Organon (OGN): Examining Valuation Following European Approval of Denosumab Biosimilars

Organon (OGN) just gained a major win: the European Commission has approved its denosumab biosimilars, Bildyos and Bilprevda, as alternatives to Amgen’s Prolia and Xgeva. This regulatory green light opens the door for Organon and its partner, Shanghai Henlius Biotech, to begin marketing these alternatives across Europe. For investors wondering what this means, the move marks a significant step in Organon's expansion in the lucrative European bone health market and could reshape how the company is valued moving forward.

This milestone arrives after a choppy year for the stock. While Organon’s share price stumbled, dropping over 44% in the past year, it has rebounded by 11% in the last month, outpacing both its sector and the broader S&P 500 over the same period. The momentum reflects shifting investor sentiment and growing optimism around new product launches and global growth initiatives, even as long-term performance remains under pressure.

With this big regulatory win and fresh momentum in the stock, is Organon undervalued at these levels, or is the market already factoring in future growth from these biosimilar approvals?

Most Popular Narrative: 20.6% Undervalued

Analyst consensus currently views Organon as significantly undervalued, forecasting more upside relative to the present share price. Their fair value estimate is based on a rigorous set of financial projections and industry trends.

New product launches and expanded indications, especially the launch of Vtama (including approved pediatric use and expanded access), as well as the upcoming 5-year Nexplanon indication, position Organon to capture additional market share and drive future revenue growth by leveraging global demographic shifts toward increased healthcare demand.

Curious how Organon could become a market outlier? The narrative is built on bold future profits, margin transformation, and a valuation math that diverges from sector averages. If you want to decode the model behind this undervalued call, uncover the actual growth assumptions and margin forecasts that are powering this price target. This could be the turning point for Organon's story and valuation.

Result: Fair Value of $13.17 (UNDERVALUED)

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

However, persistent reliance on mature products and uncertainties in U.S. policy for women's health could quickly challenge the current bullish outlook.

Find out about the key risks to this Organon narrative.

Another View: SWS DCF Model Says It’s Even Cheaper

Taking a different approach, our DCF model provides an even lower fair value. This suggests Organon might be trading at a much deeper discount than the analyst consensus implies. Does the cash flow math reveal overlooked opportunity or hidden risk?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Organon for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Organon Narrative

If you see the story unfolding differently or want to investigate the numbers on your own terms, you can build your own outlook from scratch in just a few minutes. Do it your way

A great starting point for your Organon research is our analysis highlighting 3 key rewards and 1 important warning sign 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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