Merck & Co. Completes Spin-off of OrganonBy
Merck & Co. has completed the spin-off of its women’s health, legacy brands, and biosimilars businesses, into a new separate company, Organon & Co. Merck announced the spin-off last year (February 2020).
“Today [June 3, 2021] marks a significant milestone for both Merck and Organon,” said Rob Davis, President, Merck, in a June 3, 2021 company statement. “Organon is now an independent, publicly traded company with a broad portfolio of important medicines and products and is fully prepared to deliver sustainable growth and value. “With leadership in our growth pillars and our robust pipeline, Merck is well positioned for strong long-term growth, with scientific innovation remaining the source of our value creation.”
Merck’s goal with the spin-off was to create two patient-focused companies with enhanced strategic and operational focus, improved agility, simplified operating models, optimized capital structures, and improved financial profiles.
The spin-off is expected to allow Merck to increase its focus on key “growth pillars” in oncology, vaccines, hospital products, and animal health, achieve higher revenue and earnings-per-share growth rates and enable incremental operating efficiencies of approximately $1.5 billion, which are expected to be achieved ratably over three years, with approximately $500 million realized during 2021. In connection with the spin-off, Merck received a distribution from Organon of approximately $9 billion.
Merck’s key products include: Keytruda (pembrolizumab), an immuno-oncology drug; Lynparza (olaparib), an anticancer drug; Lenvima (lenvatinib mesylate), an anticancer drug; Gardasil (human papillomavirus vaccine, recombinant), a vaccine against cervical and other cancers; Bridion (sugammadex), a relaxant binding agent; Zerbaxa (ceftolozane and tazobactam), an antibiotic; and Bravecto (fluralaner), an animal health product; as well as its diabetes products and other key products.
Organon will focus on the area of women’s health, led by the company’s Nexplanon (etonogestrel implant) franchise and its contraceptive and fertility businesses. It will also consist of Merck’s biosimilar business, for which it is partnered with Samsung Bioepis, and its current portfolio. This includes: Renflexis (infliximab-abda), a biosimilar of Johnson & Johnson’s Remicade, an anti-inflammatory drug in multiple indications; Brenzys (etanercept), a biosimilar of Amgen’s Enbrel, an anti-inflammatory drug; and Ontruzant (trastuzumab-dttb), an oncology drug and a biosimilar of Roche’s Herceptin. Organon will also have a large portfolio of established brands consisting of dermatology, pain, respiratory, and select cardiovascular products, including the anti-cholesterol drugs, Zetia (ezetimibe) and Vytorin (ezetimibe/simvastatin) as well as the rest of Merck’s Diversified Brands.
Source: Merck & Co.