Like several other pharma companies, Bayer enjoyed a better-than-expected first quarter in the early days of COVID-19. But the German conglomerate finds the uncertainties spawned by the pandemic make it difficult to paint a picture of the full year.
Benefiting from stockpiling drugs in the first quarter, Bayer grew sales by 4.8% to €12.85 billion ($13.94 billion), beating expectations by 1.9%.
Blood thinner Xarelto was one med that saw a stockpiling boost. Its sales jumped 18.8% at constant currencies to €1.12 billion, driven in part by what Bayer called “changes in ordering behavior due to the COVID-19 pandemic.” The company owns ex-U.S. Xarelto rights, while Johnson & Johnson markets it in the U.S.
Inventory buildup in preparation for the crisis also boosted the company’s otherwise placid consumer health franchise, vaulting it to 13.5% growth at unchanged exchange rates to €1.4 billion. That sales hike happened even as China’s quick lockdown hurt uptake and disrupted supplies, CEO Werner Baumann said.
However, while other firms such as Roche and Sanofi have maintained their full-year guidance, Bayer figures it can’t possibly quantify the effects of COVID-19 right now. For one thing, although all of the company’s production sites are running, costs for logistics have increased “substantially,” Bayer Chief Financial Officer Wolfgang Nickl told investors during a conference call Monday.
As a result, Bayer has decided not to provide a full-year outlook for now. Bernstein analysts don’t see the pulled guidance as a negative for Bayer’s stock, though. “We’re not overly worried about the COVID-19 impact on Bayer, and the company caveats risks that we see as largely manageable around supply chain, demand dynamics, financial markets, and cost management,” they wrote in a Monday note to clients.
There are some other worrisome signs, though. First-quarter sales of age-related macular degeneration med Eylea—€593 million for Bayer’s territories—came in 4.7% below analyst expectations. Bayer attributed the lackluster performance to withheld ordering in anticipation of pricing reductions in Japan and France.
Roche’s rival eye drug Lucentis itself suffered a slowdown in the U.S. during the first quarter, and the Swiss pharma blamed the decline on patients delaying appointments because of COVID-19. Bayer pharma chief Stefan Oelrich, however, said it was difficult to see any COVID-19 impact for Eylea outside of the U.S.
Meanwhile, the ongoing pandemic has added another layer of uncertainty to Bayer’s legal battles. As of April 14, the number of plaintiffs claiming its Roundup weedkiller causes cancer has increased to 52,500, up from 48,600 in February.
The unexpected coronavirus has slowed down settlement talks in a court-ordered mediation process. Baumann, in a Monday statement, reiterated that his company will only consider a solution that’s “financially reasonable.”
“Against the background of a looming recession and looking at, in part, considerable liquidity challenges, this applies now more than ever,” he said.
Tuesday, Baumann will face investors at the German conglomerate’s first all-virtual annual meeting.
At last year’s gathering, his exec team was slapped with a rare no-confidence vote. This time around, top proxy adviser Glass Lewis is advising shareholders to abstain during a vote on this item, while rival adviser Institutional Shareholder Services recommends approval of management’s actions last year.
Baumann expressed confidence during an interview with Bloomberg. “We have stepped up with our engagement and interaction with shareholders around the world, [with] about 500 shareholders representing 60% of our equity,” he said. “Feedback during these discussions has been appreciative and very good. We have delivered on all our portfolio measures with very, very strong outcomes.”
By: Angus Liu
Source: Fierce Pharma
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According to the deal, Sanofi will gain full global rights to Kymab’s fully human monoclonal antibody, KY1005 that attaches to OX40-Ligand and can potentially treat various immune-mediated diseases and inflammatory ailments.
Moderna tapped veteran Amgen executive Corinne Le Goff to spearhead that effort as chief commercial officer.