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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

We make statements in this 2025 Form 10-K, and we may from time to time make other written reports and oral statements, regarding our outlook or expectations for financial, business or strategic matters regarding or affecting us that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, all of which are based on management’s current expectations and are subject to risks and uncertainties which change over time and may cause results to differ materially from those set forth in the statements. One can identify these forward-looking statements by their use of words such as “anticipates,” “expects,” “plans,” “will,” “estimates,” “forecasts,” “projects,” “believes,” “would,” “potentially,” “intends,” “seeks,” “future,” “might,” “likely,” “target,” “predict,” “continue,” “should,” and other words of similar meaning, or negative variations of any of the foregoing. One can also identify them by the fact that they do not relate strictly to historical or current facts. Such forward-looking statements include, but are not limited to, statements relating to our growth and acquisition strategies, financial results, product development, product approvals, product potential and development programs. One must carefully consider any such statement and should understand that many factors could cause actual results to differ materially from our forward-looking statements. These factors may be based on inaccurate assumptions and are subject to a broad variety of other risks and uncertainties. No forward-looking statement can be guaranteed and actual future results

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may vary materially. The factors described in Part I, Item 1A. Risk Factors of this 2025 Form 10-K or otherwise described in our filings with the SEC provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations expressed in our forward-looking statements, including, but not limited to:

•the impact of tariffs and other trade restrictions or domestic sourcing requirements;

•the impact of our substantial levels of indebtedness;

•our ability to execute on our capital allocation priorities and to deleverage our business;

•expanded brand and class competition in the markets in which we operate;

•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, or otherwise meet their obligations to us;

•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 retain market exclusivity for Nexplanon or to obtain an additional period of exclusivity in the United States for Nexplanon subsequent to the expiration of the rod patents in 2027;

•the continued impact of the September 2024 LOE for Atozet;

•the success of our efforts to adopt our business and sales strategies to address the changing market and regulatory landscape in order to achieve our business objectives and remain competitive;

•restructuring or other disruptions at the FDA, the SEC and other U.S. and comparable foreign government agencies;

•difficulties and uncertainties inherent in the implementation of our acquisition strategy or failure to recognize the benefits of such acquisitions;

•pricing pressures globally, including rules and practices of managed care groups, judicial decisions and governmental laws and regulations related to or affecting Medicare, Medicaid and healthcare reform, pharmaceutical pricing and reimbursement, access to our products, international reference pricing, including MFN drug pricing, and other pricing related initiatives and policy efforts;

•the impact of higher selling and promotional costs;

•changes in government laws and regulations in the United States and other jurisdictions, including laws and regulations governing the research, development, approval, clearance, manufacturing, supply, distribution, and/or marketing of our products and related intellectual property, environmental regulations, and the enforcement thereof affecting our business;

•our inability to remediate the material weaknesses in our internal control over financial reporting;

•efficacy, safety or other quality concerns with respect to our marketed products, whether or not scientifically justified, leading to product recalls, withdrawals, labeling changes or declining sales;

•delays or failures to demonstrate adequate efficacy and safety of our product candidates in pre-clinical and clinical trials, which may prevent or delay the development, approval, clearance, or commercialization of our product candidates;

•reduced research and development investment and increased reliance on fewer research and development programs for new products to generate future revenue and replace existing products that come to the end of their market life cycle;

•future actions of third-parties, including significant changes in customer relationships or changes in the behavior and spending patterns of purchasers of healthcare products and services, including delaying medical procedures, rationing prescription medications, reducing the frequency of physician visits and forgoing healthcare insurance coverage;

•legal factors, including product liability claims, antitrust litigation and governmental investigations, including tax disputes, environmental claims and patent disputes with branded and generic competitors, any of which could preclude commercialization of products or negatively affect the profitability of existing products;

•lost market opportunity resulting from delays and uncertainties in clinical trials and the approval or clearance process of the FDA and other regulatory authorities;

•the failure by us or our third party collaborators and/or their suppliers to fulfill our or their regulatory or quality obligations, which could lead to a delay in regulatory approval or commercial marketing of our products;

•cyberattacks on, or other failures, accidents, or security breaches of, our or third-party providers’ information technology systems, which could disrupt our operations and those of third parties upon which we rely;

•increased focus on privacy issues in countries around the world, including the United States, the EU, and China, and a more difficult legislative and regulatory landscape for privacy and data protection that continues to evolve with the potential to directly affect our business, including recently enacted laws in a majority of states in the United States requiring security breach notification;

•changes in tax laws including changes related to the taxation of foreign earnings;

•the impact of any future pandemic, epidemic, or similar public health threat on our business, operations and financial performance;

•our ability to hire and retain a permanent CEO, other members of our senior management, or other key employees;

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•changes in accounting pronouncements promulgated by standard-setting or regulatory bodies, including the Financial Accounting Standards Board and the SEC, that are adverse to us;

•volatility of commodity prices, fuel, and shipping rates that impact the costs and/or ability to supply our products;

•uncertainties surrounding matters relating to the Audit Committee investigation and any related investigations, inquiries, claims, proceedings or actions, as described elsewhere in this 2025 Form 10-K; and

•economic factors over which we have no control, including changes in inflation, interest rates, recessionary pressures, and foreign currency exchange rates.

It is not possible to predict or identify all such factors. Consequently, one should not consider the above list or any other such list to be a complete statement of all potential risks or uncertainties. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law.

General

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to assist the reader in understanding our financial condition and results of operations for the years ended December 31, 2025 and 2024 and should be read in conjunction with our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K to enhance the understanding of our results of operations, financial condition and cash flows. Additionally, this section should be read in connection with Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 28, 2025 (the “Original 2024 Form 10-K”), as amended by Amendment No. 1 thereto, filed on November 10, 2025 (“Amendment No. 1” and, together with the Original 2024 Form 10-K, the “Prior Form 10-K”), which are available on the SEC’s website at www.sec.gov. The Prior Form 10-K includes a discussion regarding our financial condition and results of operations for the years ended December 31, 2024 and 2023.

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

Key Trends Affecting Our Results of Operations

•Generic Competition: Except for Emgality and Vtama, our established brands products are beyond market exclusivity. Although these products continue to represent a valuable opportunity to generate significant operating profit relative to low promotional and development expenses, they are subject to competition from generic versions of these products. For instance, we have been negatively impacted since late 2024 from the LOE for Atozet in France, Spain and Japan, and we expect these impacts to continue in 2026 driven by increased competition and further price erosion. In addition, Nexplanon is the largest brand we commercialize that continues to have market exclusivity; however, in the United States, patents claiming key aspects of the Nexplanon applicator will expire in 2030 and patents for the Nexplanon rod will expire in late 2027. Outside of the United States, we have lost exclusivity in Nexplanon in certain markets beginning in 2025 and will continue to lose market exclusivity in other geographies in the near future. See Note 18 “Contingencies—Other Matters” to the Consolidated Financial Statements in this 2025 Form 10-K.

•Historical Shift Towards Long-Acting Reversible Contraceptives:Daily contraceptive pills are by far the largest contraception market segment, with almost half of all women choosing a hormonal contraceptive electing this particular method. However, the long-acting reversible contraceptives market, including Nexplanon, is expected to continue to be an important and large segment of the overall contraceptive market. Despite an increasingly diverse market of contraception methods (including the over-the-counter birth control pill), payors, providers, and patients continue to believe in the benefits of long-acting and highly effective options such as Nexplanon. Nexplanon is available for prescription under controlled distribution once the healthcare provider has completed a clinical training program (“CTP”) demonstrating safe and effective insertion and removal of Nexplanon. During the recent label update in January 2026, the FDA expanded the duration of use for Nexplanon from three years to five years, and also enhanced the CTP program by adding a Risk Evaluation and Mitigation Strategy (REMS) program, which contains additional proactive measures to certify healthcare providers in the proper insertion and removal of Nexplanon.

•Increased Access to Fertility Solutions: With the global trend toward declining birthrates, governments and payors are implementing favorable policies across major markets that, in turn, improve access to fertility and maternal care.

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•Growing Acceptance of Biosimilars: The market for biologics continues to experience strong growth trends. Given the high cost of many of these biologics treatments, biosimilars are a potentially more affordable alternative and represent a significant opportunity for patients, providers, and payors once a biologics product loses patent protection. Moreover, a significant number of biologics are expected to lose exclusivity over the next decade, representing a large opportunity for more biosimilar approvals.

•Increased Competitive Pressures: The markets in which we conduct our business and the pharmaceutical industry in general are highly competitive and highly regulated. Our competitors include other worldwide research-based pharmaceutical companies, smaller research companies with more limited therapeutic focus and generic drug manufacturers.

•Other Macroeconomic Considerations: Geopolitical developments including changes to the political orientation of the governments in key countries, global trade issues such as tariffs imposed by or on the United States, shifting U.S. federal and state government policies, policies hindering market access, and worsening macroeconomic conditions could impact our business and results of operations and may stress our working capital resources. While tariffs have not, to date, had a material impact on our business, future tariff actions could potentially have a significant effect on our supply chain and operating costs. Regulatory agency developments, including disruptions at the FDA and other agencies, could increase the time needed for review and approval of new drugs and medical devices, potentially impacting our ability to develop new drugs, delaying our product launches and impacting our business operations. Additionally, proposed cuts to Medicaid and changes in federal funding policies could reduce access to healthcare services for low-income individuals. International reference pricing frameworks, including MFN mandates, may further constrain our pricing flexibility and commercial strategy. Voluntary price concessions in certain European markets and increased rebate negotiations across the EU have introduced additional pressure on net pricing and margins. These developments may influence our commercial strategy, constrain pricing flexibility and delay product launches. For additional information, please refer to Item 1A — Risk Factors.

Recent Developments

Business Development

Laborie Medical Technologies Corporation (“Laborie”)

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

Biogen Inc. (“Biogen”)

In March 2025, we acquired from Biogen the regulatory and commercial rights in the United States for Tofidence, a biosimilar to Actemra2 (tocilizumab), for intravenous infusion. Tofidence, launched in the U.S. market in May 2024, is indicated in certain patients for the treatment of moderately to severely active rheumatoid arthritis, giant cell arteritis, polyarticular juvenile idiopathic arthritis, systemic juvenile idiopathic arthritis, and COVID-19. Under the terms of the agreement with Biogen, we paid an upfront payment of $51 million in July 2025, and are obligated to pay tiered royalty payments based on net sales and tiered annual net sales milestone payments of up to $45 million from a previous in-license arrangement with Bio-Thera Solutions Ltd., the product developer for Tofidence. In the first quarter of 2025, we recognized an intangible asset of $51 million, related to the upfront payment to Biogen, which will be amortized over 10 years.

