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Organon & Co. (“Organon” or the “Company”) is a global healthcare company with a mission to deliver impactful medicines and solutions for a healthier every day. With a portfolio of over 70 products across women’s health and general medicines, which includes biosimilars, Organon focuses on addressing health needs that uniquely, disproportionately or differently affect women, while expanding access to essential treatments in over 140 countries and territories. The Company sells 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. The Company operates six manufacturing facilities, which are located in Belgium, Brazil, Indonesia, Mexico, the Netherlands and the United Kingdom (“UK”). Unless otherwise indicated, trademarks appearing in italics throughout this document are trademarks of, or are used under license by, the Organon group of companies.

Organon’s operations include the following product portfolios:

•Women’s Health: Organon’s health portfolio of products is sold by prescription primarily in two therapeutic areas: contraception, with key brands such as Nexplanon® (etonogestrel implant) (sold as Implanon NXT™ in some countries outside the United States) and NuvaRing® (etonogestrel / ethinyl estradiol vaginal ring); and fertility, with key brands such as Follistim AQ® (follitropin beta injection) (marketed in most countries outside the United States as Puregon™). Nexplanon is a long-acting reversible contraceptive in a class recognized as one of the most effective types of hormonal contraception available to patients with a low long-term average cost. The Jada®2 device is intended to provide control and treatment of abnormal postpartum uterine bleeding or hemorrhage when conservative management is warranted. In January 2026, the Company divested the Jada® System to Laborie Medical Technologies Corporation (“Laborie”).

•General Medicines: Organon’s general medicines portfolio includes biosimilars and established brands.

•Biosimilars: Organon’s current biosimilars portfolio spans across immunology and oncology related treatments. Organon’s oncology biosimilars: Ontruzant® (trastuzumab-dttb), AybintioTM1 (bevacizumab), Bildyos® (denosumab-nxxp) and Bilprevda® (denosumab-nxxp) have been launched in more than 20 countries. Organon’s immunology biosimilars consist of: BrenzysTM1 (etanercept), Renflexis® (infliximab-abda), Hadlima® (adalimumab-bwwd) and Tofidence® (tocilizumab-bavi). Brenzys, Renflexis, and Hadlima have been launched in five countries. In 2025, Organon launched Bildyos injection 60 mg/mL and Bilprevda injection 120 mg/1.7 mL, biosimilars to Prolia2 (denosumab) and Xgeva2 (denosumab), respectively, in the United States. In 2025, Poherdy® (pertuzumab-dpzb) was approved by the U.S. Food and Drug Administration (“FDA”), and the Company is assessing the future commercial launch of this product.

•Established Brands: Organon has a portfolio of established brands, which includes brands in cardiovascular, respiratory, dermatology and non-opioid pain management, including Emgality®2 (galcanezumab-gnlm) and Vtama® (tapinarof) cream 1%. Many brands in the established brands portfolio lost exclusivity years ago and have faced generic competition for some time.

On April 26, 2026, the Company entered into a definitive agreement with Sun Pharmaceutical Industries Limited (“Sun Pharma”) under which Sun Pharma will acquire all of the Company’s outstanding shares of common stock for $14.00 per share in cash. Completion of the transaction is subject to customary closing conditions, including receipt of required regulatory approvals and approval by the Company’s stockholders. On July 23, 2026, the Company received stockholder approval at its special meeting of stockholders. The transaction is expected to close in early 2027.

The accompanying unaudited financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and disclosures required by GAAP for complete consolidated financial statements are not included herein. The results of operations for any interim period are not necessarily indicative of the results of operations for the full year. In the Company’s opinion, all adjustments necessary for a fair statement of these interim statements have been included and are of a normal and recurring nature. All intercompany transactions and accounts within Organon have been eliminated. These interim statements should be read in conjunction with the audited financial statements and notes thereto included in Organon’s Annual Report on Form 10-K for the year ended December 31, 2025.

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Use of Estimates

The presentation of these Condensed Consolidated Financial Statements and accompanying notes in conformity with GAAP require management to make estimates and assumptions that affect the amounts reported, as further described in the Annual Report on Form 10-K for the year ended December 31, 2025. Accordingly, actual results could differ materially from management’s estimates and assumptions.

Recently Issued Accounting Standards Not Yet Adopted

In October 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract. Among other things, the ASU adds the scope exception from derivative accounting for contracts that are not exchange-traded and have features based on operations or activities specific to one of the parties involved, reducing complexity and diversity in practice. The amendments in this ASU are effective for annual periods beginning on January 1, 2027, and should be applied on a prospective basis, with the option to apply the amendments on a modified retrospective basis; early adoption is permitted. The Company is currently assessing the impact of this ASU on its consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The amendments modernize the accounting for internal-use software to better reflect contemporary development practices, such as agile and iterative methodologies. Key changes include revised cost capitalization thresholds, enhanced guidance for assessing development uncertainty, and new disclosure requirements intended to improve transparency and consistency across entities. The amendments in this ASU are effective for annual periods beginning on January 1, 2028 and interim reporting periods within those periods, and may be applied either prospectively, retrospectively or on a modified retrospective basis; early adoption is permitted. The Company is currently assessing the impact of this ASU on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. The standard requires entities to disaggregate operating expenses into specific categories to provide enhanced transparency into the nature and function of expenses. This guidance is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. This guidance should be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the consolidated financial statements. This ASU will have no impact on the Company’s consolidated financial condition or results of operations. The Company is currently evaluating the effects of this guidance on its related disclosures.

Shanghai Henlius Biotech, Inc. (“Henlius”)

In the first quarter of 2026, in anticipation of the expected launch of HLX-11 in the United States, the Company entered into an agreement with Henlius that amended the terms of the existing license agreement to modify the previous commercial milestone payments. Under the amended agreement, the Company will make payments of $17 million total, with $10 million payable in December 2026, and $7 million, payable in February 2028. The Company capitalized the $17 million as an intangible asset.

