Shares of Organon & Co. (OGN, Financial) are up nearly 7% since the pharma company was spun off by Merck & Co. Inc. (MRK, Financial) in the middle of 2021. And even bluer skies appear to be on the horizon as the company prepares to launch its version of the best-selling medication ever.
FiercePharma reported executives at New Jersey-based Organon and partner Samsung Bioepis hope to have their Humira biosimilar Hadlima on the market in the middle of next year. That would be six months after Amgen Inc. (AMGN, Financial) is expected to roll out its edition in January 2023.
Humira is AbbVie Inc.’s (ABBV, Financial) flagship therapy, racking up sales of more than $20 billion worldwide in 2021. The medicine is used to treat a variety of conditions, including arthritis, psoriasis, Crohn’s disease and ulcerative colitis. Six biosimilars are ready to pounce on the market once AbbVie loses patent protection next year.
For this year, Organon expects overall sales of $6.4 billion, executives forecasted during last week’s earnings call. The company already markets several biosimilars and sales of that line of products grew 28% last year and are expected to be major contributors to revenue, along with fertility treatments and the birth control implant Nexplanon, which the company thinks can be a billion-dollar seller.
Nexplanon has “a lot of runway for growth given its relatively small market share in the United States and around the world,” Chief Financial Officer Matthew Walsh said on the earnings call.
For all of 2021, Organon's net revenue was down 3% at $6.3 billion, a decline attributed in part to softness in certain markets within Established Brands, the company’s largest business, accounting for nearly two-thirds of sales.
The company is also confident the fertility business can do better under its umbrella because it was somewhat of a stepchild at Merck. Organon intends to optimize the product line through research and development and a greater emphasis on the part of the salesforce.
The reasons investors should believe in Organon are pretty simple, CEO Kevin Ali explained during last month’s JPMorgan 40th Annual Healthcare Conference Call.
“We spun out with the proposition that this would be a low to mid-single-digit growth company going forward over the near-term," he said. "We are committed to that. We see that in our near-term future, but also the opportunity to meet some really significant unmet needs by being a women's health-focused company.”
Toward that end, Organon has already done three deals in that space and is on the hunt for more. “If there's a deal that comes up, it's strategic, meets our capital -- return on capital hurdles, we will find a way to get it done,” Ali said.
