DECLARACIÓN DE ADVERTENCIA CON RESPECTO A LA INFORMACIÓN CON PROYECCIONES FUTURAS
Some statements and disclosures in this document are forward-looking statements. Forward-looking statements include all statements that do not relate solely to historical or current facts and can be identified by the use of words such as "may," "believe," "will," "expect," "project," "estimate," "anticipate," "plan" or "continue." These forward-looking statements are based on our current plans and expectations and are subject to a number of risks and uncertainties that could cause our plans and expectations, including actual results, to differ materially from the forward-looking statements. Risks and uncertainties that may affect our future results include, but are not limited to, expanded brand and class competition in the markets in which Organon operates; difficulties with performance of third parties Organon relies on for its business growth; the failure of any supplier to provide substances, materials, or services as agreed; the increased cost of supply, manufacturing, packaging, and operations; difficulties developing and sustaining relationships with commercial counterparties; competition from generic products as Organon's products lose patent protection; expiration of current patents or loss of patent protection for Organon's products; difficulties and uncertainties inherent in the implementation of Organon's 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 Medicare, Medicaid and health care reform, pharmaceutical reimbursement and pricing in general; and other factors discussed in Organon's most recently filed Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, including those discussed in the "Business," "Risk Factors," "Cautionary Factors that May Affect Future Results" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of those reports.
General
The following Management's Discussion and Analysis of Financial Condition and Results of Operations is intended to assist in understanding the Company's financial condition and results of operations. The following discussion and analysis should be read in conjunction with the Company's Condensed Consolidated Financial Statements included in Part I, Item 1 of this report and with our audited financial statements, including the accompanying notes, and Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K. Operating results discussed herein are not necessarily indicative of the results of any future period.Organon & Co. ("Organon") is a global healthcare company formed through a spinoff from Merck & Co., Inc. ("Merck") to focus on improving the health of women throughout their lives. Organon develops and delivers innovative health solutions through a portfolio of prescription therapies within women's health, biosimilars and established brands (the "Organon Products"). Organon has a portfolio of more than 60 medicines and products across a range of therapeutic areas. The Company sells these products through various channels including drug wholesalers and retailers, hospitals, government agencies and managed health care providers such as health maintenance organizations, pharmacy benefit managers and other institutions. The Company operates six manufacturing facilities, which are located inBelgium ,Brazil ,Indonesia ,Mexico ,the Netherlands and theUnited 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.
Separación de Merck
As previously disclosed, onJune 2, 2021 , Organon and Merck entered into a Separation and Distribution Agreement (the "Separation and Distribution Agreement"). Pursuant to the Separation and Distribution Agreement, Merck agreed to spin off the Organon Products into Organon, a new, publicly-traded company (the "Separation"). The Separation from Merck was completed onJune 2, 2021 , in which Organon's Common Stock was distributed to all holders of outstanding shares of Merck Common Stock as of the close of business onMay 17, 2021 (the "Record Date"). For each share of Merck Common Stock held, such holder received one tenth of one share of Common Stock, and holders received cash in lieu of any fractional share of Common Stock they otherwise would have been entitled to receive in connection with the Distribution. Organon is now a standalone publicly-traded company and, onJune 3, 2021 , regular-way trading of the Common Stock commenced on theNew York Stock Exchange ("NYSE") under the symbol "OGN." Until the Separation onJune 2, 2021 , Organon's historical consolidated financial statements were prepared on a standalone basis and were derived from Merck's consolidated financial statements and accounting records. For the periods subsequent toJune 2, 2021 , as a standalone publicly-traded company, Organon presents its financial statements on a consolidated basis. The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted inthe United States of America . -27-
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The Separation was completed pursuant to the Separation and Distribution Agreement and other agreements with Merck related to the Separation, including, but not limited to, a Tax Matters Agreement, an Employee Matters Agreement and a Transition Services Agreement (See Note 14 for additional details).
