net transfers to Merck & Co., Inc. | ( | ||||||||||
Employee withholding taxes related to stock-based awards | ( | ( | |||||||||
Dividend payments | ( | ( | |||||||||
Net Cash Flows Used in Financing Activities | ( | ( | |||||||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | ( | ( | |||||||||
Net Decrease in Cash and Cash Equivalents | ( | ( | |||||||||
Cash and Cash Equivalents, Beginning of Period | |||||||||||
Cash and Cash Equivalents, End of Period | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
($ in millions and shares in thousands, except per share amounts) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Basic weighted average number of shares outstanding | |||||||||||||||||||||||
Stock awards and equity units (share equivalent) | |||||||||||||||||||||||
Diluted weighted average common shares outstanding | |||||||||||||||||||||||
EPS: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||
Anti-dilutive shares excluded from the calculation of EPS |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | U.S. | Int’l | Total | U.S. | Int’l | Total | U.S. | Int'l | Total | U.S. | Int'l | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Women's Health | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nexplanon/Implanon NXT | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Follistim AQ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NuvaRing | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ganirelix Acetate Injection | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marvelon/Mercilon | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jada | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Women's Health (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Biosimilars | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Renflexis | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ontruzant | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Brenzys | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aybintio | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hadlima | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Established Brands | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cardiovascular | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Zetia | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vytorin | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Atozet | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rosuzet | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cozaar/Hyzaar | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Cardiovascular (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Respiratory | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Singulair | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nasonex | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dulera | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Clarinex | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Respiratory (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-Opioid Pain, Bone and Dermatology | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Arcoxia | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fosamax | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Diprospan | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Non-Opioid Pain, Bone and Dermatology (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proscar | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Propecia | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other (2) | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
($ in millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Europe and Canada | $ | $ | $ | $ | |||||||||||||||||||
United States | |||||||||||||||||||||||
Asia Pacific and Japan | |||||||||||||||||||||||
China | |||||||||||||||||||||||
Latin America, Middle East, Russia, and Africa | |||||||||||||||||||||||
Other (1) | |||||||||||||||||||||||
Revenues | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
($ in millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Stock-based compensation expense recognized in: | |||||||||||||||||||||||
Cost of sales | $ | $ | $ | $ | |||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Income tax benefits | $ | $ | $ | $ |
Nine Months Ended September 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
Expected dividend yield | % | % | ||||||||||||
Risk-free interest rate | ||||||||||||||
Expected volatility | ||||||||||||||
Expected life (years) |
Stock Options | Restricted Share Units | Performance Share Units | |||||||||||||||||||||||||||||||||||||||
(shares in thousands) | Shares | Weighted average exercise price | Weighted average grant date fair value | Shares | Weighted average grant date fair value | Shares | Weighted average grant date fair value | ||||||||||||||||||||||||||||||||||
Outstanding as of January 1, 2023 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Granted | |||||||||||||||||||||||||||||||||||||||||
Vested/Exercised | ( | ||||||||||||||||||||||||||||||||||||||||
Forfeited/Cancelled | ( | ( | |||||||||||||||||||||||||||||||||||||||
Outstanding as of September 30, 2023 | $ | $ | $ | $ |
Equity Awards Vested and Expected to Vest | Equity Awards That are Exercisable | ||||||||||||||||||||||||||||||||||||||||||||||
(awards in thousands; aggregate intrinsic value in millions) | Awards | Weighted Average Exercise Price | Aggregate Intrinsic Value | Remaining Term (in years) | Awards | Weighted Average Exercise Price | Aggregate Intrinsic Value | Remaining Term (in years) | |||||||||||||||||||||||||||||||||||||||
Stock Options | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Restricted Share Units | |||||||||||||||||||||||||||||||||||||||||||||||
Performance Share Units |
($ in millions) | September 30, 2023 | December 31, 2022 | |||||||||
Finished goods | $ | $ | |||||||||
Raw materials | |||||||||||
Work in process | |||||||||||
Supplies | |||||||||||
Total (approximates current cost) | $ | $ | |||||||||
Decrease to LIFO costs | ( | ( | |||||||||
$ | $ | ||||||||||
Recognized as: | |||||||||||
Inventories | $ | $ | |||||||||
Other assets | |||||||||||
Inventories valued under the last in, first out ("LIFO") method |
($ in millions) | Fair Value Measurement Level | September 30, 2023 | December 31, 2022 | ||||||||||||||
Forward contracts in Other current assets | 2 | $ | $ | ||||||||||||||
Forward contracts in Accrued and other current liabilities | 2 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
($ in millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
$ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
($ in millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Foreign exchange loss (gain) in Exchange losses (gains) | $ | $ | $ | $ | ( |
($ in millions) | September 30, 2023 | December 31, 2022 | |||||||||
Term Loan B Facility: | |||||||||||
SOFR plus | $ | $ | |||||||||
EURIBOR plus | |||||||||||
Other borrowings | |||||||||||
Other (discounts and debt issuance costs) | ( | ( | |||||||||
Total principal long-term debt | $ | $ | |||||||||
Less: Current portion of long-term debt | |||||||||||
Total Long-term debt, net of current portion | $ | $ |
($ in millions) | September 30, 2023 | December 31, 2022 | |||||||||
Long-term debt | $ | $ |
($ in millions) | |||||
2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Thereafter |
($ in millions) | Employee Benefit Plans | Cumulative Translation Adjustment | Accumulated Other Comprehensive Loss | ||||||||||||||
Balance at July 1, 2022, net of taxes | $ | ( | $ | ( | $ | ( | |||||||||||
Other comprehensive loss, pretax | ( | ( | |||||||||||||||
Tax | |||||||||||||||||
Other comprehensive loss, net of taxes | ( | ( | |||||||||||||||
Balance at September 30, 2022, net of taxes | $ | ( | $ | ( | $ | ( | |||||||||||
Balance at July 1, 2023, net of taxes | $ | $ | ( | $ | ( | ||||||||||||
Other comprehensive loss, pretax | ( | ( | |||||||||||||||
Tax | |||||||||||||||||
Other comprehensive loss, net of taxes | ( | ( | |||||||||||||||
Balance at September 30, 2023, net of taxes | $ | $ | ( | $ | ( | ||||||||||||
Balance at January 1, 2022, net of taxes | $ | ( | $ | ( | $ | ( | |||||||||||
Other comprehensive loss, pretax | ( | ( | ( | ||||||||||||||
Tax | |||||||||||||||||
Other comprehensive loss, net of taxes | ( | ( | |||||||||||||||
Balance at September 30, 2022, net of taxes | $ | ( | $ | ( | $ | ( | |||||||||||
Balance at January 1, 2023, net of taxes | $ | $ | ( | $ | ( | ||||||||||||
Other comprehensive loss, pretax | ( | ( | ( | ||||||||||||||
Tax | |||||||||||||||||
Other comprehensive loss, net of taxes | ( | ( | ( | ||||||||||||||
Balance at September 30, 2023, net of taxes | $ | $ | ( | $ | ( |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
($ in millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Sales | $ | $ | $ | $ | |||||||||||||||||||
Cost of sales | |||||||||||||||||||||||
Selling, general and administrative |
($ in millions) | September 30, 2023 | December 31, 2022 | |||||||||
