Organon & Co.

Previous wording

Some statements and disclosures in this document are forward-looking statements. Forward-looking statements include all statements that do not relate solely to historical or current facts and can be identified by the use of words such as “may,” “believe,” “will,” “expect,” “project,” “potential,” “should,” “estimate,” “anticipate,” “plan,” “intend,” “would,” “seek,” “continue,” and other words of similar meaning, or negative variations of any of the foregoing. These forward-looking statements are based on our current plans and expectations and are subject to a number of risks and uncertainties that could cause our plans and expectations, including actual results, to differ materially from the forward-looking statements. Risks and uncertainties that may affect our future results include, but are not limited to, expanded brand and class competition in the markets in which Organon & Co. (“Organon,” the “Company,” “we,” “our,” or “us”) operates; trade protection measures and import or export licensing requirements, including the direct and indirect impacts of tariffs (including pharmaceutical sector tariffs), trade sanctions or similar restrictions by the United States or other governments; changes in U.S. and foreign federal, state and local governmental funding allocations including the timing and amounts allocated to Organon’s customers and business partners; economic factors over which we have no control, including changes in inflation, interest rates, recessionary pressures, and foreign currency exchange rates; uncertainties surrounding the Audit Committee investigation described in our Current Report on Form 8-K, filed with the U.S. Securities and Exchange Commission (the “SEC”) on October 27, 2025 (the “Form 8-K”); the impact of litigation, regulatory investigations and inquiries, and other legal matters, including risks to our reputation and relationships with customers, wholesalers, suppliers, and other business partners; risks related to potential disruptions to our business as a result of the leadership changes announced in the Form 8-K, including the risk that appointing a new Chief Executive Officer may take longer than anticipated; our ability to remediate the material weaknesses in internal control over financial reporting and the related costs and management resources in connection therewith, as well as our ability to maintain effective controls over financial reporting and disclosure controls and procedures in the future; our ability to access the public securities and other capital and credit markets in accordance with our financial plans, the cost of such capital and overall condition of the capital and credit markets; actions that may be taken by credit rating agencies that could negatively affect either our access to or terms of financing or our financial condition and liquidity; our ability to meet our revenue and growth expectations and outlook; unfavorable publicity and media reports; the potential impact that actions by activ…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Some statements and disclosures in this document are forward-looking statements. Forward-looking statements include all statements that do not relate solely to historical or current facts and can be identified by the use of words such as “may,” “believe,” “will,” “expect,” “project,” “potential,” “possible,” “probable,” “outcome,” “likely,” “could,” “should,” “estimate,” “anticipate,” “plan,” “intend,” “would,” “future,” “target,” “seek,” “continue,” and other words of similar meaning, or negative variations of any of the foregoing. These forward-looking statements are based on our current plans and expectations and are subject to a number of risks and uncertainties that could cause our plans and expectations, including actual results, to differ materially from the forward-looking statements. Risks and uncertainties that may affect our future results include, but are not limited to, uncertainties as to the timing of the completion of the pending merger (the “merger”) with Sun Pharmaceutical Industries (together with its subsidiaries and/or associated companies, “Sun Pharma”); the risk that the merger may not be completed on the anticipated terms in a timely manner or at all; the failure to satisfy any of the conditions to the consummation of the merger, including receiving, on a timely basis or otherwise, the minimum vote required by our stockholders to approve the merger; the possibility that competing offers or acquisition proposals for Organon will be made; the possibility that any or all of the various conditions to the consummation of the merger may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals); the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive agreement, including in circumstances which would require us to pay a termination fee; the effect of the announcement or pendency of the merger on our ability to retain and hire key personnel, our ability to maintain relationships with our customers, suppliers and others with whom we do business, or our operating results and business generally; risks related to diverting management’s attention from our ongoing business operations; the risk that stockholder litigation in connection with the merger may result in significant costs of defense, indemnification and liability; certain restrictions during the pendency of the merger that may impact our ability to pursue certain business opportunities or strategic transactions; the risk that any announcements relating to the merger could have adverse effects on the market price of our common stock, including if the merger is not consummated; risks that the benefits of the merger are not realized when and as expected; expanded brand and class competition in the markets in which we operate; trade protection measures and import or export…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