Desarrollos recientes
Desarrollo de negocios
Shanghái Henlius Biotech, Inc. (“Henlio”)
InJune 2022 , Organon and Henlius, a global biopharmaceutical company, entered into a definitive agreement whereby Organon will license commercialization rights for biosimilar candidates referencing Perjeta® (pertuzumab, HLX11), (a trademark ofGenentech, Inc. ), used for the treatment of certain patients with HER2+ breast cancer in combinations with trastuzumab and chemotherapy and Prolia®/Xgeva® (denosumab, HLX14), (trademarks of Amgen Inc.) used for the treatment of certain patients with osteoporosis with high risk of fracture and for the prevention of skeletal-related events in patients with multiple myeloma and in patients with bone metastasis from solid tumors. Organon will acquire exclusive global commercialization rights except forChina ; includingHong Kong ,Macau andTaiwan . The agreement includes an option to negotiate an exclusive license for global commercialization rights for a biosimilar candidate referencing Yervoy® (ipilimumab, HLX13) (a trademark of Bristol-Myers Squibb Company). Ipilimumab is used for the treatment of certain patients with unresectable or metastatic melanoma, as adjuvant treatment of certain patients with cutaneous melanoma, certain patients with Renal Cell Carcinoma, Colorectal Cancer, Hepatocellular Carcinoma, Non-Small CellLung Cancer , Malignant Pleural Mesothelioma and Esophageal Cancer. Under the terms of the license agreement, Organon paid a$73 million upfront payment during the third quarter of 2022, of which$3 million was reflected in Other current assets. Henlius is eligible to receive potential developmental, regulatory and commercial milestone payments of up to$468 million . As ofJune 30, 2022 , the Company determined that certain developmental milestones were probable of occurrence and recognized$97 million reflecting the$70 million upfront payment and$27 million related to development milestones as Acquired in-process research and development and milestones. The remaining potential milestone payments will be recognized by Organon when achievement of the contractual milestones is probable. Henlius will be responsible for development and, if approved, will supply the products to Organon.
Atrevimiento
InMarch 2022 , Organon and Daré, a leader in women's health innovation, entered into an agreement whereby Organon licensed the global commercial rights to Xaciato® (clindamycin phosphate vaginal gel, 2%). Xaciato is an FDA-approved medication for the treatment of bacterial vaginosis (BV) in females 12 years of age and older. Xaciato received both Qualified Infectious Disease Product (QIDP) and Fast Track designations from the FDA for the treatment of bacterial vaginosis. Under the terms of the license agreement, Organon paid a$10 million upfront payment during the third quarter of 2022. Daré is eligible to receive potential regulatory and commercial milestone payments of up to$182.5 million and tiered double-digit royalties based on net sales. Xaciato is expected to be available commercially in theU.S. in the fourth quarter of 2022. As ofJune 30, 2022 management determined that the first commercial milestone was deemed probable of occurring, and recognized an intangible asset of$12.5 million reflecting the$10 million upfront payment and$2.5 million commercial milestone. The intangible asset will be amortized over its useful life of 12 years. The remaining potential milestone payments will be recognized by Organon when achievement of the contractual milestones is probable.
Bayer AG
InFebruary 2022 , Organon acquired the product rights and related inventory from Bayer AG to Marvelon™ (ethinylestradiol, desogestrel) and Mercilon™ (ethinylestradiol, desogestrel), combined oral hormonal daily contraceptive pills, inthe People's Republic of China , includingHong Kong andMacau , and has entered into an agreement to acquire the rights to these products inVietnam . Marvelon and Mercilon are already owned, manufactured, and marketed by Organon as prescription oral contraceptives in 20 other markets. The transaction was accounted for as an asset acquisition. In the first quarter of 2022, Organon paid$30 million to acquire the product rights and inventory inChina and accrued an additional$35 million related to these rights which was paid during the second quarter of 2022. This resulted in Organon recognizing an intangible asset of$42 million related to the product rights with the remainder of the consideration recorded to Inventories for the fair value of acquired inventory during the first quarter of 2022. The intangible assets related to currently marketed products will be amortized over their estimated useful lives of 10 years.