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Operating Results

Sales Overview

Worldwide sales were $6.2 billion for the year ended December 31, 2025, a decrease of 3%, compared to 2024. Worldwide sales during the year ended December 31, 2025 were positively impacted by approximately $36 million, or approximately 1%, due to favorable foreign exchange rates.

Excluding the impact of foreign exchange rates, sales decreases for the year ended December 31, 2025, primarily reflect lower sales of:

•Atozet, primarily due to LOE in France, Spain and Japan, partially offset by increased demand in Asia Pacific, Latin America and the product launch in China;

•Singulair, primarily attributable to price reductions in China and Japan, as well as lower demand outside of the United States resulting from increased competition and less favorable medical guidelines; and

•Dulera, primarily due to the loss of a customer contract in the first part of the year combined with increased discount rate pressure in the United States.

This decrease in the above sales was offset by sales increases for the year ended December 31, 2025 in:

•Vtama, as a result of our acquisition of Dermavant in the fourth quarter of 2024, launch of the atopic dermatitis indication for adults and children two years of age and older in the United States and launch of the topical treatment of plaque psoriasis in adults in Canada in the third quarter of 2025;

•Hadlima, due to sales ramp up since its launch in July 2023 in the United States and a modest increase in demand in Canada and other international markets;

•Emgality, as a result of our acquisition of the distribution and promotion rights from Lilly in 2024 in certain markets outside of the United States; and

•Follistim, due to increased demand in the United States, partially offset by a decrease in demand in China. Comparability of sales for the year ended December 31, 2025, is impacted by a one-time buy-in that occurred in the fourth quarter of 2023. This buy-in, a consequence of exiting our interim operating model agreement with Merck, resulted in a reduction of sales in the first half of 2024.

LOE negatively impacted sales of certain of our products by approximately $197 million during the year ended December 31, 2025, based on the decrease in sales volume compared to 2024. This was primarily driven by the LOE of Atozet in France, Spain and Japan and Rosuzet in Japan. VBP in China had an immaterial impact on our sales during the year ended December 31, 2025. However, we expect VBP to continue to negatively impact our general medicines product portfolio for the next several quarters.

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

Our operations include a portfolio of products. Highlights of the sales of our products for the year ended December 31, 2025 and 2024 are provided below. See Note 5 “Product and Geographic Information”to the Consolidated Financial Statements for further details on sales of our products.

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Women’s Health

Contraception

Worldwide sales of Nexplanon, a single-rod subdermal contraceptive implant, declined 4% for the year ended December 31, 2025, compared to 2024, primarily due to decreased demand related to policy related access restrictions and lower physician demand, coupled with increased discount rates in the United States, partially offset by increased demand in Brazil and our institutional business. Nexplanon sales for the year ended December 31, 2024, included an estimated $15 million of sales resulting from the identified sales practices for U.S. wholesalers described in Item 1. Business—Recent Developments. The impact was estimated using average daily sales, inventory levels at the wholesaler and days on hand at the wholesaler. The Company ceased the identified sales practices for U.S. wholesalers, which adversely impacted the full year 2025 sales by $15 million, as inventory levels at the wholesalers were reduced the normalized levels. In January 2026, the FDA approved a supplemental New Drug Application for Nexplanon which extends the duration of use for up to five years, an extension of the previous three-year indication.

Worldwide sales of NuvaRing, a vaginal contraceptive product, declined 21% for the year ended December 31, 2025, compared to 2024, due to the loss of a customer contract in 2024 and ongoing generic competition, partially offset by favorable discount rates in the United States associated with a new agreement. We expect a continued decline in NuvaRing sales as a result of generic competition.

Worldwide sales of Marvelon and Mercilon, combined oral hormonal daily contraceptive pills not approved or marketed in the United States, but available in certain countries outside the United States, declined 5% for the year ended December 31, 2025, compared to 2024, as a result of decreased demand in the Middle East, partially offset by increased demand in China and increased demand and favorable pricing in Asia Pacific.

Fertility

Worldwide sales of FollistimAQ, a fertility treatment, increased 11% for the year ended December 31, 2025, compared to 2024, due to increased demand in the United States, partially offset by a decrease in demand in China. Comparability of sales for the year ended December 31, 2025, is impacted by a one-time buy-in that occurred in the fourth quarter of 2023. This buy-in, a consequence of exiting our interim operating model agreement with Merck, resulted in a reduction of sales in the first half of 2024.

Other Women’s Health

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 22% for the year ended December 31, 2025, compared to 2024. The sales increase is due to continued uptake in the United States following the Jadalaunch in early 2022. In January 2026, we completed the sale of the Jada System to Laborie.

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General Medicines

Biosimilars

Renflexis is a biosimilar to Remicade for the treatment of certain autoimmune conditions. Sales declined 8% for the year ended December 31, 2025, compared to 2024, primarily due to competitive pressure and unfavorable discount rates in the United States, partially offset by increased demand in Canada.

Hadlima is a biosimilar to Humira for the treatment of certain autoimmune and autoinflammatory conditions. Sales increased 60% for the year ended December 31, 2025, compared to 2024, due to sales ramp up since its launch in July 2023 in the United States and a modest increase in demand in Canada and Puerto Rico. We have commercialization rights to Hadlima in countries outside of the European Union, South Korea, China, Turkey, and Russia. Hadlima is currently approved in the United States, Australia, Canada and Israel.

Ontruzant is a biosimilar to Herceptin for the treatment of HER2-overexpressing breast cancer and HER2-overexpressing metastatic gastric or gastroesophageal junction adenocarcinoma. Sales for the year ended December 31, 2025, compared to 2024, declined 30%, due to competitive pressure in the United States, unfavorable pricing and lower tendered volume from Brazil’s Ministry of Health when compared with 2024. We have commercialization rights to Ontruzant in all countries except in South Korea and China.

Brenzys is a biosimilar to Enbrel for the treatment of certain inflammatory diseases. Sales for the year ended December 31, 2025, compared to 2024, increased 4%, as a result of the timing of tenders in Brazil and increased demand in Asia Pacific. We have commercialization rights to Brenzys in countries outside of the United States, Europe, South Korea, China, and Japan.

Established Brands

Cardiovascular

Sales of Atozet, a medicine for lowering LDL cholesterol, declined 31% for the year ended December 31, 2025, compared to 2024, primarily due to LOE in France, Spain and Japan, partially offset by increased demand in Asia Pacific, Latin America and the product launch in China.

Combined global sales of Zetia and Vytorin, medicines for lowering LDL cholesterol, increased 4% for the year ended December 31, 2025, compared to 2024, primarily driven by increased demand in China, partially offset by the decrease in demand and pricing pressure in various international markets.

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Combined global sales of Cozaar and Hyzaar, medicines for the treatment of hypertension, declined 10% for the year ended December 31, 2025, compared to 2024, driven by decreased hospital demand in China and decreased demand in Japan.

Respiratory

Worldwide sales of Singulair, a once-a-day oral medicine for the chronic treatment of asthma and for the relief of symptoms of allergic rhinitis,declined 30% for the year ended December 31, 2025, compared to 2024. This decline was primarily attributable to price reductions in China and Japan, as well as lower demand outside of the United States resulting from increased competition and less favorable medical guidelines.

Global sales of Nasonex, an inhaled nasal corticosteroid for the treatment of nasal allergy symptoms, declined 5% for the year ended December 31, 2025, compared to 2024, due to decreased demand and an increase in competitive pressure in various international markets.

Global sales of Dulera, which is also marketed as Zenhale in certain markets outside of the United States, a combination medicine for the treatment of asthma, declined 25% for the year ended December 31, 2025, compared to 2024, primarily due to the loss of a customer contract in the first part of the year combined with increased discount rate pressure in the United States.

Non-Opioid Pain, Bone and Dermatology

* Calculation not meaningful.

Sales of Arcoxia, a medicine for the treatment of arthritis and pain, declined 2% for the year ended December 31, 2025, compared to 2024, primarily due to decreased demand in Latin America and Asia Pacific, partially offset by increased demand in Russia.

Sales of Vtama, a cream for the topical treatment of mild, moderate, and severe plaque psoriasis in adults and atopic dermatitis, also known as eczema, in adults and children two years of age and older, were $128 million for the year ended December 31, 2025, as a result of our acquisition of Dermavant in the fourth quarter of 2024, launch of the atopic dermatitis indication for adults and children two years of age and older in the United States and launch of the topical treatment of plaque psoriasis in adults in Canada in the third quarter of 2025. We anticipate launching Vtama in certain international markets in 2026 and beyond.

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Other

* Calculation not meaningful.

Sales of Emgality, amedicine for the preventive treatment of migraine, increased 63% for the year ended December 31, 2025, compared to 2024, as a result of our acquisition of the distribution and promotion rights from Lilly in 2024 in certain markets outside of the United States.

Gross Profit, Expenses and Other

Year Ended December 31, % Change

Acquired in-process research and development and milestones 6 81 8 (93) *

Goodwill impairment 301 — — * —

* Calculation not meaningful.

Cost of Sales

Cost of sales increased 8% for the year ended December 31, 2025, compared to 2024. Cost of sales for the year ended December 31, 2025, includes amortization associated with the inventory fair value adjustment related to the Dermavant acquisition of $49 million, an impairment charge related to a currently marketed women’s health product of $9 million, estimated unavoidable losses associated with a long-term vendor supply contract of $7 million and amortization of intangible assets of $205 million. Cost of sales for the year ended December 31, 2024 includes amortization of intangible assets of $145 million. In addition, the year ended December 31, 2025 was impacted by increased costs to optimize our manufacturing and supply network.See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity” for further information. Separation costs associated with manufacturing-related headcount reductions during 2025 have been incurred and are reflected in Restructuring costs.

Gross Profit

Gross profit decreased 11% for the year ended December 31, 2025, compared to 2024, due to increased costs to optimize our manufacturing and supply network, the impact of unfavorable pricing, volume and product mix, partially offset by foreign exchange.

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Selling, General and Administrative

Selling, general and administrative expenses decreased 2% for the year ended December 31, 2025, compared to 2024, due to lower costs related to the prior year implementation of our Enterprise Resource Planning (“ERP”) system and lower headcount related expenses, offset by increased costs associated with the promotion of our recently acquired products and Nexplanon and an increase in reserves for legal settlements.

Research and Development

Research and development expenses decreased 22% for the year ended December 31, 2025, compared to 2024, primarily due to a decrease in headcount related expenses and a decrease in clinical study activity. During 2025, we discontinued the clinical development programs for investigational candidates OG-6219 and OG-7191.

Acquired In-Process Research and Development and Milestones

For the year ended December 31, 2025, we recognized $6 million in acquired in-process research and development and milestones, related to the exit of our agreement with Centergene, due to the evolving fertility landscape in China. For the year ended December 31, 2024, acquired in-process research and development and milestones of $81 million primarily represented 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.