In April 2026, the European Commission granted marketing authorization for Poherdy® (pertuzumab) 420 mg/14 mL injection for intravenous use, the first and only approved biosimilar to Perjeta2 (pertuzumab) in Europe, for all indications of the product. As a result, sales-based milestones related to the Henlius agreement were determined to be probable of being achieved and the Company recognized intangible assets of $10 million related to these milestones.

Sebela Pharmaceuticals (“Sebela”)

On February 19, 2026, Organon entered into an exclusive license agreement with Sebela for the global rights to Miudella®, a hormone-free copper intrauterine device (“IUD”) that was approved by the FDA on February 24, 2025. Under the terms of the agreement, Organon paid $27.5 million in June 2026, with potential sales-based milestone payments of up to $505 million, and tiered double-digit royalties based on net sales. In the second quarter of 2026, the Company recognized an intangible asset of $27.5 million. The intangible assets will be amortized over 8 years.

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Laborie Medical Technologies Corporation (“Laborie”)

In January 2026, the Company divested the Jada System to Laborie for an aggregate payment of up to $465 million, comprised of consideration of $440 million, subject to certain customary closing adjustments, including inventory value, plus potential contingent consideration payments of up to $25 million based on the achievement of certain 2026 net sales targets. Approximately 100 Company employees transferred to Laborie as part of this transaction.

Upon the closing of the divestiture, the Company recognized a net gain on the sale of the Jada System of $81 million recognized in Other expense (income), net in the Condensed Consolidated Statement of Income for the six months ended June 30, 2026.

As part of the divestiture of the Jada System in January 2026, the Company is eligible to receive potential contingent consideration of up to $25 million based on the achievement of certain net sales targets for the Jada System during 2026. This contingent consideration is recorded as a financial asset at fair value. The fair value of the contingent consideration was estimated using the projected future net sales of the Jada System and the probability of various achievement scenarios for the sales targets. See Note 11. “Financial Instruments” for further information.

In connection with the Jada divestiture, certain related assets and liabilities met the criteria for held for sale classification as of December 31, 2025. The disposal group is measured at the lower of carrying amount or fair value less cost to sell. No impairment was recognized.

Details of assets and liabilities held for sale as of December 31, 2025 are as follows:

Inventory						$	8
Assets held for sale						$	8
Goodwill						$	226
Intangible assets, net						164
Noncurrent assets held for sale						$	390
Accrued and other current liabilities						$	2
Liabilities held for sale						$	2
Deferred taxes						$	32
Noncurrent liabilities held for sale						$	32

Oss Biotech Site

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The calculations of basic and diluted EPS are as follows:

			Three Months Ended June 30,												Six Months Ended June 30,
($ in millions and shares in thousands, except per share amounts)			2026						2025						2026						2025
Net income			$	108					$	145					$	254					$	232
Basic weighted average number of shares outstanding			262,611						259,939						261,497						258,906
Stock awards and equity units (share equivalent)			7,838						217						5,182						1,678
Diluted weighted average common shares outstanding			270,449						260,156						266,679						260,584
EPS:
Basic			$	0.41					$	0.56					$	0.97					$	0.90
Diluted			$	0.40					$	0.56					$	0.95					$	0.89
Anti-dilutive shares excluded from the calculation of EPS			9,337						18,568						9,029						17,761

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Revenues of the Company’s products were as follows:

			Three Months Ended June 30,																																				Six Months Ended June 30,
			2026																		2025																		2026																		2025
($ in millions)			U.S.						Int’l						Total						U.S.						Int’l						Total						U.S.						Int’l						Total						U.S.						Int’l						Total
Women’s Health
Nexplanon/Implanon NXT			$	129					$	101					$	230					$	163					$	77					$	240					$	256					$	175					$	431					$	339					$	148					$	488
Follistim AQ			17						43						59						30						43						74						38						82						120						65						77						142
NuvaRing			9						18						27						7						21						28						14						37						51						13						37						50
Ganirelix Acetate Injection			2						24						26						3						25						27						4						48						52						7						47						54
Marvelon/Mercilon			—						32						32						—						33						33						—						58						58						—						72						72
Jada (3)			—						—						—						18						—						18						5						—						5						33						—						33
Other Women’s Health (1)			15						29						45						14						27						42						33						58						90						30						57						86
General Medicines
Biosimilars
Renflexis			44						21						65						46						17						63						87						36						122						90						30						120
Hadlima			55						24						79						36						14						50						106						40						146						69						27						96
Ontruzant			5						1						6						5						26						31						9						2						11						8						41						49
Brenzys			—						14						14						—						22						22						—						34						34						—						36						36
Bildyos/Bilprevda			14						5						19						—						—						—						20						15						35						—						—						—
Other Biosimilars (1)			10						2						12						3						4						7						15						5						20						3						10						13
Established Brands
Cardiovascular
Atozet			—						80						80						—						86						86						—						165						165						—						162						162
Zetia			2						95						96						1						72						74						3						181						183						3						156						159
Cozaar/Hyzaar			2						48						50						2						54						56						5						103						107						4						107						111
Vytorin			1						20						21						1						26						27						2						40						42						2						48						50
Rosuzet			—						5						5						—						6						6						—						11						11						—						10						10
Other Cardiovascular (1)			1						23						25						1						33						34						1						50						53						1						64						65
Respiratory
Singulair			2						46						48						2						64						66						4						84						88						4						136						140
Nasonex			—						58						58						—						66						66						—						123						123						—						137						137
Dulera			30						11						41						32						9						41						53						23						76						66						19						84
Clarinex			1						30						30						1						33						34						2						60						61						1						67						68
Other Respiratory (1)			16						1						18						11						3						14						27						3						30						21						6						27
Non-Opioid Pain, Bone and Dermatology
Arcoxia			—						69						69						—						63						63						—						128						128						—						124						124
Fosamax			1						24						25						—						34						34						1						53						54						2						65						67
Diprospan			—						44						44						—						41						41						—						79						79						—						71						71
Vtama			34						1						35						29						2						31						57						3						60						49						6						54
Other Non-Opioid Pain, Bone and Dermatology (1)			4						75						79						4						76						80						7						140						147						7						143						151
Other
Propecia			2						34						36						1						30						32						3						62						65						3						55						58
Emgality			—						54						54						—						42						42						—						108						108						—						74						74
Proscar			—						20						20						—						22						22						—						46						46						—						46						46
Other (1)			2						94						96						3						85						87						4						178						184						5						159						164
Other (2)			—						14						14						1						24						23						—						32						33						1						44						46
Revenues			$	398					$	1,160					$	1,558					$	414					$	1,180					$	1,594					$	756					$	2,262					$	3,018					$	826					$	2,281					$	3,107