La transacción para adquirir los derechos sobre estos productos en
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Actualización de COVID-19
Organon remains focused on protecting the safety of its employees and supporting Organon's communities in response to the COVID-19 pandemic. COVID-19-related disruptions, including patients' inability to access health care providers, prioritization of COVID-19 patients, as well as social distancing measures have negatively affected our results. Our product portfolio is comprised of physician prescribed products, mainly in established brands, which have been affected by social distancing measures and fewer medical visits. Additionally, our portfolio in women's health includes products that are physician administered, which have been affected by limited access to physicians and healthcare centers. These impacts, as well as the prioritization of COVID-19 patients at health care providers, resulted in reduced administration of many products within established brands particularly for respiratory and cardiovascular products and women's health product Nexplanon® (etonogestrel implant) (sold as Implanon NXT™ in some countries outside the US), throughout the prior year. During the second quarter of 2022, our business was impacted by lockdowns in selective cities acrossthe People's Republic of China , across our portfolio in Fertility and Established Brands. We believe that global health systems and patients continue to adapt to the evolving impacts of the COVID-19 pandemic. Due to the significant uncertainty that exists relative to the duration and overall impact of the COVID-19 pandemic resulting from resurgences in COVID-19 infections or new strains of the virus, our future operating performance, particularly in the short-term, may be subject to volatility. Operating Results Sales Overview Three Months Ended June 30, % Change Six Months Ended June 30, % Change Excluding Excluding ($ in millions) 2022 2021 % Change Foreign Exchange 2021 2020 % Change Foreign Exchange United States$ 351 $ 339 4 % 4 % $ 680$ 690 (1) % (1) % International 1,234 1,257 (2) % 5 % 2,472 2,412 2 % 9 % Total$ 1,585 $ 1,595 (1) % 5 %$ 3,152 $ 3,101 2 % 6 %
Worldwide sales were$1.6 billion for the three months endedJune 30, 2022 , a decrease of 1% compared with 2021. The decrease is primarily due to the unfavorable impact of foreign exchange of$83 million and the impact of discount rates inthe United States . Offsetting these declines are increases primarily due to strong performance of women's health product Nexplanon® (etonogestrel implant) (sold as Implanon NXT™ in some countries outside the US), primarily due to the impact of favorable pricing and demand uptake inthe United States as well as volume growth acrossLatin America and the institutional business inAfrica . Worldwide sales also reflect strong performance in biosimilar products mainly inthe United States resulting from the continued uptake of Renflexis® (infliximab-abda) and strong performance for Ontruzant® (trastuzumab-dttb). Worldwide sales were$3.2 billion for the six months endedJune 30, 2022 , an increase of 2% compared with 2021. The sales increase is primarily due to strong volume growth for products within the established brands business, particularly for respiratory products Nasonex® (mometasone) and Singulair® (montelukast sodium) primarily inJapan andChina . Worldwide sales also reflect strong performance in biosimilar products mainly inthe United States andCanada , resulting from the continued uptake of Renflexis® inthe United States , as well as strong performance of Ontruzant®, primarily inthe United States . These increases were offset by generic competition for women's health product NuvaRing® (etonogestrel/ethinyl estradiol vaginal ring) and the authorized generic etonogestrel/ethinyl estradiol vaginal ring inthe United States and the unfavorable impact of foreign exchange. The loss of exclusivity ("LOE") negatively impacted sales by approximately$10 million and$40 million during the three and six months endedJune 30, 2022 , respectively, compared to the three and six months endedJune 30, 2021 , based on the decrease in volume period over period, mainly impacting NuvaRing inthe United States . Volume-based procurement ("VBP") had a de minimis impact on sales during the three and six months endedJune 30, 2022 compared to the prior periods. Organon's operations include a portfolio of products. Highlights of the sales of Organon's products for the three and six months endedJune 30, 2022 and 2021 are provided below. See Note 13 to the Condensed Consolidated Financial Statements for further details on sales of our products. -29-
