CEO Steps Down Amid Audit Committee Investigation

Organon ($OGN) shares plunged 20% after the company announced the resignation of CEO Kevin Ali amid an audit committee investigation into improper sales practices tied to its flagship contraceptive Nexplanon.

The investigation found that from 2022 through 2025, certain U.S. wholesalers were encouraged to purchase excess inventory across multiple quarters — a move that artificially helped Organon meet revenue guidance and analyst expectations.

Details of the Findings

The sales in question represented less than 1% of total company revenue, but the activity was deemed inconsistent with proper channel management.
The probe determined that CFO involvement was not found.
The company has terminated its Head of U.S. Commercial & Government Affairs and is tightening internal financial controls.

Leadership Transition

To stabilize leadership, the board announced:

Joseph Morrissey, EVP and Head of Manufacturing & Supply, as Interim CEO
Carrie Cox, Board Chair, will serve as Executive Chair
Robert Essner appointed as Lead Independent Director

The board has also begun a formal search for a permanent CEO.

Market Reaction

Investors reacted sharply to the news, driving Organon shares down 20% on Friday. Analysts cited the probe as a major reputational setback for the women’s health and biosimilars company, particularly given Nexplanon’s importance to its revenue base.

Next Steps

Organon said it is strengthening financial oversight and compliance processes and will cooperate with regulators as needed. Despite the issue’s limited financial impact, the event underscores governance and control challenges the company aims to rectify swiftly.