Organon & Co

Item 1A. Risk Factors

Except as set forth below, there have been no material changes in our risk factors from those disclosed in Item 1A. Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2024, as amended.

Key products generate a significant amount of our The self-initiated Audit Committee internal investigation has been time-consuming and expensive and may result in additional expense and/or litigation.

After concerns regarding the Companys sales practices for wholesalers for Nexplanon were brought to the Boards attention, the Audit Committee oversaw an independent, internal investigation into these sales practices.

The Audit Committees investigation focused on the Companys sales of Nexplanon to wholesalers. The investigation has found that the Company asked two wholesalers in the United States to purchase greater quantities of Nexplanon at the end of the Relevant Periods than they otherwise would have purchased based on wholesaler demand. In certain instances, the Company waived inventory management fee performance metrics associated with caps on days of inventory to allow wholesalers to be paid the inventory management fees they would have earned but for the Companys ask to purchase additional inventory.

As a result of these purchases, the United States wholesalers significantly decreased or even halted their purchases of Nexplanon during the early weeks of the following quarters until their days of inventory on hand were reduced to levels within the contractual range. Although the incremental amount of Nexplanon sales that occurred during the Relevant Periods represented less than 1% of the Companys consolidated revenue for the year ended December 31, 2022 or December 31, 2024, as applicable (and less than 2% of the Companys consolidated revenue for the relevant quarterly periods), based on the results of the investigation, the Company has determined that without these improper sales practices for wholesalers, the Companys consolidated revenue for the fiscal year ended December 31, 2024 reported in the Original Form 10-K (and certain of the other Relevant Periods) would have fallen short of the Companys guidance range and/or certain external expectations. While we have taken certain actions aimed at preventing the use of such improper sales practices for wholesalers (including the appointment of a new Interim CEO, the termination and appointment of a new Head of U.S. Commercial Government Affairs, the appointment of an Executive Chair and the appointment of a Lead Independent Director) and are in the process of implementing additional measures, there is no assurance that these actions and procedures will continue to be effective over time. 

Additionally, while the Audit Committees investigation is complete, the Company has identified material weaknesses in its internal control over financial reporting as described in Part I, Item 4 of this report and, as a result, the Companys management has determined that our disclosure controls and procedures and internal control over financial reporting were not effective as of December 31, 2024 or as of September 30, 2025. To address the ineffective disclosure controls and profits and cash cedures and internal control over financial reporting due to the material weaknesses, the Company, with the oversight of its Audit Committee, has developed a remediation plan, which is described in Part I, Item 4 of this report. In accordance with the remediation plan, we

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continue to evaluate our policies and procedures and we are actively engaged in remedial activities to strengthen the Companys internal control environment, which include, but are not limited to, the activities described in Part I, Item 4 oflows,  this report. As we execute on our remediation plan, there can be no assurance that we will not discover additional matters that we will need to address that could have an adverse impact on us, our business and any even/or our results of operations, including determining that further changes to our internal controls are required. We have incurred significant expenses, including audit, legal, forensic accounting, consulting and other professional fees, in connection with the Audit Committee investigation and related matters, and we may incur additional time and expense as a result of the investigation and our efforts that adversely affect the markets for our leading products couo address the investigation results. The incurrence of significant additional expense, or the requirement that management and the Board continue to devote significant time that could reduce the time available to execute on our business strategies, could have an adverse effect on our business, results of operations and financial condition.

We voluntarily contacted the SEC staff to advise that we had an internal Audit Committee investigation as described in this report. We cannot guarantee that we will not receive inquiries from the SEC or any other regulatory authorities regarding the investigation, or that we will not be subject to future claims, investigations or proceedings. Any future inquiries from the SEC or other regulatory authorities, or future claims or proceedings or any related regulatory investigation will, regardless of the outcome, likely consume a significant amount of our internal resources and result in additional legal and accounting costs. We can provide no assurances as to the outcome of any governmental investigation.

In addition, we may be subject to potential legal proceedings arising out of our announcement of the Audit Committee investigation and/or findings of the investigation. Any future litigation, investigation or other actions that may be filed or initiated against us or our officers or directors, may be time consuming and expensive. We cannot predict what losses we may incur in these litigation matters, and contingencies related to our obligations under the federal and state securities laws, or in other legal proceedings or governmental investigations or proceedings related to these matters.

Any legal proceedings, if decided adversely to us, could adversely affect our resresult in significant monetary damages, penalties and reputational harm, and will likely involve significant defense and other costs. We have entered into indemnification agreements with each of our directors and certain of our officers, and our Amended and Restated Bylaws require us to indemnify each of our directors and officers. Further, our insurance may not cover all claims that have been or may be brought against us, and insurance coverage may not continue to be available to us at a reasonable cost. As a results of oper, we may be exposed to substantial uninsured liabilities, including pursuant to our indemnification obligations, which could adversely affect our business, prospects, results of operations and financial condition.

The Company identified material weaknesses in the Companys internal control over financial reporting, which could impact the Companys ability to report its results of operations and financial condition accurately and in a timely manner.