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Table of ContentsWomen's Health Three Months Ended June 30, % Change Six Months Ended June 30, % Change Excluding Excluding ($ in millions) 2022 2021 % Change Foreign Exchange 2022 2021 % Change Foreign Exchange Nexplanon/Implanon NXT$ 195 $ 184 6 % 8 % $ 366$ 368 - % 1 % NuvaRing 42 53 (21) % (18) % 83 98 (16) % (12) % Follistim AQ 58 65 (11) % (9) % 119 117 2 % 4 % Ganirelix Acetate Injection 32 31 3 % 9 % 61 60 3 % 7 % Contraception Worldwide sales of Nexplanon, a single-rod subdermal contraceptive implant, increased 6% for the three months endedJune 30, 2022 compared to 2021, primarily due to the impact of favorable pricing inthe United States and demand uptake inthe United States ,Latin America and volume growth from the institutional business inAfrica , offset by unfavorable discount rates inthe United States . Sales of Nexplanon for the six months endedJune 30, 2022 , were consistent with the prior year period reflecting lower volume inthe United States in the beginning of the year, resulting from distributors' buying patterns in prior periods, offset by a favorable impact from the timing of tenders inLatin America and volume growth from the institutional business inAfrica . Worldwide sales of NuvaRing, a vaginal contraceptive product, declined 21% and 16% for the three and six months endedJune 30, 2022 compared to 2021, respectively, primarily due to ongoing generic competition inthe United States . We expect a continued decline in NuvaRing sales as a result of generic competition. In addition to sales of branded NuvaRing, we have an agreement with a generic manufacturer that authorizes the sale of a generic etonogestrel/ethinyl estradiol vaginal ring inthe United States . Under the terms of the agreement, we are reimbursed on a cost-plus basis by the generic manufacturer for supplying finished goods and receive a share of the net profits recorded by the generic manufacturer. Under the terms of the agreement, our share in the profits declines over time as new participants enter the market. Revenues from this arrangement were$14 million and$19 million for the three months endedJune 30, 2022 and 2021, respectively, and$25 million and$51 million for the six months endedJune 30, 2022 and 2021, respectively. The decline in revenue for the three and six months endedJune 30, 2022 is due to the entry of a new market participant. Given the nature of this arrangement, we expect revenues under this arrangement to continue to decline significantly for the remainder of 2022.
Fertilidad
Worldwide sales of Follistim AQ® (marketed in most countries outsidethe United States as Puregon™), a fertility treatment, decreased 11% for the three months endedJune 30, 2022 primarily due to an unfavorable shift in customer mix inthe United States and the negative impact from the COVID related lockdowns in certain territories inChina . Sales of Follistim AQ® increased 2% for the six months endedJune 30, 2022 compared to 2021, primarily due to higher demand inChina during the first quarter of 2022 and continuous demand growth inthe United States , partly offset by an unfavorable shift in customer mix inthe United States . Biosimilars Three Months Ended June 30, % Change Six Months Ended June 30, % Change Excluding Excluding ($ in millions) 2022 2021 % Change Foreign Exchange 2022 2021 %
Change Foreign Exchange Renflexis$ 59 $ 43 38 % 39 %$ 105 $ 81 30 % 30 % Ontruzant 35 22 57 % 61 % 57 45 28 % 33 % Brenzys 14 11 28 % 34 % 28 21 34 % 39 % Hadlima 2 2 5 % 3 % 8 4 99 % 101 %
Los siguientes productos biosimilares son parte de un acuerdo de desarrollo y comercialización entre Organon y
