Organon & Co.
For the period ended Sep 30, 2024. Filed Nov 1, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 1, 2024
OGN$13.87+0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0001821825-24-000083
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-01.
0001821825-24-000108
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 102 previous paragraphs and 112 current paragraphs.
47 unchanged; 48 reworded; 15 added; 5 removed; 2 previous and 2 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
Dermavant Sciences Ltd. (“Dermavant”)
Current report
On October 28, 2024, Organon acquired Dermavant, a company dedicated to developing and commercializing innovative therapeutics in immuno-dermatology. Dermavant’s novel product, Vtama® (tapinarof) cream, 1%, for the topical treatment of mild, moderate, and severe plaque psoriasis in adults, was approved by the U.S. Food and Drug Administration (FDA) in May 2022. It is currently being reviewed by the FDA for the treatment of atopic dermatitis, also known as eczema, in adults and children 2 years of age and older. Atopic dermatitis is one of the most common inflammatory dermatological conditions in adults, presenting a higher disease burden for women compared to men.
Current report
The transaction will be accounted for as an acquisition of a business. Consideration consists of an upfront payment of $175 million and a $75 million milestone payment upon regulatory approval, as well as payments of up to $950 million for the achievements of certain commercial milestones, tiered royalties on net sales, and the assumption of liabilities, including certain debt obligations, which would be accounted for at fair value on the acquisition date. Organon incurred costs associated with the transaction of approximately $4 million recognized in Selling, general and administrative expenses for the three and nine months ended September 30, 2024.
Current report
Suzhou Centergene Pharmaceuticals (“Centergene”)
Current report
In September 2024, we entered into license and supply agreements with Centergene acquiring the exclusive commercialization rights to its investigational asset, SJ02, a long-acting recombinant human follicle-stimulating hormone carboxyl-terminal peptide fusion protein (FSH-CTP) designed for controlled ovarian stimulation (COS) in combination with a gonadotropin-releasing hormone (GnRH) antagonist to facilitate the development of multiple follicles in women undergoing assisted reproductive technology (ART) programs. Under the terms of the agreement, we will pay $12 million of which $6 million will be paid in the fourth quarter of 2024 and $6 million is payable when we obtain the manufacturing license, which are refundable if the regulatory approval is not obtained or marketing authorization cannot be transferred, and additional regulatory and sales-based milestones of up to $170 million. We will recognize regulatory and sales-based milestones when the achievement is probable.
Current report
In August of 2024, we expanded the agreement with Lilly to become the sole distributor and promoter for Emgality in the following additional markets: Canada, Colombia, Israel, South Korea, Kuwait, Mexico, Qatar, Saudi Arabia, Taiwan, Turkey and the United Arab Emirates. We paid an upfront payment of $23 million for the expansion of territory upon closing of the transaction in August 2024, and recognize sales-based milestones when the achievement is probable. As of September 30, 2024, we recognized an additional intangible asset of $113 million, comprised of the $23 million upfront payment and $90 million related to the sales-based milestones that were deemed probable. The intangible asset will be amortized over 10 years.
Current report
•Nexplanon, due to increased demand, favorable price and discount rates in the United States and increased demand in international markets, partially offset by the timing of tenders in Latin America;
Current report
•Emgalityand Rayvow, due to the acquisition of the distribution and promotion rights from Lilly in 2024.
Current report
•Cozaar® (losartan) and Hyzaar® (losartan / hydrochlorothiazide) due to the unfavorable pricing in Japan.
Current report
•Nexplanon, due to increased demand, favorable price and discount rates in the United States and increased demand in international markets and our institutional business in Africa;
Current report
•Emgalityand Rayvow, due to the acquisition of the distribution and promotion rights from Lilly in 2024.
Current report
Combined global sales of Zetiaand Vytorin, medicines for lowering LDL cholesterol, increased 5% for the three months ended September 30, 2024, compared to 2023, primarily driven by increased demand in China partially offset by unfavorable pricing in Japan. Sales declined 9% for the nine months ended September 30, 2024, compared to 2023, primarily driven by the decrease in demand and unfavorable pricing in Japan, partially offset by increased demand in China.
