Organon CEO Kevin Ali has stepped down from his leading position at the company, following its board’s discovery of sales malpractice.

This follows a probe from the board’s audit committee, which found that Organon was conducting “improper” wholesaler sales practices. This involved encouraging US-based wholesalers to buy more of the company’s contraceptive implant, Nexplanon, than they needed.

According to the probe, wrongdoing occurred between 2022 and 2025, with the board identifying misconduct at the end of Q4 2022, Q3-Q4 2024, and the first three quarters of 2025.

While the sales involved in this scandal represent less than 1% of the company’s consolidated revenue for both 2022 and 2024, they did enable Organon to meet guidance and external revenue expectations.

It seems that efforts to maintain investor sentiment have backfired, as Organon’s stock value dropped 20.9% from $9.16 at close on 24 October to $7.25 at market open on 27 October following the publication of the probe’s findings.

This follows a general downturn in the company’s stock value, which has decreased by 58% since this time in 2024.

Organon’s board shakeup

Upon Ali’s resignation as CEO and board member, he will not be entitled to any severance or equity-associated retirement benefits. He will now hand over his responsibilities to new interim CEO Joseph Morrissey, who previously served as the company’s executive VP and head of manufacturing and supply.

Morrissey will be supported by Organon’s board chair Carrie Cox while director Robert Essner will assume the position of lead independent director.

Amid this restructuring, Ali will not be the only one leaving, as the company’s head of US commercial and government affairs was also fired following this investigation.

Organon’s CFO Matt Walsh will remain in his role as the investigation found no evidence to suggest he was “aware of improper wholesaler sales practices,” the company noted in a 27 October statement.

Moving forward, the board will search for a permanent CEO, which could be either an internal or external candidate.

This tumultuous period at Organon follows the company’s spinoff from MSD in 2021, with the aim of the company becoming the “leading women’s health specialist”.

During its time under MSD, Organon was accused of Medicaid fraud related to sales of its anti-depressant, Remeron (mirtazapine), as the company was offering the drug to nursing home pharmacy companies at a discounted rate compared with the price offered to federal and state-run Medicaid programmes. This was eventually settled in court for $34m.

However, since the split from the US-based big pharma, Organon had once again found itself in hot water earlier this year, as investors are attempting to sue the healthcare company. This follows accusations of the company’s violation of securities laws.

This follows Organon’s Q1 earnings announcement, which saw the company cut its quarterly dividend by around 90%, despite previously assuring investors it was committed to dividend payments.