Receivables from Samsung included in Other current assets | $ | $ | |||||||||
Payables to Samsung included in Trade accounts payable |
($ in millions) | September 30, 2023 | December 31, 2022 | |||||||||
Due from Merck in Accounts receivable | $ | $ | |||||||||
Due to Merck in Accounts payable |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
($ in millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Sales | $ | $ | $ | $ | |||||||||||||||||||
Cost of sales |
Three Months Ended September 30, | % Change | % Change Excluding Foreign Exchange | Nine Months Ended September 30, | % Change | % Change Excluding Foreign Exchange | ||||||||||||||||||||||||||||||||||||||||||
($ in millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||
United States | $ | 370 | $ | 366 | 1 | % | 1 | % | $ | 1,067 | $ | 1,043 | 2 | % | 2 | % | |||||||||||||||||||||||||||||||
International | 1,149 | 1,171 | (2) | (1) | 3,598 | 3,646 | (1) | 2 | |||||||||||||||||||||||||||||||||||||||
Total | $ | 1,519 | $ | 1,537 | (1) | % | (1) | % | $ | 4,665 | $ | 4,689 | (1) | % | 2 | % |
Three Months Ended September 30, | % Change | % Change Excluding Foreign Exchange | Nine Months Ended September 30, | % Change | % Change Excluding Foreign Exchange | ||||||||||||||||||||||||||||||||||||||||||
($ in millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||
Nexplanon/Implanon NXT | $ | 220 | $ | 229 | (4) | % | (3) | % | $ | 599 | $ | 595 | 1 | % | 2 | % | |||||||||||||||||||||||||||||||
NuvaRing | 37 | 50 | (26) | (23) | 117 | 133 | (12) | (10) | |||||||||||||||||||||||||||||||||||||||
Marvelon/Mercilon | 30 | 31 | (3) | (2) | 97 | 85 | 13 | 17 | |||||||||||||||||||||||||||||||||||||||
Follistim AQ | 54 | 60 | (10) | (8) | 179 | 179 | — | 3 | |||||||||||||||||||||||||||||||||||||||
Ganirelix Acetate Injection | 25 | 36 | (30) | (29) | 88 | 97 | (9) | (7) | |||||||||||||||||||||||||||||||||||||||
Jada | 13 | 5 | 134 | 134 | 31 | 12 | 150 | 150 |
Three Months Ended September 30, | % Change | % Change Excluding Foreign Exchange | Nine Months Ended September 30, | % Change | % Change Excluding Foreign Exchange | ||||||||||||||||||||||||||||||||||||||||||
($ in millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||
Renflexis | $ | 69 | $ | 60 | 15 | % | 15 | % | $ | 201 | $ | 166 | 22 | % | 22 | % | |||||||||||||||||||||||||||||||
Ontruzant | 40 | 29 | 36 | 34 | 93 | 87 | 8 | 7 | |||||||||||||||||||||||||||||||||||||||
Brenzys | 13 | 24 | (43) | (41) | 45 | 52 | (13) | (8) | |||||||||||||||||||||||||||||||||||||||
Hadlima | 8 | 6 | 38 | 42 | 20 | 14 | 48 | 55 |
Three Months Ended September 30, | % Change | % Change Excluding Foreign Exchange | Nine Months Ended September 30, | % Change | % Change Excluding Foreign Exchange | ||||||||||||||||||||||||||||||||||||||||||
($ in millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||
Zetia/Vytorin | $ | 99 | $ | 118 | (16) | % | (16) | % | $ | 339 | $ | 390 | (13) | % | (11) | % | |||||||||||||||||||||||||||||||
Atozet | 126 | 109 | 16 | 10 | 397 | 350 | 14 | 14 | |||||||||||||||||||||||||||||||||||||||
Cozaar/Hyzaar | 68 | 70 | (2) | 2 | 225 | 256 | (12) | (7) |
Three Months Ended September 30, | % Change | % Change Excluding Foreign Exchange | Nine Months Ended September 30, | % Change | % Change Excluding Foreign Exchange | ||||||||||||||||||||||||||||||||||||||||||
($ in millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||
Singulair | $ | 91 | $ | 94 | (4) | % | — | % | $ | 290 | $ | 316 | (8) | % | (3) | % | |||||||||||||||||||||||||||||||
Nasonex | 55 | 49 | 10 | 16 | 188 | 182 | 3 | 7 | |||||||||||||||||||||||||||||||||||||||
Dulera | 49 | 40 | 24 | 24 | 144 | 127 | 13 | 14 |
Three Months Ended September 30, | % Change | % Change Excluding Foreign Exchange | Nine Months Ended September 30, | % Change | % Change Excluding Foreign Exchange | ||||||||||||||||||||||||||||||||||||||||||
($ in millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||
Arcoxia | $ | 64 | $ | 64 | — | % | 5 | % | $ | 207 | $ | 185 | 12 | % | 16 | % | |||||||||||||||||||||||||||||||
Diprospan | 31 | 28 | 10 | 11 | 58 | 91 | (37) | (36) |
Three Months Ended September 30, | % Change | % Change Excluding Foreign Exchange | Nine Months Ended September 30, | % Change | % Change Excluding Foreign Exchange | ||||||||||||||||||||||||||||||||||||||||||
($ in millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||
Proscar | $ | 25 | $ | 27 | (6) | % | (2) | % | $ | 77 | $ | 77 | — | % | 6 | % |
Three Months Ended September 30, | % Change | Nine Months Ended September 30, | % Change | ||||||||||||||||||||||||||||||||
($ in millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||
Cost of sales | $ | 612 | $ | 551 | 11 | % | $ | 1,832 | $ | 1,700 | 8 | % | |||||||||||||||||||||||
Selling, general and administrative | 538 | 440 | 22 | 1,424 | 1,234 | 15 | |||||||||||||||||||||||||||||
Research and development | 137 | 127 | 8 | 394 | 329 | 20 | |||||||||||||||||||||||||||||
Acquired in-process research and development and milestones | — | 10 | (100) | 8 | 107 | (93) | |||||||||||||||||||||||||||||
Restructuring costs | — | 11 | (100) | 4 | 11 | (64) | |||||||||||||||||||||||||||||
Interest expense | 134 | 108 | 24 | 398 | 303 | 31 | |||||||||||||||||||||||||||||
Exchange losses (gains) | 14 | 4 | * | 25 | (21) | * | |||||||||||||||||||||||||||||
Other expense, net | 4 | 4 | — | 11 | 15 | (27) | |||||||||||||||||||||||||||||
$ | 1,439 | $ | 1,255 | 15 | % | $ | 4,096 | $ | 3,678 | 11 | % |
Number | Description | ||||||||||
10.1 | |||||||||||
*31.1 | — | ||||||||||
*31.2 | — | ||||||||||
**32.1 | — | ||||||||||
**32.2 | — | ||||||||||
101.INS | — | XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document. | |||||||||
101.SCH | — | XBRL Taxonomy Extension Schema Document. | |||||||||
101.CAL | — | XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||||
101.DEF | — | XBRL Taxonomy Extension Definition Linkbase Document. | |||||||||
101.LAB | — | XBRL Taxonomy Extension Label Linkbase Document. | |||||||||
101.PRE | — | XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||||
104 | — | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | |||||||||
* | Filed herewith | ||||||||||
** | Furnished herewith | ||||||||||
ORGANON & CO. | ||||||||
Date: November 3, 2023 | /s/ Kathryn DiMarco | |||||||
Kathryn DiMarco | ||||||||
Senior Vice President Finance - Corporate Controller | ||||||||
Date: November 3, 2023 | /s/ Matthew Walsh | |||||||
Matthew Walsh | ||||||||
Chief Financial Officer |
November 3, 2023 | /s/ Kevin Ali | ||||||||||||||||
Kevin Ali | |||||||||||||||||
Chief Executive Officer |
November 3, 2023 | /s/ Matthew Walsh | ||||||||||||||||
Matthew Walsh | |||||||||||||||||
Chief Financial Officer |
November 3, 2023 | /s/ Kevin Ali | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kevin Ali | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Chief Executive Officer |
November 3, 2023 | /s/ Matthew Walsh | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Matthew Walsh | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Chief Financial Officer |
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Income Statement [Abstract] | ||||
Revenues | $ 1,519 | $ 1,537 | $ 4,665 | $ 4,689 |
Costs, Expenses and Other | ||||
Cost of sales | 612 | 551 | 1,832 | 1,700 |
Selling, general and administrative | 538 | 440 | 1,424 | 1,234 |
Research and development | 137 | 127 | 394 | 329 |
Acquired in-process research and development and milestones | 0 | 10 | 8 | 107 |
Restructuring costs | 0 | 11 | 4 | 11 |
Interest expense | 134 | 108 | 398 | 303 |
Exchange losses (gains) | 14 | 4 | 25 | (21) |
Other expense, net | 4 | 4 | 11 | 15 |
Total, costs expenses and other | 1,439 | 1,255 | 4,096 | 3,678 |
Income Before Income Taxes | 80 | 282 | 569 | 1,011 |
Taxes on income | 22 | 55 | 92 | 202 |
Net Income | $ 58 | $ 227 | $ 477 | $ 809 |
Earnings per Share: | ||||
Basic (in dollars per share) | $ 0.23 | $ 0.89 | $ 1.87 | $ 3.19 |
Diluted (in dollars per share) | $ 0.23 | $ 0.89 | $ 1.86 | $ 3.17 |
Weighted Average Shares Outstanding: | ||||
Basic (in shares) | 255,588 | 254,348 | 255,112 | 253,986 |
Diluted (in shares) | 256,349 | 255,067 | 256,162 | 255,094 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 58 | $ 227 | $ 477 | $ 809 |
Other Comprehensive Income, Net of Taxes: | ||||
Benefit plan net loss and prior service cost, net of amortization | 0 | 0 | (1) | 0 |
Cumulative translation adjustment | (43) | (97) | (11) | (173) |
Other comprehensive income (loss) | (43) | (97) | (12) | (173) |
Comprehensive income | $ 15 | $ 130 | $ 465 | $ 636 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 9 | $ 9 |
Inventories classified in other assets | $ 95 | $ 148 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, issued (in shares) | 255,606,000 | 254,370,000 |
Common stock, outstanding (in shares) | 255,606,000 | 254,370,000 |
Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Parenthetical) - $ / shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Statement of Stockholders' Equity [Abstract] | ||||
Common stock dividends declared (in dollars per share) | $ 0.28 | $ 0.28 | $ 0.84 | $ 0.84 |
Background and Nature of Operations |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background and Nature of Operations | Background and Nature of Operations Organon & Co. ("Organon" or the "Company") is a global health care company with a focus on improving the health of women throughout their lives. Organon develops and delivers innovative health solutions through a portfolio of prescription therapies and medical devices within women's health, biosimilars and established brands (the "Organon Products"). Organon has a portfolio of more than 60 medicines and products across a range of therapeutic areas. The Company sells these products through various channels including drug wholesalers and retailers, hospitals, government agencies and managed health care providers such as health maintenance organizations, pharmacy benefit managers and other institutions. The Company operates six manufacturing facilities, which are located in Belgium, Brazil, Indonesia, Mexico, the Netherlands and the United Kingdom. Unless otherwise indicated, trademarks appearing in italics throughout this document are trademarks of, or are used under license by, the Organon group of companies. The Company's operations include the following product portfolios: •Women's Health: Organon's women's health products are sold by prescription primarily in two therapeutic areas, contraception, with key brands such as Nexplanon® (etonogestrel implant) (sold as Implanon NXT™ in some countries outside the United States) and NuvaRing® (etonogestrel / ethinyl estradiol vaginal ring), and fertility, with key brands such as Follistim AQ® (follitropin beta injection) (marketed in most countries outside the United States as Puregon™). Nexplanon is a long-acting reversible contraceptive, which is a class of contraceptives that is recognized as one of the most effective types of hormonal contraception available to patients with a low long-term average cost. Other women’s health products include the Jada® System, which is intended to provide control and treatment of abnormal postpartum uterine bleeding or hemorrhage when conservative management is warranted and a license from Daré Biosciences for the global commercial rights to Xaciato™ (clindamycin phosphate vaginal gel, 2%), an FDA-approved medication for the treatment of bacterial vaginosis ("BV") in females 12 years of age and older. In October 2023, Xaciato was launched in the United States. •Biosimilars: Organon's current portfolio spans across immunology and oncology treatments. Organon's oncology biosimilars have been launched in more than 20 countries and Organon's immunology biosimilars have been launched in five countries. All five biosimilars in Organon's portfolio have launched in Canada, and three biosimilars; Ontruzant® (trastuzumab-dttb), Renflexis® (infliximab-abda) and Hadlima™ (adalimumab-bwwd) have been launched in the United States. •Established Brands: Organon has a portfolio of established brands, which generally are beyond market exclusivity, including leading brands in cardiovascular, respiratory, dermatology and non-opioid pain management. A number of Organon's established brands lost exclusivity years ago and have faced generic competition for some time.
|
Basis of Presentation |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and disclosures required by GAAP for complete consolidated financial statements are not included herein. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year. In the Company's opinion, all adjustments necessary for a fair statement of these interim statements have been included and are of a normal and recurring nature. All intercompany transactions and accounts within Organon have been eliminated. These interim statements should be read in conjunction with the audited financial statements and notes thereto included in Organon's Annual Report on Form 10-K for the year ended December 31, 2022. Use of Estimates The presentation of these Condensed Consolidated Financial Statements and accompanying notes in conformity with U.S. GAAP require management to make estimates and assumptions that affect the amounts reported, as further described in the Annual Report on Form 10-K for the year ended December 31, 2022. Accordingly, actual results could differ materially from management's estimates and assumptions. The Company was impacted by COVID-19 during the first half of 2023, specifically, in the Company's operations in China. The Company does not anticipate a continued impact from COVID-19. The assessment of certain accounting matters and specifically its effect on the Company's results require consideration of forecasted financial information in the context of the information reasonably available to the Company as of September 30, 2023 and through the date of this report which are difficult to predict. Recently Adopted Accounting Standards In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting and subsequently issued clarifying amendments. The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. The optional guidance is effective upon issuance and can be applied on a prospective basis at any time between January 1, 2020 and December 31, 2022; the sunset date was subsequently deferred to December 31, 2024 based on the amendment issued in December 2022 under ASU 2022-06, Reference Rate Reform (Topic 848). The Company applied this guidance to our Senior Credit Agreement, as amended on June 30, 2023. The impact to the Consolidated Financial Statements as a result of the application of the reference rate reform guidance is not material. See Note 11 "Long-Term Debt" for additional details. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, guidance to improve the accounting for contract assets and contract liabilities from acquired revenue contracts with customers in a business combination. The guidance addresses diversity in practice and inconsistency related to the recognition of an acquired contract liability, payment terms and their effect on subsequent revenue recognized by an acquirer. The guidance became effective for the Company on January 1, 2023 and its amendments will be applied prospectively to business combinations occurring on or after the effective date of the guidance. The adoption of this guidance did not have an impact on the Company's Consolidated Financial Statements for prior acquisitions; however, the impact in future periods will be dependent upon the contract assets and contract liabilities acquired in future business combinations.
|
Acquisitions and Licensing Arrangements |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions and Licensing Arrangements | Acquisitions and Licensing ArrangementsClaria Medical, Inc. ("Claria")In January 2023, the Company made a strategic investment in Claria, a privately-held company developing an investigational medical device being studied for use during minimally invasive laparoscopic hysterectomy. Under the terms of the agreement, Organon paid $8 million upfront and has the option to acquire Claria for an additional $47 million, payable if and when the option is exercised. The $8 million was expensed as Acquired in-process research and development and milestones in our Condensed Consolidated Statement of Income for the nine months ended September 30, 2023. |
Earnings per Share ("EPS") |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share ("EPS") | Earnings per Share ("EPS") The calculations of basic and diluted earnings per common share are as follows:
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Product and Geographic Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product and Geographic Information | Product and Geographic Information The Company's operations include the following product portfolios, which constitute one operating segment engaged in developing and delivering innovative health solutions through its portfolio of prescription therapies within women's health, biosimilars and established brands. Revenues of the Company's products were as follows:
Totals may not foot due to rounding. Trademarks appearing above in italics are trademarks of, or are used under license by, the Organon group of companies. (1) Includes sales of products not listed separately. Revenues from Marvelon and Mercilon and Jada were previously reported as part of Other Women's Health. Revenue from an arrangement for the sale of generic etonogestrel/ethinyl estradiol vaginal ring is included in Other Women's Health. (2) Includes manufacturing sales to Merck & Co., Inc. ("Merck") and third parties for current and prior periods. Revenues by geographic area where derived are as follows:
(1) Primarily reflects manufacturing sales to Merck and third parties for current and prior periods.