In connection with the Audit Committee investigation, the Company identified material weaknesses in the Companys internal control over financial reporting. For a description of these material weaknesses, see Controls and Procedures in Part I, Item 4 of this report. While the Company has developed a remediation plan, the material weaknesses cannot be considered remediated until the applicable remedial control is implemented and operates for a sufficient period of time to allow management to conclude, through testing, that this remediation plan is implemented and the control is operating effectively. The material weaknesses, if not fully addressed, could result in a material misstatement of the Companys annual or interim financial statements, and the Company may be unable to remediate these material weaknesses in a timely manner, which could adversely impact the accuracy and timeliness of future reports and filings the Company makes with the SEC. Any such failure could result in litigation or regulatory actions by the SEC or other regulatory authorities, which could further result in loss of investor confidence, a decline in the price of our common stock, delisting of our securities, harm to our reputation and financial condition and/or diversion of financial and management resources from the operation of our business.

Key products generate a significant amount of our profits and cash flows, and any events that adversely affect the markets for our leading products could adversely affect our results of operations and financial condition.

Our ability to generate profits and operating cash flow depends largely upon the continued profitability of our key products, such as Nexplanon, Arcoxia, Singulair and the ezetimibe family of products. As a result of our dependence on key products, any event that adversely affects any of these products or the markets for any of these products could adversely affect our sales,

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results of operations or cash flows. These adverse events could include increased costs associated with manufacturing, product shortages, increased generic or over-the-counter availability of our products or competitive products, the discovery of previously unknown side effects or enhanced safety warnings, results of post-approval trials, increased competition from the introduction of new, more effective treatments and discontinuation or removal from the market of these products for any reason. In addition, recent adverse market and political events could negatively impact our key products and/or our business, results of operation and financial condition as a whole. These recent adverse events may include, among other things, U.S. and

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international tariffs or other protectionist trade measures, the recent changes to U.S. tax laws, healthcare and regulatory reforms, including those relating to insurance coverage, and other U.S. and international regulatory changes, including changes in regulatory enforcement landscape. We also expect that competition will continue to adversely affect the sales of our key products (including generic competition as a result of LOE in 2024 for Atozet and if we are unable to obtain an additional period of market exclusivity for Nexplanon).

To address such adverse effects and remain competitive, we have and will continue to adapt our business and sales strategiespractices for wholesalers, particularly in connection with our key products. SaThese business and sales strategipractices hafor wholesalers have historically included product discount programs and discussing with wholesalers whether to increase itheir inventory levels either within or above the reagreed upon product inventory levels under the relevant agreement terms for select key productpursuant to waivers. In the United States, the current structure of our arrangements provides us with data on inventory levels at our wholesalers, which is closely monitored and reviewed to with the goal of ensureing that inventory levels are appropriate and reasonable in the normal course of business. Additionally, with respect to markets outside of the United States, inventory levels are also reviewed to the extent information is available by market or customer type. However, if demand does not even with available inventory data, if we do not accurately predict inventory levels or we otherwise determine that inventory levels of our wholesalers should increase due to either customer demand or demand generated via the sales practices for wholesalers, then this may result in the inventory of our wholesalers exceeding customer demand at the time. However, if demand does not keep pace with the additional inventory purchases, then channel inventory for such products could grow in any particular quarter, which could adversely affect corresponding product revenues and/or rate of returns , and could result in sua greater amount of product expirations, reduced inventory purchases in subsequent qumonths and/or product discounts being recorded in subsequent quarters. Moreover, if we choose to eliminate or reduceadjust the use of these strategies or if wholesalers decrease their inventory levels, this could contribute to our quarterly and/or annual revenue failing to meet our expectations.

Recent health care reform initiatives focused on the cost of prescription drugs may have a material adverse effect on our business and results of operations.

Governments globally, as well as payors in the U.S., are increasingly using a variety of measures to control costs, including, among others, legislative or regulatory pricing reforms, drug formularies. In the United States, there have been significant and wide-ranging federal policy and legislative reforms impacting drug pricing and reimbursement. For example, in April 2025, the U.S. presidential administration issued an executive order with multiple directives aimed at lowering drug prices, including refining the Medicare drug price negotiation program established by the Inflation Reduction Act of 2022; accelerating competition for high-cost prescription drugs by accelerating approval of generics and biosimilars and facilitating the process for re-classifying prescription drugs as over-the-counter drugs; and increasing drug importation. In May 2025, the U.S. presidential administration issued another executive order that directed government agencies and officials to identify MFN pricing targets for prescription drugs (and looked to pharmaceutical manufacturers to make significant progress towards delivering target prices to patients); prevent foreign countries from disproportionately shifting the cost of global pharmaceutical research and development to the United States; and facilitate direct-to-consumer purchasing programs for pharmaceutical manufacturers to sell their products to patients at the MFN price. In addition, in July 2025, the One Big Beautiful Bill Act (OBBBA) was enacted into law. The OBBBA includes significant corporate tax provisions such as modifications to interest deductibility, the option to fully expense U.S.-based RD costs, and changes to the taxation of foreign earnings. We expect to see continued focus by the U.S. government and states on regulating drug pricing and access to medicine, any of which could impair our ability to compete and have a material adverse impact on our business, financial condition, and results of operations.