Intangibles and Goodwill

12 Months Ended

Dec. 31, 2025

Goodwill and Intangible Assets Disclosure [Abstract]

Intangibles consists of:


	December 31, 2025						December 31, 2024
($ in millions)	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Products and product rights	$	24,687	$	23,981	$	706	$	24,917	$	23,936	$	981
Licenses	653		263		390		564		192		372
Acquired IPR&D	34		—		34		61		—		61
	$	25,374	$	24,244	$	1,130	$	25,542	$	24,128	$	1,414

As of December 31, 2024, net intangibles include $61 million of indefinite lived Acquired IPR&D related to Vtama. See Note 3 “Acquisitions and Licensing Arrangements” for further information. During the year ended December 31, 2025, $27 million of Acquired IPR&D related to Vtama was transferred to product and product rights.

The Company recorded an impairment charge related to a currently marketed women’s health product of $9 million for the year ended December 31, 2025. The Company did not have impairment charges for the year ended December 31, 2024.

Aggregate amortization expense recorded within Cost of sales was $205 million in 2025, $145 million in 2024 and $116 million in 2023.

The estimated aggregate future amortization expense is as follows:


($ in millions)
2026	$	184
2027	127
2028	119
2029	114
2030	110
Thereafter	442

The following table summarizes the changes in goodwill:


($ in millions)							Total
Beginning balance January 1, 2024							$	4,603
Additions (1)							77

Ending balance December 31, 2024							$	4,680
(1) Relates to the Dermavant acquisition. See Note 3 “Acquisitions and Licensing Arrangements” for further information.

	Organon		U.S.		International		Total
Beginning balance January 1, 2025	$	4,680	$	—	$	—	$	4,680
Transfers	(4,680)		1,448		3,232		—
Additions	—		—		—		—
Assets held for sale (1)	—		(226)		—		(226)
Impairment	—		(301)		—		(301)

Ending balance December 31, 2025	$	—	$	921	$	3,232	$	4,153
(1) In connection with the Jada divestiture in January 2026, the Company determined that $226 million of Goodwill met the criteria for held for sale classification as of December 31, 2025. See Note 3 “Acquisitions and Licensing Arrangements for further information.”

Following a change in executive leadership in the second quarter, the Company reassessed its segment reporting structure and determined that it operates as one operating segment comprised of two reporting units: U.S. and International. In conjunction with the segment assessment in the second quarter, the Company performed an impairment analysis and determined there was no impairment.

In the fourth quarter of 2025, the Company performed their impairment assessment and determined that the fair value of the U.S. reporting unit was below its carrying value, indicating that goodwill was impaired. The goodwill impairment resulted from the decline of the Company’s patent protected products in the U.S. in the fourth quarter for 2025 that is expected to result in a continuing impact on the products’ future forecast. The decline in fair value reflects continued pressure on the U.S. reporting unit resulting from lower-than-expected financial performance primarily from our patent-protected products, revised forward-looking projections, adverse geopolitical development market conditions, and uncertainty in the macroeconomic environment.

Accordingly, the Company recorded a goodwill impairment charge of $301 million during the fourth quarter of 2025, which represents the amount by which the carrying value of goodwill exceeded its implied fair value, or 11.7% of the reporting unit’s carrying amount. The impairment charge is included in Goodwill impairment in the Consolidated Statements of Income and resulted in a corresponding reduction of Goodwill.

The U.S. reporting unit that was impaired as of the fourth quarter 2025 impairment test was written down to its respective fair value, resulting in zero excess fair value over carrying amount. The U.S. reporting unit had an aggregate goodwill carrying amount of $921 million after the impairment change and therefore any adverse changes to the key assumptions or operating results could result in additional impairment charges. The international reporting unit had less than 20% fair value over carrying amount with an aggregate goodwill carrying amount of $3.2 billion. As a result, the U.S. reporting unit is more susceptible to future impairment than the International reporting unit.

In estimating the fair value of the U.S. and International reporting units, management utilized several key assumptions. This includes a discount rate of 13.5% and 15%, respectively, and a long term growth rate of 0% for both reporting units. Changes in these assumptions could materially affect the estimated fair value of the U.S. reporting unit and result in additional impairment in future periods

Organon & Co. 10-K