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Stock-Based Compensation Plans |
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Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation Plans | Stock-Based Compensation Plans The Company grants stock option awards, performance share units ("PSUs") and restricted share units ("RSUs") pursuant to its 2021 Incentive Stock Plan. The PSU awards are based on the following performance factors: •total stockholder return of the Company relative to an index of peer companies ("relative TSR") specified in the awards; and •the results of the cumulative free cash flow ("FCF") of the Company over a three-year period. Stock-based compensation expenses incurred by the Company were as follows:
The weighted average fair value of options granted was determined using the following assumptions:
A summary of the equity award transactions for the nine months ended September 30, 2023 is as follows:
The following table summarizes information about equity awards outstanding that are vested and expected to vest and equity awards outstanding that are exercisable as of September 30, 2023:
The amount of unrecognized compensation costs as of September 30, 2023 was $170 million, which will be recognized in operating expense ratably over the weighted average vesting period of 1.93 years.
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Restructuring |
9 Months Ended |
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Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring In 2022, Organon initiated restructuring activities to optimize its internal operations by reducing headcount through selected markets and functions. As a result of this program, the Company restructured approximately 130 positions, with the majority of the position eliminations occurring in selected markets outside of the United States in our commercial organizations. During the nine months ended September 30, 2023, $15 million of restructuring charges have been paid, with the remaining severance payments to be paid by the end of the 2023 fiscal year. For the nine months ended September 30, 2023, the Company recorded restructuring charges of $4 million, which relate to severance costs for eliminated positions. Liabilities for costs associated with restructuring activities were $10 million and $20 million at September 30, 2023 and December 31, 2022, respectively, and are included primarily in Accrued and other current liabilities. In the fourth quarter of 2023, Organon will implement additional restructuring activities to optimize its internal operations by reducing headcount in certain markets and functions. As a result of these activities, the Company expects to restructure approximately 3% of the Company's headcount, which is expected to result in a charge of approximately $60 million to $70 million primarily representing severance and severance related costs in the fourth of quarter of 2023. These amounts will be paid over the next twelve months.
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Taxes on Income |
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Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Taxes on Income | Taxes on IncomeThe effective income tax rates were 27.0% and 19.6% for the three months ended September 30, 2023 and 2022, respectively, and 16.1% and 20.0% for the nine months ended September 30, 2023 and 2022, respectively. These effective income tax rates reflect the beneficial impact of foreign earnings, offset by the impact of U.S. inclusions under the Global Intangible Low-Taxed Income regime and a partial valuation allowance recorded against non-deductible U.S. interest expense. The 2023 year-to-date effective tax rate favorable impact is primarily attributable to a reduced tax rate arrangement that was agreed to in Switzerland for an active entity.On August 16, 2022, the United States enacted the Inflation Reduction Act of 2022. Provisions of the bill that relate to tax include the minimum tax on book income, a 1% excise tax on stock buybacks and certain tax incentives to promote clean energy. There are no impacts of the legislation to the third quarter 2023 results. The Company will continue to assess future impacts of this legislation. |
Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories consisted of:
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Financial Instruments |
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Financial Instruments | Financial Instruments Foreign Currency Risk Management The Company has a balance sheet risk management and a net investment hedging program to mitigate against volatility of changes in foreign exchange rates. The Company uses a balance sheet risk management program to partially mitigate the exposure of net monetary assets of its subsidiaries that are denominated in a currency other than a subsidiary's functional currency from the effects of volatility in foreign exchange. In these instances, Organon principally utilizes forward exchange contracts to partially offset the effects of exchange on exposures denominated in developed country currencies, primarily the euro, Swiss franc, and Japanese yen. For exposures in developing country currencies, the Company enters into forward contracts to partially offset the effects of exchange on exposures when it is deemed economical to do so based on a cost-benefit analysis that considers the magnitude of the exposure, the volatility of the exchange rate and the cost of the hedging instrument. Monetary assets and liabilities denominated in a currency other than the functional currency of a given subsidiary are remeasured at spot rates in effect on the balance sheet date with the effects of changes in spot rates reported in Exchange losses (gains). The forward contracts are not designated as hedges and are marked to market through Exchange losses (gains). Accordingly, fair value changes in the forward contracts help mitigate the changes in the value of the remeasured assets and liabilities attributable to changes in foreign currency exchange rates, except to the extent of the spot-forward differences. These differences are not significant due to the short-term nature of the contracts, which typically have average maturities at inception of less than one year. The notional amount of forward contracts was $1.0 billion and $1.5 billion as of September 30, 2023 and December 31, 2022, respectively. The cash flows and the related gains and losses from these contracts are reported as operating activities in the Condensed Consolidated Statements of Cash Flows. The Company measures fair value based on the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used to measure fair value. These tiers include Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. The following financial instruments were recorded at their estimated fair value. The recurring fair value measurement of our assets and liabilities were as follows:
Foreign exchange risk is also managed through the use of economic hedges on foreign currency balances. See Note 11 "Long-Term Debt" for additional details. €1.983 billion in the aggregate of both the euro-denominated term loan (€733 million) and the 2.875% euro-denominated secured notes (€1.25 billion) has been designated and is effective as an economic hedge of the net investment in euro-denominated subsidiaries. Foreign currency gains due to spot rate fluctuations on the euro-denominated debt instruments included in foreign currency translation adjustments resulting from hedge designation were as follows:
The Condensed Consolidated Statements of Income include the impact of actual net (gains) and losses of Organon's derivative financial instruments:
Organon has established accounts receivable factoring agreements with financial institutions in certain countries to sell accounts receivable. Under these agreements, Organon factored $55 million and $43 million of accounts receivable as of September 30, 2023 and December 31, 2022, respectively, which reduced outstanding accounts receivable. The cash received from the financial institutions is reported within operating activities in the Condensed Consolidated Statements of Cash Flows.
