Organon Shares Slide on Quarterly Loss and Cautious Outlook

Organon & Co. reported fourth-quarter financial results that fell short of Wall Street's projections, driven by a substantial impairment charge. The company's outlook for the coming year suggests a period of stabilization rather than rapid growth, raising questions about whether strength in its biosimilars unit can offset persistent challenges in women's health.

For the final quarter of the year, Organon posted a net loss of $205 million. This result was heavily impacted by a non-cash goodwill impairment charge totaling $301 million. The significant charge pushed the company's operating margin down to -9.8%, a stark contrast to the 18.1% margin reported for the same period a year earlier.

Revenue declined by 5% year-over-year to $1.51 billion, slightly below the average analyst expectation of $1.52 billion. On an adjusted basis, earnings per share came in at $0.63, missing the consensus forecast range of $0.73 to $0.74.

Diverging Segment Performance

A mixed performance across its business segments characterized the quarter. The biosimilars portfolio emerged as a clear growth driver, with revenue increasing by 11% on a currency-adjusted basis to $181 million. The autoimmune treatment Hadlima showed particular strength, recording full-year 2025 growth of 61%.

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Conversely, the women's health division experienced considerable pressure. Revenue in this segment fell by 16% on a currency-adjusted basis to $398 million. Sales of the contraceptive implant Nexplanon dropped by 20% in the fourth quarter alone. The company's largest segment, established brands, also saw a currency-adjusted decline of 5%.

Guidance and Strategic Priorities

Management's forecast for the 2026 fiscal year indicates an expectation of broadly stable performance. Both revenue and adjusted EBITDA are projected to remain approximately flat, with revenue anticipated at around $6.2 billion and adjusted EBITDA near $1.9 billion, mirroring 2025 levels.

Strengthening the balance sheet is a stated priority. The company aims to reduce its net leverage ratio from the current level of 4.3 to below 4.0 by the end of 2026. A key step in this direction was the recently completed sale of the Jada System, which generated net proceeds of approximately $390 million. Organon confirmed its next quarterly dividend of $0.02 per share will be paid on March 12 to shareholders of record as of February 23.