Goodwill impairment

For the year ended December 31, 2025, we recognized a $301 million impairment of goodwill which represents the amount by which the carrying value of goodwill exceeded its implied fair value. The goodwill impairment resulted from the decline of the Company’s patent protected products in the U.S. in the fourth quarter for 2025 that it is expected to result in a continuing impact on the products’ future forecast. The goodwill impairment recorded reflects continued pressure on the U.S. reporting unit resulting from lower-than-expected financial performance primarily from our patent-protected products, revised forward-looking projections, adverse geopolitical development market conditions, and uncertainty in the macroeconomic environment. As a result, the U.S. reporting unit is more susceptible to future impairment than the International reporting unit. See Note 11 “Intangibles and Goodwill” to the Consolidated Financial Statements for information on the impairment.

Restructuring Costs

For the year ended December 31, 2025, we incurred restructuring costs of $95 million comprised primarily of headcount-related restructuring expense associated with restructuring initiatives that were aimed at driving operational efficiencies in 2025. For the year ended December 31, 2024, we incurred restructuring costs of $31 million, comprised of headcount-related restructuring expense related to the optimization of our internal operations, primarily within the research and development function.

Interest Expense

Interest expense decreased 3% for the year ended December 31, 2025, compared to 2024, and reflects lower interest rates as a result of refinancing a portion of our long-term debt in the prior year and the repurchase and cancellation of approximately $419 million of the 2031 Notes during the second and fourth quarters of 2025 combined with lower reference rates on our variable rate debt, offset by interest related to the debt acquired as part of the Dermavant acquisition and previously unamortized debt issuance fees of approximately $3 million associated with the repurchase and cancellation of approximately $419 million of the 2031 Notes.

Exchange Losses

Exchange losses decreased 46% for the year ended December 31, 2025, compared to 2024, primarily due to favorable movements in certain foreign currencies relative to the U.S. dollar.

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Other (Income) Expense, net

Other (income) expense, net was impacted for the year ended December 31, 2025, by a $69 million pre-tax gain related to the repurchase and cancellation of approximately $419 million of the 2031 Notes and the repayment and termination of the NovaQuest Funding Agreement and the fair value adjustments and $50 million related to the accretion of the Dermavant acquisition contingent consideration, related to changes in the timing of expected commercial milestones based on updated sales forecasts. See Note 12 “Long-Term Debt, Short-Term Borrowings and Leases” to the Consolidated Financial Statements for further details on the repurchase of the 2031 Notes and the NovaQuest Funding Agreement.

Taxes on Income

The effective income tax rates were 56.0% and (7.1)% for the year ended December 31, 2025 and 2024, respectively. These effective income tax rates reflect the beneficial impact of foreign earnings, offset by the impact of U.S. inclusions under the Global Intangible Low-Taxed Income regime and a valuation allowance recorded against non-deductible U.S. interest expense. The 2025 effective tax rate was driven higher by a non-deductible goodwill impairment and an investment basis difference on the sale of the Jada System, offset by the favorable impact of a tax amortization benefit. The favorable impact to the 2024 effective tax rate was driven by the reversal of a valuation allowance, the favorable closure of two non-U.S. tax audits and a return to provision adjustment for an entity in Switzerland.

The OBBBA includes significant corporate tax provisions such as modifications to interest deductibility, the option to fully expense U.S.-based research and development costs, and changes to the taxation of foreign earnings. For 2025, any impact of the OBBBA is immaterial. For 2026 and beyond, we are evaluating the impacts of the OBBBA on our U.S. cash tax liability and income tax provision.

Liquidity and Capital Resources

As of December 31, 2025, we had cash and cash equivalents of $574 million. We have historically generated and expect to continue to generate positive cash flow from operations.

Working capital is defined as current assets less current liabilities and was $1.96 billion and $1.63 billion as of December 31, 2025 and December 31, 2024, respectively. Working capital was positively impacted by our active cash cycle management, which includes the factoring of receivables and timing of vendor payments; milestone payments; net repayments of debt; and increased inventory associated with the acquisition of the Oss Biotech Site in July 2025.

We have accounts receivable factoring agreements with financial institutions in certain countries. Under these agreements, we have factored $217 million and $186 million of our accounts receivable as of December 31, 2025 and December 31, 2024, respectively. See Note 13 “Financial Instruments” to the Consolidated Financial Statements for information on our accounts receivable factoring and related agreements.

Net cash provided by operating activities was $700 million for the year ended December 31, 2025, compared to $939 million for the same period in the prior year due to lower operating income, partially offset by our active cash cycle management.

Net cash used in investing activities was $390 million for the year ended December 31, 2025, compared to $513 million for the same period in the prior year, primarily due to decreased milestone payments and capital spending.

Net cash used in financing activities was $561 million for the year ended December 31, 2025, compared with $368 million for the same period in the prior year, primarily driven by the repurchase and cancellation of $419 million of the 2031 Notes and the payment and termination of the NovaQuest Funding Agreement, partially offset by borrowings on our Revolving Credit Facility, decreased dividend payments in the current year and no debt issuance costs compared to the prior period.

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

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Contractual Obligations

Our contractual obligations as of December 31, 2025, which require material cash requirements in the future, consist of contractual milestones, purchase obligations and lease obligations.

Contractual milestones are potential payments based upon the achievement of specified milestones associated with business development transactions. Such milestone payments will only be payable in the event that our collaborative partners achieve contractually defined success-based milestones such as the advancement of the specified research and development programs or the receipt of regulatory approval for the specified compounds or products and/or we reach a sales threshold of the specified compounds or products. The timing of the payments of the contractual milestones are uncertain and the likelihood of achieving the milestones cannot be determined. As of December 31, 2025, total potential payments for contractual milestones are $2.2 billion. Potential amounts to be paid within the next twelve months are $75 million.

Purchase obligations are enforceable and legally binding obligations for purchases of goods and services which include inventory purchase commitments. As of December 31, 2025, total payments due for purchase obligations are $1.1 billion and extend through 2033. Amounts due within the next twelve months are $298 million.

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

Long-term debt consists of both fixed and variable-rate instruments. As of December 31, 2025, total payments due for debt obligations are $8.7 billion and extend through 2034. Amounts due within the next twelve months are $10 million. Approximately $3.6 billion of notes are scheduled to mature in 2028.

Lease obligations exclude reasonably certain lease renewals that have not yet been executed. As of December 31, 2025, total payments due for lease obligations are $176 million and extend through 2041. Amounts due within the next twelve months are $47 million.

During 2025, we paid cash dividends of $0.34 per share. On February 12, 2026, our Board of Directors declared a quarterly dividend of $0.02 for each issued and outstanding share of our common stock. The dividend is payable on March 12, 2026, to stockholders of record at the close of business on February 23, 2026.

We or our affiliates may, at any time and from time to time, seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such transactions, if any, may be material, and will depend upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

Critical Accounting Estimates

The audited annual consolidated financial statements are prepared in conformity with U.S. GAAP and, accordingly, include certain amounts that are based on management’s best estimates and judgments. A discussion of accounting estimates considered critical because of the potential for a significant impact on the Consolidated Financial Statements due to the inherent uncertainty in such estimates are disclosed below. Because of the uncertainty inherent in such estimates, actual results may differ from these estimates.

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Revenue Recognition

Our accounting policy for revenue recognition has a substantial impact on reported results and relies on certain estimates. Revenue is recognized following a five-step model: (i) identify the customer contract; (ii) identify the contract’s performance obligation; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation; and (v) recognize revenue when or as a performance obligation is satisfied. Revenue is reduced for gross-to-net sales adjustments discussed below, all of which involve significant estimates and judgment after considering applicable laws and regulations and definitive contractual agreements with private sector and public sector benefit providers. These types of variable consideration are estimated at the time of sale generally using the expected value method, although the most likely amount method is used for prompt pay discounts. In addition, revenues are recorded net of time value of money discounts if collection of accounts receivable is expected to be in excess of one year. Estimates are assessed each period and adjusted as required to revise information or actual experience.

In the United States, revenue is reduced by sales discounts issued to customers at the point-of-sale, through an intermediary wholesaler (known as chargebacks), or in the form of rebate amounts owed based upon definitive contractual agreements or legal requirements with private sector (Managed Care) and public sector (Medicaid and Medicare Part D) customers. Additionally, sales are generally made with a limited right of return under certain conditions.

The provision for aggregate customer discounts in the United States covers chargebacks and rebates. We determine the provision for chargebacks based on expected sell-through levels by our wholesale customers to contracted customers, as well as estimated wholesaler inventory levels. The provision for rebates is based on expected patient usage, as well as inventory levels in the distribution channel to determine the contractual obligation to the benefit providers. We use historical customer segment utilization mix, sales, changes to product mix and price, inventory levels in the distribution channel, government pricing calculations and prior payment history in order to estimate the expected provision. Amounts accrued for aggregate customer discounts are evaluated on a quarterly basis through comparison of information provided by the wholesalers, health maintenance organizations, pharmacy benefit managers, federal and state agencies, and other customers to the amounts accrued.

We continually monitor our provision for aggregate customer discounts. There were no material adjustments to estimates associated with the aggregate customer discount provision in 2025, 2024, or 2023.

Summarized information about changes in the aggregate customer discount accrual related to sales in the United States is as follows:

Year EndedDecember 31,

(1) The year ended December 31, 2024 includes $48 million of liabilities assumed as part of the 2024 Dermavant acquisition.

Accruals for chargebacks are reflected as a direct reduction to accounts receivable and accruals for rebates as current liabilities. The accrued balances relative to these provisions included in accounts receivable and accrued and other current liabilities were $111 million and $412 million, respectively, at December 31, 2025, and $100 million and $380 million, respectively, at December 31, 2024.

Outside of the United States, variable consideration in the form of discounts and rebates is a combination of commercially-driven discounts in highly competitive product classes, discounts required to gain or maintain reimbursement, or legislatively mandated rebates. In certain European countries, legislatively mandated rebates are calculated based on an estimate of the government’s total unbudgeted spending and our specific payback obligation. Rebates may also be required based on specific product sales thresholds. We apply an estimated factor against our actual invoiced sales to represent the expected level of future discount or rebate obligations associated with the sale.

We maintain a returns policy that allows our customers in certain countries to return product within a specified period prior to and subsequent to the expiration date (generally, three to six months before and 12 months after product expiration). The estimate of the provision for returns is based upon historical experience with actual returns. Additionally, we consider factors such as levels of inventory in the distribution channel, product dating and expiration period, whether products have been

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discontinued, entrance in the market of generic competition, changes in formularies or launch of over-the-counter products, among others.