Totals may not foot due to rounding. Trademarks appearing above in italics are trademarks of, or are used under license by, the Organon group of companies unless otherwise indicated.

(1) Includes sales of products not listed separately.

(2) Includes manufacturing sales to third parties.

(3) Jada is a trademark registered in the US in the name of Alydia Health, Inc.

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Revenues by geographic area where derived are as follows:

			Three Months Ended June 30,												Six Months Ended June 30,
($ in millions)			2026						2025						2026						2025
Europe and Canada			$	432					$	419					$	845					$	795
United States			398						414						756						826
Asia Pacific and Japan			232						250						457						502
China			208						204						402						409
Latin America, Middle East, Russia, and Africa			269						285						516						524
Other (1)			19						22						42						51
Revenues			$	1,558					$	1,594					$	3,018					$	3,107

(1) Includes manufacturing sales to third parties.

The Company grants stock option awards, restricted share units (“RSUs”), performance share units (“PSUs”), and cash awards pursuant to the 2021 Incentive Stock Plan.

Stock-based compensation expenses incurred by the Company were as follows:

			Three Months Ended June 30,												Six Months Ended June 30,
($ in millions)			2026						2025						2026						2025
Stock-based compensation expense recognized in:
Cost of sales			$	4					$	4					$	7					$	8
Selling, general and administrative			16						14						29						30
Research and development			5						4						8						8
Total			$	25					$	22					$	44					$	46
Income tax benefits			$	5					$	5					$	9					$	10

The fair value of options granted was determined using the following assumptions:

												Six Months Ended June 30,
												2025
Expected dividend yield												7.41		%
Risk-free interest rate												4.08
Expected volatility												40.25
Expected life (years)(1)												5.89

(1)The expected term was estimated using the historical option‑exercise and settlement patterns, supplemented by a midpoint‑based assumption applied to awards meeting a one‑year post‑grant eligibility filter.

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A summary of the equity award transactions for the six months ended June 30, 2026 is as follows:

			Stock Options																		RSUs												PSUs
(shares in thousands)			Shares						Weighted average exercise price						Weighted average grant date fair value						Shares						Weighted average grant date fair value						Shares						Weighted average grant date fair value
Outstanding as of January 1, 2026			7,519						$	27.30					$	6.99					9,716						$	15.35					589						$	23.61
Granted/Issued			—						—						—						13,585						6.02						2,128						8.27
Vested/Exercised			—						—						—						(3,497)						17.81						(193)						23.20
Forfeited/Cancelled			(2,299)						30.78						8.11						(1,053)						9.68						(140)						23.20
Outstanding as of June 30, 2026			5,220						$	25.76					$	6.50					18,751						$	8.45					2,384						$	9.98

The following table summarizes information about equity awards outstanding that are vested and expected to vest and equity awards outstanding that are exercisable as of June 30, 2026:

			Equity Awards Vested and Expected to Vest																								Equity Awards That are Exercisable
(awards in thousands; aggregate intrinsic value in millions)			Awards						Weighted Average Exercise Price						Aggregate Intrinsic Value						Remaining Term (in years)						Awards						Weighted Average Exercise Price						Aggregate Intrinsic Value						Remaining Term (in years)
Stock Options			5,126						$	25.76					$	—					6.23						3,949						$	29.00					$	—					5.49
RSUs			17,065												254						2.19
PSUs			2,328												36						2.22

The amount of unrecognized compensation costs as of June 30, 2026 was $162 million, which will be recognized in operating expense ratably over the weighted average vesting period of 2.16 years.

During the first quarter of 2026, the Company implemented restructuring initiatives that will result in an approximate 3% headcount reduction, to streamline and optimize the Company's research and development and manufacturing operations, focusing on enhancing efficiency and aligning resources with strategic priorities. The Restructuring costs primarily consist of employee termination benefits and other associated expenses.

During the first quarter of 2025, the Company implemented restructuring initiatives to drive an enterprise-wide operating model optimization that resulted in an approximate 6% headcount reduction. The restructuring activities were initiated to streamline and simplify the Company’s operating model to create more efficient processes and a simplified structure. Restructuring costs include separation costs associated with manufacturing-related headcount reductions.

The following is a summary of changes in severance liabilities related to the restructuring activities included within Accrued and other current liabilities:

						June 30, 2026						December 31, 2025
Beginning balance						$	8					$	14
Severance & severance related costs						31						95
Cash payments and other						(23)						(101)
Ending balance						$	16					$	8

Organon expects the remaining severance payments associated with the restructuring activities to be paid within the next twelve months.

