Hello, and welcome to the Organon Fourth Quarter and Full Year 2025 Earnings Call and webcast. [Operator Instructions]. I would now like to turn the conference over to Jennifer Halchak, Vice President, Investor Relations. You may begin.

Thank you, operator. Good morning, everyone. With me today are Joe Morrissey, Organon's Interim Chief Executive Officer; and Matt Walsh, our Chief Financial Officer; Carrie Cox, Organon's Board Chair; and Juan Camilo Arjona Ferreira, Organon's Head of R&D, will also be joining for the Q&A portion of this call. Today, we are referencing a presentation that will be visible during this call for those of you on our webcast. This presentation will also be available following this call on the Events and Presentations section of our Organon Investor Relations website. Please reference Slides 2 and 3 for a couple of brief reminders. I would like to caution listeners that certain information discussed by management during this call will include forward-looking statements. Forward-looking statements can be identified because they do not relate strictly to historical or current facts and use words such as potential, should, will, continue, expects, believe, future, estimates, believes, outlook and other words of similar meaning. Actual results could differ materially from those stated or implied by forward-looking statements due to risks and uncertainties associated with the company's business, which are discussed in the company's filings with the Securities and Exchange Commission. This includes our most recent Form 10-K and Forms 10-Q and those amended forms. These statements are based on information as of today, February 12, 2026 and except as required by law, Organon undertakes no obligation to update or revise any of these forward-looking statements. In addition, we will discuss certain non-GAAP financial measures on this call, which should be considered a supplement to and not a substitute for financial measures prepared in accordance with GAAP. Descriptions of these measures and reconciliations to the comparable GAAP measures are included in today's earnings press release and conference call presentation, both of which are available on our Investor Relations website and have been furnished to the SEC on the current report on Form 8-K. I note that while our full year 2026 guidance measures other than revenue are provided on a non-GAAP basis, Organon does not provide GAAP financial measures on a forward-looking basis because we cannot predict with reasonable certainty and without unreasonable effort, the ultimate outcome of legal proceedings, unusual gains and losses, the occurrence of matters creating GAAP tax impacts and acquisition-related expenses. These items are uncertain, depend on various factors and could be material to our results computed in accordance with GAAP. I'd now like to turn the call over to Joe Morrissey.

Thank you, Jen. Beginning on Slide 4. In 2025, Organon delivered $6.2 billion in revenue and $1.9 billion of adjusted EBITDA. Revenue was down 3% on both a reported and ex exchange basis. Relative to where we began the year, our biosimilar franchise performed better than expected, driven by solid performance in Hadlima as well as contributions from new launches. Vtama delivered $128 million of global revenue in 2025 and Emgality and our fertility business also grew strongly in 2025. That performance helped to offset the continued impact of the LOE of Atozet and headwinds in other parts of the business that emerged during the year. Those include policy-related changes in the U.S. for Nexplanon and a revision to medical guidelines in certain international markets that deprioritize the use of montelukast, which impacted Singulair. Though Nexplanon had its challenges this year, the FDA approved our sNDA to extend the duration of Nexplanon from 3 to 5 years. The study supporting the approval enrolled a population of women with varying body mass indices, including women with overweight or obesity, a testament to Organon's commitment to inclusive and comprehensive women's health care. This is a meaningful milestone for Organon and the Nexplanon brand as it potentially broadens the addressable market for this key product. The approval also includes a new risk evaluation and mitigation strategy program that will enhance Organon's existing clinical training program and controlled distribution program, which has been in place since 2006. One of the most important decisions the company made in 2025 was to lower our dividend payout ratio and apply those excess funds to debt reduction. We also divested the Jada system, resulting in approximately $390 million in net proceeds that will help us to reduce net debt in 2026. Together, these decisions mark our commitment to…

Thank you, Joe. Beginning on Slide 5, let's talk about the main drivers of performance in women's health. Women's health was down 16% ex FX for the fourth quarter and down 2% for the year. Sales of Nexplanon decreased 20% ex FX in the fourth quarter and 4% for the full year, in line with what we discussed in November when we re-guided on the product. As we've talked about in previous quarters, in 2025, Nexplanon was impacted by several headwinds. Let's break it down between those we expect to continue versus those that we believe are onetime in nature. And starting with the onetime item. As we talked about last quarter, we expected an approximate $17 million negative impact in the fourth quarter related to the cessation of certain identified U.S. wholesaler sales practices identified in the Audit Committee's internal investigation disclosed in late October. The impact from that practice is contained to 2025. Now what do we think is likely to persist in 2026. We see 4 drivers. The first driver is in the U.S. and is macro in nature. Government policy-related access restrictions have impacted planned parenthood and federally qualified health centers where Nexplanon has a leading market share among LARCs, incorporated in our guidance is that this policy environment persists in 2026. The second driver. In 2025, we saw a developing weakness with smaller independent commercial clinics who are tightly managing their buy-and-bill purchasing with some choosing to switch to specialty pharmacy claims for each patient via assignment of benefits. While we expect this change to remain, we are actively engaging customers in this segment to support sustained and improved access to Nexplanon. Third driver. As we've discussed previously, in 2026, we will have a volume headwind from loss of reinsertions as we transition to the…

This is Carrie. Before we go to Q&A, I'd just like to say that we won't be able to answer any questions today regarding the topic referred to in our press release under other matters that was brought to the attention of the Audit Committee yesterday. With that, operator, we are ready to begin Q&A.