Current report
Gross profit for the three and nine months ended September 30, 2024, compared to 2023, was impacted by increased sales due to volume, partially offset by unfavorable product mix and price, foreign exchange translation and higher inflation impacts to material and distribution costs.
Current report
Other expense decreased for the three and nine months ended September 30, 2024, compared to 2023.
Current report
In the third quarter of 2024, the Swiss tax authority confirmed to the Company the applicable useful life of an existing tax asset. As a result, the Company has now concluded it is more likely than not it will utilize the entirety of the tax asset. As such, the Company released a $210 million related valuation allowance.
Removed paragraphs (5)
Previous report
•Nexplanon, primarily due to favorable price and discount rates in the United States, an increase in demand in our institutional business in Africa, and increased demand in our international markets;
Previous report
•Nexplanon, primarily due to favorable price and discount rates in the United States, an increase in demand in our institutional business in Africa, increased demand in our international markets and customer buying patterns associated with our decision to forgo our normal Nexplanon list-price increase in 2023, which positively impacted the first quarter of 2024.
Previous report
•Zetia/Vytorin, primarily driven by the decrease in demand in Japan, the negative impact of competition and the phasing of shipments related to the implementation of our ERP system in several international markets.
Previous report
Combined global sales of Zetiaand Vytorin, medicines for lowering LDL cholesterol, declined 23% and 15% for the three and six months ended June 30, 2024, compared to 2023, respectively, primarily driven by the decrease in demand in Japan, the negative impact of competition and phasing of shipments related to the implementation of our ERP system in several international markets.
Previous report
Other expense increased for the three and six months ended June 30, 2024, compared to 2023.
Reworded paragraphs (48)
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,” “estimate,” “anticipate,” “plan,” “forecast,” “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, pricing pressures globally, including rules and practices of managed care groups, judicial decisions and governmental laws and regulations related to Medicare, Medicaid and health care reform, pharmaceutical reimbursement and pricing in general; an inability to fully execute on our product development and commercialization plans in the United States, Europe, and elsewhere internationally; an inability to adapt to the industry-wide trend toward highly discounted channels; changes in tax laws or other tax guidance which could adversely affect our cash tax liability, effective tax rates, and results of operations and lead to greater audit scrutiny; expanded brand and class competition in the markets in which Organon & Co. (“Organon,” the “Company,” “we,” “our,” or “us”) operates; global tensions, which may result in disruptions in the broader global economic environment; governmental initiatives that adversely impact our marketing activities, particularly in China; volatility in our stock price; political and social pressures, or regulatory developments, that adversely impact demand for, availability of, or patient access to contraception or fertility products; difficulties with performance of third parties we rely on for our business growth; the failure of any supplier to provide substances, materials, or services as agreed; the increased cost of supply, manufacturing, packaging, and operations; difficulties developing and sustaining relationships with commercial counterparties; competition from generic products as our products lose patent protection; any failure by us to obtain an additional period of market exclusivity in the United States for Nexplanon subsequent to the expiration of certain current patents in 2027; difficulties implementing or executing on our acquisition strategy or failure to recognize the benefits of such acquisitions; the impact of higher selling and promotional costs; the impact of cyberattacks or other events that may affect our information technology systems or those of third parties; and other factors discussed in our most recently filed Annual Report on Form 10-K and Current Reports on Form 8-K, including those discussed in…
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,” “estimate,” “anticipate,” “plan,” “forecast,” “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, pricing pressures globally, including rules and practices of managed care groups, judicial decisions and governmental laws and regulations related to Medicare, Medicaid and health care reform, pharmaceutical reimbursement and pricing in general; an inability to fully execute on our product development and commercialization plans in the United States, Europe, and elsewhere internationally; an inability to adapt to the industry-wide trend toward highly discounted channels; difficulties implementing or executing on our acquisition strategy, difficulties integrating such acquisitions (including our recent acquisition of Dermavant) or any other failure to recognize the benefits of such acquisitions; changes in tax laws or other tax guidance which could adversely affect our cash tax liability, effective tax rates, and results of operations and lead to greater audit scrutiny; expanded brand and class competition in the markets in which Organon & Co. (“Organon,” the “Company,” “we,” “our,” or “us”) operates; global tensions, which may result in disruptions in the broader global economic environment; governmental initiatives that adversely impact our marketing