See Note 2 “Summary of Accounting Policies” to the Consolidated Financial Statements included in this 2025 Form 10-K for additional details on our revenue recognition policy.

Contingencies and Environmental Liabilities

We are involved in various claims and legal proceedings of a nature considered normal to our business, including product liability, intellectual property, and commercial litigation, as well as certain additional matters including governmental and environmental matters. See Note 18 “Contingencies” to the Consolidated Financial Statements included in this 2025 Form 10-K. We record accruals for contingencies when it is probable that a liability has been incurred and the amount can be reasonably estimated.

Legal defense costs expected to be incurred in connection with a loss contingency are accrued when probable and reasonably estimable.

We believe that there are no compliance issues associated with applicable environmental laws and regulations that would have a material adverse effect on us. Expenditures for remediation and environmental liabilities were $2 million in 2025, and are estimated at $14 million in the aggregate for the years 2026 through 2030. Liabilities for all environmental matters that are probable and reasonably estimable have been accrued and totaled $16 million and $16 million at December 31, 2025 and 2024, respectively. These liabilities are undiscounted, do not consider potential recoveries from other parties and will be paid out over the periods of remediation for the applicable sites, which are expected to occur primarily over the next 12 years. Although it is not possible to predict with certainty the outcome of these matters, or the ultimate costs of remediation, we do not believe that any reasonably possible expenditures that may be incurred in excess of the liabilities accrued should exceed $26 million in the aggregate. We also do not believe that these expenditures should result in a material adverse effect on our financial condition, results of operations or liquidity for any year.

Impairments of Long-Lived Assets, Goodwill and Indefinite-Lived Assets

We assess changes in economic, regulatory and legal conditions and make assumptions regarding estimated future cash flows in evaluating the value of our property, plant and equipment, goodwill and intangible assets. The judgments made in evaluating impairment of long-lived intangibles, goodwill and indefinite-lived intangibles such as in-process research and development (“IPR&D”) can materially affect our results of operations.

We periodically evaluate whether current facts or circumstances indicate that the carrying values of our long-lived assets to be held and used may not be recoverable. If such circumstances are determined to exist, an estimate of the undiscounted future cash flows of these assets, or appropriate asset groupings, is compared to the carrying value to determine whether an impairment exists. If the asset is determined to be impaired, the loss is measured based on the difference between the asset’s fair value and its carrying value. If quoted market prices are not available, we estimate fair value using a discounted value of estimated future cash flows approach.

Long-lived intangibles are initially recorded at fair value, assigned an estimated useful life, and amortized primarily on a straight-line basis over their estimated useful lives. When events or circumstances warrant a review, we will assess recoverability from future operations using pretax undiscounted cash flows derived from the lowest appropriate asset groupings. Potential risks leading to impairment could include LOE occurring earlier than expected, competition, pricing reductions, and other macroeconomic changes. Impairments are recognized in operating results to the extent that the carrying value of the intangible asset exceeds its fair value, which is determined based on the net present value of estimated future cash flows. We recorded an impairment charge related to a currently marketed women’s health product of $9 million for the year ended December 31, 2025. We did not have impairment charges for the years ended December 31, 2024 and 2023. See Note 11 “Intangibles and Goodwill” to the Consolidated Financial Statements included in this 2025 Form 10-K for additional details on intangibles.

Goodwill and indefinite-lived intangibles are evaluated for impairment each year in the fourth quarter, or more frequently if impairment indicators exist, by first assessing qualitative factors to determine whether it is more likely than not that fair value is less than carrying value.

Goodwill represents the excess of the consideration transferred over the fair value of net assets of businesses acquired. Some of the factors considered in the assessment include general macroeconomic conditions, conditions specific to the industry and

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market, cost factors which could have a significant effect on earnings or cash flows, and overall financial performance. If we conclude it is more likely than not that fair value is less than carrying value, a quantitative fair value test is performed. If carrying value is greater than fair value, a goodwill impairment charge will be recorded for the difference (up to the carrying value of goodwill).

Our quantitative goodwill impairment analysis relies on projected cash flows and market assumptions. Key assumptions used in projected cash flows include projected revenue growth rates, operating margins, terminal growth rates, and discount rates. These assumptions require significant judgment and are based on our best estimates of future economic and market conditions. A significant decline in forecasted performance, whether due to external economic factors or internal operational challenges, could result in the fair value of either the U.S. or International reporting unit falling below its carrying amount. In such cases, we would be required to recognize a non-cash impairment charge, which could materially impact our financial condition and results of operations. Additionally, we may be required to record impairment charges on goodwill related to a reporting unit if adverse macroeconomic or geopolitical developments materially affect our business outlook. These developments may include, but are not limited to, the implementation of tariffs, changes in trade policies, inflationary pressures, supply chain disruptions, or regulatory changes that reduce forecasts or increase operating costs.

Indefinite-lived intangibles acquired in conjunction with the acquisition of a business are initially recorded at fair value. We evaluate the indefinite-lived intangibles for impairment by first assessing qualitative factors to determine whether it is more likely than not that the fair value is less than its carrying amount. Some of the factors and indicators considered in the assessment include regulatory and status of clinical testing, commercial and competitive landscape, legal and financial considerations for the indefinite-lived intangibles. If we conclude it is more likely than not that the fair value is less than its carrying amount, a quantitative impairment test is performed. If carrying value is greater than fair value, an impairment charge will be recorded for the difference. We completed the annual impairment test as in the fourth quarter of 2025 and concluded that there was no impairment to indefinite-lived intangibles.

Taxes on Income

Deferred taxes are recognized for the future tax effects of temporary differences between financial and income tax reporting based on enacted tax laws and rates. We establish valuation allowances for our deferred tax assets when the amount of expected future income is not likely to support the use of the deduction or credit. We evaluate tax positions to determine whether the benefits of tax positions are more likely than not of being sustained upon audit based on the technical merits of the tax position. For tax positions that are more likely than not of being sustained upon audit, we recognize the largest amount of the benefit that is greater than 50% likely of being realized upon ultimate settlement in the Consolidated Financial Statements. For tax positions that are not more likely than not of being sustained upon audit, we do not recognize any portion of the benefit in the Consolidated Financial Statements. We recognize interest and penalties associated with uncertain tax positions as a component of Taxes on Income in the consolidated statement of income.

InventoryValuation

Inventories consist of currently marketed products and are valued at the lower of cost or net realizable value. Inventories are assessed regularly for impairment and valuation reserves are established when necessary based on a number of factors including, but not limited to, product obsolescence and changes in estimates of future product demand and expiry. The determination of events and the assumptions utilized in our quantification of valuation reserves may require judgment. No material adjustments have been required to our inventory reserve estimates for the periods presented. Adverse changes in assumptions utilized in our inventory reserve calculations could result in an increase to our inventory valuation reserves and higher cost of sales.

Acquisitions

Business combinations are evaluated in order to determine whether transactions should be accounted for as acquisitions of assets or businesses. We make certain judgments, which include assessment of the inputs, processes, and outputs associated with the acquired set of activities. If we determine that substantially all of the fair value of gross assets included in a transaction is concentrated in a single asset (or a group of similar assets), we account for the transaction as an asset acquisition. In an asset acquisition, IPR&D with no alternative future use is charged to expense and contingent consideration is not recognized at the acquisition date. Product development milestones are recognized upon achievement and sales-based milestones are recognized when the milestone is deemed probable of being achieved. No goodwill is recorded in an asset acquisition.

To be considered a business, the assets in a transaction need to include an input and a substantive process that together significantly contribute to the ability to create outputs. Businesses acquired are consolidated upon obtaining control. The fair

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value of assets acquired and liabilities assumed are recognized at the date of acquisition. Assets acquired and liabilities assumed in a business combination that arise from contingencies are generally recognized at fair value. If fair value cannot be determined, the asset or liability is recognized if probable and reasonably estimable; if these criteria are not met, no asset or liability is recognized. Any excess of the purchase price over the estimated fair values of the net assets acquired is recognized as goodwill. Business acquisition costs are expensed when incurred.

The fair values of identifiable intangible assets related to currently marketed products are primarily determined by using an income approach through which fair value is estimated based on each asset’s discounted projected net cash flows. Our estimates of market participant net cash flows consider historical and projected pricing, margins and expense levels; the performance of competing products and the current and expected competition environment where applicable; relevant industry and product growth drivers and factors; product life cycles; the ability to obtain additional marketing and regulatory approvals; the ability to manufacture and commercialize the products; and the life of each asset’s underlying patent and related patent term extension, if any. The net cash flows are then discounted to present value utilizing an appropriate discount rate.

The fair values of identifiable intangible assets related to IPR&D are also determined using an income approach, through which fair value is estimated based on each asset’s probability-adjusted future net cash flows, which reflect the different stages of development of each product and the associated probability of successful completion. The net cash flows are then discounted to present value using an appropriate discount rate. Amounts allocated to acquired IPR&D are capitalized and accounted for as indefinite-lived intangible assets, subject to impairment testing until completion or abandonment of the projects. Upon successful completion of each IPR&D project, we will make a determination as to the then-useful life of the intangible asset, generally determined by the period in which the substantial majority of the cash flows are expected to be generated and begin amortization.

Certain of our business combinations involve the potential for future payment of consideration that is contingent upon the achievement of performance milestones, including product development milestones and royalty payments on future product sales. The fair value of contingent consideration liabilities is determined at the acquisition date using unobservable inputs. These inputs include the estimated amount and timing of projected cash flows, the probability of success (achievement of the contingent event) and the risk-adjusted discount rate used to present value the probability-weighted cash flows. Subsequent to the acquisition date, at each reporting period until the contingency is resolved, the contingent consideration liability is remeasured at current fair value with changes (either expense or income) recorded in earnings in Other expense, net. Changes in any of the inputs may result in a significantly different fair value adjustment.

Pension

Our pension plans are calculated using actuarial assumptions including a discount rate for plan benefit obligations and an expected rate of return on plan assets. These significant assumptions are reviewed annually and are disclosed in Note 14 “Pension and Other Postretirement Benefit Plans” to the Consolidated Financial Statements included in this 2025 Form 10-K.

For our pension plans, the discount rate is evaluated on measurement dates to reflect the prevailing market rate of a portfolio of high-quality fixed-income debt instruments that would provide the future cash flows needed to pay the benefits included in the benefit obligation as they come due.

The expected rate of return for the pension plans represents the average rate of return to be earned on plan assets over the period the benefits included in the benefit obligation are to be paid. In developing the expected rate of return, we consider long-term compound annualized returns of historical market data, current market conditions and actual returns on our plan assets. Using this reference information, we develop forward-looking return expectations for each asset category and a weighted-average expected long-term rate of return for a target portfolio allocated across these investment categories. The expected portfolio performance reflects the contribution of active management as appropriate.