-26- or their regulatory or quality obligations, which could lead to a delay in regulatory approval or commercial marketing of our products; cyberattacks on, or other failures, accidents, or security breaches of, our or third-party providers’ information technology systems, which could disrupt our operations and those of third parties upon which we rely; increased focus on privacy issues in countries around the world, including the United States, the European Union, and China, and a more difficult legislative and regulatory landscape for privacy and data protection that continues to evolve with the potential to directly affect our business, including recently enacted laws in a majority of states in the United States requiring security breach notification; changes in tax laws including changes related to the taxation of foreign earnings; the impact of any future pandemic, epidemic, or similar public health threat on our business, operations and financial performance; loss of key employees or inability to identify and recruit new employees; changes in accounting pronouncements promulgated by standard-setting or regulatory bodies, including the Financial Accounting Standards Board and the SEC, that are adverse to us; volatility of commodity prices, fuel, shipping rates that impact the costs and/or ability to supply our products; and other factors discussed in our most recently filed Annual Report on Form 10-K (as amended), Quarterly Reports on Form 10-Q (as amended) and Current Reports on Form 8-K, including those discussed in the “Business,” “Risk Factors,” “Cautionary Statement Regarding Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of those reports.

Current wording

-23- reliance on fewer research and development programs for new products to generate future revenue and replace existing products that come to the end of their market life cycle; future actions of third-parties, including significant changes in customer relationships or changes in the behavior and spending patterns of purchasers of healthcare products and services, including delaying medical procedures, rationing prescription medications, reducing the frequency of physician visits and forgoing healthcare insurance coverage; legal factors, such as product liability claims, stockholder litigation, governmental investigations, and patent disputes; lost market opportunity resulting from delays and uncertainties in clinical trials and the approval or clearance process of the FDA and other regulatory authorities; the failure by us or our third party collaborators and/or their suppliers to fulfill our or their regulatory or quality obligations, which could lead to a delay in regulatory approval or commercial marketing of our products; cyberattacks on, or other failures, accidents, or security breaches of, our or third-party providers’ information technology systems, which could disrupt our operations and those of third parties upon which we rely; increased focus on privacy issues in countries around the world, including the United States, the European Union, and China, and a more difficult legislative and regulatory landscape for privacy and data protection that continues to evolve with the potential to directly affect our business, including recently enacted laws in a majority of states in the United States requiring security breach notification; changes in tax laws including changes related to the taxation of foreign earnings; the impact of any future pandemic, epidemic, or similar public health threat on our business, operations and financial performance; changes in accounting pronouncements promulgated by standard-setting or regulatory bodies, including the Financial Accounting Standards Board and the SEC, that are adverse to us; volatility of commodity prices, fuel, and shipping rates that impact the costs and/or ability to supply our products; and other factors discussed in our most recently filed Annual Report on Form 10-K and subsequent filings, including those discussed in the “Business,” “Risk Factors,” “Cautionary Statement Regarding Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of those reports.

Previous wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to assist the reader in understanding our financial condition and results of operations. The following discussion and analysis should be read in conjunction with our Condensed Consolidated Financial Statements included in Part I, Item 1 of this report and with our audited financial statements, including the accompanying notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2024, as amended. Operating results discussed herein are not necessarily indicative of the results of any future period.

Current wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to assist the reader in understanding our financial condition and results of operations. The following discussion and analysis should be read in conjunction with our Condensed Consolidated Financial Statements included in Part I, Item 1 of this report and with our audited financial statements, including the accompanying notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2025. Operating results discussed herein are not necessarily indicative of the results of any future period.

Previous wording

We are a global health care company with a primary focus on improving the health of women throughout their lives. We develop and deliver innovative health solutions through a portfolio of prescription therapies and medical devices within our women’s health and general medicines portfolios. We have a portfolio of more than 70 medicines and products across a range of therapeutic areas. We sell 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. We operate 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, our group of companies.

Current wording

We are a global healthcare company with a primary focus on improving the health of women throughout their lives. We develop and deliver innovative health solutions through a portfolio of prescription therapies within our women’s health and general medicines portfolios. We have a portfolio of more than 70 medicines and products across a range of therapeutic areas. We sell these products through various channels including drug wholesalers and retailers, hospitals, government agencies and managed healthcare providers such as health maintenance organizations, pharmacy benefit managers and other institutions. We own and operate 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, our group of companies.

Previous wording

Worldwide sales were $4.7 billion for the nine months ended September 30, 2025, a decrease of 2%, compared to 2024. Worldwide sales during the nine months ended September 30, 2025 were positively impacted by approximately $2 million, due to favorable foreign exchange rates.