activities, particularly in China; volatility in our stock price; political and social pressures, or regulatory developments, that adversely impact demand for, availability of, or patient access to contraception or fertility products; recent Supreme Court decisions and other developments impacting regulatory agencies and their rule making, including related financial market reactions, tax planning and international trade practices; difficulties with performance of third parties we rely on for our business growth; the failure of any supplier to provide substances, materials, or services as agreed; the increased cost of supply, manufacturing, packaging, and operations; difficulties developing and sustaining relationships with commercial counterparties; competition from generic products as our products lose patent protection; any failure by us to obtain an additional period of market exclusivity in the United States for Nexplanon subsequent to the expiration of certain current patents in 2027; the impact of…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
In December 2023, we announced an agreement with Lilly to become the sole distributor and promoter of the migraine medicines Emgality and Rayvow in Europe. Lilly will remain the marketing authorization holder and will manufacture the products for sale. Under the terms of the agreement, we paid an upfront payment of $50 million, upon closing of the transaction in January 2024, and will recognize sales-based milestones when the achievement is probable. In the first quarter of 2024, we recognized an intangible asset of $220 million, comprised of the $50 million upfront payment and $170 million of sales-based milestones that were deemed probable. The intangible asset will be amortized over 10 years. As of June 30, 2024, we accrued $20 million in Accrued and Other current liabilities and $150 million in Other noncurrent liabilities related to the probable sales-based milestones.
Current wording
In December 2023, we announced an agreement with Lilly to become the sole distributor and promoter of the migraine medicines Emgality and Rayvow in Europe. Lilly will remain the marketing authorization holder and will manufacture the products for sale. Under the terms of the agreement, we paid an upfront payment of $50 million upon closing of the transaction in January 2024, and recognized sales-based milestones when the achievement was deemed probable. In the first quarter of 2024, we recognized an intangible asset of $220 million, comprised of the $50 million upfront payment and $170 million of sales-based milestones that were deemed probable. The intangible asset will be amortized over 10 years.
Previous wording
Worldwide sales were $1.6 billion for the three months ended June 30, 2024 and 2023, respectively. Worldwide sales were negatively impacted by approximately 2% or $28 million, due to unfavorable foreign exchange.
Current wording
Worldwide sales were $1.6 billion for the three months ended September 30, 2024 an increase of 4%, compared to 2023. Worldwide sales were negatively impacted by approximately 1% or $18 million, due to unfavorable foreign exchange.
Previous wording
•Hadlima, due to the launch in the United States in July 2023.
Current wording
•Hadlima, due to the launch in the United States in July 2023 and a modest increase in international markets; and
Previous wording
•Ontruzant, driven by increased demand due to a government tender in Brazil partially offset by the negative impact of unfavorable discount rates in the United States and lower demand in Europe.
Current wording
•Ontruzant, due to the timing of tenders in Brazil and lower demand in the United States and Europe; and
Previous wording
Worldwide sales were $3.2 billion for the six months ended June 30, 2024, an increase of 3%, compared to 2023. Worldwide sales during the six months ended June 30, 2024 were negatively impacted by approximately 2% or $58 million, due to unfavorable foreign exchange.
Current wording
Worldwide sales were $4.8 billion for the nine months ended September 30, 2024, an increase of 3%, compared to 2023. Worldwide sales during the nine months ended September 30, 2024 were negatively impacted by approximately 2% or $76 million, due to unfavorable foreign exchange.
Previous wording
Excluding foreign exchange, sales increases for the six months ended June 30, 2024 primarily reflect the performance of:
Current wording
Excluding foreign exchange, sales increases for the nine months ended September 30, 2024 primarily reflect the performance of:
Previous wording
•Diprospan™1 (betamethasone), due to recovery from the manufacturing issues resulting from the regulatory inspection finding at the Heist manufacturing location that impacted the manufacturing of selected injectable steroid brands in the first quarter of 2023 (the “Market Action”);
Current wording
•Diprospan™ 1(betamethasone), due to recovery from the manufacturing issues resulting from the regulatory inspection finding at the Heist manufacturing location that impacted the manufacturing of selected injectable steroid brands in the first quarter of 2023 (the “Market Action”); and
Previous wording
This performance was offset by decreases for the six months ended June 30, 2024 in:
Current wording
This performance was offset by decreases for the nine months ended September 30, 2024 in:
Previous wording
•Zetia® (ezetimibe), which is marketed as Ezetrol™ in most countries outside of the United States, and Vytorin® (ezetimibe / simvastatin), which is marketed as Inegy™ outside of the United States primarily driven by the decrease in demand in Japan, the negative impact of competition and the phasing of shipments related to the implementation of our Enterprise Resource Planning (“ERP”) system in several international markets.