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Long-Term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt The following is a summary of Organon's total debt:
1.The SOFR adjustment is an additional interest amount per annum of 11.448 bps for a one-month interest period, 26.161 bps for a three-month interest period, or 42.826 bps for a six-month interest period, at our option. The nature and terms of our Senior Credit Agreement, Notes and Other borrowings are described in detail in Note 11 "Long-Term Debt and Leases" in the 2022 Annual Report on Form 10-K for the year ended December 31, 2022. On June 30, 2023, the Company entered into Amendment No. 1 to the Senior Credit Agreement. Amendment No. 1 replaces LIBOR-based rates with Adjusted Term Secured Overnight Financing Rate ("SOFR")-based rates and updates certain other provisions of the Senior Credit Agreement to reflect the transition from LIBOR to the Adjusted Term SOFR. The impact of the rate transition was not material to the Condensed Consolidated Financial Statements. Long-term debt was recorded at the carrying amount. The estimated fair value of long-term debt (including current portion) is as follows:
Fair value was estimated using inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability and would be considered Level 2 in the fair value hierarchy. The Company made interest payments related to its debt instruments of $311 million for the nine months ended September 30, 2023. The average maturity of the Company's long-term debt as of September 30, 2023 is approximately 5.3 years and the weighted-average interest rate on total borrowings as of September 30, 2023 is 5.7%. On March 30, 2023, the Company made a discretionary prepayment of $250 million on the U.S. Dollar-denominated term loan. On June 21, 2023, the Company borrowed $80 million on the Revolving Credit Facility and subsequently repaid the amount on June 30, 2023. The schedule of principal payments required on long-term debt for the next five years and thereafter is as follows:
The Senior Credit Agreement contains customary financial covenants, including a total leverage ratio covenant, which measures the ratio of (i) consolidated total debt to (ii) consolidated earnings before interest, taxes, depreciation, and amortization, and subject to other adjustments, that must meet certain defined limits which are tested on a quarterly basis. In addition, the Senior Credit Agreement contains covenants that limit, among other things, Organon’s ability to prepay, redeem or repurchase its subordinated and junior lien debt, incur additional debt, make acquisitions, merge with other entities, pay dividends or distributions, redeem, or repurchase equity interests, and create or become subject to liens. As of September 30, 2023, the Company is in compliance with all financial covenants and no default or event of default has occurred.
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Accumulated Other Comprehensive Income (Loss) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Changes in Accumulated other comprehensive income (loss) by component are as follows:
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Samsung Collaboration |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Samsung Collaboration | Samsung Collaboration The Company has an agreement with Samsung Bioepis Co., Ltd. ("Samsung Bioepis") to develop and commercialize multiple pre-specified biosimilar candidates, which have since launched and are part of the Company's product portfolio. Under the agreement, Samsung Bioepis is responsible for preclinical and clinical development, process development and manufacturing, clinical trials and registration of product candidates, and the Company has an exclusive license for worldwide commercialization with certain geographic exceptions specified on a product-by-product basis. The Company's access rights to each product under the agreement last for 10 years from each product's launch date on a market-by-market basis. Gross profits are shared equally in all markets with the exception of certain markets in Brazil where gross profits are shared 65% to Samsung Bioepis and 35% to the Company. Since the Company is the principal on sales transactions with third parties, the Company recognizes sales, cost of sales and selling, general and administrative expenses on a gross basis. Generally, profit sharing adjustments are recorded either to Cost of sales (after commercialization) or Selling, general and administrative expenses (prior to commercialization). Samsung Bioepis is eligible for additional payments associated with pre-specified clinical and regulatory milestones. As of September 30, 2023, potential future regulatory milestone payments of $25 million remain under the agreement. In July 2023, the Company began selling Hadlima, a biosimilar referencing Humira1 (adalimumab), in the United States. Summarized information related to this collaboration is as follows:
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Third-Party Arrangements |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Third-Party Arrangements | Third-Party Arrangements On June 2, 2021, Organon and Merck entered into a Separation and Distribution Agreement (the "Separation and Distribution Agreement"). Pursuant to the Separation and Distribution Agreement, Merck agreed to spin off the Organon Products into Organon, a new, publicly-traded company (the "Separation"). The Separation was completed pursuant to the Separation and Distribution Agreement and other agreements with Merck related to the Separation, including, but not limited to a tax matters agreement, an employee matters agreement, Interim Operating Model Agreements ("IOM Agreements"), Manufacturing and Supply Agreements, Intellectual Property License Agreements, Regulatory Agreements and a transition services agreement (the "Transition Service Agreement" or "TSA"). Following the Separation, certain functions continue to be provided by Merck under the TSA or are being performed using the Company's own resources or third-party service providers. Under the TSA, Merck is providing Organon various services and, similarly, Organon is providing Merck various services. The provision of certain services under the TSA expired as of July 2, 2023, however, certain services have been extended to at least 35 months. Additionally, under manufacturing and supply agreements, the Company manufactures certain products for Merck, or its applicable affiliate, and Merck manufactures certain products for the Company, or its applicable affiliate. For details on the rights and responsibilities of the parties under the agreements, refer to Note 18 "Third-Party Arrangements and Related Party Disclosures" to the audited Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. For the three and nine months ended September 30, 2023, material transactions occurred in connection with the IOM Agreements. The amounts due under such agreements were:
Sales and cost of sales resulting from the manufacturing and supply agreements with Merck were:
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Contingencies |
9 Months Ended |
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Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Organon is involved in various claims and legal proceedings of a nature considered normal to its business, including product liability, intellectual property, and commercial litigation, as well as certain additional matters including governmental and environmental matters. Organon records accruals for contingencies when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted periodically as assessments change or additional information becomes available. Individually significant contingent losses are accrued when probable and reasonably estimable. Legal defense costs expected to be incurred in connection with a loss contingency are accrued when probable and reasonably estimable. Given the nature of the litigation discussed in this note and the complexities involved in these matters, Organon is unable to reasonably estimate a possible loss or range of possible loss for such matters until Organon knows, among other factors, (i) what claims, if any, will survive dispositive motion practice, (ii) the extent of the claims, including the size of any potential class, particularly when damages are not specified or are indeterminate, (iii) how the discovery process will affect the litigation, (iv) the settlement posture of the other parties to the litigation, and (v) any other factors that may have a material effect on the litigation. Organon's decision to obtain insurance coverage is dependent on market conditions, including cost and availability, existing at the time such decisions are made. Organon has evaluated its risks and has determined that the cost of obtaining product liability insurance outweighs the likely benefits of the coverage that is available and, as such, has no insurance for most product liabilities. Reference is made below to certain litigation in which Merck, but not Organon, is named as a defendant. Pursuant to the Separation and Distribution Agreement, Organon is required to indemnify Merck for liabilities relating to, arising from, or resulting from such litigation. Product Liability Litigation Fosamax Merck is a defendant in product liability lawsuits in the United States involving Fosamax® (alendronate sodium) (the "Fosamax Litigation"). As of September 30, 2023, approximately 3,130 cases comprising the Fosamax Litigation are pending against Merck in either federal or state court. Plaintiffs in the vast majority of these cases generally allege that they sustained femur fractures and/or other bone injuries ("Femur Fractures") in association with the use of Fosamax. All federal cases involving allegations of Femur Fractures have been or will be transferred to a multidistrict litigation in the District of New Jersey ("Femur Fracture MDL"). In the only bellwether case tried to date in the Femur Fracture MDL, Glynn v. Merck, the jury returned a verdict in Merck's favor. In addition, in June 2013, the Femur Fracture MDL court granted Merck's motion for judgment as a matter of law in the Glynn case and held that the plaintiff's failure to warn claim was preempted by federal law. In August 2013, the Femur Fracture MDL court entered an order requiring plaintiffs in the Femur Fracture MDL to show cause why those cases asserting claims for a femur fracture injury that took place prior to September 14, 2010, should not be