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The effective income tax rates were 41.3% and 37.0% for the three months ended June 30, 2026 and 2025, respectively, and 36.0% and 29.8% for the six months ended June 30, 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 six month 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.

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 the Company’s U.S. cash tax liability and income tax provision primarily reflected as an increase in the Company’s interest expense limitation offset by a decrease in the Company’s foreign income inclusions.

Inventories consisted of:

($ in millions)			June 30, 2026						December 31, 2025
Finished goods			$	686					$	751
Raw materials			12						14
Work in process			845						791
Supplies			78						81
Total (approximates current cost)			$	1,621					$	1,637
Increase (Decrease) to last in, first out (“LIFO”) costs			3						5
			$	1,624					$	1,642
Recognized as:
Inventories			$	1,351					$	1,406
Other assets			273						236
Inventories valued under the LIFO method			155						114

In connection with the Jada divestiture in January 2026, $8 million of inventory was reclassified to Assets held for sale on the Consolidated Balance Sheet as of December 31, 2025.

As part of the Dermavant acquisition in 2024, the Company acquired $97 million of inventory, which included a $63 million purchase accounting inventory fair value adjustment. As of June 30, 2026, the amount has been fully expensed. As of December 31, 2025, there was $7 million remaining in inventory related to the fair value adjustment.

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Long-term debt and short-term borrowings consist of the following:

($ in millions)			June 30, 2026						December 31, 2025
Senior Credit Agreement
Term Loan B Facility:
SOFR plus 225 bps term loan due 2031			$	1,522					$	1,543
EURIBOR plus 275 bps euro-denominated term loan due 2031 (€707 million in 2026 and €717 million in 2025)			806						843
4.125% secured notes due 2028			2,100						2,100
2.875% euro-denominated secured notes due 2028 (€1.25 billion)			1,425						1,470
5.125% notes due 2031			1,582						1,582
6.750% secured notes due 2034			500						500
7.875% notes due 2034			500						500
Revenue Interest Purchase and Sale Agreement (1)			182						179
Other borrowings			8						8
Other (discounts and debt issuance costs)			(72)						(81)
Total principal long-term debt and short-term borrowings			$	8,553					$	8,644
Less: Current portion of long-term debt and short-term borrowings			74						16
Total Long-term debt, net of current portion			$	8,479					$	8,628

(1) Recognized at the amortized cost basis. The remaining principal is determined as the initial fair value less principal payments. As of June 30, 2026, the remaining principal of the revenue interest purchase and sale agreement (the “RIPSA”) that the Company assumed in connection with its 2024 acquisition of Dermavant is $156 million.

The nature and terms of Organon’s long-term debt are described in detail in Note 12. “Long-Term Debt and Leases” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

On February 6, 2026, the Company made mandatory prepayments from the proceeds of the Jada System divestiture of $20.4 million on the U.S. Dollar Term Loans and €9.6 million on the Euro Term Loan Facility. Additional mandatory prepayments totaling $55 million are required across the Company’s senior secured notes within 450 days of the January 2026 closing of the Jada System divestiture.

For the six months ended June 30, 2026, the Company had no borrowings or repayments on the Company’s Revolving Credit Facility (the “Revolving Credit Facility”). There were no outstanding balances under the Revolving Credit Facility as of June 30, 2026 or December 31, 2025.

Long-term debt was recorded at the carrying amount. The estimated fair value of long-term debt (including current portion) is as follows:

($ in millions)						Fair Value Measurement Level						June 30, 2026						December 31, 2025
Long-term debt						2						$	8,438					$	7,922
Long-term debt - RIPSA						3						134						136

Level 2 was estimated using inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the liability. Level 3 was estimated using unobservable inputs.

The Company made interest payments related to its debt instruments of $209 million for the six months ended June 30, 2026. The average maturity of the Company’s long-term debt as of June 30, 2026 is approximately 4.1 years and the weighted-average interest rate on total borrowings as of June 30, 2026 is 4.9%.

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The schedule of principal payments required on long-term debt and short-term borrowings for the next five years, exclusive of $26 million of accrued interest related to the RIPSA, and thereafter are as follows:

($ in millions)
2026			$	1
2027			61
2028			3,486
2029			9
2030			21
Thereafter			5,021

The Senior Credit Agreement contains customary financial covenants, including a total leverage ratio covenant, which measures the ratio of (i) consolidated total debt to (ii) consolidated earnings before interest, taxes, depreciation and amortization, and subject to other adjustments, that must meet certain defined limits which are tested on a quarterly basis. In addition, the Senior Credit Agreement contains covenants that limit, among other things, Organon’s ability to prepay, redeem or repurchase its subordinated and junior lien debt, incur additional debt, make acquisitions, merge with other entities, pay dividends or distributions, redeem, or repurchase equity interests, and create or become subject to liens. As of June 30, 2026, the Company is in compliance with all financial covenants, and no default or event of default has occurred.

The Company measures fair value based on the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used to measure fair value. These tiers include Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The following financial instruments were recorded at their estimated fair value. The recurring fair value measurement of the assets and liabilities was as follows:

($ in millions)			Fair Value Measurement Level						June 30, 2026						December 31, 2025
Other current assets:
Forward contracts			2						$	16					$	12
Contingent consideration(a)			3						9						—
Accrued and other current liabilities:
Forward contracts			2						18						11
Other noncurrent liabilities:
Contingent consideration			3						273						269
Cross-currency swap			2						58						82

(a) As part of the divestiture of the Jada System in January 2026, the Company is eligible to receive potential contingent consideration based on the achievement of certain net sales targets for the Jada System during 2026. See Note 3. “Acquisitions and Licensing Arrangements” for further information.