Current wording
•Zetia® (ezetimibe), which is marketed as Ezetrol™in most countries outside the United States; Vytorin® (ezetimibe / simvastatin), which is marketed as Inegy™ outside of the United States, primarily driven by the decrease in demand and unfavorable pricing in Japan, partially offset by increased demand in China; and
Previous wording
•Cozaar® and Hyzaar® (losartan and losartan / hydrochlorothiazide), driven by the negative impact of volume-based procurement (“VBP”) in China.
Current wording
•Cozaar and Hyzaar, driven by the negative impact of volume-based procurement (“VBP”) in China and unfavorable pricing in Japan.
Previous wording
The loss of exclusivity (“LOE”) negatively impacted sales of certain of our products by approximately $7 million and $12 million during the three and six months ended June 30, 2024, compared to the three and six months ended June 30, 2023, respectively, based on the decrease in volume period over period, mainly impacting Atozet TM 1 (ezetimibe and atorvastatin) in Japan. VBP in China had a $6 million and $13 million negative impact on our sales during the three and six months ended June 30, 2024, compared to the three and six months ended June 30, 2023, respectively. We expect VBP to continue to impact our established brands product portfolio for the next several quarters.
Current wording
The loss of exclusivity (“LOE”) negatively impacted sales of certain of our products by approximately $3 million and $15 million during the three and nine months ended September 30, 2024, compared to the three and nine months ended September 30, 2023, respectively, based on the decrease in volume period over period, mainly impacting Atozet TM 1 (ezetimibe and atorvastatin) in Japan. VBP in China had a $13 million negative impact on our sales during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. VBP in China did not have an impact for the three months ended September 30, 2024. We expect VBP to continue to impact our established brands product portfolio for the next several quarters.
Previous wording
Our operations include a portfolio of products. Highlights of the sales of our products for the three and six months ended June 30, 2024 and 2023 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
Our operations include a portfolio of products. Highlights of the sales of our products for the three and nine months ended September 30, 2024 and 2023 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 Nexplanon, a single-rod subdermal contraceptive implant, increased 13% and 22% for the three and six months ended June 30, 2024, compared to 2023, respectively, primarily due to favorable price and discount rates in the United States, an increase in demand in our institutional business in Africa, and increased demand in our international markets. In addition, sales for the six months ended June 30, 2024, primarily related to customer buying patterns associated with our decision to forgo our normal Nexplanon list-price increase in 2023, which positively impacted the first quarter of 2024.
Current wording
Worldwide sales of Nexplanon, a single-rod subdermal contraceptive implant, increased 10% and 17% for the three and nine months ended September 30, 2024, compared to 2023, respectively, primarily due to increased demand, favorable price and discount rates in the United States and increased demand in international markets. In addition, sales for the three months ended September 30, 2024, were partially offset by the timing of tenders in Latin America, and sales for the nine months ended September 30, 2024, were impacted by an increase in demand in our institutional business in Africa.
Previous wording
Worldwide sales of NuvaRing, a vaginal contraceptive product, declined 36% and 29% for the three and six months ended June 30, 2024, compared to 2023, respectively, due to ongoing generic competition and the negative impact of increased government discount rates in the United States. We expect a continued decline in NuvaRing sales as a result of generic competition.
Current wording
Worldwide sales of NuvaRing, a vaginal contraceptive product, declined 45% and 34% for the three and nine months ended September 30, 2024, compared to 2023, respectively, due to ongoing generic competition and the negative impact of increased government discount rates in the United States. We expect a continued decline in NuvaRing sales as a result of generic competition.