dismissed based on the court's preemption decision in the Glynn case. Pursuant to the show cause order, in March 2014, the Femur Fracture MDL court dismissed with prejudice approximately 650 cases on preemption grounds. Plaintiffs in approximately 515 of those cases appealed that decision to the U.S. Court of Appeals for the Third Circuit ("Third Circuit"). In March 2017, the Third Circuit issued a decision reversing the Femur Fracture MDL court's preemption ruling and remanding the appealed cases back to the Femur Fracture MDL court. In May 2019, the U.S. Supreme Court decided that the Third Circuit had incorrectly concluded that the issue of preemption should be resolved by a jury, and accordingly vacated the judgment of the Third Circuit and remanded the proceedings back to the Third Circuit to address the issue in a manner consistent with the Supreme Court's opinion. In November 2019, the Third Circuit remanded the cases back to the District Court in order to allow that court to determine in the first instance whether the plaintiffs' state law claims are preempted by federal law under the standards described by the Supreme Court in its opinion. On March 23, 2022, the District Court granted Merck's motion and ruled that plaintiffs' failure to warn claims are preempted as a matter of law to the extent they assert that Merck should have added a Warning or Precaution regarding atypical femur fractures prior to October 2010. On July 11, 2022, the District Court entered an Order to Show Cause as to why the Court should not dismiss either with prejudice or conditionally all of plaintiffs' claims that are not dependent on the preempted failure to warn claims. On November 18, 2022, as a result of the Order to Show Cause, the District Court entered a Final Judgment resulting in the dismissal with prejudice of all plaintiffs in the MDL. On December 16, 2022, those plaintiffs filed their Notice of Appeal to the Third Circuit challenging the District Court's preemption ruling. 974 of the 975 cases previously pending in the Femur Fracture MDL have either been dismissed or are on appeal to the Third Circuit. Plaintiff's motion to remand one case back to its transferor court is pending. As of September 30, 2023, approximately 1,880 cases alleging Femur Fractures have been filed in New Jersey state court and are pending in Middlesex County. The parties selected an initial group of cases to be reviewed through fact discovery, and Merck continued to select additional cases to be reviewed. As of September 30, 2023, approximately 275 cases alleging Femur Fractures have been filed and are pending in California state court. All of the Femur Fracture cases filed in California state court have been consolidated before a single judge in Orange County, California. Additionally, there are four Femur Fracture cases pending in other state courts. Discovery is presently stayed in the Femur Fracture MDL and in the state court in California. Nexplanon/Implanon Merck is a defendant in lawsuits brought by individuals relating to the use of Nexplanon and Implanon™ (etonogestrel implant). There are two filed product liability actions involving Implanon, both of which are pending in the Northern District of Ohio as well as 56 unfiled cases involving Implanon alleging similar injuries, which have been tolled under a written tolling agreement. As of September 30, 2023, Merck had 18 cases pending outside the United States, of which 12 relate to Implanon and six relate to Nexplanon. Propecia/Proscar As of September 30, 2023, one case involving Proscar® (finasteride) remains pending in the United States in the United States District Court for the Eastern District of California in which Merck's motion to dismiss was granted by the District Court, but the plaintiff can appeal the decision. The Company is also defending 14 product liability cases involving Propecia® (finasteride) outside the United States, two of which are class actions and three of which are putative class actions. Governmental Proceedings From time to time, Organon's subsidiaries may receive inquiries and may be the subject of preliminary investigation activities from competition and/or other governmental authorities, including in markets outside the United States. These authorities may include regulators, administrative authorities, and law enforcement and other similar officials, and these preliminary investigation activities may include site visits, formal or informal requests or demands for documents or materials, inquiries or interviews and similar matters. Certain of these preliminary inquiries or activities may lead to the commencement of formal proceedings. Should those proceedings be determined adversely to Organon, monetary fines and/or remedial undertakings may be required. Subject to certain exceptions specified in the Separation and Distribution Agreement, Organon assumed liability for all pending and threatened legal matters related to products transferred to Organon, including competition investigations resulting from enforcement activity concerning Merck's conduct involving Organon's products. Organon could be obligated to indemnify Merck for fines or penalties, or a portion thereof, resulting from such investigations. In one such enforcement matter in Spain concerning NuvaRing, in October 2022, the National Commission on Markets and Competition ("CNMC") imposed a fine on Merck in the amount of €39 million for abuse of a dominant position in the market for contraceptive vaginal rings from June 2017 to April 2018. The CNMC decision to impose the fine has been appealed to the National High Court in Spain. If the fine ultimately stands, Organon could be obligated to indemnify Merck for a portion thereof. Hadlima In July 2021, Organon received a Civil Investigation Demand ("CID") from the Office of the Attorney General for the State of Washington. The CID requests answers to interrogatories, as well as various documents, regarding certain activities related to adalimumab and adalimumab biosimilars. Organon is cooperating with the government's investigation and has produced information in response to the CID. Patent Litigation From time to time, generic manufacturers of pharmaceutical products file Abbreviated New Drug Applications with the FDA seeking to market generic forms of Organon's products prior to the expiration of relevant patents owned by Organon. To protect its patent rights, Organon may file patent infringement lawsuits against such generic companies. Similar lawsuits defending Organon's patent rights may exist in other countries. Organon intends to vigorously defend its patents, which it believes are valid, against infringement by companies attempting to market products prior to the expiration of such patents. As with any litigation, there can be no assurance of the outcomes, which, if adverse, could result in significantly shortened periods of exclusivity for these products, potential payment of damages and legal fees, and, with respect to products acquired through acquisitions, potentially significant intangible asset impairment charges. Nexplanon In June 2017, Microspherix LLC ("Microspherix") sued Organon in the U.S. District Court for the District of New Jersey asserting that the manufacturing, use, sale and importation of Nexplanon infringed several of Microspherix's patents that claim radio-opaque, implantable drug delivery devices. Microspherix is claiming damages from September 2014 until the patents expired in May 2021. Organon brought Inter Partes Review proceedings in the United States Patent and Trademark Office ("USPTO") and successfully stayed the district court action. The USPTO invalidated some, but not all, of the claims asserted against Organon. Organon appealed the decisions that found claims valid, and the Court of Appeals for the Federal Circuit affirmed the USPTO's decisions. The matter is no longer stayed in the district court, and Organon is currently litigating the invalidity and non-infringement of the remaining asserted claims. A claim construction hearing was held on March 2, 2022, and a claim construction order issued on February 27, 2023. This case was scheduled for trial before a jury in Camden, New Jersey starting on October 16, 2023; however, on October 13, 2023, a status conference was held during which the parties informed the district court that an agreement in principle of the key terms of a settlement was reached. The proceedings were stayed for 60 days to allow time for the parties to execute a settlement agreement. Organon reserved $80 million to cover the settlement. Other Litigation In addition to the matters described above, there are various other pending legal proceedings involving Organon, principally product liability and intellectual property lawsuits. While it is not feasible to predict the outcome of such proceedings, in the opinion of Organon as of September 30, 2023, either the likelihood of loss is remote or any reasonably possible loss associated with the resolution of such proceedings is not expected to be material to Organon's financial condition, results of operations or cash flows either individually or in the aggregate. Legal Defense Reserves Legal defense costs expected to be incurred in connection with a loss contingency are accrued when probable and reasonably estimable. Some of the significant factors considered in the review of these legal defense reserves are as follows: the actual costs incurred by Organon; the development of Organon's legal defense strategy and structure in light of the scope of its litigation; the number of cases being brought against Organon; and the costs and outcomes of completed trials and the most current information regarding anticipated timing, progression, and related costs of pre-trial activities and trials in the associated litigation. The legal defense reserve as of September 30, 2023 and December 31, 2022 was $23 million and $17 million, respectively, and represented Organon's best estimate of the minimum amount of defense costs to be incurred in connection with its outstanding litigation; however, events such as additional trials and other events that could arise in the course of its litigation could affect the ultimate amount of legal defense costs to be incurred by Organon. Organon will continue to monitor its legal defense costs and review the adequacy of the associated reserves and may determine to increase the reserves at any time in the future if, based upon the factors set forth, it believes it would be appropriate to do so.