Foreign Currency Risk Management

The Company uses a balance sheet risk management program to partially mitigate the exposure of net monetary assets of its subsidiaries that are denominated in a currency other than a subsidiary’s functional currency from the effects of volatility in foreign exchange. In these instances, Organon principally utilizes forward exchange contracts to partially offset the effects of exchange on exposures denominated in developed country currencies, primarily the euro, Swiss franc, and Canadian dollar. For exposures in developing country currencies, the Company enters into forward contracts to partially offset the effects of exchange on exposures when it is deemed economical to do so based on a cost-benefit analysis that considers the magnitude of the exposure, the volatility of the exchange rate and the cost of the hedging instrument.

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Forward Contracts

Monetary assets and liabilities denominated in a currency other than the functional currency of a given subsidiary are remeasured at spot rates in effect on the balance sheet date with the effects of changes in spot rates reported in Exchange losses (gains) in the Condensed Consolidated Statements of Income. The forward contracts are not designated as hedges and are marked to market through Exchange losses (gains) in the Condensed Consolidated Statements of Income. Accordingly, fair value changes in the forward contracts help mitigate the changes in the value of the remeasured assets and liabilities attributable to changes in foreign currency exchange rates, except to the extent of the spot-forward differences. These differences are not significant due to the short-term nature of the contracts, which typically have average maturities at inception of less than one year. The notional amount of forward contracts was $1.6 billion and $1.7 billion as of June 30, 2026 and December 31, 2025, respectively. The cash flows and the related gains and losses from these contracts are reported as Operating activities in the Condensed Consolidated Statements of Cash Flows.

Net Investment Hedge

Euro-denominated debt instruments

Foreign exchange risk is also managed through the use of economic hedges on foreign currency balances. €707 million of the euro-denominated term loan and €1.25 billion of the 2.875% euro-denominated secured notes have been designated and are effective as a hedge of the net investment in euro-denominated subsidiaries. See Note 10 “Long-Term Debt and Short-Term Borrowings” for additional details.

Cross-currency swaps

The Company entered into cross-currency swaps that mature in 2029. The Company elected to designate the fixed-for-fixed swaps as a hedge of the net investment in euro-denominated subsidiaries balance and the change in the fair value attributable to the changes in the spot rate is recorded in Other Comprehensive Income (Loss), Net of Taxes. Throughout the term of the swaps, the Company will pay a fixed interest rate of 5.8330% based on the Euro notional amount of €922 million and receive a fixed interest rate of 7.3125% based on the U.S. dollar notional amount of $1 billion. The notional amount based on the Euro leg of the cross-currency swaps has been designated and is effective as a hedge of the net investment in euro-denominated subsidiaries. The difference between the interest rate received and paid under the cross-currency swap agreements is recorded in Interest expense in the Condensed Consolidated Statements of Income. The cash flows and the related gains and losses from the periodic settlements of the cross-currency swaps are reported as Operating Activities in the Condensed Consolidated Statements of Cash Flows.

Foreign currency gain (loss) due to spot rate fluctuations on the euro-denominated debt instruments and the change in fair value of the cross-currency swaps resulting from hedge designation were included within Cumulative translation adjustment in Other comprehensive income (loss), net of taxes:

			Three Months Ended June 30,												Six Months Ended June 30,
($ in millions)			2026						2025						2026						2025
Euro-denominated debt instruments gain (loss)			$	22					$	(179)					$	71					$	(249)
Cross-currency swaps (loss) gain			(3)						(104)						24						(129)

The Condensed Consolidated Statements of Income include the impact of net (gains) losses of Organon’s derivative financial instruments:

			Three Months Ended June 30,												Six Months Ended June 30,
($ in millions)			2026						2025						2026						2025
Derivative loss (gain) in Exchange losses (gains)			$	13					$	(17)					$	25					$	(19)
Derivative gain in Interest expense			(3)						(1)						(5)						(5)

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Contingent Consideration

The fair value measurement of contingent consideration arising from business combinations is determined via probability-weighted cash flows using a Monte Carlo simulation model, which are then discounted to present value. These inputs may include: (i) the estimated amount and timing of projected cash flows, (ii) the probability of the achievement of the factor(s) on which the contingency is based and (iii) the risk-adjusted discount rate used to present value the probability-weighted cash flows. Significant increases or decreases in any of those inputs in isolation could result in a significantly higher or lower fair value measurement. At June 30, 2026, the fair value measurements of acquisition-related contingent consideration were determined using discount rates ranging from 5.91% to 7.15%.

The following table presents a reconciliation of contingent consideration measured on a recurring basis using significant unobservable inputs (Level 3):

($ in millions)						June 30, 2026
Beginning balance						$	269
Accretion and changes in fair value in Other expense (income), net						4
Ending balance						$	273

In the first quarter of 2026, the Company identified an approximate $12 million error related to the fair value remeasurement of tax‑related contingent consideration, including expected net operating loss utilization. An adjustment was recorded to increase Other (income) expense, net during the first quarter of 2026 and relates to amounts that should have been reflected in the fourth quarter of 2025. The contingent consideration liability is appropriately stated as of June 30, 2026. The error was determined not to be material to the current or previously issued financial statements.

Concentrations of Credit Risk

Organon has established accounts receivable factoring agreements with financial institutions in certain countries to sell accounts receivable. Under these agreements, Organon factored $216 million and $217 million of accounts receivable as of June 30, 2026 and December 31, 2025, respectively, which reduced outstanding accounts receivable. The cash received from the financial institutions is reported within Operating Activities in the Condensed Consolidated Statements of Cash Flows. The cost of factoring such accounts receivable was not material for the six months ended June 30, 2026 and 2025.