Previous wording
Worldwide sales of Marvelon TM 1 (desogestrel and ethinyl estradiol pill) and Mercilon TM 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, increased 38% and 10% for the three and six months ended June 30, 2024, compared to 2023, respectively, as a result of increased demand in various international markets.
Current wording
Worldwide sales of Marvelon TM 1 (desogestrel and ethinyl estradiol pill) and Mercilon TM 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 months ended September 30, 2024, compared to 2023. Sales increased 6% for the nine months ended September 30, 2024, compared to 2023, as a result of increased demand in various international markets.
Previous wording
Worldwide sales of Follistim AQ, a fertility treatment, declined 11% and 13% for the three and six months ended June 30, 2024, compared to 2023, respectively, due to a one-time buy-in as a result of the exit of the Interim Operating Model Agreement in the United States with Merck & Co.,Inc. (“Merck”), during the fourth quarter of 2023.
Current wording
Worldwide sales of Follistim AQ, a fertility treatment, increased 16% for the three months ended September 30, 2024, compared to 2023, due to increased demand in the United States and launches in various international markets, partially offset by unfavorable discount rates in the United States. Sales declined 4% for the nine months ended September 30, 2024, compared to 2023, due to a one-time buy-in as a result of our exit from our Interim Operating Model Agreement in the United States with Merck & Co., Inc. (“Merck”), during the fourth quarter of 2023 and unfavorable discount rates in the United States, partially offset by increased demand in the United States and launches in various international markets.
Previous wording
Worldwide sales of ganirelix acetate injection, a fertility treatment, declined 20% and 12% for the three and six months ended June 30, 2024, compared to 2023, respectively, primarily due to generic competition.
Current wording
Worldwide sales of ganirelix acetate injection, a fertility treatment, increased 3% for the three months ended September 30, 2024, compared to 2023, primarily due to increased demand in the United States. Sales declined 7% for the nine months ended September 30, 2024, compared to 2023, primarily due to generic competition partially offset by increased demand in the United States.
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 31% and 52% for the three and six months ended June 30, 2024, compared to 2023, respectively. The sales increase is due to continued uptake in the United States following the Jada launch in early 2022.
Current 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 24% and 40% for the three and nine months ended September 30, 2024, compared to 2023, respectively. The sales increase is due to continued uptake in the United States following the Jada launch in early 2022.
Previous wording
Renflexisis a biosimilar to Remicade 2 (infliximab) for the treatment of certain autoimmune conditions. Sales declined 2% for the three months ended June 30, 2024, compared to 2023, driven primarily by an increase in discount rates in the United States, partially offset by continued demand growth in Canada. Sales increased 5% for the six months ended June 30, 2024, compared to 2023, driven primarily by continued demand growth in Canada and demand growth in the United States, partially offset by an increase in discount rates in the United States. We have commercialization rights to Renflexis in countries outside of Europe, Korea, China, Turkey, and Russia.
Current wording
Renflexisis a biosimilar to Remicade 2 (infliximab) for the treatment of certain autoimmune conditions. Sales increased 3% and 4% for the three and nine months ended September 30, 2024, compared to 2023, respectively, primarily due to continued demand growth in the United States and Canada, partially offset by unfavorable discount rates in the United States. We have commercialization rights to Renflexis in countries outside of Europe, Korea, China, Turkey, and Russia.
Previous 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 and six months ended June 30, 2024, compared to 2023, increased 46% and 62%, respectively, driven by increased demand due to a government tender in Brazil partially offset by the negative impact of unfavorable discount rates in the United States and lower demand in Europe. We have commercialization rights to Ontruzant in all countries except in 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 September 30, 2024, compared to 2023, declined 49%, due to the timing of tenders in Brazil and lower demand in the United States and Europe. Sales for the nine months ended September 30, 2024, compared to 2023, increased 15%, driven by increased demand as a result of tenders in Brazil partially offset by lower demand in the United States and Europe. We have commercialization rights to Ontruzant in all countries except in Korea and China.