Current wording

Worldwide sales were $1.5 billion for the three months ended March 31, 2026, a decrease of 4%, compared to 2025. Worldwide sales during the three months ended March 31, 2026 were positively impacted by approximately $76 million, or approximately 5%, due to favorable foreign exchange rates.

Previous wording

Excluding the impact of foreign exchange rates, sales increases for the three months ended September 30, 2025 primarily reflect the performance of:

Current wording

Excluding the impact of foreign exchange rates, sales decreases for the three months ended March 31, 2026, primarily reflect lower sales of:

Previous wording

LOE negatively impacted sales of certain of our products by approximately $47 million and $170 million during the three and nine months ended September 30, 2025, respectively, based on the decrease in volume period over period. This was primarily driven by the LOE of Atozet in France, Spain and Japan and Rosuzet™ (ezetimibe and rosuvastatin) in Japan. Volume-based procurement (“VBP”) in China had an immaterial impact on our sales during the nine months ended September 30, 2025. We expect VBP to continue to impact our general medicines product portfolio for the next several quarters.

Current wording

Loss of exclusivity (“LOE”) negatively impacted sales of certain of our products by approximately $4 million during the three months ended March 31, 2026, based on the decrease in sales volume compared to 2025. Volume-based procurement (“VBP”) in China negatively impacted sales by approximately $2 million during the three months ended March 31, 2026. We expect VBP to continue to negatively impact our general medicines product portfolio for the next several quarters.

Previous wording

Due to changing market conditions, new and evolving U.S. and international tariffs, U.S. tax law changes and regulatory uncertainty that impact our business, as well as the pharmaceutical industry, we have been and will continue to adapt our business and sales strategies to address this changing landscape in order to achieve our business objectives and remain competitive. Such strategies may include implementing or continuing to assess product discount programs and wholesaler inventory levels under the relevant agreements or waivers of their terms for certain key products.

Current wording

Due to changing market conditions, including ongoing conflicts, new and evolving U.S. and international tariffs, U.S. tax law changes and regulatory uncertainty that impact our business, as well as the pharmaceutical industry, we have been and will continue to adapt our business and sales strategies to address this changing landscape in order to achieve our business objectives and remain competitive. Such strategies may include implementing or continuing to assess product discount programs and wholesaler inventory levels under the relevant agreements or waivers of their terms for certain key products.

Previous wording

Our operations include a portfolio of products. Highlights of the sales of our products for the three and nine months ended September 30, 2025 and 2024 are provided below. See Note 5 “Product and Geographic Information” to the Condensed Consolidated Financial Statements for further details on sales of our products.

Current wording

Highlights of the sales of our products for the three months ended March 31, 2026 and 2025 are provided below. See Note 5 “Product and Geographic Information” to the Condensed Consolidated Financial Statements for further details on sales of our products.

Previous wording

Worldwide sales of Marvelon™1 (desogestrel and ethinyl estradiol pill) and Mercilon™1 (desogestrel and ethinyl estradiol pill), combined oral hormonal daily contraceptive pills not approved or marketed in the United States, but available in certain countries outside the United States, remained consistent for the three and nine months ended September 30, 2025, compared to 2024, respectively, as a result of favorable pricing in Asia Pacific offset by the phasing of shipments in various international markets. The nine months ended September 30, 2025 was impacted by increased demand in China.

Current wording

Worldwide sales of Marvelon and Mercilon, combined oral hormonal daily contraceptive pills not approved or marketed in the United States, but available in certain countries outside the United States, declined 34% for the three months ended March 31, 2026, compared to 2025, as a result of decreased demand and market contraction in China and the timing of shipments in Asia Pacific.

Previous wording

Worldwide sales of Jada, a device intended to provide control and treatment of abnormal postpartum uterine bleeding or hemorrhage when conservative management is warranted, increased 30% and 25% for the three and nine months ended September 30, 2025, compared to 2024, respectively. The sales increase is due to continued uptake in the United States following the Jada launch in early 2022. Subsequent to September 30, 2025, we entered into a definitive agreement to divest the Jada System to Laborie Medical Technologies Corporation. The transaction is expected to close in early 2026, subject to regulatory approvals and other customary closing conditions.

Current wording

In January 2026, we completed the sale of the Jada System to Laborie. As a result, worldwide sales of Jada, a device intended to provide control and treatment of abnormal postpartum uterine bleeding or hemorrhage when conservative management is warranted, declined 66% for the three months ended March 31, 2026, compared to 2025.

