Organon reported sharply higher GAAP earnings during the first quarter of 2026, but its adjusted results declined as an $81 million gain from the sale of the Jada system and lower restructuring expenses improved reported profitability.
Net income increased 68% to $146 million from $87 million. And diluted earnings per share increased 67% to $0.55 from $0.33.
Adjusted net income moved in the opposite direction, declining 29% to $188 million from $265 million.
Adjusted diluted earnings per share fell 30% to $0.71 from $1.02.
The $81 million Jada divestiture gain was excluded from Organon’s adjusted net-income calculation.
The company completed the sale of the Jada system to Laborie in January 2026.
Organon also recorded $31 million of restructuring expense, compared with $86 million during the prior-year quarter.
Other income reached $96 million, compared with $12 million of other expenses a year earlier. Those changes helped pretax income more than double to $213 million from $101 million.
Higher taxes partly offset those benefits.
Income tax expense increased to $67 million from $14 million, while the GAAP effective tax rate rose to 31.4% from 13.4%.
Revenue declined 4% to $1.46 billion from $1.51 billion.
Excluding foreign-exchange effects, revenue declined 9%, showing that favorable currency movements reduced the reported contraction by approximately five percentage points.
Women’s Health revenue declined 16% as reported and 19% excluding foreign exchange to $389 million.
The decrease was driven partly by weaker Nexplanon, oral contraceptive, and fertility-product sales.
Global Nexplanon and Implanon NXT sales declined to $201 million from $248 million.
U.S. sales fell to $127 million from $176 million, while international sales increased slightly to $74 million from $72 million.
Organon attributed the U.S. decline partly to a counterintuitive consequence of Nexplanon’s five-year label approval.
The longer approved duration delayed product reinsertions, while uncertainty involving federal funding also reduced physician demand.
Marvelon and Mercilon sales declined 36%, excluding foreign exchange, because of lower demand, market contraction in China, and shipment timing across the Asia Pacific.
Global Fertility revenue fell 9% excluding currency, primarily because of competition-related pricing reductions in the United States.
Biosimilars provided the company’s strongest growth.
Revenue increased 23% as reported and 21% excluding foreign exchange to $173 million.
The increase reflected stronger Hadlima demand in the United States and Puerto Rico, along with contributions from Bildyos, Bilprevda, and Tofidence. Hadlima sales increased to $67 million from $47 million.
Other biosimilar sales increased to $24 million from $5 million, while Ontruzant declined to $5 million from $18 million.
Established Brands revenue declined 1% as reported and 7% excluding foreign exchange to $880 million.
Growth from Emgality partly offset weaker respiratory products affected by pricing pressure, lower demand, and revised medical guidelines.
Emgality sales increased to $54 million from $32 million.
Singulair sales declined to $40 million from $74 million as medical guidelines in several international markets, including China, deprioritized the use of montelukast.
Dulera sales fell to $35 million from $43 million.
Regional performance also varied significantly.
Revenue in Europe and Canada increased to $412 million from $376 million, while U.S. revenue declined to $358 million from $412 million.
Asia Pacific and Japan revenue fell to $226 million from $251 million, and China declined to $194 million from $204 million.
Reported gross profit declined 7% to $783 million, and gross margin contracted to 53.6% from 55.6%.
Adjusted gross profit declined 8% to $861 million, while adjusted gross margin fell 270 basis points to 59%.
Organon attributed the margin deterioration to unfavorable pricing, product mix, and foreign-exchange movements.
Adjusted EBITDA declined 14% to $415 million.
Adjusted EBITDA margin contracted by 360 basis points to 28.4% from 32%, primarily because of the lower adjusted gross margin.
Organon ended March with $1.12 billion in cash and cash equivalents and $8.57 billion of debt.
Gross debt was approximately 7.7 times the company’s cash balance.
The board declared a quarterly dividend of $0.02 per share, payable on June 11 to shareholders of record as of May 11.
Organon is also preparing for its pending all-cash merger into Sun Pharmaceutical Industries.
The transaction is expected to close in early 2027, subject to regulatory approvals, shareholder approval, and other customary conditions.
Because of the pending acquisition, Organon stopped issuing financial guidance and suspended its quarterly earnings calls.
The merger limits visibility into management’s standalone expectations while the company continues operating through revenue pressure, declining adjusted margins, and a highly leveraged balance sheet.
Organon’s first-quarter results demonstrate why the distinction between reported and adjusted earnings is particularly important.
The Jada divestiture gain and lower restructuring expenses helped produce a 68% increase in GAAP net income, while lower revenue and weaker margins drove a 29% decline in adjusted net income.
KEY QUOTES:
“In light of the pending merger, Organon will not be providing financial guidance or hosting quarterly earnings calls.”
Organon statement
