Organon CEO resigns after internal investigation into sales to wholesalers

Organon (OGN) announced that its board of directors has appointed the company’s executive VP and head of manufacturing and supply, Joseph Morrissey, interim CEO. Board chair Carrie Cox will also take on additional responsibilities on an interim basis as executive chair to support Morrissey in his new role. Director Robert Essner will assume the role of lead independent director. These appointments follow the resignation of Kevin Ali as CEO and member of the board in connection with the audit committee investigation described below. Ali has agreed that he will not be entitled to severance or equity-related retirement benefits in connection with his resignation. After concerns regarding the company’s wholesaler sales practices for its Nexplanon product were brought to the board’s attention, the audit committee of the board oversaw an independent, internal investigation into its sales to wholesalers. The investigation found that certain wholesalers in the United States were asked to buy more Nexplanon than they needed at the end of the fourth quarter of 2022, the third and fourth quarters of 2024 and the first, second and third quarters of 2025. The investigation found these sales represented less than 1% of the company’s consolidated revenue for the year ended December 31, 2022 or December 31, 2024 as applicable but enabled Organon to meet guidance and/or certain external revenue expectations. The company’s board determined that these wholesaler sales practices were improper and certain of the company’s prior statements were inaccurate or incomplete. While the findings to date do not necessitate a restatement or revision to any previously issued financial statements, the company is taking remedial actions to improve its financial controls and address any material weaknesses. In connection with the investigation, the company terminated the employment of its head of U.S. commercial and government affairs. There has been no finding that the company’s CFO was aware of the improper wholesaler sales practices. The board is initiating a search for a permanent CEO, including both internal and external candidates, and retaining a search firm to assist with the process.