Renflexis® (infliximab-abda) is a biosimilar to Remicade® (infliximab) (a trademark ofJanssen Biotech, Inc. ) for the treatment of certain inflammatory diseases. Sales growth for the three and six months endedJune 30, 2022 was driven primarily by continued demand growth, favorable channel mix and favorable discount rates inthe United States . We have commercialization rights to Renflexis in countries outsideEurope ,Korea ,China ,Turkey andRussia . Ontruzant® (trastuzumab-dttb) is a biosimilar to Herceptin® (trastuzumab) (a trademark ofGenentech, Inc. ) for the treatment of HER2-overexpressing breast cancer and HER2-overexpressing metastatic gastric or gastroesophageal junction -30-
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adenocarcinoma. Sales in the three and six months endedJune 30, 2022 increased driven by the phasing and timing of tenders inBrazil and the continued uptake inthe United States since its launch inJuly 2020 , partially offset by competitive pressures inEurope . We have commercialization rights to Ontruzant in countries outside ofKorea andChina . Brenzys™ (etanercept) is a biosimilar to Enbrel® (etanercept) (a trademark ofImmunex Corporation ) for the treatment of certain inflammatory diseases. Sales in the three and six months endedJune 30, 2022 increased 28% and 34%, respectively, primarily due to volume growth inCanada . We have commercialization rights to Brenzys in countries outside ofthe United States ,Europe ,Korea ,China andJapan . Hadlima™ (adalimumab-bwwd) is a biosimilar to Humira® (adalimumab) (a trademark ofAbbVie Technology Ltd. ) for the treatment of certain inflammatory diseases. We have worldwide commercialization rights to Hadlima in countries outside of the EU,Korea ,China ,Turkey andRussia .Samsung Bioepis reached a global settlement with AbbVie permitting us to launch Hadlima outside ofthe United States starting in 2021 and inthe United States inJune 2023 . Hadlima is currently approved inthe United States ,Australia ,Canada , andIsrael . Hadlima was launched inAustralia andCanada inFebruary 2021 . Following these launches, we recorded sales of$2 million and$8 million during the three and six months endedJune 30, 2022 , respectively, reflecting an increase from modest sales during the six months endedJune 30, 2021 .
Marcas establecidas
Las marcas establecidas representan una amplia cartera de marcas reconocidas, que generalmente están más allá de la exclusividad del mercado, incluidas marcas líderes en el control del dolor cardiovascular, respiratorio, dermatológico y no opioide, para las cuales la competencia genérica varía según el mercado.
Cardiovascular
Three Months Ended June 30, % Change Six Months Ended June 30, % Change
Excluding Excluding
($ in millions) 2022 2021 % Change Foreign Exchange 2022 2021 % Change Foreign Exchange
Zetia/Vytorin $ 136 $ 144 (5) % - % $ 273 $ 276 (1) % 4 %
Atozet 122 121 - % 11 % 240 233 3 % 12 %
Rosuzet 16 18 (10) % 3 % 38 33 15 % 29 %
Cozaar/Hyzaar 92 86 7 % 12 % 186 177 5 % 9 %
Combined global sales of Zetia® (ezetimibe) (marketed in most countries outside
of the United States as Ezetrol™) and Vytorin® (ezetimibe/simvastatin) (marketed
outside of the United States as Inegy™), medicines for lowering LDL cholesterol,
declined 5% and 1% for the three and six months ended June 30, 2022 , compared to
2021, respectively, primarily driven by increased competition and lower
performance in Europe and Asia Pacific , partly offset by volume growth in China .
Sales of Atozet™ (ezetimibe and atorvastatin calcium) (marketed outside of the
United States ), a medicine for lowering LDL cholesterol, remained consistent for
the three months ended June 30, 2022 and increased 3% for the six months ended
June 30, 2022 , compared to 2021, primarily due to increased demand in France and
Spain .
Sales of Rosuzet™ (ezetimibe and rosuvastatin calcium) (marketed outside of the
United States ), a medicine for lowering LDL cholesterol, decreased 10% for the
three months ended June 30, 2022 compared to 2021, primarily due to the effect
of foreign exchange and increased 15% for the six months ended June 30, 2022
compared to 2021, primarily due to higher demand in Japan .
Combined global sales of Cozaar® (losartan potassium), and Hyzaar® (losartan
potassium and hydrochlorothiazide) (a combination of Cozaar and
hydrochlorothiazide that is marketed in Japan as Preminent™), a medicine for the
treatment of hypertension, increased 7% and 5% for the three and six months
ended June 30, 2022 , compared to 2021, respectively, primarily due to favorable
volume demand resulting from competitors' supply disruptions in various markets.