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Changes in Accumulated other comprehensive income (loss) by component are as follows:

($ in millions)			Employee Benefit Plans						Cumulative Translation Adjustment						Accumulated Other Comprehensive Income (Loss)
Balance at April 1, 2025, net of taxes			$	(17)					$	(600)					$	(617)
Other comprehensive income, pretax			—						45						45
Tax			—						—						—
Other comprehensive income, net of taxes			—						45						45
Balance at June 30, 2025, net of taxes			$	(17)					$	(555)					$	(572)
Balance at April 1, 2026, net of taxes			$	5					$	(544)					$	(539)
Other comprehensive loss, pretax			—						(9)						(9)
Tax			—						—						—
Other comprehensive loss, net of taxes			—						(9)						(9)
Balance at June 30, 2026, net of taxes			$	5					$	(553)					$	(548)
Balance at January 1, 2025, net of taxes			$	(17)					$	(632)					$	(649)
Other comprehensive income, pretax			—						77						77
Tax			—						—						—
Other comprehensive income, net of taxes			—						77						77
Balance at June 30, 2025, net of taxes			$	(17)					$	(555)					$	(572)
Balance at January 1, 2026, net of taxes			$	4					$	(531)					$	(527)
Other comprehensive income (loss), pretax			1						(22)						(21)
Tax			—						—						—
Other comprehensive income (loss), net of taxes			1						(22)						(21)
Balance at June 30, 2026, net of taxes			$	5					$	(553)					$	(548)

The Company is party to a Development and Commercialization Agreement (the “Samsung Agreement”) with Samsung Bioepis Co., Ltd. (“Samsung Bioepis”) to develop and commercialize multiple pre-specified biosimilar candidates, which have since launched and are part of the Company's product portfolio.

On May 22, 2026, the Samsung Agreement was amended to include commercialization rights for Pyzchiva®2 (ustekinumab biosimilar) in Canada. Samsung Bioepis retains full development, manufacturing, and regulatory responsibilities (“Amendment No. 8”).

On May 26, 2026, the Samsung Agreement was amended to extend commercialization rights for certain biosimilar products, including Renflexis and Brenzys, in specified markets for up to seven years beyond the original contract term (“Amendment No. 9”).

In connection with Amendment No. 9, the Company is required to make fixed payments totaling $30 million over a nine-year period from 2026 through 2034. The Company recorded an intangible asset and corresponding liability of $20.8 million, the present value of the future payments. The intangible asset will be amortized over nine years.

The liability is accreted to its contractual value over time using the effective interest method, with accretion recognized within Interest expense to reflect the nature of the underlying arrangement.

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Amendment No. 9 also includes the return of commercialization rights to Samsung for certain oncology biosimilars, including Ontruzant and Aybintio, in specified ex‑U.S. markets such as Europe, Canada, and Brazil. These returns of rights are subject to defined, phased transition and cutover periods extending from 2026 through 2029, during which the Company may continue to commercialize products and fulfill contractual obligations.

On June 2, 2026, the Samsung Agreement was amended to include commercialization rights for Epyztek®2 in Australia. Samsung Bioepis retains full development, manufacturing, and regulatory responsibilities (“Amendment No. 10”).

Under the broader agreement, Samsung Bioepis is responsible for preclinical and clinical development, process development and manufacturing, clinical trials and registration of product candidates, and the Company has an exclusive license for worldwide commercialization with certain geographic exceptions specified on a product-by-product basis. The Company's access rights to each product under the agreement last for 10 years from each product's launch date on a market-by-market basis. Gross profits are shared equally in all markets with the exception of certain markets in Brazil where gross profits are shared 65% to Samsung Bioepis and 35% to the Company. Since the Company is the principal on sales transactions with third parties, the Company recognizes sales, cost of sales and selling, general and administrative expenses on a gross basis. Generally, profit sharing adjustments are recorded either to Cost of sales (after commercialization) or Selling, general and administrative expenses (prior to commercialization).

Summarized information related to this collaboration is as follows:

			Three Months Ended June 30,												Six Months Ended June 30,
($ in millions)			2026						2025						2026						2025
Sales			$	166					$	170					$	318					$	311
Cost of sales			100						102						191						192
Selling, general and administrative			18						20						36						38

($ in millions)			June 30, 2026						December 31, 2025
Payables to Samsung included in Trade accounts payable			161						94

On June 2, 2021, Organon and Merck entered into a Separation and Distribution Agreement (the “Separation and Distribution Agreement”). Pursuant to the Separation and Distribution Agreement, Merck agreed to spin off the Organon products into Organon, a new, publicly-traded company (the “Separation”).

The Separation was completed pursuant to the Separation and Distribution Agreement and other agreements with Merck related to the Separation. As of June 30, 2026, only one jurisdiction remains under an Interim Operating Model Agreement.

Under the manufacturing and supply agreements, the Company manufactures certain products for Merck, or its applicable affiliate, and Merck manufactures certain products for the Company, or its applicable affiliate. For details on the rights and responsibilities of the parties under the agreements, refer to Note 17 “Third-Party Arrangements” to the audited Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

The amounts due under such agreements were:

($ in millions)			June 30, 2026						December 31, 2025
Due from Merck in Accounts receivable			$	143					$	98
Due to Merck in Accounts payable			374						337

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Sales and cost of sales resulting from the manufacturing and supply agreements with Merck were:

			Three Months Ended June 30,												Six Months Ended June 30,
($ in millions)			2026						2025						2026						2025
Sales			$	13					$	19					$	26					$	37
Cost of sales			10						16						21						32

Organon is involved in various claims and legal proceedings of a nature considered normal to its business, including product liability, intellectual property, and commercial litigation, as well as certain additional matters including governmental and environmental matters.

Organon records accruals for contingencies when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted periodically as assessments change or additional information becomes available. Individually significant contingent losses are accrued when probable and reasonably estimable. Legal defense costs expected to be incurred in connection with a loss contingency are accrued when probable and reasonably estimable.