Previous wording

Renflexis® (infliximab-abda) is a biosimilar to Remicade 2 (infliximab) for the treatment of certain autoimmune conditions. Sales declined 2% and 9% for the three and nine months ended September 30, 2025, compared to 2024, respectively, primarily due to competitive pressure and unfavorable discount rates in the United States, partially offset by increased demand in Canada.

Current wording

Renflexisis a biosimilar to Remicade 2(infliximab) for the treatment of certain autoimmune conditions. Sales increased 1% for the three months ended March 31, 2026, compared to 2025, primarily due to favorable foreign exchange and increased demand in Canada partially offset by the competitive pressure and unfavorable discount rates in the United States.

Previous wording

Hadlima is a biosimilar to Humira 2 (adalimumab) for the treatment of certain autoimmune and autoinflammatory conditions. Sales increased 57% and 62% for the three and nine months ended September 30, 2025, compared to 2024, respectively, due to sales ramp up since its launch in July 2023 in the United States and a modest increase in international markets. We have commercialization rights to Hadlima in countries outside of the European Union, South Korea, China, Turkey, and Russia. Hadlima is currently approved in the United States, Australia, Canada, and Israel.

Current wording

Hadlima is a biosimilar to Humira 2 (adalimumab) for the treatment of certain autoimmune and autoinflammatory conditions. Sales increased 44% for the three months ended March 31, 2026, compared to 2025, due to stronger demand in the United States and increased demand in Puerto Rico. We have commercialization rights to Hadlima in countries outside of the European Union, South Korea, China, Turkey, and Russia. Hadlima is currently approved in the United States, Australia, Canada and Israel.

Previous wording

Ontruzant® (trastuzumab-dttb) is a biosimilar to Herceptin 2 (trastuzumab) for the treatment of HER2-overexpressing breast cancer and HER2-overexpressing metastatic gastric or gastroesophageal junction adenocarcinoma. Sales for the three months ended September 30, 2025, compared to 2024, increased 54% due to increased demand and timing of tenders in Brazil partially offset by unfavorable pricing in Brazil. Sales for the nine months ended September 30, 2025, compared to 2024, declined 25%, due to competitive pressure in the United States, unfavorable pricing and lower tendered volume from Brazil’s Ministry of Health when compared with 2024. We have commercialization rights to Ontruzant in all countries except in South Korea and China.

Current wording

Ontruzant is a biosimilar to Herceptin 2(trastuzumab) for the treatment of HER2-overexpressing breast cancer and HER2-overexpressing metastatic gastric or gastroesophageal junction adenocarcinoma. Sales for the three months ended March 31, 2026, compared to 2025, declined 71%, due to increased competition in international markets and lower tendered volume from Brazil’s Ministry of Health when compared with the same period in 2025. We have commercialization rights to Ontruzant in all countries except in South Korea and China.

Previous wording

Brenzys™1 (etanercept) is a biosimilar to Enbrel 2 (etanercept) for the treatment of certain inflammatory diseases. Sales for the three and nine months ended September 30, 2025, compared to 2024, declined 13% and 5%, respectively, as a result of the

Current wording

Brenzys is a biosimilar to Enbrel 2 (etanercept) for the treatment of certain inflammatory diseases. Sales for the three months ended March 31, 2026, compared to 2025, increased 39%, as a result of the timing of prior year tenders in Brazil. We have commercialization rights to Brenzys in countries outside of the United States, Europe, South Korea, China, and Japan.

Previous wording

Sales of Atozet, a medicine for lowering LDL cholesterol, declined 24% and 35% for the three and nine months ended September 30, 2025, compared to 2024, respectively, primarily due to LOE in France, Spain and Japan, partially offset by increased demand in Asia Pacific, Latin America and China. We anticipate a continued significant decline in sales of Atozet in 2025 due to LOE, which occurred late in the third quarter of 2024.

Current wording

Sales of Atozet, a medicine for lowering LDL cholesterol, increased 11% for the three months ended March 31, 2026, compared to 2025, primarily due to increased demand in China, due to the product launch in 2025, and in Asia Pacific as well as volume uptake in certain countries in Europe, partially offset by unfavorable pricing in Europe.

Previous wording

Combined global sales of Zetia® (ezetimibe) and Vytorin® (ezetimibe / simvastatin), medicines for lowering LDL cholesterol, increased 10% and 1% for the three and nine months ended September 30, 2025, compared to 2024, respectively, primarily driven by increased demand in China, partially offset by the decrease in demand and pricing pressure in various international markets.