Previous wording
Brenzys is a biosimilar to Enbrel 2 (etanercept) for the treatment of certain inflammatory diseases. Sales in the three months ended June 30, 2024, compared to 2023, remained relatively consistent. Sales in the six months ended June 30, 2024, compared to 2023, increased 13% driven by the timing of government orders in Brazil. We have commercialization rights to Brenzys in countries outside of the United States, Europe, Korea, China, and Japan.
Current wording
Brenzys is a biosimilar to Enbrel 2 (etanercept) for the treatment of certain inflammatory diseases. Sales in the three and nine months ended September 30, 2024, compared to 2023, increased 98% and 38%, respectively, driven by the timing of government orders in Brazil. We have commercialization rights to Brenzys in countries outside of the United States, Europe, Korea, China, and Japan.
Previous wording
Hadlima is a biosimilar to Humira 2 (adalimumab) for the treatment of certain autoimmune and autoinflammatory conditions. We have commercialization rights to Hadlima in countries outside of the EU, Korea, China, Turkey, and Russia. We recorded sales of $28 million and $58 million during the three and six months ended June 30, 2024, respectively, reflecting an increase due to the launch in the United States in July 2023. In addition, sales for the six months ended June 30, 2024 were impacted by a modest increase in international markets. 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. We have commercialization rights to Hadlima in countries outside of the EU, Korea, China, Turkey, and Russia. We recorded sales of $40 million and $98 million during the three and nine months ended September 30, 2024, respectively, reflecting an increase due to the launch in the United States in July 2023 and a modest increase in international markets. Hadlima is currently approved in the United States, Australia, Canada, and Israel.
Previous wording
Sales of Atozet, a medicine for lowering LDL cholesterol, declined 2% and remained consistent for the three and six months ended June 30, 2024, compared to 2023, respectively, primarily due to LOE in Japan and the timing of tenders in the Latin America region partially offset by increased demand in Europe. We anticipate LOE in certain markets in Europe to commence late in the third quarter of 2024.
Current wording
Sales of Atozet, a medicine for lowering LDL cholesterol, declined 1% and remained consistent for the three and nine months ended September 30, 2024, compared to 2023, respectively, primarily due to LOE in Japan and the timing of tenders in the
Previous wording
Combined global sales of Cozaar and Hyzaar, medicines for the treatment of hypertension, declined 16% and 19% for the three and six months ended June 30, 2024, compared to 2023, respectively, driven by the negative impact of VBP in China.
Current wording
Combined global sales of Cozaar and Hyzaar, medicines for the treatment of hypertension, declined 13% and 17% for the three and nine months ended September 30, 2024, compared to 2023, respectively, due to the unfavorable pricing in Japan. Sales for the nine months ended September 30, 2024 were impacted by VBP in China.
Previous wording
Worldwide sales of Singulair® (montelukast sodium), a once-a-day oral medicine for the chronic treatment of asthma and for the relief of symptoms of allergic rhinitis, increased 16% for the three months ended June 30, 2024, compared to 2023, due to increased demand in China and phasing of shipments related to the implementation of our ERP system in various international markets, partially offset by mandatory price decreases in Japan. Sales declined 5% for the six months ended June 30, 2024, compared to 2023, due to decreased demand and price decreases in Japan, partially offset by increased demand in China.
Current wording
Worldwide sales of Singulair® (montelukast sodium), a once-a-day oral medicine for the chronic treatment of asthma and for the relief of symptoms of allergic rhinitis, decreased 7% for the three months ended September 30, 2024, compared to 2023, due to unfavorable pricing in Japan and China. Sales decreased 5% for the nine months ended September 30, 2024, compared to 2023, due to decreased demand and price decreases in Japan.
Previous wording
Global sales of Nasonex® (mometasone), an inhaled nasal corticosteroid for the treatment of nasal allergy symptoms, declined 9% for the three months ended June 30, 2024, due to the phasing of shipments related to the implementation of our ERP system in various international markets. Sales remained consistent for the six months ended June 30, 2024, due to increased demand across our international markets offset by the phasing of shipments related to the implementation of our ERP system in various international markets.
Current wording
Global sales of Nasonex® (mometasone), an inhaled nasal corticosteroid for the treatment of nasal allergy symptoms, increased 5% and 1% for the three and nine months ended September 30, 2024, compared to 2023, respectively, due to increased demand across international markets partially offset by the phasing of shipments in various international markets.