Given the nature of the litigation discussed in this note and the complexities involved in these matters, Organon is unable to reasonably estimate a possible loss or range of possible loss for such matters until Organon knows, among other factors, (i) which claims, if any, will survive dispositive motion practice, (ii) the extent of the claims, including the size of any potential class, particularly when damages are not specified or are indeterminate, (iii) how the discovery process will affect the litigation, (iv) the settlement posture of the other parties to the litigation, and (v) any other factors that may have a material effect on the litigation.

Organon’s decision to obtain insurance coverage is dependent on market conditions, including cost and availability, existing at the time such decisions are made. Organon has evaluated its risks and has determined that the cost of obtaining product liability insurance outweighs the likely benefits of available coverage and, as such, has no insurance for most product liabilities.

Reference is made below to certain litigation in which Merck, but not Organon, is named as a defendant. Pursuant to the Separation and Distribution Agreement, Organon is required to indemnify Merck for liabilities relating to, arising from, or resulting from such litigation.

Product Liability Litigation

Fosamax

Merck is a defendant in product liability lawsuits in the United States involving Fosamax® (alendronate sodium) (the “Fosamax Litigation”). As of June 30, 2026, the Fosamax Litigation comprises approximately 498 cases in Federal court, approximately 1,478 cases in New Jersey state court, one case in Pennsylvania state court and approximately 149 cases in California state court. Plaintiffs in the vast majority of these cases generally allege that they sustained femur fractures and/or other bone injuries (“Femur Fractures”) associated with the use of Fosamax.

All federal cases alleging femur fractures have been transferred to a multidistrict litigation in the U.S. District Court for the District of New Jersey (the “Femur Fracture MDL”) where the only bellwether case tried to date, Glynn v. Merck, resulted in a verdict in Merck’s favor. Although many cases were previously dismissed on federal preemption grounds, subsequent appellate rulings — including a September 2024 Third Circuit decision and the U.S. Supreme Court’s June 2025 denial of certiorari — resulted in those cases being reinstated and proceeding before the court.

In New Jersey state court, the cases have been consolidated before a single judge in Middlesex County. On July 28, 2025, the Company entered into a Master Settlement Agreement with the New Jersey state and federal plaintiffs’ lawyers who represent eligible clients (“NJ MSA Attorneys”), pursuant to which, in exchange for a confidential, but non-material settlement payment, at least 95% of the NJ MSA Attorneys’ eligible clients will release the Company and Merck from any liability related to their filed claims.

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In California state court, the cases have been consolidated before a single judge in Orange County, California. In the only bellwether case tried to date in California, Galper v. Merck, the jury returned a verdict in Merck’s favor. On February 18, 2026, the Company entered into a Master Settlement Agreement with the California plaintiffs’ lawyers and claimants pursuant to which, in exchange for a confidential, non-material settlement payment, at least 95% of the claimants will release the Company and Merck from any liability related to their claims.

Nexplanon/Implanon

Merck is a defendant in lawsuits brought by individuals relating to the use of Nexplanon and Implanon™ (etonogestrel implant). There are two filed product liability actions involving Implanon, both of which are pending in the Northern District of Ohio as well as 56 unfiled cases involving Implanon alleging similar injuries, all of which have been tolled under a written tolling agreement. There is one matter involving Nexplanon pending in California state court. On March 12, 2026, the Company signed a Master Settlement Agreement with the attorneys representing plaintiffs and all but two of the claimants with unfiled cases, pursuant to which, in exchange for a confidential, but non-material settlement payment, 56 plaintiffs and claimants will release the defendant parties from any liability for their filed and unfiled claims. As of June 30, 2026, Merck had 19 of such cases pending outside the United States, of which seven relate to Implanon and twelve relate to Nexplanon.

Securities and Stockholder Derivative Litigation

On May 27, 2025, a stockholder filed a lawsuit against the Company and certain of its officers on behalf of a putative class of stockholders who acquired Company shares between October 31, 2024 and April 30, 2025. A separate stockholder suit was filed on July 8, 2025 on behalf of a putative class of stockholders who acquired Company shares between November 3, 2022 and April 30, 2025. Both actions allege that the defendants made materially false and misleading statements regarding the Company’s capital allocation strategy, including through the use of quarterly dividends, and its debt reduction strategy.

The court consolidated the securities class actions on March 6, 2026 and appointed Teamsters Local 710 Pension Fund (the “Lead Plaintiff”) as the lead plaintiff. On May 8, 2026, the Lead Plaintiff filed an amended complaint that contained allegations similar to those raised in the complaints filed in the original, individual actions. The amended complaint also raised allegations relating to the Nexplanon matter (defined below). The amended complaint seeks unspecified monetary damages. On May 29, 2026, the Lead Plaintiff informed the defendants that it intended to file a second amended complaint and on June 17, 2026, the court entered an order setting the Company’s time to answer, move or otherwise respond as 60 days from the later of the date on which the court denies the Lead Plaintiff’s motion to file a second amended complaint or the date on which the Lead Plaintiff files a second amended complaint.

The same alleged misconduct also forms the basis of two stockholder derivative lawsuits filed against the Company, and certain of its officers and directors asserting breach of fiduciary duties arising from purportedly materially false and misleading statements. On July 7, 2025, the court consolidated each of the stockholder derivative lawsuits. Subsequently, on September 8, 2025, the court stayed the proceedings pending the final resolution of all motions to dismiss filed in the securities lawsuits.

All of the foregoing actions were filed in the U.S. District Court for the District of New Jersey and seek unspecified monetary damages and other relief.