Current wording

Combined global sales of Zetia® (ezetimibe), which is marketed as Ezetrol™in most countries outside the United States; and Vytorin® (ezetimibe / simvastatin), which is marketed as Inegy™ outside the United States, medicines for lowering LDL cholesterol, increased 1% for the three months ended March 31, 2026, compared to 2025, primarily driven by favorable foreign exchange and increased demand in China, partially offset by less tender volume and the timing of shipments in the Middle East.

Previous wording

Combined global sales of Cozaar®(losartan potassium) and Hyzaar® (losartan potassium and hydrochlorothiazide), medicines for the treatment of hypertension, declined 7% and 11% for the three and nine months ended September 30, 2025, compared to 2024, respectively, driven by decreased demand in Japan and Latin America. Additionally, the nine months ended September 30, 2025 was impacted by decreased hospital demand in China.

Current wording

Combined global sales of Cozaar® (losartan) and Hyzaar® (losartan / hydrochlorothiazide), medicines for the treatment of hypertension, increased 4% for the three months ended March 31, 2026, compared to 2025, driven by favorable foreign exchange and increased demand in China, partially offset by decreased demand in various international markets.

Previous wording

Worldwide sales of Singulair, a once-a-day oral medicine for the chronic treatment of asthma and for the relief of symptoms of allergic rhinitis, decreased 37% and 30% for the three and nine months ended September 30, 2025, compared to 2024, respectively, due to lower demand outside of the United States and the negative impact from price reductions in Japan and China.

Current wording

Worldwide sales of Singulair, a once-a-day oral medicine for the chronic treatment of asthma and for the relief of symptoms of allergic rhinitis, declined 46% for the three months ended March 31, 2026, compared to 2025. This decline was primarily attributable to decreased demand due to less favorable medical guidelines in certain international markets, most recently in China, as well as temporary supply constraints in Japan and mandatory price reductions in China and Japan.

Previous wording

Global sales of Nasonex, an inhaled nasal corticosteroid for the treatment of nasal allergy symptoms, declined 5% and 1% for the three and nine months ended September 30, 2025, compared to 2024, respectively, due to decreased demand and an increase in competitive pressure in various international markets.

Current wording

Global sales of Nasonex, an inhaled nasal corticosteroid for the treatment of nasal allergy symptoms, declined 9% for the three months ended March 31, 2026, compared to 2025, due to competitive pressure in various international markets.

Previous wording

Global sales of Dulera, which is also marketed as Zenhale TM in certain markets outside of the United States, a combination medicine for the treatment of asthma, declined 31% and 22% for the three and nine months ended September 30, 2025, compared to 2024, respectively, primarily due to the loss of a customer contract in the first part of the year combined with increased discount rate pressure in the United States. In the third quarter, demand was further impacted by supply constraints, which are expected to continue into the fourth quarter.

Current wording

Global sales of Dulera® (formoterol/fumarate dihydrate), which is also marketed as Zenhale in certain markets outside of the United States, a combination medicine for the treatment of asthma, declined 20% for the three months ended March 31, 2026, compared to 2025, primarily due to increased discount rate pressure and decreased demand in the United States.

Previous wording

Sales of Arcoxia™ 1(etoricoxib), a medicine for the treatment of arthritis and pain, increased 4% for the three months ended September 30, 2025, compared to 2024, due to the impact of foreign exchange offset by decreased demand in Latin America and the phasing of shipments in various international regions. Sales declined 8% for the nine months ended September 30, 2025, compared to 2024, primarily due to decreased demand in Latin America and Asia Pacific and the phasing of shipments in various international regions.

Current wording

Sales of Arcoxia™¹ (etoricoxib), a medicine for the treatment of arthritis and pain, declined 5% for the three months ended March 31, 2026, compared to 2025, primarily due to the phasing of shipments in various international regions and decreased demand in China.

Previous wording

Sales of Vtama, a cream for the topical treatment of mild, moderate, and severe plaque psoriasis in adults and atopic dermatitis, also known as eczema, in adults and children two years of age and older, were $34 million and $89 million for the three and nine months ended September 30, 2025, respectively as a result of our acquisition of Dermavant in the fourth quarter of 2024, launch of the atopic dermatitis indication in the United States and launch of the topical treatment of plaque psoriasis in adults in Canada in the third quarter of 2025.

