Shares of Organon & Co. plunged as much as 23% Oct. 27 after the women’s health-focused company said chief executive officer Kevin Ali will resign after an internal investigation into sales of its Nexplanon contraceptive implant to wholesalers indicated “improper” practices.
The company’s board of directors appointed Joseph Morrissey, its executive vice president and head of manufacturing and supply, as interim CEO. Board Chair Carrie S. Cox will 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.
“The board has confidence in Joe Morrissey’s ability to drive operational excellence,” said Cox. “Joe has extensive experience in senior leadership roles and is a highly regarded leader inside the organization.”
Ali told the company he 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 Nexplanon 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 Dec. 31, 2022 or Dec. 31, 2024, but enabled Organon to meet guidance and/or certain external revenue expectations.
The board determined that these wholesaler sales practices were improper and some of the company’s prior statements were inaccurate or incomplete. Organon said it 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. Organon’s CFO Matt Walsh will remain in his role as the investigation found no evidence to suggest he was “aware of improper wholesaler sales practices,” the company noted in a statement.
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.
“Carrie’s deep experience leading global pharmaceutical businesses, coupled with her extensive board experience, will complement Joe’s skills and make her the right partner to assist Joe in leading the company forward. We believe they have the integrity, skills and experience to continue executing on our strategy to drive Organon’s business,” said Essner.
Morrissey, a member of the company’s executive leadership team, has served as head of Organon’s global manufacturing and supply chain capabilities for more than four years. He is a former Merck executive with more than 30 years of experience.
“I look forward to continuing to execute on Organon’s business strategy, including further de-levering the business and driving cost savings while achieving revenue growth,” said Morrissey. “We believe Organon’s focus on operational execution, especially around our growth pillars, as well as reducing our debt ratios will drive long-term shareholder value.”
Organon has a market cap of $1.83 billion. More than 32.1 million of its shares changed hands Oct. 27, nearly four times the average daily volume.