Governmental Proceedings

From time to time, Organon and its subsidiaries receive inquiries and may be the subject of preliminary investigation activities from competitors and/or governmental authorities, including in markets outside the United States. These authorities may include regulators, administrative authorities, and law enforcement and other similar officials, and these preliminary investigation activities may include site visits, formal or informal requests or demands for documents or materials, inquiries or interviews and similar matters. Certain of these preliminary inquiries or activities may lead to the commencement of formal proceedings. Should those proceedings be determined adversely to Organon, monetary fines and/or remedial undertakings may be required. Subject to certain exceptions specified in the Separation and Distribution Agreement, Organon assumed liability for all pending and threatened legal matters related to products transferred from Merck to Organon in connection with the spinoff, including competition investigations resulting from enforcement activity concerning Merck’s conduct involving Organon’s products. Organon could be obligated to indemnify Merck for fines or penalties, or a portion thereof, resulting from such investigations.

On October 26, 2025, Organon made a voluntary self-disclosure to the U.S. Securities and Exchange Commission (the “SEC”) to advise it of an investigation conducted by the Audit Committee of the Company’s Board of Directors (the “Audit Committee”) regarding the Company’s Nexplanon sales to certain wholesalers in the United States (the “Nexplanon Matter”).

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The SEC subsequently opened an investigation into the Nexplanon Matter, and the Company intends to cooperate with any inquiries from the SEC or any other regulatory authorities. The Company cannot guarantee that it (or its directors or officers) will not be subject to future inquiries, investigations, claims, actions, or proceedings relating to the Nexplanon Matter, nor can it predict the outcome of any of the foregoing; however, regardless of outcome, any inquiries, investigations, claims, actions, or proceedings relating to the Nexplanon Matter would likely consume a significant amount of Company resources and result in considerable legal and other costs.

Patent Litigation

From time to time, generic manufacturers of pharmaceutical products file Abbreviated New Drug Applications with the FDA seeking to market generic forms of Organon’s products prior to the expiration of relevant patents owned by Organon. To protect its patent rights, Organon may file patent infringement lawsuits against such generic companies. Similar lawsuits defending Organon’s patent rights may exist in other countries. Organon intends to vigorously defend its patents, which it believes are valid, against infringement by companies attempting to market products prior to the expiration of such patents. As with any litigation, there can be no assurance of the outcomes, which, if adverse, could result in significantly shortened periods of exclusivity for these products, potential payment of damages and legal fees, and, with respect to products acquired through acquisitions, potentially significant intangible asset impairment charges.

Nexplanon

On February 24, 2025, Organon received a Paragraph IV Certification Letter notifying the Company that Xiromed Pharma Espana, S.L. (“Xiromed”) filed an abbreviated new drug application (“ANDA”) to the FDA seeking approval to market a generic version of Nexplanon in the United States prior to the expiration of U.S. Patent Nos. 8,722,037 (the “‘037 patent”) and 9,757,552 (the “‘552 patent”), in 2027 and 2030, respectively. On April 2, 2025, the Company sued Xiromed in the U.S. District Court for the District of New Jersey asserting that the filing of the ANDA infringed the ‘037 patent and ‘552 patent and triggering a stay of regulatory approval of Xiromed’s ANDA for up to 30 months.

Vtama

On July 22, 2026, Organon received a Paragraph IV Certification Letter under the Hatch-Waxman Act notifying the Company that Encube Ethical Private Limited (Encube) has filed an abbreviated new drug application to the FDA seeking approval to market a generic version of Vtama. Encube’s notice letter included a Paragraph IV certification with respect to twelve patents listed in the Orange Book for Vtama, expiring between 2036 and 2039. On July 23, 2026, Organon received a Paragraph IV Certification Letter under the Hatch-Waxman Act notifying the Company that Mylan Pharmaceuticals, Inc. (Mylan) has filed an abbreviated new drug application to the FDA seeking approval to market a generic version of Vtama. Mylan’s notice letter included a Paragraph IV certification with respect to nine patents listed in the Orange Book for Vtama, expiring between 2036 and 2039. On July 27, 2026, Organon received a Paragraph IV Certification Letter under the Hatch-Waxman Act notifying the Company that Natco Pharma Limited (Natco) has filed an abbreviated new drug application to the FDA seeking approval to market a generic version of Vtama. Natco’s notice letter included a Paragraph IV certification with respect to nine patents listed in the Orange Book for Vtama, expiring between 2036 and 2039. Organon is reviewing the details of the Paragraph IV Certification Letters and intends to defend and enforce its intellectual property rights protecting Vtama.

Other Matters

In addition to the matters described above, there are various other pending legal proceedings involving Organon, principally product liability and intellectual property lawsuits. While it is not feasible to predict the outcome of such proceedings, in the opinion of Organon as of June 30, 2026, either the likelihood of loss is remote or any reasonably possible loss associated with the resolution of such proceedings is not expected to be material to Organon’s financial condition, results of operations or cash flows either individually or in the aggregate.

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Legal Defense Reserves

Legal defense costs expected to be incurred in connection with a loss contingency are accrued when probable and reasonably estimable. Some of the significant factors considered in the review of these legal defense reserves are as follows: the actual costs incurred by Organon; the development of Organon’s legal defense strategy and structure in light of the scope of its litigation; the number of cases being brought against Organon; and the costs and outcomes of completed trials and the most current information regarding anticipated timing, progression, and related costs of pre-trial activities and trials in the associated litigation. The legal defense reserve as of June 30, 2026 and December 31, 2025 was $8 million and $10 million, respectively, and represented Organon’s best estimate of the minimum amount of defense costs to be incurred in connection with its outstanding litigation; however, events such as additional trials, other events that could arise in the course of pending litigation, or the filing of new matters, could affect the ultimate amount of legal defense costs to be incurred by Organon. Organon will continue to monitor its legal defense costs and review the adequacy of the associated reserves and may determine to increase the reserves at any time in the future if, based upon the factors set forth above, it believes it would be appropriate to do so.

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