Current wording

Sales of Vtama, a cream for the topical treatment of mild, moderate, and severe plaque psoriasis in adults and atopic dermatitis, also known as eczema, in adults and children two years of age and older, increased 5% for the three months ended March 31, 2026, compared to 2025, due to increased demand and favorable discount rates in the United States. We anticipate launching Vtama in certain international markets in 2026 and beyond, subject to health authority reviews and approvals.

Previous wording

Sales of Emgality, a medicine for the preventive treatment of migraine and Rayvow™2 (lasmiditan), a medicine for acute treatment of the headache phase of migraine attacks, increased for the three and nine months ended September 30, 2025, compared to 2024, as a result of our acquisition of the distribution and promotion rights from Lilly in 2024 in certain markets outside of the United States.

Current wording

Sales of Emgality, a medicine for the preventive treatment of migraine, increased 69% for the three months ended March 31, 2026, compared to 2025, as a result of continued uptake following the acquisition of the distribution and promotion rights from Lilly in January of 2024 in certain markets outside of the United States.

Previous wording

Cost of sales increased 13% and 7% for the three and nine months ended September 30, 2025, compared to 2024. Cost of sales for the three and nine months ended September 30, 2025, includes amortization associated with the inventory fair value adjustment related to the Dermavant acquisition of $12 million and $31 million, respectively, an impairment charge in the nine months ended September 30, 2025 related to a currently marketed women’s health product of $9 million and amortization of intangible assets of $52 million and $155 million, respectively. Cost of sales for the three and nine months ended September 30, 2024 includes amortization of intangible assets of $35 million and $102 million, respectively. In addition, the three and nine months ended September 30, 2025 were impacted by increased costs to optimize our manufacturing and supply network and unfavorable foreign exchange rates. Separation costs associated with manufacturing-related headcount reductions have been incurred and are reflected in Restructuring costs.

Current wording

Cost of sales increased 1% for the three months ended March 31, 2026, compared to 2025, driven by our product mix. Cost of sales for the three months ended March 31, 2026 compared to 2025, includes amortization associated with the inventory fair value adjustment related to the Dermavant acquisition of $7 million and $9 million, respectively, and amortization of intangible assets of $47 million and $50 million, respectively.

Previous wording

Gross profit decreased 7% and 9% for the three and nine months ended September 30, 2025, compared to 2024, respectively, due to increased costs to optimize our manufacturing and supply network, the impact of unfavorable price, unfavorable product mix and foreign exchange translation offset by an increase in volume.

Current wording

Gross profit decreased 7% for the three months ended March 31, 2026, compared to 2025, due to the impact of unfavorable pricing and product mix and unfavorable foreign exchange.

Previous wording

Selling, general and administrative expenses decreased 2% and remained consistent for the three and nine months ended September 30, 2025, compared to 2024, respectively, due to lower costs related to the prior year implementation of our ERP system offset by increased costs associated with the promotion of our recently acquired products and Nexplanonand reserves for legal settlements.

Current wording

Selling, general and administrative expenses increased 1% for the three months ended March 31, 2026, compared to 2025, due to increased costs associated with our Jada divestiture.

Previous wording

For the nine months ended September 30, 2025, we recognized $6 million in acquired in-process research and development and milestones, related to the exit of our agreement with Centergene, due to the evolving fertility landscape in China. For the three months ended September 30, 2024, acquired in-process research and development and milestones of $51 million primarily represents the research and development milestones related to our agreement with Henlius, which were determined to be probable of being achieved. For the nine months ended September 30, 2024, acquired in-process research and development and milestones of $81 million primarily represents the research and development milestones of $70 million for our agreement with Henlius and $10 million for our agreement with Cirqle, which were determined to be probable of being achieved.

Current wording

For the three months ended March 31, 2025, we recognized $6 million in acquired in-process research and development and milestones, related to the exit of our agreement with Centergene, due to the evolving fertility landscape in China.

Previous wording

For the nine months ended September 30, 2025, we incurred restructuring costs of $88 million comprised primarily of headcount-related restructuring expense associated with restructuring initiatives that were aimed at driving operational efficiencies in 2025. The restructuring activities combined with our other cost savings initiatives are expected to result in approximately $200 million of annual savings. For the nine months ended September 30, 2024 we incurred restructuring costs of $23 million, comprised of headcount-related restructuring expense related to the optimization of our internal operations, primarily within the research and development function.