Stock-Based Compensation

We expense all stock-based payment awards to employees, including grants of stock options, over the requisite service period based on the grant date fair value of the awards. The fair value of certain stock-based awards is determined using the Black-Scholes option-pricing model which uses both historical and current market data to estimate the fair value. This method incorporates various assumptions such as the risk-free interest rate, expected volatility, expected dividend yield and expected life of the options.

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Recently Issued Accounting Standards

For a discussion of recently issued accounting standards, see Note 2 “Summary of Accounting Policies” to the Consolidated Financial Statements included in this 2025 Form 10-K.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Risk

We operate on a global basis and are exposed to the risk that our earnings, cash flows and equity could be adversely affected by fluctuations in foreign exchange rates. We are primarily exposed to foreign exchange risk with respect to forecasted transactions and net assets denominated in the euro, Brazilian real, Swiss franc and Canadian dollar. We established a balance sheet risk management program and a net investment hedge to mitigate against volatility of changes in foreign exchange rates. See Note 13 “Financial Instruments” to the Consolidated Financial Statements included in this 2025 Form 10-K for further information on our risk management.

Interest Rate Risk

Our long-term debt portfolio consists of both fixed and variable-rate instruments. For any variable rate debt, interest rate changes in the underlying index rates will impact future interest expense. We do not hold any derivative contracts that hedge our interest rate risk; however, we may consider entering into such contracts in the future.

We estimate a hypothetical 10% adverse movement in interest rates of our variable rate debt would not materially change annual interest expense.

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Item 8. Financial Statements

Index to the Consolidated Financial Statements Page

Report of Independent Registered Public Accounting Firm (PCAOB ID 238) 59

Consolidated Statements of Income 62

Consolidated Statements of Comprehensive Income 63

Consolidated Balance Sheets 64

Consolidated Statements of Stockholders’ Equity 65

Consolidated Statements of Cash Flows 66

Notes to Consolidated Financial Statements 67

1.Background and Nature of Operations 67

2.Summary of Accounting Policies 67

3.Acquisitions and Licensing Arrangements 73

4.Earnings per Share 78

5.Product and Geographic Information 79

6.Stock-Based Compensation Plans 80

7.Restructuring 82

8.Taxes on Income 83

9.Inventories 87

10.Property, Plant and Equipment 88

11.Intangibles and Goodwill 88

12.Long-Term Debt, Short-Term Borrowings and Leases 90

13.Financial Instruments 94

14.Pension and Other Postretirement Benefit Plans 96

15.Accumulated Other Comprehensive Income (Loss) 100

16.Samsung Collaboration 100

17.Third-Party Arrangements 101

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Report of Independent Registered Public Accounting Firm

To theBoard of Directors and Stockholders of Organon & Co.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Organon & Co. and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework(2013)issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO because material weaknesses in internal control over financial reporting existed as of that date related to the Company (i) failing to set an appropriate tone at the top which resulted in violations of the Company’s code of conduct, and (ii) not designing or maintaining effective controls related to providing complete information and appropriate communication between the former CEO and certain senior members of the Company’s U.S. commercial organization and the Company’s disclosure committee and financial reporting group to evaluate disclosures and financial reporting conclusions related to sales practices for wholesalers.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses referred to above are described in Management's Annual Report on Internal Control Over Financial Reporting appearing under Item 9A. We considered these material weaknesses in determining the nature, timing, and extent of audit tests applied in our audit of the 2025 consolidated financial statements, and our opinion regarding the effectiveness of the Company’s internal control over financial reporting does not affect our opinion on those consolidatedfinancial statements.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in management's report referred to above. Our responsibility is to express opinions on the Company’s consolidatedfinancial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

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Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Annual Goodwill Impairment Assessment – U.S. Reporting Unit

As described in Notes 2 and 11 to the consolidated financial statements, the Company’s goodwill balance was $4,153 million, of which $921 million relates to the U.S. reporting unit as of December 31, 2025. The Company recorded a goodwill impairment charge of $301 million during the fourth quarter of 2025, which represents the amount by which the carrying value of goodwill exceeded its implied fair value of the U.S. reporting unit’s carrying amount. Goodwill is evaluated for impairment in the fourth quarter each year, or more frequently if impairment indicators exist, by first assessing qualitative factors to determine whether it is more likely than not that fair value is less than carrying value. If the Company concludes it is more likely than not that fair value is less than carrying value, a quantitative fair value test is performed. If carrying value is greater than fair value, a goodwill impairment charge will be recorded for the difference (up to the carrying value of goodwill). Management estimates the fair value of a reporting unit using a discounted cash flow model which relies on projected cash flows and market assumptions. Key assumptions used in projected cash flows include projected revenue growth rates, cost of sales, selling, general and administrative expenses, terminal growth rates, and discount rates.

The principal considerations for our determination that performing procedures relating to annual goodwill impairment assessment of the U.S. reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the U.S. reporting unit; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, cost of sales, selling, general and administrative expenses, terminal growth rate and discount rate; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of the U.S. reporting unit. These procedures also included, among others, (i) testing management’s process for developing the fair value estimate of the U.S. reporting unit; (ii) evaluating the appropriateness of the discounted cash flow model used by management; (iii) testing the completeness and accuracy of underlying data used in the discounted cash flow model; and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, cost of sales, selling, general and administrative expenses, terminal growth rate and discount rate. Evaluating management’s assumptions related to revenue growth rates, cost of sales, selling, general and administrative expense and terminal growth rate involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the U.S. reporting unit; (ii) the consistency with external market and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the discounted cash flow model and (ii) the reasonableness of the discount rate assumption.

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U.S. Rebate Accruals – Medicaid and Managed Care Rebates

As described in Note 2 to the consolidated financial statements, the Company records certain variable consideration including discounts, which are estimated at the time of sale generally using the expected value method. Amounts accrued, included in accrued and other current liabilities, for aggregate customer discounts as of December 31, 2025, in the United States was $412 million, of which the majority related to U.S. rebate accruals for Medicaid and Managed Care. These rebate accruals are evaluated on a quarterly basis through comparison of information provided by the wholesalers, health maintenance organizations, pharmacy benefit managers, federal and state agencies, and other customers to the amounts accrued. Certain of these discounts are in the form of rebates, which are amounts owed based upon definitive contractual agreements or legal requirements with private sector (Managed Care) and public sector (Medicaid and Medicare Part D) benefit providers, after the final dispensing of the product by a pharmacy to a benefit plan participant. The provision for rebates is based on expected patient usage, as well as inventory levels in the distribution channel to determine the contractual obligation to the benefit providers. Management uses historical customer segment utilization mix, sales, changes to product mix and price, inventory levels in the distribution channel, government pricing calculations and prior payment history in order to estimate the expected provision.

The principal considerations for our determination that performing procedures relating to U.S. rebate accruals for Medicaid and Managed Care is a critical audit matter are (i) the significant judgment by management when developing these rebate accruals; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to changes to price and historical customer segment utilization mix; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to provisions for U.S. Medicaid and Managed Care rebates. These procedures also included, among others (i) developing an independent estimate of the U.S. rebate accruals for Medicaid and Managed Care by utilizing third-party data on historical customer segment utilization mix in the U.S., changes to price, the terms of the specific rebate programs, and the historical trends of actual rebate claims paid; (ii) comparing the independent estimate to the U.S. rebate accruals for Medicaid and Managed Care recorded by management; and (iii) testing, on a sample basis, actual rebate claims paid for U.S. Medicaid and Managed Care, including evaluating those claims for consistency with the contractual terms of the Company's rebate agreements. Professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of certain changes to price used in the Medicaid portion of the accrual.

/s/ PricewaterhouseCoopers LLP

Florham Park, New Jersey

February 24, 2026

We have served as the Company's auditor since 2019.

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Organon & Co.

Consolidated Statements of Income

($ in millions except shares in thousands and per share amounts)

Year EndedDecember 31,

Acquired in-process research and development and milestones 6 81 8

Goodwill impairment 301 — —

Other (income) expense, net (119) 21 15

Income tax expense (benefit) 238 (57) (350)

Earnings per share:

Weighted average shares outstanding:

The accompanying notes are an integral part of these Consolidated Financial Statements.

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Organon & Co.

Consolidated Statements of Comprehensive Income

($ in millions)

Year EndedDecember 31,

Other Comprehensive Income (Loss), Net of Taxes:

Cumulative translation adjustment 101 (106) 48

The accompanying notes are an integral part of these Consolidated Financial Statements.

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Organon & Co.

Consolidated Balance Sheets

($ in millions except shares in thousands and per share amounts)

Assets

Current Assets:

Cash and cash equivalents $ 574 $ 675

Assets held for sale 8 —

Property, plant and equipment, net 1,303 1,168

Noncurrent assets held for sale 390 —

Liabilities and Equity

Current Liabilities:

Current portion of long-term debt and short-term borrowings $ 16 $ 20

Accrued and other current liabilities 1,335 1,411

Income taxes payable 85 134

Liabilities held for sale 2 —

Deferred income taxes 57 74

Other noncurrent liabilities 1,008 977

Noncurrent liabilities held for sale 32 —

Contingencies (Note 18)

Organon & Co. Stockholders’ Equity:

Additional paid-in capital 167 108

Accumulated other comprehensive loss (527) (649)

Total Stockholders’ Equity 752 472

Total Liabilities and Stockholders’ Equity $ 12,867 $ 13,101

The accompanying notes are an integral part of these Consolidated Financial Statements.

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Consolidated Statements of Stockholders’ Equity

($ in millions, except shares in thousands and per share amounts)

Shares Par Value

Other comprehensive income, net of taxes — — — — 23 23

Cash dividends declared on common stock ($1.12 per share) — — — (295) — (295)

Stock-based compensation plans and other 1,256 — 25 59 — 84

Other comprehensive loss, net of taxes — — — — (108) (108)

Cash dividends declared on common stock ($1.12 per share) — — — (297) — (297)

Stock-based compensation plans and other 2,173 — 83 — — 83

Other comprehensive income, net of taxes — — — — 122 122

Cash dividends declared on common stock ($0.34 per share) — — — (88) — (88)

Stock-based compensation plans and other 2,517 — 59 — — 59

The accompanying notes are an integral part of these Consolidated Financial Statements.

