Assessing Organon (OGN) Valuation After New Nilemdo Cholesterol Therapy Agreement

Why the new Nilemdo agreement matters for Organon shareholders

Organon (OGN) has agreed with Daiichi Sankyo Europe to commercialize Nilemdo, a first in class cholesterol lowering drug, across several Northern European countries. This agreement gives the company a new angle in cardiovascular treatment.

See our latest analysis for Organon.

Against this backdrop, Organon’s recent agreement arrives as the share price shows short term momentum. The 7 day share price return is 14.23% and the year to date share price return is 13.12%, set against a 1 year total shareholder return decline of 47.50%.

If this kind of pharma news has your attention, it could be a good moment to widen your watchlist into other pharma stocks with solid dividends that might fit your income and growth preferences.

With the shares still showing a 47.5% 1 year total return decline despite recent gains and trading below the average analyst price target, the key question is whether Organon is undervalued today or if the market is already pricing in future growth.

Most Popular Narrative Narrative: 12.5% Undervalued

Compared with Organon’s last close at US$8.19, the most popular narrative places fair value higher, which sets up a very different picture of what the shares might be worth.

The company's continued debt reduction and strong free cash flow generation enhance financial flexibility, enabling further pipeline investments and M&A opportunities, both of which can accelerate long-term earnings growth and mitigate risks from patent cliffs or single-segment concentration.

Read the complete narrative.

Curious what kind of earnings path and margin profile support that higher valuation signal, and how low the implied future P/E multiple really is? The full narrative lays out the growth tempo, profitability shift, and discount rate that all have to line up for this pricing gap to make sense.

Result: Fair Value of $9.36 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, those valuation hopes run into real friction if Nexplanon headwinds deepen or if the Nexplanon controls breakdown continues to weigh on Organon’s credibility with investors.

Find out about the key risks to this Organon narrative.

Build Your Own Organon Narrative

If you are not fully aligned with this view or prefer to test the assumptions yourself, you can build a fresh thesis in minutes: Do it your way

A great starting point for your Organon research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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