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Pay vs Performance Disclosure - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
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Pay vs Performance Disclosure | ||||
Net income | $ 58 | $ 227 | $ 477 | $ 809 |
Insider Trading Arrangements |
3 Months Ended |
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Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Basis of Presentation (Policies) |
9 Months Ended |
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Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | The accompanying unaudited financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and disclosures required by GAAP for complete consolidated financial statements are not included herein. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year. In the Company's opinion, all adjustments necessary for a fair statement of these interim statements have been included and are of a normal and recurring nature. All intercompany transactions and accounts within Organon have been eliminated. These interim statements should be read in conjunction with the audited financial statements and notes thereto included in Organon's Annual Report on Form 10-K for the year ended December 31, 2022. |
Use of Estimates | Use of Estimates The presentation of these Condensed Consolidated Financial Statements and accompanying notes in conformity with U.S. GAAP require management to make estimates and assumptions that affect the amounts reported, as further described in the Annual Report on Form 10-K for the year ended December 31, 2022. Accordingly, actual results could differ materially from management's estimates and assumptions. The Company was impacted by COVID-19 during the first half of 2023, specifically, in the Company's operations in China. The Company does not anticipate a continued impact from COVID-19. The assessment of certain accounting matters and specifically its effect on the Company's results require consideration of forecasted financial information in the context of the information reasonably available to the Company as of September 30, 2023 and through the date of this report which are difficult to predict.
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Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting and subsequently issued clarifying amendments. The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. The optional guidance is effective upon issuance and can be applied on a prospective basis at any time between January 1, 2020 and December 31, 2022; the sunset date was subsequently deferred to December 31, 2024 based on the amendment issued in December 2022 under ASU 2022-06, Reference Rate Reform (Topic 848). The Company applied this guidance to our Senior Credit Agreement, as amended on June 30, 2023. The impact to the Consolidated Financial Statements as a result of the application of the reference rate reform guidance is not material. See Note 11 "Long-Term Debt" for additional details. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, guidance to improve the accounting for contract assets and contract liabilities from acquired revenue contracts with customers in a business combination. The guidance addresses diversity in practice and inconsistency related to the recognition of an acquired contract liability, payment terms and their effect on subsequent revenue recognized by an acquirer. The guidance became effective for the Company on January 1, 2023 and its amendments will be applied prospectively to business combinations occurring on or after the effective date of the guidance. The adoption of this guidance did not have an impact on the Company's Consolidated Financial Statements for prior acquisitions; however, the impact in future periods will be dependent upon the contract assets and contract liabilities acquired in future business combinations.
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Earnings per Share ("EPS") (Tables) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Basic and Diluted Earnings Per Common Share | The calculations of basic and diluted earnings per common share are as follows:
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Product and Geographic Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Sales of Company's Products | Revenues of the Company's products were as follows:
Totals may not foot due to rounding. Trademarks appearing above in italics are trademarks of, or are used under license by, the Organon group of companies. (1) Includes sales of products not listed separately. Revenues from Marvelon and Mercilon and Jada were previously reported as part of Other Women's Health. Revenue from an arrangement for the sale of generic etonogestrel/ethinyl estradiol vaginal ring is included in Other Women's Health. (2) Includes manufacturing sales to Merck & Co., Inc. ("Merck") and third parties for current and prior periods.
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Schedule of Consolidated Revenues by Geographic Area | Revenues by geographic area where derived are as follows:
(1) Primarily reflects manufacturing sales to Merck and third parties for current and prior periods.
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Stock-Based Compensation Plans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock-based Compensation Expenses | Stock-based compensation expenses incurred by the Company were as follows:
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Schedule of Stock Option Valuation Assumptions | The weighted average fair value of options granted was determined using the following assumptions:
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Summary of Equity Award Transactions | A summary of the equity award transactions for the nine months ended September 30, 2023 is as follows:
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Summary of Equity Awards Outstanding | The following table summarizes information about equity awards outstanding that are vested and expected to vest and equity awards outstanding that are exercisable as of September 30, 2023:
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Inventories (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory | Inventories consisted of:
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Schedule of Inventory, Noncurrent | Inventories consisted of:
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Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Instruments Recorded at Estimated Fair Value | The following financial instruments were recorded at their estimated fair value. The recurring fair value measurement of our assets and liabilities were as follows:
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Schedule of Long-term Debt Instruments | due to spot rate fluctuations on the euro-denominated debt instruments included in foreign currency translation adjustments resulting from hedge designation were as follows:
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Schedule of (Gain) Loss on Derivative Instruments | The Condensed Consolidated Statements of Income include the impact of actual net (gains) and losses of Organon's derivative financial instruments:
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Long-Term Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Long-term Debt Instruments | The following is a summary of Organon's total debt:
1.The SOFR adjustment is an additional interest amount per annum of 11.448 bps for a one-month interest period, 26.161 bps for a three-month interest period, or 42.826 bps for a six-month interest period, at our option.
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Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | Long-term debt was recorded at the carrying amount. The estimated fair value of long-term debt (including current portion) is as follows:
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Schedule of Maturities on Long-term Debt | The schedule of principal payments required on long-term debt for the next five years and thereafter is as follows:
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Accumulated Other Comprehensive Income (Loss) (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Accumulated Other Comprehensive Income (Loss) by Component | Changes in Accumulated other comprehensive income (loss) by component are as follows:
|
Samsung Collaboration (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Information Related to Collaboration | Summarized information related to this collaboration is as follows:
|
Third-Party Arrangements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | The amounts due under such agreements were:
Sales and cost of sales resulting from the manufacturing and supply agreements with Merck were:
|
Background and Nature of Operations (Details) |
Sep. 30, 2023
manufacturingFacility
country
segment
product
|
---|---|
Product Information [Line Items] | |
Number of medicines and products | segment | 60 |
Number of manufacturing facilities | manufacturingFacility | 6 |
CANADA | |
Product Information [Line Items] | |
Number of biosimilar products | product | 5 |
U.S. | |
Product Information [Line Items] | |
Number of biosimilar products | product | 3 |
Oncology Biosimilar | |
Product Information [Line Items] | |
Number of countries product sold in | country | 20 |
Immunology Biosimilar | |
Product Information [Line Items] | |
Number of countries product sold in | country | 5 |
Acquisitions and Licensing Arrangements (Details) - Claria Medical, Inc. - USD ($) $ in Millions |
Sep. 30, 2023 |
Jan. 31, 2023 |
---|---|---|
Asset Acquisition [Line Items] | ||