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Consolidated Statements of Cash Flows

($ in millions)

Year Ended December 31,

Cash Flows from Operating Activities

Impairment of assets 9 — —

Acquired in-process research and development and milestones 6 81 8

Accretion and changes in fair value in contingent consideration (50) 11 —

Deferred income tax expense (benefit) 63 (160) (485)

Unrealized foreign exchange (gain) loss (21) (2) 40

Gain on debt repurchase (73) — —

Impairment of Goodwill 301 — —

Net changes in assets and liabilities, net of assets acquired

Other current assets (32) (236) (10)

Accrued and other current liabilities (142) (101) 102

Income taxes payable (61) (65) 16

Net Cash Flows Provided by Operating Activities 700 939 799

Cash Flows from Investing Activities

Proceeds from sale of property, plant and equipment 1 4 1

Acquired in-process research and development and milestones (30) (71) (8)

Dermavant acquisition, net of cash acquired (75) (166) —

Purchase of product rights and asset acquisition (124) (105) (2)

Net Cash Flows Used in Investing Activities (390) (513) (260)

Cash Flows from Financing Activities

Payment of long-term debt issuance costs — (38) —

Employee withholding taxes related to stock-based awards (15) (22) (17)

Net Cash Flows Used in Financing Activities (561) (368) (569)

Effect of Exchange Rate Changes on Cash and Cash Equivalents 150 (76) 17

Net Decrease in Cash and Cash Equivalents (101) (18) (13)

Cash and Cash Equivalents, Beginning of Period 675 693 706

Cash and Cash Equivalents, End of Period $ 574 $ 675 $ 693

The accompanying notes are an integral part of these Consolidated Financial Statements.

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Notes to Consolidated Financial Statements

1. Background and Nature of Operations

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 NXTTM 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 PuregonTM). 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. Organon’s other women’s health products include the Jada® System, which 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.

2. Summary of Accounting Policies

Revenue Recognition —Recognition of revenue requires evidence of a contract, probable collection of sales proceeds and completion of substantially all performance obligations. The Company acts as the principal in its customer arrangements and therefore records revenue on a gross basis. The majority of the Company’s contracts have a single performance obligation — the promise to transfer goods. Shipping is considered immaterial in the context of the overall customer arrangement and damages or loss of goods in transit are rare. Therefore, shipping is not deemed a separately recognized performance obligation.

Revenues from sales of products, including tenders, are recognized at a point in time when control of the goods is transferred to the customer, which the Company has determined is when title and risks and rewards of ownership transfer to the customer and the Company is entitled to payment.

The nature of the Company’s business gives rise to several types of variable consideration including discounts and returns, which are estimated at the time of sale generally using the expected value method, although the most likely amount method is used for prompt pay discounts.

In the United States, sales discounts are issued to customers at the point-of-sale, through an intermediary wholesaler (known as chargebacks), or in the form of rebates. Additionally, sales are generally made with a limited right of return under certain

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conditions. Revenues are recorded net of provisions for sales discounts and returns, which are established at the time of sale. In addition, revenues are recorded net of time value of money discounts if collection of accounts receivable is expected to be in excess of one year.

Chargebacks are discounts that occur when a contracted customer purchases through an intermediary wholesaler. The contracted customer generally purchases product from the wholesaler at its contracted price plus a mark-up. The wholesaler, in turn, charges the Company back for the difference between the price initially paid by the wholesaler and the contract price paid to the wholesaler by the customer. The Company estimates the provision for chargebacks based on expected sell-through levels by the Company’s wholesale customers to contracted customers, as well as estimated wholesaler inventory levels. Rebates are amounts owed based upon definitive contractual agreements or legal requirements with private sector, (Managed Care), and public sector (Medicaid and Medicare Part D) benefit providers, after the final dispensing of the product by a pharmacy to a benefit plan participant. The provision for rebates is based on expected patient usage, as well as inventory levels in the distribution channel to determine the contractual obligation to the benefit providers. The Company uses historical customer segment utilization mix, sales, changes to product mix and price, inventory levels in the distribution channel, government pricing calculations and prior payment history to estimate the expected provision.

The Company continually monitors the provision for aggregate customer discounts. There were no material adjustments to estimates associated with the aggregate customer discount provision in 2025, 2024, or 2023.

Summarized information about changes in the aggregate customer discount accrual related to sales in the United States is as follows:

Year EndedDecember 31,

(1) The year ended December 31, 2024 includes $48 million of liabilities assumed as part of the 2024 Dermavant acquisition.

Amounts accrued for aggregate customer discounts are evaluated on a quarterly basis through comparison of information provided by the wholesalers, health maintenance organizations, pharmacy benefit managers, federal and state agencies, and other customers to the amounts accrued. The accrued balances relative to the provisions for chargebacks and rebates in the United States included in Accounts receivable and Accrued and other current liabilities were $111 million and $412 million, respectively, at December 31, 2025 and $100 million and $380 million, respectively, at December 31, 2024.

Outside of the United States, variable consideration in the form of discounts and rebates is a combination of commercially-driven discounts in highly competitive product classes, discounts required to gain or maintain reimbursement, or legislatively mandated rebates. The accrued balances relative to the provision for chargebacks and rebates, based on the terms and nature of the rebate, are included in Accounts receivable and Accrued and other current liabilities. Rebates may also be required based on specific product sales thresholds. The Company applies an estimated factor against its actual invoiced sales to represent the expected level of future discount or rebate obligations associated with the sale. At December 31, 2025 and 2024, the accrued balances related to the provision for rebates and discounts included in other current liabilities were approximately $180 million and $155 million, respectively.

The Company maintains a returns policy that allows customers in certain countries to return product within a specified period prior to and subsequent to the expiration date (generally, three to six months before and 12 months after product expiration). The estimate of the provision for returns is based upon historical experience with actual returns and consideration of other relevant factors.

The Company’s payment terms are typically 30 days to 90 days, although certain markets have longer payment terms. See Note 5 “Product and Geographic Information” for disaggregated revenue disclosures.

Cash Equivalents —Cash equivalents are comprised of certain highly liquid investments with original maturities of three months or less.

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Notes to Consolidated Financial Statements

Inventories — Inventories are valued at the lower of cost or net realizable value. The cost of a substantial majority of U.S. inventories is determined using the last-in, first-out (“LIFO”) method for both financial reporting and tax purposes. The cost of all other inventories is determined using the first-in, first-out (“FIFO”) method.

Value Added Tax —The Company’s purchases, sales and intercompany transfers of goods are subject to value added tax (“VAT”) and VAT receivables are recognized for amounts that represent credits against future VAT obligations. VAT receivables included inOther current assets were $102 million and $103 million as of December 31, 2025 and 2024, respectively. VAT payables included in Accrued and other current liabilities were $17 million and $11 million as of December 31, 2025 and 2024, respectively. The related expense is included in the Company’s operating expenses.

Depreciation —Depreciation is provided over the estimated useful lives of the assets, principally using the straight-line method. The estimated useful lives primarily range from 25 to 40 years for buildings, and from 3 to 15 years for machinery, equipment and office furnishings. Depreciation expense was $156 million in 2025, $132 million in 2024, and $120 million in 2023. Repairs and maintenance costs are expensed as incurred as they do not extend the economic life of an asset.

Advertising and Promotion Costs —Advertising and promotion costs are expensed as incurred and included in Selling, general and administrative expenses. The Company recorded advertising and promotion expenses of $240 million, $206 million, and $209 million in 2025, 2024 and 2023, respectively.

Goodwill —Goodwill represents the excess of the consideration transferred over the fair value of net assets of businesses acquired. Goodwill is evaluated for impairment each year in the fourth quarter, or more frequently if impairment indicators exist, by first assessing qualitative factors to determine whether it is more likely than not that fair value is less than carrying value. If the Company concludes it is more likely than not that fair value is less than carrying value, a quantitative fair value test is performed. If carrying value is greater than fair value, a goodwill impairment charge will be recorded for the difference (up to the carrying value of goodwill).

The Company estimates the fair value of a reporting unit using a discounted cash flow model which relies on projected cash flows and market assumptions. Key assumptions used in projected cash flows include projected revenue growth rates, cost of sales, selling, general and administrative expenses, terminal growth rates, and discount rates. These assumptions require significant judgment and are based on best estimates of future economic and market conditions. A significant decline in forecasted performance, whether due to external economic factors or internal operational challenges, could result in the fair value of either the U.S. or International reporting unit falling below its carrying amount. In such cases, the Company would be required to recognize a non-cash impairment charge, which could materially impact our financial condition and results of operations. Additionally, the Company may be required to record impairment charges on goodwill related to a reporting unit if adverse macroeconomic or geopolitical developments materially affect our business outlook. These developments may include, but are not limited to, the implementation of tariffs, changes in trade policies, inflationary pressures, supply chain disruptions, or regulatory changes that reduce forecasts or increase operating costs. See Note 11 “Intangibles and Goodwill” for additional details.

Intangibles — Intangibles include products and product rights and licenses, which are initially recorded at fair value, assigned an estimated useful life, and amortized on a straight-line basis over their estimated useful lives. Licenses include milestone payments made to collaborative partners upon or subsequent to regulatory approval. The estimated useful lives of intangibles range from 5 to 15 years. The Company periodically evaluates whether current facts or circumstances indicate that the carrying values of its intangibles may not be recoverable. If such circumstances are determined to exist, an estimate of the undiscounted future cash flows of these assets, or appropriate asset groupings, is compared to the carrying value to determine whether an impairment exists. If the asset is determined to be impaired, the loss is measured based on the difference between the carrying value of the intangible asset and its fair value, which is determined based on the net present value of estimated future cash flows. See Note 11 “Intangibles and Goodwill” for additional details.

Acquired In-Process Research and Development (“IPR&D”) —IPR&D that the Company acquires in conjunction with the acquisition of a business represents the fair value assigned to incomplete research projects which, at the time of acquisition, have not reached technological feasibility. The amounts are capitalized and are accounted for as indefinite-lived intangible assets, subject to impairment testing until completion or abandonment of the projects. Upon successful completion of each project, Organon will make a determination as to the then-useful life of the intangible asset, generally determined by the period in which the substantial majority of the cash flows are expected to be generated, and begin amortization. The Company evaluates IPR&D for impairment as of October 1 each year, or more frequently if impairment indicators exist and it is more likely than not that the fair value is less than its carrying amount, by performing a quantitative test that compares the fair value of the IPR&D intangible asset with its carrying value. If the fair value is less than the carrying amount, an impairment loss is recognized in operating results. See Note 11 “Intangibles and Goodwill” for additional details.

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Notes to Consolidated Financial Statements

Contingent Consideration —For transactions accounted for as a business acquisition, contingent consideration liabilities are recognized at the estimated fair value on the acquisition date. Subsequent changes to the fair value of contingent consideration liabilities are recognized in Other expense, net in the Consolidated Statements of Income. Contingent consideration payments made or received soon after the acquisition date are classified as Investing activities in the Consolidated Statements of Cash Flows. Contingent consideration payments not made or received soon after the acquisition date that are related to the acquisition date fair value are reported as Financing activities in the Consolidated Statements of Cash Flows, and amounts paid or received in excess of the original acquisition date fair value are reported as Operating activities in the Consolidated Statements of Cash Flows. For transactions accounted for as an asset acquisition, contingent consideration liabilities that are payable prior to regulatory approval are recognized in Acquired in-process research and development and milestones in the Consolidated Statements of Income when achievement of the milestone is deemed probable. Contingent consideration liabilities that are payable on or after regulatory approval are capitalized as intangible assets when the payments have become probable and amortized to Cost of sales over the remaining useful life of the related intangible assets.