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Respiratory
Three Months Ended June 30, % Change Six Months Ended June 30, % Change
Excluding Excluding
($ in millions) 2022 2021 % Change Foreign Exchange 2022 2021 %
Change Foreign Exchange Singulair$ 92 $ 92 - % 8 % $ 222$ 199 11 % 18 % Nasonex 58 52 12 % 16 % 133 95 40 % 45 % Dulera 47 52 (9) % (8) % 88 91 (3) % (3) % 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, remained consistent for the three months endedJune 30, 2022 compared to 2021, and increased 11% for the six months endedJune 30, 2022 compared to 2021. The increase in sales during the six months endedJune 30, 2022 was primarily attributable to volume recovery from the COVID-19 pandemic and demand resulting from competitors supply disruptions inJapan . Global sales of Nasonex, an inhaled nasal corticosteroid for the treatment of nasal allergy symptoms, increased 12% for the three months endedJune 30, 2022 compared to 2021, primarily driven by increased demand inEurope ,Canada and theMiddle East region as well as higher demand resulting from competitors' supply disruptions inJapan . Nasonex sales increased 40% during the six months endedJune 30, 2022 primarily driven by higher demand resulting from competitors' supply disruptions inJapan , recovery from the COVID-19 pandemic inChina , and increased demand across several markets. In addition, sales during the six months endedJune 30, 2022 included a$10 million milestone payment related to a regulatory approval inthe United States . Global sales of Dulera® (formoterol/fumarate dihydrate), a combination medicine for the treatment of asthma, decreased 9% and 3% for the three and six months endedJune 30, 2022 compared to 2021, respectively, primarily due to unfavorable discount rates and lower volume growth inthe United States .
Dolor No Opiáceo, Óseo y Dermatología
Three Months Ended June 30, % Change Six Months Ended June 30, % Change
Excluding Excluding
($ in millions) 2022 2021 % Change Foreign Exchange 2022 2021 %
Change Foreign Exchange Arcoxia$ 61 $ 62 (2) % 2 % $ 121$ 119 2 % 7 % Sales of Arcoxia™ (etoricoxib) (marketed outside ofthe United States ), a medicine for the treatment of arthritis and pain, were slightly lower for the three months endedJune 30, 2022 compared to 2021, primarily due to the impact of foreign exchange. Sales of Arcoxia increased 2% during the six months endedJune 30, 2022 compared to 2021, primarily due to the higher demand inChina and theSouth East Asia region. Other Three Months Ended June 30, % Change Six Months Ended June 30, % Change Excluding Excluding ($ in millions) 2022 2021 % Change Foreign Exchange 2022 2021 %
Change Foreign Exchange Proscar$ 26 $ 32 (18) % (16) % $ 50$ 64 (21) % (20) % Worldwide sales of Proscar, a medicine for the treatment of symptomatic benign prostate enlargement, declined 18% and 21% for the three and six months endedJune 30, 2022 compared to 2021, respectively, primarily due to lower demand inChina . -32-
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Costas, Gastos y Otros
Three Months Ended June 30, Six Months Ended June 30, ($ in millions) 2022 2021 % Change 2022 2021 % Change Cost of sales$ 588 $ 583 1 %$ 1,149 $ 1,174 (2) % Selling, general and administrative 423 416 2 % 794 798 (1) % Research and development 106 76 39 % 202 143 41 % Acquired in-process research and development and milestones 97 - * 97 - * Restructuring costs - 1 * - 2 * Interest expense 98 62 58 % 195 62 215% Other (income) expense, net (14) 20 * (14) 18 *$ 1,298 $ 1,158 12 %$ 2,423 $ 2,197 10 %
* Cálculo no significativo.
