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Saturday, June 05, 2021 2:40:26 PM
https://www.barrons.com/articles/jobs-report-fed-interest-rates-inflation-51622846230
Organon (OGN), which Merck (MRK) jettisoned this past week, could be another winner. This is a classic spinoff situation. Organon is a group of noncore Merck businesses—off-patent drugs sold mainly overseas, biosimilars, and a women’s health business—that may fare better as an independent company.
“You easily can see how this business could have been lost inside of Merck and been undermanaged relative to the rest of the portfolio,” says James Hounsell, a senior research analyst at Smead Capital Management, a Merck shareholder. “That’s when the magic happens with spinoffs.”
The shares trade around $34, giving the company a market value of $8.6 billion, plus about $9 billion of net debt. Merck shareholders received one Organon share for every 10 of Merck. Organon trades for just six times 2020 profits of $5.90 a share. Similar earnings are expected this year.
Organon isn’t as cheap when valued against projected 2021 earnings before interest, taxes, depreciation, and amortization, or Ebitda, of $2.3 billion, based on its enterprise value of equity value plus net debt. Then, it trades around eight times, in line with mature drug companies.
At a May investor day, Merck projected $6.1 billion to $6.4 billion of 2021 revenue for Organon and annual sales increases in the low- to mid-single digits. The dividend hasn’t been set yet, but based on Organon’s financial guidance, it could be about 3%.
Major drivers for the company are expected to be an implantable women’s contraceptive called Nexplanon and biosimilars, which are generic versions of bioengineered drugs.
“This is a stable, predictable business with low- to mid-single digit growth organically,” Organon CEO Kevin Ali tells Barron’s. He is bullish on the growth outlook for the women’s health business, now about 25% of revenue, plus the opportunity for potential acquisitions.
Given its low price/earnings ratio, Organon has good appreciation potential if it can deliver on its financial goals.
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Recent OGN News
- オルガノンとリリーが片頭痛治療薬の商業化契約を拡大、11の新しい市場に参入 • Business Wire • 08/21/2024 12:13:00 AM
- Organon und Lilly erweitern Migräne-Vermarktungsvereinbarung auf 11 weitere Märkte • Business Wire • 08/20/2024 09:06:00 PM
- Organon y Lilly amplían su acuerdo de comercialización para la migraña a otros 11 mercados • Business Wire • 08/20/2024 07:34:00 PM
- Organon et Lilly élargissent l'accord de commercialisation pour la migraine à 11 marchés supplémentaires • Business Wire • 08/20/2024 02:20:00 PM
- Organon & Lilly Expand Migraine Commercialization Agreement to 11 Additional Markets • Business Wire • 08/20/2024 11:30:00 AM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 08/07/2024 12:07:10 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/06/2024 11:39:19 AM
- Organon Reports Results for the Second Quarter Ended June 30, 2024 • Business Wire • 08/06/2024 11:30:00 AM
- US Index Futures Rise After Market Sell-off, Oil Prices Trim Losses • IH Market News • 08/06/2024 09:49:06 AM
- Organon To Report Second Quarter 2024 Results and Host Conference Call on August 6, 2024 • Business Wire • 07/09/2024 11:30:00 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/11/2024 07:17:07 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/11/2024 07:16:43 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/11/2024 07:16:19 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 06/06/2024 11:00:25 AM
- Europäische Arzneimittel-Agentur (EMA) validiert Einreichungen von Henlius und Organon für den Prolia ® und Xgeva ® (Denosumab) Biosimilar-Kandidaten HLX14 • Business Wire • 05/24/2024 05:59:00 PM
- L’Agence européenne des médicaments (EMA) entérine les dépôts de Henlius et d’Organon pour le candidat biosimilaire HLX14 de Prolia ® et Xgeva ® (denosumab) • Business Wire • 05/24/2024 05:59:00 PM
- 欧州医薬品庁(EMA)、ヘンリウスとオルガノンによるProlia ® およびXgeva ® (デノスマブ)バイオシミラー候補HLX14を認証 • Business Wire • 05/24/2024 03:29:00 PM
- European Medicines Agency (EMA) Validates Henlius and Organon Filings for Prolia® and Xgeva® (denosumab) Biosimilar Candidate HLX14 • Business Wire • 05/24/2024 10:00:00 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/17/2024 08:15:27 PM
- Organon Announces Pricing of $1.0 Billion Senior Notes Offering • Business Wire • 05/08/2024 12:20:00 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/07/2024 08:07:27 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/07/2024 08:07:02 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/07/2024 08:06:49 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/07/2024 08:06:27 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/07/2024 08:06:11 PM
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