Upfront payments | $ 8 | |
Commercial milestone payments | $ 47 |
Earnings per Share ("EPS") (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Net income | $ 58 | $ 227 | $ 477 | $ 809 |
Basic weighted average number of shares outstanding (in shares) | 255,588 | 254,348 | 255,112 | 253,986 |
Stock awards and equity units (share equivalent) (in shares) | 761 | 719 | 1,050 | 1,108 |
Diluted weighted average common shares outstanding (in shares) | 256,349 | 255,067 | 256,162 | 255,094 |
EPS: | ||||
Basic (in dollars per share) | $ 0.23 | $ 0.89 | $ 1.87 | $ 3.19 |
Diluted (in dollars per share) | $ 0.23 | $ 0.89 | $ 1.86 | $ 3.17 |
Share-based Compensation Plans | ||||
EPS: | ||||
Anti-dilutive shares excluded from the calculation of EPS (in shares) | 10,390 | 6,313 | 9,833 | 4,432 |
Product and Geographic Information - Narrative (Details) |
9 Months Ended |
---|---|
Sep. 30, 2023
segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Product and Geographic Information - Revenues by Geographic Area (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Revenue from External Customer [Line Items] | ||||
Revenues | $ 1,519 | $ 1,537 | $ 4,665 | $ 4,689 |
Europe and Canada | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 392 | 363 | 1,259 | 1,243 |
United States | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 370 | 366 | 1,067 | 1,043 |
Asia Pacific and Japan | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 284 | 283 | 869 | 888 |
China | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 202 | 241 | 661 | 721 |
Latin America, Middle East, Russia, and Africa | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 239 | 236 | 687 | 665 |
Other | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | $ 32 | $ 48 | $ 122 | $ 129 |
Stock-Based Compensation Plans - Narrative (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2023
USD ($)
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Amount of unrecognized compensation costs | $ 170 |
Amount of unrecognized compensation costs period for recognition | 1 year 11 months 4 days |
PSU's | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award performance period | 3 years |
Stock-Based Compensation Plans - Stock-based Compensation Expenses (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 27 | $ 18 | $ 74 | $ 52 |
Income tax benefits | 6 | 3 | 16 | 11 |
Cost of sales | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 5 | 3 | 13 | 9 |
Selling, general and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 18 | 12 | 50 | 35 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 4 | $ 3 | $ 11 | $ 8 |
Stock-Based Compensation Plans - Stock Option Valuation Assumptions (Details) |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Share-Based Payment Arrangement [Abstract] | ||
Expected dividend yield | 4.82% | 3.12% |
Risk-free interest rate | 3.56% | 2.47% |
Expected volatility | 42.30% | 43.43% |
Expected life (years) | 5 years 10 months 20 days | 5 years 10 months 20 days |
Restructuring (Details) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Dec. 31, 2023
USD ($)
|
Sep. 30, 2023
USD ($)
|
Sep. 30, 2022
USD ($)
|
Sep. 30, 2023
USD ($)
position
|
Sep. 30, 2022
USD ($)
|
Dec. 31, 2022
USD ($)
|
|
Restructuring Cost and Reserve [Line Items] | ||||||
Number of positions | position | 130 | |||||
Payments for restructuring | $ 15 | |||||
Restructuring costs | $ 0 | $ 11 | 4 | $ 11 | ||
Restructuring activities | $ 10 | $ 10 | $ 20 | |||
Forecast | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Headcount reductions, percent | 3.00% | |||||
Minimum | Forecast | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring costs | $ 60 | |||||
Maximum | Forecast | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring costs | $ 70 |
Taxes on Income (Details) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 27.00% | 19.60% | 16.10% | 20.00% |
Inventories (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Finished goods | $ 496 | $ 482 |
Raw materials | 128 | 44 |
Work in process | 606 | 601 |
Supplies | 57 | 44 |
Total (approximates current cost) | 1,287 | 1,171 |
Decrease to LIFO costs | (6) | (20) |
Inventory | 1,281 | 1,151 |
Recognized as: | ||
Inventories | 1,186 | 1,003 |
Other assets | 95 | 148 |
Inventories valued under the last in, first out ("LIFO") method | $ 85 | $ 77 |
Financial Instruments - Narrative (Details) € in Millions, $ in Millions |
Sep. 30, 2023
USD ($)
|
Sep. 30, 2023
EUR (€)
|
Dec. 31, 2022
USD ($)
|
---|---|---|---|
Derivative Instruments, Gain (Loss) [Line Items] | |||
Accounts receivables factored | $ | $ 55 | $ 43 | |
Euro Denominated Term Loan | Senior Notes | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Face amount of debt | € 1,983 | ||
Term Loan B Facility | Senior Notes | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Face amount of debt | 733 | ||
2.875% Senior Secured Notes Due 2028 | Senior Notes | Organon Finance 1 LLC | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Face amount of debt | € 1,250 | ||
Stated interest rate | 2.875% | 2.875% | |
Foreign Exchange Forward | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Notional amount | $ | $ 1,000 | $ 1,500 |
Financial Instruments - Schedule of Financial Instruments Recorded at Estimated Fair Value (Details) - Level 2 - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Forward contracts in Other current assets | $ 17 | $ 6 |
Forward contracts in Accrued and other current liabilities | $ 12 | $ 24 |
Financial Instruments - Schedule of Long-term Debt Instruments (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative Gain Statement of Income or Comprehensive Income [Extensible Enumeration] | Foreign currency gains in Other comprehensive income | Foreign currency gains in Other comprehensive income | ||
Euro Denominated Term Loan | Senior Notes | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains on derivatives | $ 79 | $ 176 | $ 21 | $ 303 |
Financial Instruments - Schedule of (Gain) Loss on Derivative Instruments (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Exchange losses (gains) | $ 14 | $ 4 | $ 25 | $ (21) |
Other (Income) Expense | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Exchange losses (gains) | $ 14 | $ 4 | $ 25 | $ (21) |
Long-Term Debt - Schedule of Carrying Values and Estimated Fair Values of Debt Instruments (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Debt Disclosure [Abstract] | ||
Long-term debt | $ 7,853 | $ 8,294 |
Long-Term Debt - Narrative (Details) - USD ($) $ in Millions |
9 Months Ended | ||
---|---|---|---|
Jun. 21, 2023 |
Mar. 30, 2023 |
Sep. 30, 2023 |
|
Debt Instrument [Line Items] | |||
Debt instrument interest payments | $ 311 | ||
Average maturity of long-term debt | 5 years 3 months 18 days | ||
Weighted-average interest rate of debt | 5.70% | ||
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Proceeds from revolving credit facility | $ 80 | ||
Term Loan B Facility | Senior Notes | |||
Debt Instrument [Line Items] | |||
Early repayment of senior debt | $ 250 |
Long-Term Debt - Schedule of Maturities on Long-term Debt (Details) $ in Millions |
Sep. 30, 2023
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2023 | $ 2 |
2024 | 9 |
2025 | 9 |
2026 | 9 |
2027 | 9 |
Thereafter | $ 8,703 |
Samsung Collaboration - Narrative (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2023
USD ($)
| |
Brazil | |
Disaggregation of Revenue [Line Items] | |
Gross profit sharing arrangement percentage | 35.00% |
Samsung Bioepis | |
Disaggregation of Revenue [Line Items] | |
Collaboration agreement period | 10 years |
Potential future regulatory milestone payments | $ 25 |
Samsung Bioepis | Brazil | |
Disaggregation of Revenue [Line Items] | |
Gross profit sharing arrangement percentage | 65.00% |
Samsung Collaboration - Summary of Information Related to Collaboration (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|
Disaggregation of Revenue [Line Items] | |||||
Sales | $ 1,519 | $ 1,537 | $ 4,665 | $ 4,689 | |
Cost of sales | 612 | 551 | 1,832 | 1,700 | |
Selling, general and administrative | 538 | 440 | 1,424 | 1,234 | |
Receivables from Samsung included in Other current assets | 1,648 | 1,648 | $ 1,475 | ||
Payables to Samsung included in Trade accounts payable | 1,067 | 1,067 | 1,132 | ||
Samsung Bioepis | |||||
Disaggregation of Revenue [Line Items] | |||||
Sales | 143 | 129 | 394 | 346 | |
Cost of sales | 98 | 86 | 272 | 221 | |
Selling, general and administrative | 17 | $ 18 | 53 | $ 60 | |
Receivables from Samsung included in Other current assets | 8 | 8 | 21 | ||
Payables to Samsung included in Trade accounts payable | $ 62 | $ 62 | $ 72 |
Third-Party Arrangements - Accounts Receivables (Details) - USD ($) $ in Millions |
Jun. 03, 2021 |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|---|
Related Party Transaction [Line Items] | |||
Due from Merck in Accounts receivable | $ 1,648 | $ 1,475 | |
Due to Merck in Accounts payable | 1,067 | 1,132 | |
Related Party | |||
Related Party Transaction [Line Items] | |||
Provision of services extension period | 35 months | ||
Due from Merck in Accounts receivable | 467 | 374 | |
Due to Merck in Accounts payable | $ 601 | $ 543 |
Third-Party Arrangements - Sales and Cost of Sales Resulting from the Manufacturing and Supply Agreements (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Related Party Transaction [Line Items] | ||||
Sales | $ 1,519 | $ 1,537 | $ 4,665 | $ 4,689 |
Cost of sales | 612 | 551 | 1,832 | 1,700 |
Related Party | ||||
Related Party Transaction [Line Items] | ||||
Sales | 28 | 38 | 95 | 104 |
Cost of sales | $ 25 | $ 31 | $ 88 | $ 91 |
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