Previous 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, remained relatively consistent for the three months ended June 30, 2024, compared to 2023. Sales increased 8% for the six months ended June 30, 2024, compared to 2023, primarily due to the favorable impact of increased demand in the United States and Canada.
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, remained relatively consistent for the three months ended September 30, 2024, compared to 2023. Sales increased 5% for the nine months ended September 30, 2024, compared to 2023, primarily due to the favorable impact of increased demand in the United States and Canada.
Previous wording
Sales of Arcoxia™¹ (etoricoxib), a medicine for the treatment of arthritis and pain, declined 7% for the three months ended June 30, 2024, compared to 2023, primarily due to a decrease in demand in various international markets. Sales remained consistent for the six months ended June 30, 2024, compared to 2023, primarily due to favorable pricing in the Asia Pacific region offset by a decrease in demand in various international markets and the impact of foreign exchange.
Current wording
Sales of Arcoxia™¹ (etoricoxib), a medicine for the treatment of arthritis and pain, increased 8% and 2% for the three and nine months ended September 30, 2024, compared to 2023, respectively, primarily due to increased demand in China and favorable pricing in the Asia Pacific region partially offset by a decrease in demand in various international markets.
Previous wording
Sales of Diprospan, a corticosteroid approved for treatment of a wide range of inflammatory conditions, increased 196% and 146% for the three and six months ended June 30, 2024, compared to 2023, respectively, due to recovery from the manufacturing issues resulting from the Market Action. In the first quarter of 2023, we resolved the regulatory inspection findings. We expect sales recovery to continue over the course of 2024.
Current wording
Sales of Diprospan, a corticosteroid approved for treatment of a wide range of inflammatory conditions, increased 19% and 78% for the three and nine months ended September 30, 2024, compared to 2023, respectively, due to recovery from the manufacturing issues resulting from the Market Action. In the first quarter of 2023, we resolved the regulatory inspection findings. We expect sales recovery to continue through the end of 2024.
Previous wording
Sales of Emgalityand Rayvow were $30 million and $40 million for the three and six months ended June 30, 2024, due to the acquisition of the distribution and promotion rights from Lilly in the first quarter of 2024.
Current wording
Sales of Emgalityand Rayvow were $29 million and $69 million for the three and nine months ended September 30, 2024, due to the acquisition of the distribution and promotion rights from Lilly in 2024.
Previous wording
Worldwide sales of Proscar® (finasteride), a medicine for the treatment of symptomatic benign prostate enlargement, for the three and six months ended June 30, 2024, compared to 2023, were substantially consistent.
Current wording
Worldwide sales of Proscar® (finasteride), a medicine for the treatment of symptomatic benign prostate enlargement, declined 8% and 6% for the three and nine months ended September 30, 2024, compared to 2023, respectively, due to decreased demand in China.
Previous wording
Cost of sales increased 4% and 9% for the three and six months ended June 30, 2024, compared to 2023, respectively, primarily due to unfavorable product mix, foreign exchange translation and higher inflation impacts to material and distribution costs.
Current wording
Cost of sales increased 8% and 9% for the three and nine months ended September 30, 2024, compared to 2023, respectively, primarily due to unfavorable product mix, foreign exchange translation and higher inflation impacts to material and distribution costs.
Previous wording
Selling, general and administrative expenses decreased 3% and 2% for the three and six months ended June 30, 2024, compared to 2023, respectively, due to lower costs associated with the implementation of our ERP system.
Current wording
Selling, general and administrative expenses decreased 22% and 9% for the three and nine months ended September 30, 2024, compared to 2023, respectively, due to the $80 million charge in 2023 related to the Microspherix legal matter and lower costs associated with the implementation of our Enterprise Resource Planning (“ERP”) system.
Previous wording
Research and development expenses decreased 9% and 11% for the three and six months ended June 30, 2024, compared to 2023, respectively, primarily due to lower personnel costs due to a reduction in headcount related to our restructuring initiatives. In addition, the six months ended June 30, 2024, were impacted by a decrease in clinical study activity.