Cost of Sales Cost of sales increased 1% for the three months endedJune 30, 2022 compared to 2021 primarily due to product mix offset by favorable foreign exchange. For the six months endedJune 30, 2022 , cost of sales decreased 2% compared to the same period in 2021, primarily reflecting lower supply sales compared to the prior year, as well as pre-spin allocated costs related to the Separation incurred during the prior year which were not incurred during the six months endedJune 30, 2022 and favorable foreign exchange. During the three and six months endedJune 30, 2022 , the Company recorded an impairment charge of$9 million related to a product right for a biosimilar product. Gross margin was 63% for the three months endedJune 30, 2022 compared with 63% for the same period in 2021. Gross margin was 64% for the six months endedJune 30, 2022 compared with 62% for the same period in 2021. The gross margin increase compared to the prior year reflects lower margin supply sales as well as pre-spin allocated costs related to the Separation incurred during the prior year which were not incurred during the three and six months endedJune 30, 2022 .
Vendedor general y administrativo
Selling, general and administrative expenses increased 2% for the three months endedJune 30, 2022 due to higher selling and promotional costs offset by pre-spin allocated costs related to the Separation incurred during the prior year which were not incurred during the three months endedJune 30, 2022 . For the six months endedJune 30, 2022 , selling, general and administrative expenses decreased 1% reflecting pre-spin allocated costs related to the Separation incurred during the prior year which were not incurred during the six months endedJune 30, 2022 , partially offset by higher selling and promotional costs.
Investigación y desarrollo
Research and development expenses increased 39% and 41% for the three and six months endedJune 30, 2022 , primarily due to higher costs associated with the Company's recent acquisitions of clinical stage assets and higher employee-related costs.
Acquired in-process research and development and milestones for the three and six months endedJune 30, 2022 represent the upfront and development milestones related to the Henlius transaction.
Gastos por intereses
Por los tres y seis meses terminados
Otros (Ingresos) Gastos, Neto
Por los tres y seis meses terminados
Impuestos sobre la Renta
The effective income tax rates were 18.5% and 1.4% for the second quarter of 2022 and 2021, respectively. These effective income tax rates reflect the beneficial impact of foreign earnings, offset by the impact ofU.S. inclusions under the Global Intangible Low-Taxed Income regime. The effective income tax rate for the first six months of 2021 reflects the beneficial impact of foreign earnings, the$70 million tax benefit relating to a portion of the non-U.S. step-up of tax basis as -33-
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well as the income tax benefit recognized in connection with the conclusion of the Internal Revenue Service (IRS) examination of Merck's 2015-2016U.S. federal income tax returns. As a result of that examination conclusion, we reflected an allocation from Merck of$18 million in the Condensed Consolidated Financial Statements representing our portion of the payment made to theIRS . Our portion of reserves for unrecognized tax benefits for the years under examination exceeded the allocated adjustments relating to this examination period. Therefore, for the six months endedJune 30, 2021 , we reflected a$29 million net tax benefit. This net benefit reflects reductions in reserves for unrecognized tax benefits and other related liabilities for tax positions relating to the years that were under examination.
Utilidad/Pérdida de Operaciones Discontinuadas
The historical results of certain Merck non-U.S. legal entities that were contributed to Organon in connection with the Separation included operations related to other Merck products that were retained by Merck. The Merck Retained Products business of the Transferred Entities were contributed by Organon to Merck and its affiliates. Accordingly, the historical results of operations of the Merck Retained Products have been reflected as discontinued operations in the Condensed Consolidated Financial Statements for all periods presented. There was no income or loss from discontinued operations, net of taxes for the three and six months endedJune 30, 2022 and the six months endedJune 30, 2021 . Loss from discontinued operations, net of taxes, was$4 million for the three months endedJune 30, 2021 .
