Building a New Legacy

Pharmaceutical Executive, Pharmaceutical Executive-09-01-2022, Volume 42, Issue 9

Pharm Exec catches up with longtime Merck international business leader Kevin Ali to find out how Organon, the ambitious Merck spinoff he formed just over a year ago, has fared so far in delivering on its mission of creating a global leader and difference-maker in women’s health.

Veteran pharma leader Kevin Ali, today CEO of Organon, the nascent women’s healthcare spinoff of Merck & Co., speaks proudly of his time with the global independent company so far—one he acknowledges may be his most fulfilling—and exhaustive—assignment yet. “It is the happiest and most excited I’ve ever been in my entire life and I’ve spent 35-plus good years in the industry,” Ali tells Pharm Exec. “Organon’s my baby—I was employee No. 1. But, at the same time, it’s also the most taxing. Organon has about 9,500 ‘founders,’ but if something goes bump in the night, that’s on me. On one hand, I’ve never been so excited, happy, and engaged every day. On the other hand, spinning out and creating Organon and leading the first two years of its existence is like drinking from a fire hose.”

Organon, headquartered in Jersey City, NJ, was formed through the Merck spinoff on June 3, 2021. Its foundation is comprised of more than 60 medicines and other products across a range of areas, including reproductive health, heart disease, dermatology, allergies, and asthma. Organon has three main pillars: a keen focus on improving the health of women throughout their lives, an expanding biosimilars business, and stability garnered from established brands. (The company brought in $6.2 billion in prescription drug sales in 2021, placing it 30th in Pharm Exec’s most recent “Pharma 50” rankings, published in June).

Launching point

Ali’s story starts back in his college days at University of California, Berkeley. “I was at one of those job fairs in a huge auditorium—there must have been hundreds of kiosks, and I just kind of looked for the longest line,” he recalls. “As I joined it, I asked what company it was for, and the guy in front of me gave me a perplexed look and said ‘Merck.’ And I honestly didn’t know what Merck was.”

At the time, Merck & Co. had again earned the title of America’s most admired corporation by Fortune magazine. Ali applied for one of 20 jobs available in California in an, as expected, highly competitive applicant pool. As an international economics and political science major, it seemed like his chances of signing on were slim, but he was hired. “I think they were taken by the fact that I was one of two non-science majors out of the 20 they hired, and I was capable of creating engaging relationships, as well as learning the science side quickly,” says Ali. “Back in those days, you had to go through extensive scientific training.”

From there, Ali spent six years as a sales representative, got his graduate degree in business, and took what he describes as an unorthodox turn at the time, toward international business. He spent over 20 years living in different countries around the world, first in Greece, and leading Turkey and then Germany, becoming the first American to run the Merck subsidiary. He subsequently established Merck’s emerging markets business. About six years as president of emerging markets led to the next big chapter—a role created specifically for Ali—leading all of Merck’s international business, which accounted for 96% of the world’s population and over half of Merck’s pharmaceutical revenues at that time. Soon after, the early seeds of Organon were sewn.

Targeting new terrain

About 30 years after Ali walked out of the auditorium in Berkeley and into a lifelong Merck career, he was presented with a new challenge by his mentor, then-Merck CEO Kenneth Frazier, to create the new company that would become Organon. “Ken pulled me aside and essentially said to me, ‘I know you’re used to dealing with all the international markets and so many of our people outside of the US. Now see if you can make a company out of it,’” says Ali. Frazier, who retired as CEO last June, offered Ali a chance to come back with a value proposition that included 64 products and two potential growth components, women’s health and biosimilars, as well as an established brands portfolio that would provide a stable foundation for the business. At the time, Merck was 50/50 on actually following through on such a complex and difficult spinoff that would stand as a separate business rather than one within the company. How would it make sense and just how would it work? When asked whether he was excited or nervous at the time, Ali confides: “I was very trepidatious. Ken didn’t have an idea at that point what it would look like, and I had no idea.”

Ali took some time to think about it and the three important components turned trepidation into positive momentum. He told Frazier, “I see a future here if we focus on something that no other company our size has focused on so far, being a women’s health global leader.” Merck already had a robust fertility and contraceptives business that, along with other products, produced strong cash flows that could aid in business development and support future investments. Organon could make a tremendous impact on women’s health, targeting the many unmet needs and conditions that disproportionately affect women worldwide, beyond fertility and contraception.

The second key component was the spinoff’s potential commercial global footprint, which at the time of launch boasted a direct sales presence in 58 markets, while supplying products to over 140 markets, a nice jump-off point.

Lastly, and perhaps the most important factor, was that the eventual workforce of 9,500 people, or as Organon refers to them, “founders,” some of which would come directly from Merck, which is crucial when it comes to culture, purpose, and the potential success of such a spinoff. “For 30 years, I’ve seen that people at Merck are really connected to its purpose,” says Ali. “The purpose of being a women’s health leader at this new company was something that really served as a magnet for the people of Merck to transfer over, to really establish and create something that hasn’t been created before.”

Two years later in 2021, after “a lot of love and intense work by thousands of people,” notes Ali, Organon was born. Ali chose the name Organon, a legacy name refurbished and rejuvenated, boasting 100 years of history and purpose focused on women’s health. Organon was a Dutch company started in 1923 that was acquired in 2007 by Schering-Plough and became part of Merck in the 2009 merger.

Today’s Organon has a lot of work to do. According to Ali, over the past few years, a mere 4% of the overall investment in R&D in the healthcare industry has been targeted toward areas of women’s health. “I think that’s going to be growing because we’ve got some tailwinds,” he says. “Currently in the world today, women’s issues are emerging in every society, and you see more and more women coming into positions of power, driving agendas that are favoring women’s health issues.”