Current wording
Research and development expenses decreased 19% and 14% for the three and nine months ended September 30, 2024, compared to 2023, respectively, primarily due to a decrease in clinical study activity and lower personnel costs due to a reduction in headcount related to our restructuring initiatives.
Previous wording
For the three months ended June 30, 2024, acquired in-process research and development and milestones of $15 million represent the research and development milestones of $5 million for Henlius and $10 million for Cirqle, which were determined to be probable of being achieved. For the six months ended June 30, 2024, acquired in-process research and development and milestones of $30 million represent the research and development milestones of $20 million for Henlius and $10 million for Cirqle, which were determined to be probable of being achieved. For the six months ended June 30, 2023 acquired in-process research and development and milestones of $8 million represents the upfront and development milestones related to the Claria transaction.
Current wording
For the three months ended September 30, 2024, acquired in-process research and development and milestones of $51 million primarily represent 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 represent 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. For the nine months ended September 30, 2023 acquired in-process research and development and milestones of $8 million represent the upfront and development milestones related to the Claria transaction.
Previous wording
For the six months ended June 30, 2024, we incurred $23 million of headcount-related restructuring expense related to the ongoing optimization of our internal operations, primarily the research and development function.
Current wording
For the nine months ended September 30, 2024, we incurred $23 million, of headcount-related restructuring expense related to the ongoing optimization of our internal operations, primarily the research and development function.
Previous wording
Interest expense remained consistent for the three and six months ended June 30, 2024, compared to 2023. Interest expense for the three and six months ended June 30, 2024 reflects the inclusion of approximately $4 million in debt issuance costs related to the refinancing of our long-term debt offset by lower interest rates on the refinanced debt and our cross-currency swaps. Beginning in May 2024, the difference between the interest rate received of 7.3125% and paid of 5.8330% under the cross-currency swap agreements is recorded in Interest expense.
Current wording
Interest expense for the three months ended September 30, 2024, compared to 2023, decreased 6% due to lower interest rates on the refinanced debt and our cross-currency swaps. Interest expense for the nine months ended September 30, 2024, compared to 2023, decreased 3% due to lower interest rates on the refinanced debt and our cross-currency swaps, partially offset by approximately $4 million in debt issuance costs related to the refinancing of our long-term debt. Beginning in May 2024, the difference between the interest rate received of 7.3125% and paid of 5.8330% under the cross-currency swap agreements is recorded in Interest expense.
Previous wording
For the three and six months ended June 30, 2024, the reduction in exchange losses was driven by less volatility in foreign exchange compared to the prior year and the favorable changes in spot rates of our forward contracts.
Current wording
For the three and nine months ended September 30, 2024, the reduction in exchange losses was driven by less volatility in foreign exchange compared to the prior year and the favorable changes in spot rates of our forward contracts.
Previous wording
The effective income tax rates were 16.0% and 14.4% for the six months ended June 30, 2024 and 2023, 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 2024 year-to-date effective tax rate which was driven by the favorable closure of the two non-US tax audits and a return to provision adjustment for the Switzerland entity.
Current wording
The effective income tax rates were (11.3)% and 16.1% for the nine months ended September 30, 2024 and 2023, 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 2024 year-to-date effective tax rate, which was driven by the favorable closure of the two non-US tax audits and a return to provision adjustment for the Switzerland entity.
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Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
As of September 30, 2024, we had accrued $20 million in Accrued and Other current liabilities and $240 million in Other noncurrent liabilities in total related to the probable sales-based milestones.
Current report — wording carried from elsewhere
Latin America region partially offset by increased demand in certain markets in Europe. We anticipate a significant decline in sales beginning in the fourth quarter of 2024 due to LOE, which occurred late in the third quarter, in certain markets in Europe.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
•Diprospan, due to recovery from the manufacturing issues resulting from the Market Action;
Previous report — wording carried elsewhere
Gross profit decreased 3% for the three months ended June 30, 2024, compared to 2023, respectively, primarily due to flat sales coupled with unfavorable product mix, foreign exchange translation and higher inflation impacts to material and distribution costs. Gross profit decreased 2% for the six months ended June 30, 2024, compared to 2023, respectively, primarily due to higher sales offset by unfavorable product mix, foreign exchange translation and higher inflation impacts to material and distribution costs.