Análisis de Liquidez y Recursos de Capital
Liquidez y Recursos de Capital
As ofJune 30, 2022 , Organon had cash and cash equivalents of$545 million . OnJune 6, 2022 , the Company made a discretionary prepayment of$100 million on theU.S. Dollar-denominated term loan. The Company has historically generated and expects to continue to generate positive cash flow from operations. We plan to continue to fund our ongoing operating, investing and financing requirements mainly through cash flows from operations, available liquidity through cash on hand, available capacity under our Revolving Credit Facility and access to capital markets. Working capital of continuing operations was$1.4 billion as ofJune 30, 2022 and$1.2 billion as ofDecember 31, 2021 . The increase in working capital of continuing operations was primarily driven by a decrease in trade accounts payable and an increase in accounts receivable. Net cash provided by operating activities was$274 million for the six months endedJune 30, 2022 compared to$1.7 billion for the same period in the prior year. The decrease in cash provided by operating activities in 2022 was primarily attributable to the decrease in trade payables, including balances with Merck. Net cash used in investing activities was$146 million for the six months endedJune 30, 2022 compared to$287 million for the same period in the prior year, primarily reflecting the asset acquisition of Marvelon and Mercilon in the six months endedJune 30, 2022 and the asset acquisition ofAlydia Health in the six months endedJune 30, 2021 . Net cash used in financing activities was$274 million for the six months endedJune 30, 2022 compared to$772 million for the same period in the prior year. The change in cash used in financing activities reflects the settlement of the transactions with Merck in connection with the Separation in 2021, partially offset by the payment of dividends in the current year (see Note 14 to our Condensed Consolidated Financial Statements). 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, payment of dividends and strategic business development transactions. InFebruary 2022 , the armed conflict betweenUkraine andRussia escalated, which may adversely impact Organon's business. Specifically, trade sanctions, travel bans and asset and financial freezes announced bythe United States ,European Union and other countries against Russian entities and designated individuals, as well as counter-measures announced byRussia , have impacted and may continue to impact many global businesses in direct and indirect ways (including, but not limited to, product shipping delays, supply shortages, delays in regulatory approvals and audits, constraints in energy supply, currency exchange rates and exchange controls). Such actions may negatively impact the financial institutions, vendors, manufacturers, suppliers, partners and other third parties with whom Organon conducts business. Organon will continue to monitor the impacts of the conflict, which may negatively impact Organon's operations, financial position or cash flows. For the six months endedJune 30, 2022 and the year endedDecember 31, 2021 , Organon's combined revenues fromUkraine andRussia were approximately 2% of total revenues. As ofJune 30, 2022 , the Company's assets inUkraine andRussia are not material. -34-
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Our contractual obligations as ofDecember 31, 2021 , which require material cash requirements in the future, consist of purchase obligations and lease obligations. In addition, Organon is responsible for settlement of certain tax matters, of which the Company expects to pay during 2022. Refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2021 Form 10-K for further details. As ofJune 30, 2022 , there have been no material changes to our contractual obligations, or settlements of tax matters outside the ordinary course of business. During the first and second quarter of 2022, Organon paid cash dividends of$0.28 per share. OnAugust 4, 2022 , the Board of Directors declared a quarterly dividend of$0.28 for each issued and outstanding share of the Company's common stock. The dividend is payable onSeptember 15, 2022 to stockholders of record at the close of business onAugust 15, 2022 . 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. The economy ofTurkey was deemed hyperinflationary during the second quarter of 2022. Consequently, in accordance withU.S. GAAP, the Company began remeasuring its monetary assets and liabilities for those operations in earnings beginning in the second quarter of 2022. The impact to the Company's results is immaterial.
Estimaciones contables críticas
Our significant accounting policies, which include management's best estimates and judgments, are included in Note 3 to the Consolidated Financial Statements included in our Form 10-K for the year endedDecember 31, 2021 . See Note 2 to the Condensed Consolidated Financial Statements for information on the adoption of new accounting standards during 2022. There have been no changes to our accounting policies as ofJune 30, 2022 . A discussion of accounting estimates considered critical because of the potential for a significant impact on the financial statements due to the inherent uncertainty in such estimates are disclosed in the Critical Accounting Estimates section of Management's Discussion and Analysis of Financial Condition and Results of Operations included in Organon's Form 10-K for the year endedDecember 31, 2021 .
Normas contables emitidas recientemente
Para una discusión de las normas contables emitidas recientemente, consulte la Nota 2 de los Estados financieros consolidados condensados.
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