Current wording

For the three months ended March 31, 2026, we incurred restructuring costs of $31 million related to our 2026 restructuring initiatives to streamline and optimize our research and development and manufacturing operations, focusing on enhancing efficiency and aligning resources with strategic priorities. For the three months ended March 31, 2025, we incurred restructuring costs of $86 million, comprised primarily of headcount-related restructuring expense associated with restructuring initiatives that were aimed at driving operational efficiencies in 2025.

Previous wording

Exchange losses increased for the three and nine months ended September 30, 2025, compared to 2024, primarily due to unfavorable movements in certain foreign currencies relative to the U.S. dollar. While the U.S. dollar weakened overall during 2025, several currencies in which we have exposure experienced adverse shifts, resulting in increased losses.

Current wording

Exchange losses (gains) were unfavorable for the three months ended March 31, 2026, compared to 2025, primarily due to unfavorable movements in certain foreign currencies relative to the U.S. dollar.

Previous wording

Other (income) expense, net was impacted for the three months ended September 30, 2025, by the fair value adjustments and accretion of the Dermavant acquisition contingent consideration, related to changes in the timing of expected commercial milestones based on updated sales forecasts. Other (income) expense, net was impacted for the nine months ended September 30, 2025, by a $46 million pre-tax gain related to the repurchase and cancellation of approximately $242 million of the 2031 Notes and the repayment and termination of the NovaQuest Funding Agreement and the fair value adjustments and accretion of the Dermavant acquisition contingent consideration, related to changes in the timing of expected commercial milestones based on updated sales forecasts.

Current wording

Other (income) expense, net was impacted for the year ended March 31, 2026, by an $81 million net gain related to the divestiture of the Jada System to Laborie in the first quarter of 2026 and $7 million related to the accretion of the Dermavant acquisition contingent consideration, related to changes in the timing of expected commercial milestones based on updated sales forecasts.

Previous wording

The effective income tax rates were 34.0% and (73.7)% for the three months ended September 30, 2025 and 2024, respectively, and 31.6% and (11.3)% for the nine months ended September 30, 2025 and 2024, 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. There was a favorable impact to the 2025 year-to-date effective tax rate driven by a tax amortization benefit. The favorable impact to the 2024 year-to-date effective tax rate was driven by the reversal of a valuation allowance, the favorable closure of two non-U.S. tax audits and a return to provision adjustment for an entity in Switzerland.

Current wording

The effective income tax rates were 31.4% and 13.4% for the three months ended March 31, 2026 and 2025, 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 valuation allowance recorded against non-deductible U.S. interest expense. Also included in the first quarter tax rate, is the beneficial impact of the sale of the Jada System. There was a favorable impact to the 2025 year-to-date effective tax rate driven by a tax amortization benefit.

Previous wording

On July 4, 2025, U.S. House Resolution 1, referred to as the One Big Beautiful Bill Act (“OBBBA”), was signed into law. The OBBBA includes significant corporate tax provisions such as modifications to interest deductibility, the option to fully expense U.S.-based R&D costs, and changes to the taxation of foreign earnings. For 2025, any impact of the OBBBA is immaterial. For 2026 and beyond, we are evaluating the impacts of the OBBBA on our U.S. cash tax liability and income tax provision.

Current wording

On July 4, 2025, U.S. House Resolution 1, referred to as the One Big Beautiful Bill Act (“OBBBA”), was signed into law. The OBBBA includes significant corporate tax provisions such as modifications to interest deductibility, the option to fully expense U.S.-based R&D costs, and changes to the taxation of foreign earnings. For 2026 and beyond, the impacts of the OBBBA are reflected in our U.S. cash tax liability and income tax provision primarily reflected as an increase in our interest expense limitation offset by a decrease in our foreign income inclusions.

Previous wording

As of September 30, 2025, we had cash and cash equivalents of $672 million. We have historically generated and expect to continue to generate positive cash flow from operations. Our ability to fund our operations and anticipated capital needs is reliant upon the generation of cash from operations, supplemented as necessary by periodic utilization of our revolving credit facility. Our principal uses of cash in the future will be primarily to fund our operations, working capital needs, capital expenditures, repayment of borrowings, strategic business development transactions and the payment of dividends. We believe that our financing arrangements, future cash from operations, and access to capital markets will provide adequate resources to fund our future cash flow needs.