Research and Development —Research and development costs associated with clinical development programs that have not yet received regulatory approval are expensed as incurred.

Acquired in-process research and development and milestones— Acquired IPR&D and milestones includes upfront and milestone payments, related to asset acquisitions, licensing or collaborative arrangements that are not considered an acquisition of a business and involve clinical development programs that have not yet received regulatory approval.

Foreign Currency Transaction and Translation — Transactions denominated in a currency other than the entity's functional currency is considered a foreign currency transaction. Foreign currency transactions may produce cash, receivables or payables which are fixed in terms of the amount of foreign currency to be received/paid. A change in exchange rate before settlement between the functional currency and the currency in which the transaction is denominated is included in net income in the period of exchange rate change as Exchange losses. The net assets of international operations where the local currencies have been determined to be the functional currencies are translated into U.S. dollars using current exchange rates. The U.S. dollar effects that arise from translating the net assets of these subsidiaries at changing rates are recorded in the foreign currency translation account, which is included in Accumulated other comprehensive loss and reflected as a separate component of equity. For those operations that operate in highly inflationary economies and for those operations where the U.S. dollar has been determined to be the functional currency, non-monetary foreign currency assets and liabilities are translated using historical rates, while monetary assets and liabilities are translated at current rates, with the U.S. dollar effects of rate changes included in Exchange losses.

Stock-Based Compensation — Effective June 3, 2021, Organon established the 2021 Incentive Stock Plan (the “Plan”). A total of 42.8 million shares of Common Stock are authorized under the Plan, reflecting an increase of 7.8 million shares approved in the Company’s 2025 Proxy Statement. The plan provides for the grant of various types of awards, including restricted stock unit awards, stock appreciation rights, stock options, performance-based awards and cash awards. Under the Plan, the exercise price of awards, if any, is set on the grant date and may not be less than the fair market value per share on that date. The Company measures stock-based compensation for equity awards at fair value on the date of grant and records stock-based compensation as a charge to earnings net of the estimated impact of forfeited awards. Accordingly, the Company recognizes stock-based compensation cost only for those stock-based awards that are estimated to ultimately vest over their requisite service period, based on the vesting provisions of the individual grants. The cumulative effect on current and prior periods of a change in the estimated forfeiture rate is recognized as compensation cost in earnings in the period of the change. See Note 6 “Stock-Based Compensation Plans” for additional details.

Pension and Other Postretirement Benefit Plans — For certain defined benefit plans, the over funded or underfunded status of the plan was recognized as an asset or liability on the consolidated balance sheet. Organon sponsors certain non-U.S. defined benefit pension plans. See Note 14 “Pension and Other Postretirement Benefit Plans” for additional details.

Restructuring Costs —Costs associated with exit or disposal activities are recognized in the period in which they are incurred. Costs for one-time termination benefits in which the employee is required to render service until termination in order to receive the benefits are recognized ratably over the future service period. In accordance with existing benefit arrangements, future employee termination costs to be incurred in conjunction with involuntary separations are accrued when such separations are probable and estimable.

Contingencies and Legal Defense Costs —The Company records accruals for contingencies and legal defense costs expected to be incurred in connection with a loss contingency when it is probable that a liability has been incurred and the amount can be reasonably estimated.

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Notes to Consolidated Financial Statements

Taxes on Income —Deferred taxes are recognized for the future tax effects of temporary differences between financial and income tax reporting based on enacted tax laws and rates. The Company establishes valuation allowances for its deferred tax assets when the amount of expected future income is not likely to support the use of the deduction or credit. The Company assesses all available evidence to estimate whether a valuation allowance should be recorded against existing deferred tax assets. The amounts of the deferred tax asset considered realizable, however, could be adjusted in future periods if estimates of future income are reduced or increased.

The Company evaluates tax positions to determine whether the benefits of tax positions are more likely than not of being sustained upon audit based on the technical merits of the tax position. For tax positions that are more likely than not of being sustained upon audit, the Company recognizes the largest amount of the benefit that is greater than 50% likely of being realized upon ultimate settlement in the Consolidated Financial Statements. For tax positions that are not more likely than not of being sustained upon audit, the Company does not recognize any portion of the benefit in the Consolidated Financial Statements.

The Company recognizes interest and penalties associated with uncertain tax positions as a component of Taxes on Income in the Consolidated Statement of Income. The Company accounts for the tax effects of the tax on global intangible low-taxed income of certain foreign subsidiaries in the income tax provision in the period the tax arises. The Company and Merck entered into the Tax Matters Agreement in connection with the Separation. See Note 17 “Third-Party Arrangements” for additional details and defined terms.

Leases — The Company has operating leases primarily for real estate. The Company determines if an arrangement is a lease at inception. When evaluating contracts for embedded leases, the Company exercises judgment to determine if there is an explicit or implicit identified asset in the contract and if the Company controls the use of that asset. Embedded leases are immaterial. The lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company has made an accounting policy election not to record short-term leases (leases with an initial term of 12 months or less) on the balance sheet. Lease expense associated with short term leases is not material for all periods presented.

Lease expense for operating lease payments is recognized on a straight-line basis over the term of the lease. Operating lease assets and liabilities are recognized based on the present value of lease payments over the lease term. Since most of the Company’s leases do not have a readily determinable implicit discount rate, the Company uses its incremental borrowing rate to calculate the present value of lease payments. On a quarterly basis, an updated incremental borrowing rate is determined based on the weighted average remaining lease term of each asset class and the Company’s pretax cost of debt for that same term. The updated rates for each asset class are applied prospectively to new leases. The Company does not separate lease components (e.g., payments for rent) from non-lease components (e.g., common-area maintenance costs) in the event that the agreement contains both. The Company includes both the lease and fixed non-lease components for purposes of calculating the lease liability and the related right-of-use asset. See Note 12 “Long-Term Debt, Short Term Borrowings and Leases” for additional details.

Principles of Consolidation — The consolidated financial statements include the accounts of the Company and all of its subsidiaries. All intercompany transactions and accounts have been eliminated.

Use of Estimates —The presentation of these Consolidated Financial Statements and accompanying notes in conformity with U.S. GAAP require management to make estimates and assumptions that affect the amounts reported. Estimates are used in determining such items as provisions for sales discounts and returns, depreciable and amortizable lives, recoverability of inventories, amounts recorded for contingencies, environmental liabilities, pension and other postretirement benefit plan assumptions, stock-based compensation assumptions, restructuring costs, impairments of long-lived or indefinite-lived assets (including intangible assets and goodwill), investments, and taxes on income. Additionally, estimates are used in acquisitions, including initial fair value determinations of assets and liabilities (primarily IPR&D, intangible assets and contingent consideration), as well as subsequent fair value measurements.

Segments — The Company operates as one operating segment comprised of two reporting units: U.S. and International. Organon is engaged in developing and delivering innovative health solutions through its portfolio of prescription therapies within women's health and general medicines. The Company’s chief operating decision‐maker (the “CODM”) is the Interim Chief Executive Officer. The CODM assesses performance and decides how to allocate resources for our one operating segment based on consolidated net income that is reported on the consolidated statements of income. The Company has also evaluated the significant segment expenses incurred by our single segment and regularly provided to the CODM. The significant segment expenses provided to the CODM are consistent with those reported on the Consolidated Statements of Income and include cost of sales, selling, general and administrative, research and development, interest expense and income

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taxes. The CODM uses these metrics to make key operating decisions such as: approving a new product launch strategy, making significant capital expenditures, approving the design of key commercialization strategies, decisions about key personnel, and approving annual operating and capital budgets. Our CODM considers budget-to-actual variances and year over year performance when making decisions supporting capital resource allocation. The Company manages assets on a consolidated basis as reported on the consolidated balance sheets.

Recently Adopted Accounting Standards

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. The amendments in this ASU are effective for annual periods beginning on January 1, 2025, and should be applied on a prospective basis with the option to apply the standard retrospectively. The Company adopted this ASU for the fiscal year ended December 31, 2025, on a prospective basis. The adoption of the ASU did not have an impact on the Company’s consolidated financial condition or results of operations. See Note 8 “Taxes on Income” for additional details and defined terms.

Recently Issued Accounting Standards Not Yet Adopted

In October 2025, the FASB issued 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 having 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.

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Notes to Consolidated Financial Statements

3. Acquisitions and Licensing Arrangements

2026 Transactions

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 earnout payments of up to $25 million based on the achievement of certain 2026 net sales targets. Approximately 100 employees transferred to Laborie as part of this transaction.

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 asset and liabilities held for sale are as follows:

Inventory $ 8

Assets held for sale $ 8

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

2025 Transactions

Biogen Inc. (“Biogen”)

In March 2025, Organon acquired from Biogen the regulatory and commercial rights in the United States for Tofidence. Tofidence, launched in the U.S. market in May 2024, is indicated in certain patients for the treatment of moderately to severely active rheumatoid arthritis, giant cell arteritis, polyarticular juvenile idiopathic arthritis, systemic juvenile idiopathic arthritis, and COVID-19. Under the terms of the agreement with Biogen, Organon paid an upfront payment of $51 million in July 2025, and is obligated to pay tiered royalty payments based on net sales and tiered annual net sales milestone payments of up to $45 million from a previous in-license arrangement with Bio-Thera Solutions Ltd., the product developer for Tofidence. In the first quarter of 2025, the Company recognized an intangible asset of $51 million, related to the upfront payment to Biogen, which will be amortized over 10 years.

Shanghai Henlius Biotech, Inc. (“Henlius”)

In November 2025, the FDA approved the Biologics License Application for Poherdy 420 mg/14 mL injection for intravenous use, an interchangeable biosimilar to Perjeta2 (pertuzumab), for all indications of the reference product. The Company is assessing the future commercial launch of the product.

In the third quarter of 2025, the FDA approved Bildyos injection 60 mg/mL and Bilprevda injection 120 mg/1.7 mL, biosimilars to Prolia and Xgeva, respectively, for all indications of the reference products, and the European Commission granted marketing authorization for Bildyos and Bilprevda. 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 $30 million related to these milestones. The intangible assets will be amortized over nine years. As of December 31, 2025, Organon paid $20 million related to these milestones.