[Operator Instructions]. Your first question comes from Umer Raffat with Evercore ISI.

And Carrie I want to be respectful for what you just said, but not relating to that specific issue on what exactly the specifics are of the purchasing. My question is more higher level. Remember last quarter, I asked you how can one -- anyone know that the channel behavior issues were limited to Nexplanon? And why was the Audit Committee investigation so limited in its scope only to Nexplanon? And I remember at the time, you said it did span beyond look through other product areas and found nothing else. Today, we're learning there was another issue. And this time, it's biosimilars purchasing and that too because it was brought up, meaning 5 other things could be brought up. How can we know that a comprehensive review has been taken? It almost looks like there's an unwillingness by the Board and the leadership to actually solve this for once and do it the right way so we can move on and look at fundamentals and pay down all the $9 billion in debt.

Thanks, Umer. I'm sorry. We can't provide any additional color at this point.

The next question comes from Mike Nedelcovych with TD Cowen.

I have 2. My first is on the biosimilar portfolio. Back in October, as you know, FDA released draft guidance limiting the requirement for comparative efficacy studies for biosimilars. So I'm curious what you consider to be the status of this policy in the U.S. What's your interpretation of that guidance? And what impact should we expect it to have on Organon's business, for example, does it open the biosimilar floodgates and hugely boost margins? Or is it more of an incremental change? And then my second question is on your 2026 guidance. Can you provide any more detail on the Nexplanon contribution that's contemplated in your 2026 sales guidance and will launch of the longer-acting Nexplanon implant be accretive to total Nexplanon sales this year?

Mike, I think the first -- the first question on the biosimilars. We feel it would be more incremental. So we think our strategy with biosimilars is the right one of picking the right partners that are positioning their biosimilars in the right order of the ability to launch and building out those partnerships. We're excited about our opportunities in the U.S., continuing to grow Hadlima as well as with our launch of the denosumab biosimilars and expanding that in other markets around the world and continue to grow in that way. So we see that more incremental.

And on the second part of the question for 2026 guidance at Nexplanon, we believe Nexplanon will be roughly flat year-on-year. We've got pushes and pulls on the Nexplanon business. Ex U.S., the business will continue to grow nicely. We talked about improved access to Nexplanon in Latin American markets. In the United States, we'll have consistent with the launch of the 5-year label, we will have a bit of a dip due to no reinsertion. Roughly -- and we've said 10% to 15%, let's call it, 13% of insertions annually are actually reinsertions. So now with the move to 3 to 5 years, that will create a bit of an inflection point in volume there. And some of the channel issues that we experienced in the second half of the year will annualize. So net-net, the contribution of Nexplanon to our 2026 guidance is to summarize roughly the level with 2025. But we remain optimistic that the attractiveness of the 5-year label, especially for high BMI patients, and now with the duration making the product more attractive versus other long-acting reversible contraceptives, bode very well for the long-term growth of the product, both inside and outside the United States.

The next question comes from Jason Gerberry with Bank of America.

This is Bhavin Patel on for Jason. Two questions from us. So the first is you're guiding to a flat 2026 adjusted EBITDA of $1.9 billion, and we have $275 million in annualized cost savings from the reset flowing into the P&L. So I guess if we strip out those savings, the underlying EBITDA performance appears to be declining. Maybe if you can help us bridge where that $275 million benefit is being absorbed. Is it purely the 75 to 100 bps of gross margin deterioration? Or are there a massive onetime reinvestments into Vtama and Nexplanon REMS program? And then my second question is to double-click on this REMS program that launches in a couple of weeks with a 6-month grace period ending in August. So does your 2026 Nexplanon outlook assume any volume bottlenecks or certification friction in the second half of the year once that mandate is fully enforced? And maybe does the REMS mandate distributor registration potentially provide you with like a cleaner data to monitor the wholesaler days of coverage?