Current wording

As of March 31, 2026, we had cash and cash equivalents of $1.12 billion. We have historically generated and expect to continue to generate positive cash flow from operations. Our ability to fund our operations and anticipated capital needs is reliant upon the generation of cash from operations, supplemented as necessary by periodic utilization of our revolving credit facility. Our principal uses of cash in the future will be primarily to fund our operations, working capital needs, capital expenditures, repayment of borrowings, strategic business development transactions and the payment of dividends. We believe that our financing arrangements, future cash from operations, and access to capital markets will provide adequate resources to fund our future cash flow needs. Our ability to raise new capital or refinance our debt, will depend on the capital markets and our financial condition at such times.

Previous wording

Working capital is defined as current assets less current liabilities and was $2.02 billion and $1.63 billion as of September 30, 2025 and December 31, 2024, respectively. Working capital was impacted by our active cash cycle management, which includes the factoring of receivables and timing of vendor payments; milestone payments; net repayments of debt; and increased inventory associated with the acquisition of the Oss Biotech Site.

Current wording

Working capital is defined as current assets less current liabilities and was $2.43 billion and $1.96 billion as of March 31, 2026 and December 31, 2025, respectively. Working capital was positively impacted by our active cash cycle management, which includes the factoring of receivables and timing of vendor payments and the proceeds from the divestiture of the Jada System.

Previous wording

We have accounts receivable factoring agreements with financial institutions in certain countries. Under these agreements, we have factored $268 million and $186 million of our accounts receivable as of September 30, 2025 and December 31, 2024, respectively. See Note 11 “Financial Instruments” to the Condensed Consolidated Financial Statements for information on the Company’s’ accounts receivable factoring and related agreements.

Current wording

We have accounts receivable factoring agreements with financial institutions in certain countries. Under these agreements, we have factored $216 million and $217 million of our accounts receivable as of March 31, 2026 and December 31, 2025, respectively. See Note 11 “Financial Instruments” to the Condensed Consolidated Financial Statements for information on our accounts receivable factoring and related agreements.

Previous wording

Net cash provided by operating activities was $559 million for the nine months ended September 30, 2025, compared to $549 million for the same period in the prior year due to lower operating income, partially offset by our active cash cycle management.

Current wording

Net cash provided by operating activities was $225 million for the three months ended March 31, 2026, compared to $75 million for the same period in the prior year due to our active cash cycle management.

Previous wording

Net cash used in investing activities was $325 million for the nine months ended September 30, 2025, compared to $217 million for the same period in the prior year, primarily due to increased milestone payments.

Current wording

Net cash provided by investing activities was $386 million for the three months ended March 31, 2026, compared to $172 million used in investing activities for the same period in the prior year, primarily due to proceeds from the divestiture of the Jada system and decreased milestone payments.

Previous wording

Net cash used in financing activities was $374 million for the nine months ended September 30, 2025, compared with $286 million for the same period in the prior year primarily driven by the repurchase and cancellation of $242 million of the 2031 Notes and the payment and termination of the NovaQuest Funding Agreement, partially offset by borrowings on our Revolving Credit Facility, decreased dividend payments in the current year and no debt issuance costs compared to the prior period.

Current wording

Net cash used in financing activities was $38 million for the three months ended March 31, 2026, compared with $75 million for the same period in the prior year, primarily driven by decreased dividend payments in the current year and increased repayments of debt in the current year.

Previous wording

As part of our post-spinoff plan, we have an ongoing initiative to further optimize our manufacturing and supply network. As part of this initiative, we will continue to separate our supply chain through planned exits from supply agreements with Merck through 2031. This will enable us to redefine our appropriate sourcing strategy, and move to fit-for-purpose supply chains, while focusing on delivering efficiencies. We anticipate we will incur costs associated with this separation, including but not limited to accelerated depreciation, exit premiums and fees, technology transfer costs, stability and qualification batch costs, one-time resourcing costs, regulatory and filing costs, capital investment, and inventory stock bridges.

Current wording

As part of our post-spinoff plan to further optimize our manufacturing and supply network, we will continue to separate our supply chain through planned exits from supply agreements with Merck through 2031. This will enable us to redefine our appropriate sourcing strategy, and move to fit-for-purpose supply chains, while focusing on delivering efficiencies. We anticipate continuing to incur costs associated with this separation, including but not limited to accelerated depreciation, exit premiums and fees, technology transfer costs, stability and qualification batch costs, one-time resourcing costs, regulatory and filing costs, capital investment, and inventory stock bridges.