Having women leadership “in the room” is of the utmost importance, says Ali, and it appears Organon walks the walk when it comes to the diversity of their senior leadership team and board. In fact, 60% of their management team are women, and the board assembled by Ali and board chair Carrie Cox is made up of 70% women, the most diverse healthcare board on the S&P 500. In addition, 50% of the board have either worked, lived, or been born and raised outside of the US.

Service-minded

When it comes to Ali’s leadership style, one gets the impression that he’s very grounded, logical, and focused on the future. There were a couple of instances, he tells Pharm Exec, where he was pleasantly surprised by the quick ascendancy and positive reaction by employees to all the plans that needed to be created as part of a new company. It’s apparent that transparency is part of who Ali is, and he describes his approach to leadership as one of service. “I realized early on as a new marketer in Cyprus, my first job outside of the United States, that no one cared one bit about my degrees and pedigree,” says Ali. “They wanted to understand how I could help them be more successful in their country; so, I developed a ‘CQ,’ or cultural quotient, which I happily embraced.”

Through his decades abroad, Ali learned about the importance of understanding the signals of listening, of being a servant and coach for his team members to help them be more successful and advance in their careers. “I think that style coupled with the passion I have for the purpose of Organon has really helped me distill and consolidate everyone’s views on what needs to be done to really develop this company for the long term,” he says.

Ali also likes to spend time on the road connecting with Organon’s people, including the people in the manufacturing facilities all over the world. He shares: “Forty percent of our employees are part of the manufacturing organizations, so I like to talk to them, keep them motivated, especially as they delivered without fail throughout the pandemic. I say to them: ‘This is the right company, the right time, and the right purpose. How many times in your life will you get to be a founder of a company with a noble cause?’ I pour a lot of passion into connecting with our people and inspiring them around the opportunity in front of us.”

There are several challenges Ali and Organon have pledged to tackle. Ones that many of his colleagues in the industry would agree are pain points are improving access as well as accuracy and timeliness of reimbursement for healthcare innovations brought to market. “In many parts of the world, it either comes too late, or too little, and we see opportunities to be able to create headroom,” explains Ali. “For example, let’s take endometriosis—through her lifetime, a woman typically sees an average of six different physicians before she has an accurate indication that she has endometriosis. Imagine the costs associated with those visits and all the things that happen because of her misdiagnosis, and taking pain medications, the psychological burden, losing time at work—all consequences of misdiagnosis. When governments start to see the opportunities, they’re going to being able to address this earlier on.”

Ali hopes new efforts can address some of the fertility issues that are downstream impacts of endometriosis, and perhaps save women—one in 10 of reproductive age in the US, for example, have endometriosis—from unnecessary chronic pain and suffering.

Organon, a year-plus later

Ali is confident investors, analysts, and others are “starting to see that there are many reasons to believe that a company like Organon can have a noble cause focused on solving some of these significant unmet needs that exist in women’s health across the world, but also continue to create a sustainable, successful commercial enterprise.” Ali remains equally bullish on Organon’s business development deals closed in its first year—seven in total, he notes—and those that are on the horizon. In November 2021, the organization acquired Finland-based Forendo Pharma, a clinical-stage drug development company focused on novel treatments in women’s health. Its lead clinical compound is an investigational, potentially first-in-class oral 17β-hydroxysteroid dehydrogenase type 1 inhibitor for endometriosis being evaluated for its effect on endometriotic lesions. Organon’s mid-stage candidate, OG 6219, is a promising asset that, according to Ali, is essentially a new mechanism of action for the treatment of endometriosis and could arrive to world markets in 2028. With the drug’s potential as a long-term therapeutic option, Ali believes it could provide a blockbuster opportunity for Organon commercially, but more importantly, a breakthrough treatment approach for women around the world.

“We are going to continue to be very active in business development, building out our pipeline of assets in the near term and medium term, as well as early-stage assets that we see clearly solve a significant need,” Ali tells Pharm Exec. Organon has gone from focusing on contraception and fertility to expanding into seven different areas dedicated to women’s health.

The company also has a number of public-private partnerships it’s engaged in currently. They include a FemTech accelerator in the Middle East to support women’s health and women-led initiatives, an important signal in the region; an agreement with the Asia-Pacific Economic Cooperation (APEC) Council to launch a “smart families project,” a holistic policy platform to address issues affecting the economy like falling birth rates, fertility, and unintended pregnancies; and a collaboration with the United Nations Population Fund (UNFPA) and the local government to try to solve issues around unintended pregnancy rates in Xochimilco, Mexico. Organon has also launched its “Her Promise Access Initiative”—designed to prevent 120 million unintended pregnancies by 2030 in the world’s 69 least-developed countries.

“I also believe that we need to play a bigger role here in the US,” he adds. “A recent study stated 44% of women say they have delayed seeing a doctor until their symptoms became urgent, which is frightening. There’s a lot of work that needs to go into more education, more awareness. This is not an overnight story—this will take time.”

Nevertheless, a venture that originally started as a business puzzle and a 50/50 chance of coming to fruition, has gained significant momentum quickly, exceeding expectations. “It almost resembles a movement,” Ali tells Pharm Exec. “Our founders have been incredibly passionate behind the vision and the purpose of this company.” The response has been similar across many of the global markets Organon serves, he says. “This is an amazing experiment of sorts that was long overdue—to see if a company can be focused on a demographic of gender, a demographic of women, to solve some of these unmet needs that exists today,” explains Ali. “You see us really trumpeting the fact that we can be a great partner for the world, so now is the time to prove that our intuition was correct.”

Fran Pollaro is Pharm Exec's Senior Editor. He can be reached at
fpollaro@mjhlifesciences.com.