Organon CEO Resigns Amid Improper Sales Tactics Investigation

Organon, the women's health-focused pharmaceutical company spun off from Merck in 2021, is facing a significant leadership shake-up following an internal investigation into questionable sales practices. The probe has led to the resignation of CEO Kevin Ali and the termination of the company's head of U.S. commercial and government affairs.

Internal Audit Reveals Improper Nexplanon Sales Strategies

An audit committee investigation uncovered that Organon had encouraged certain U.S. wholesalers to purchase more of its birth control implant, Nexplanon, than needed over multiple quarters in 2022, 2024, and 2025. The company reportedly incentivized these excess purchases by offering fees tied to inventory management metrics.

While these practices accounted for less than 1% of Organon's consolidated revenue for 2022 and 2024, they allowed the company to meet guidance and external revenue expectations for the periods in question. The board has deemed these wholesaler sales practices "improper" and acknowledged that some of the company's prior statements were "inaccurate or incomplete."

Leadership Changes and Interim Measures

Kevin Ali, who had led Organon since its inception in 2021, resigned from his position as CEO and stepped down from the company's board of directors on Sunday. As part of his departure agreement, Ali will forgo severance and equity-related retirement benefits.

Joseph Morrissey, Organon's executive vice president and head of manufacturing and supply, has been appointed as interim CEO while the company conducts a search for a permanent successor. Morrissey, who joined Organon during its split from Merck, brings over four years of experience in global production and supply chain management within the company.

Financial Impact and Future Outlook

The revelation of these sales tactics has had an immediate impact on Organon's stock, with shares dropping nearly 20% in early trading following the announcement. Despite this setback, the company has stated that its investigation is "substantially complete" and does not currently plan to restate or revise any previously issued earnings statements.

Organon remains committed to its business strategy, with Morrissey emphasizing a focus on "operational execution, especially around our growth pillars, as well as reducing our debt ratios" to drive long-term shareholder value. The company intends to file its third-quarter earnings report on schedule and will proceed with its planned investor call to discuss the results.