So I'll take the first part of the question, Juan Camilo can take the REMS question. So on the operating expense savings, the $275 million we referred to when we spoke earlier in the year was all related to gross takeouts that we were going after in sort of the base administrative and structural elements of our cost structure. That was the gross number we were going after. That enabled us to take a portion of that and reinvest it, for example, in increased enhanced promotional activity for Vtama. So when you asked the question, you essentially answered it by saying that some of that $275 million would be redirected to revenue growth opportunities. I'll take a step back and say that the management team here continues to go after OpEx very aggressively. We've built another round of OpEx savings into our 2026 guidance, not quite as large as the 2025 effort, but certainly in the same ballpark. And it's just essential that we continue to rightsize the operating expense footprint of the company in light of what's happening in terms of our gross margins being compressed. Now I'll turn the question over to Juan Camilo for REMS.

Yes. Thank you, Matt, and thanks, Jason. Yes. We are pretty confident that with this window that we have and the efforts that we have already planned, we will be able to recertify the prescribers that constantly use or loyalty use of Nexplanon. This physicians that have been already certified before will have a very small requirement that will take them around 15 to 20 minutes to be certified. So we are pretty confident that we'll be able to maintain the volume based on the retraining that I believe was your question. The other factors are the ones that Matt and Joe already covered.

The next question comes from Chris Schott with JPMorgan.

This is Ethan on for Chris. Maybe just building on the margin commentary, just maybe taking a step back, what are your latest thoughts on what operating costs and margins can look like over time from here? And then on Nexplanon, very helpful commentary on the headwinds going to the 5-year indication. Just maybe how long should we think about that headwind -- about the duration of that headwind? And are there any potential offsets via price there?

So the first part of the question relates to OpEx. And I think the challenge for the company as we've seen gross margins compress since the spin is to continue to streamline, make the business more efficient, get economies of scale where we can. And I just make the broad comment that it's incumbent upon us to continue to do that. And -- but at the same time, make sure that we are not sacrificing OpEx where it can draw a clear line to revenue growth and value creation in the top line. So I don't have a numerical answer to the question. What I have is the philosophy here that we are deploying -- have been deploying as we try and manage a bottom line that optimizes what our opportunity is. On the 5-year and the reinsertion, I think this year will be the most pronounced for it, 2026. We might be talking about reinsertion risk in 2027. It should be at a fairly significantly lower level than what we're talking about this year.

The next question comes from David Amsellem with Piper Sandler.

This is Alex on for David. The first one is, can you talk to the pressure on established brands and how we should think about key established brand segments, not only in 2026 but also beyond? And how you're thinking about potential trouble spots such as respiratory? And then on Vtama, how are you thinking about competitive dynamics for the product given that growth has been slower than topical roflumilast? So with that in mind, how are you thinking about your support of the product?

So the first part of that question -- go ahead, Joe.

Yes. Thanks, Matt. So I think, Alex, the first thing with the established brands, I think Matt said it in his commentary, right? We do think established brands are going to have some years where you have somewhat of a reset like we did with the respiratory in 2025 and then remaining backward flat. I think when we look at it, a lot of the respiratory risk, it may -- it will pull into this year but it's largely we're getting past that as well as some of the declines we had over the year and the prior year in Japan. And so when we look at them, the growth with products like Emgality plus Vtama and so forth, that's where we see stabilization in established brands, but it's still going to be somewhat chunky, I would say, in the future, where we'll have some challenges and then opportunities to offset that with growth. Matt, do you want to take Vtama?

Yes. So from a Vtama perspective, as it competes against steroidal nonsteroidal options, we see that 2026, the product is likely to grow in line with the other nonsteroidal topical. So in the 20%, 25% range year-on-year for Vtama. The only other thing I would add to Joe's comment on established brands is that we continue to add products there that capitalize on the global infrastructure that we have. So we -- the company made an announcement tail-end of last year that we will be marketing [ Nilemdo ] in the EU. Not a big product, but it can slide right in similar to Emgality, very little in the way of incremental operating expense necessary and once again, capitalizes on what's a unique asset and feature for Organon's business, which is this global infrastructure that enables us to sell either directly or directly into 140 countries around the globe.

The next question comes from Terence Flynn with Morgan Stanley.

Two for me. I was just wondering if you can give us any update on the search for a permanent CEO? And then the second one relates to the denosumab biosimilar that I know you guys launched end of December. I think Amgen has talked about being able to, on the Prolia side, at least, hold on some more share given they have Evenity as another option. So I guess as you think about your go-to-market strategy, on the denosumab biosimilar specifically for the osteoporosis setting. Anything you're doing differently to try to capture more share there?

So I can take the one on the CEO search. You might recall there was a special committee of the Board formed last year. We've had a very robust process underway, but there's no public update to share right now.

And as far as the denosumab question, I think let's just talk about what we should be modeling and how investors should be thinking about Organon's opportunity for that product. And like a lot of the biosimilar partnered opportunities that we have will be competing against highly competitive markets, both from a volume and price perspective when we think about what the peak revenues might be for that denosumab product over both reference products, it's on the order of $100 million in total, let's say, over about a 5-year time frame.

This concludes the question-and-answer session and we'll conclude today's conference call and webcast. Thank you for joining. You may now disconnect.