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Notes to Consolidated Financial Statements

In February 2025, Organon paid $10 million related to the milestone for the development of HLX11, an investigational biosimilar of Perjeta, which was recognized as Acquired in-process research and development and milestones in 2024. In March 2025, the European Medicines Agency validated the marketing authorization application for HLX11.

Oss Biotech Site

In July 2025, Organon acquired the Oss Biotech manufacturing facility in the Netherlands from Merck & Co., Inc., Rahway, NJ, U.S. (“Merck”). This agreement covers Organon’s fertility drug substance production and associated support functions. Organon is required to pay aggregate consideration of $25 million, of which $15 million was paid in July 2025 and the remaining $10 million will be paid in the first half of 2026. In addition to the purchase of the facility, the Company also paid $71 million for the purchase of the remaining inventory at the site.

2024 Transactions

Dermavant Sciences Ltd. (“Dermavant”)

On October 28, 2024, Organon acquired Dermavant, a company dedicated to developing and commercializing innovative therapeutics in immuno-dermatology. Dermavant’s novel product, Vtama was approved by the FDA in May 2022 for the topical treatment of mild, moderate, and severe plaque psoriasis in adults. In December 2024, the FDA approved Vtama for the treatment of atopic dermatitis, also known as eczema, in adults and children two 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. The acquisition expanded Organon’s existing portfolio of general medicines.

Consideration for Dermavant consists of the upfront payment of $175 million and a $75 million milestone payment upon regulatory approval of the atopic dermatitis indication in the United States, which was paid in the first quarter of 2025, 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 were accounted for at fair value on the acquisition date.

The transaction was accounted for as a business combination. The aggregate consideration is calculated as follows:

(in millions)

Cash consideration paid to Dermavant at closing $ 198

Fair value of contingent consideration, as of acquisition date 383

Aggregate purchase price consideration $ 581

Contingent consideration included as part of the consideration relates to potential future milestone obligations of up to $1.025 billion, including: (i) up to $75 million in cash payable upon regulatory approval, and (ii) up to $950 million for the achievements of certain commercial milestones. The fair value of the contingent consideration recognized on the acquisition date was determined using the inputs disclosed in Note 13 “Financial Instruments.” The Company reassesses its acquisition-related contingent consideration liabilities each quarter for changes in fair value.

In the second quarter of 2025, the final allocation of the consideration transferred to the assets acquired and the liabilities assumed was completed. The Company did not make any adjustments to the allocation of the consideration since initially reported in the fourth quarter of 2024.

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Notes to Consolidated Financial Statements

The following table summarizes the fair values of the assets acquired and liabilities assumed related to the Dermavant acquisition as of the acquisition date:

($ in millions)

Cash and cash equivalents $ 31

Accounts receivable 46

Inventories 97

Other assets 36

Long-term debt (258)

Other liabilities (108)

Deferred income taxes (12)

Total identifiable net assets 504

Goodwill 77

Purchase Consideration $ 581

The carrying values of cash and cash equivalents, accounts receivables, raw materials inventory, other assets and other liabilities represented their fair values at the date of acquisition.

The fair value of finished goods inventory was determined based on its net realizable based on the estimated selling price adjusted for cost of the selling effort and a reasonable profit allowance for the selling effort.

The fair value of the identifiable intangible assets was determined primarily using the “income approach,” which requires a forecast of the expected future cash flows (including net revenue, cost of sales, operating expenses) and the appropriate discount rate.

The intangible assets acquired, as well as their fair values and estimated useful life consist of the following:

($ in millions) Fair Value Estimated Useful Life (in years)

Currently marketed products - products and product rights:

Vtama - Plaque Psoriasis $ 216 11

Indefinite life - acquired IPR&D:

Vtama - Atopic Dermatitis (1) 395 N/A

Vtama - International 61 N/A

(1) In December 2024, the FDA approved Vtama for the treatment of atopic dermatitis, also known as eczema, in adults and children two years of age and older. As a result, the Company reclassified the Vtama - Atopic Dermatitis acquired IPR&D intangible asset to product and product rights.

The fair value of the assumed debt was determined using the option-pricing model which is determined using expected payments and timing of payments, and a discount rate.

The fair value measurement of contingent consideration arising from business combinations was determined via a probability-weighted cash flows using a Monte Carlo simulation model which was 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.

The excess of the consideration paid over the fair value of the net assets acquired was recorded as goodwill. The goodwill recognized upon acquisition is not deductible for income tax purposes.

In December 2024, the FDA approved Vtama for atopic dermatitis. As a result, the Company transferred the IPR&D amount of $395 million to Currently marketed products – products and product rights and will amortize the asset over 11 years.

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Notes to Consolidated Financial Statements

During the fourth quarter of 2024, the regulatory milestone related to the atopic dermatitis indication of Vtama, which was recorded as part of contingent consideration at fair value, was achieved and recorded inAccrued and other current liabilities.

During the fourth quarter of 2024, Organon recognized an additional intangible asset of $24 million, related to a sales-based milestone that was deemed probable and was related to an assumed licensing agreement. The intangible asset will be amortized over 11 years.

In the first quarter of 2025, the Company paid $75 million for the regulatory milestone related to the atopic dermatitis indication of Vtama in the United States achieved during the fourth quarter of 2024, and paid $35 million related to sales-based milestones that were achieved in the fourth quarter of 2024 related to an assumed licensing agreement.

In April 2025, Health Canada approved Nduvra® (tapinarof) cream, the first in a novel class of aryl hydrocarbon receptor agonists to be approved in Canada for the topical treatment of plaque psoriasis in adults. As a result, in the second quarter of 2025, the Company reclassified the acquired IPR&D intangible asset to product and product rights and will amortize the intangible asset over nine years.

Unaudited Pro forma Information

The unaudited pro forma combined financial information was prepared using the acquisition method of accounting and was based on the historical financial information of Organon and Dermavant. The unaudited pro forma financial information includes adjustments to reflect incremental amortization expense to be incurred based on the current preliminary fair values of the identifiable intangible assets acquired; the incremental cost of sales related to the fair value adjustments associated with acquisition date inventory; and the reclassification of acquisition-related costs incurred during the year ended December 31, 2024 to the year ended December 31, 2023. The unaudited pro forma financial information is not necessarily indicative of what the consolidated results of operations would have been had the acquisition been completed on January 1, 2023. In addition, the unaudited pro forma financial information is not a projection of future results of operations of the combined Company nor does it reflect the expected realization of any synergies or cost savings associated with the acquisition.

The following unaudited pro forma summary presents consolidated information as if the business combination had occurred on January 1, 2023:

Pro formaYear EndedDecember 31,

(unaudited) (unaudited)

Transactions Costs

Organon incurred costs associated with the Dermavant transaction of approximately $12 million, comprised of transaction fees and legal costs and were recognized in Selling, general and administrative expenses for the year ended December 31, 2024.

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Notes to Consolidated Financial Statements

Suzhou Centergene Pharmaceuticals (“Centergene”)

In September 2024, we entered into license and supply agreements with Centergene, pursuant to which we acquired the exclusive commercialization rights to Centergene’s investigational asset, SJ02, in China. Due to changes in the evolving fertility landscape in China, the Company exited its agreement with Centergene. As a result, during the first quarter of 2025, the Company recognized $6 million in Acquired in-process research and development and milestones.

Eli Lilly (“Lilly”)

In December 2023, Organon announced an agreement with Lilly to become the sole distributor and promoter of the migraine medicine Emgality in Europe. Lilly will remain the marketing authorization holder and will manufacture the products for sale. Under the terms of the agreement, Organon 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 deemed probable. In the first quarter of 2024, the Company 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.

In August of 2024, Organon expanded its 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. Organon paid an upfront payment of $23 million for the expansion of territory upon closing of the transaction in August 2024, and will recognize sales-based milestones when the achievement is deemed probable. In the third quarter of 2024, Organon 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.

As of December 31, 2025, Organon has $50 million accrued in Accrued and other current liabilities and $190 million accrued in Other noncurrent liabilities related to the probable sales-based milestones. In January 2025, the Company paid $20 million related to the milestones.

Cirqle Biomedical (“Cirqle”)

In July 2022, the Company entered into a research collaboration and license agreement with Cirqle for a novel investigational non-hormonal, on-demand contraceptive candidate. Under the terms of the agreement, Cirqle is responsible for conducting preclinical studies according to the mutually agreed research plan. Organon obtained exclusive worldwide rights to develop and commercialize the asset. For the year ended December 31, 2024, research and development milestones related to the Cirqle agreement were determined to be probable of being achieved and the Company expensed and paid $10 million in Acquired in-process research and development and milestones expense.

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Notes to Consolidated Financial Statements

4. Earnings per Share (“EPS”)

The calculations of basic and diluted EPS are as follows:

Year EndedDecember 31,

($ in millions and shares in thousands, except per share amounts) 2025 2024 2023

Stock awards and equity units (share equivalent) 1,269 2,106 1,031

EPS:

Anti-dilutive shares excluded from the calculation of EPS 12,641 8,363 9,025

Diluted EPS was computed using the treasury stock method for stock option awards, performance share units, and restricted share units. The computation of diluted EPS excludes the effect of the potential exercise of stock-based awards when the effect of the potential exercise would be anti-dilutive.

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Notes to Consolidated Financial Statements

5. Product and Geographic Information

Revenues of the Company’s products were as follows:

Year Ended December 31,

($ in millions) U.S. Int’l Total U.S. Int’l Total U.S. Int'l Total

Women’s Health

General Medicines

Biosimilars

Established Brands

Cardiovascular

Respiratory

Non-Opioid Pain, Bone and Dermatology

Other

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.

(1) Includes sales of products not listed separately.

(2)Includes manufacturing sales to third parties.

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Notes to Consolidated Financial Statements

Revenues by geographic area where derived are as follows:

Year EndedDecember 31,

Latin America, Middle East, Russia, and Africa 1,072 1,034 965

(1) Includes manufacturing sales to third parties.

As of December 31, 2025, approximately 75% of the Company’s long-lived fixed assets are located in Europe and Canada, and 17% are in the United States. The Company does not disaggregate assets on a products and services basis for internal management reporting and, therefore, such information is not presented.

6. Stock-Based Compensation Plans

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

Employee stock options are granted to purchase shares of Company common stock at the fair market value at the time of grant. Generally, stock options have a contractual term of ten years and vest one-third each year over a three-year period, subject to limited exceptions.

RSUs are stock awards that are granted to employees and entitle the holder to shares of common stock as the awards vest. RSU awards generally vest one-third each year over a three-year period. The fair value of the stock option and RSU awards is determined and fixed on the grant date based on the Company’s stock price.

The terms of the Company’s PSU awards allow the recipients of such awards to earn a variable number of common shares based on the cumulative results of specified performance factors.