Sector News

Bayer outlines €10B new-drug sales target to allay post-Monsanto worries

September 21, 2016
Life sciences

Critics of Bayer’s $66 billion Monsanto deal have said it would hurt the German drugmaker’s pharma ambitions. Bayer itself isn’t worried about that.

Tuesday, CEO Werner Baumann worked to tamp down those worries with a slate of new growth forecasts for Bayer’s blockbuster meds. The company now sees its recently launched pharma products reaching peak sales of more than €10 billion.

That’s a big leap from Bayer’s previous target of €7.5 billion for the group, which comprises next-gen anticoagulant Xarelto, eye blockbuster Eylea, pulmonary arterial hypertension therapy Adempas and cancer-fighters Stivarga and Xofigo.

The way Bayer sees it, those 5 products should help its pharma unit generate average annual sales growth of about 6% by the end of 2018. That same year, Bayer is aiming to increase its EBITDA margin for the business to between 32% and 34%.

And new CEO Baumann is confident about the meds coming up the pipeline, too. Six of Bayer’s prospects have combined sales potential of at least €6 billion, he said, including candidates for diabetic kidney disease, chronic heart failure and prostate cancer.

It’s the pipeline situation that has worried some of the analysts who aren’t too keen on the Monsanto deal. As Bernstein’s Ronny Gal wrote last week, the merger is a “lost opportunity to build the pharma pipeline.” Bayer doesn’t have the money to invest in both crop science and pharma at the same time, Gal figures, and with patent expirations approaching, it “can’t wait to de-lever before investing in pharma,” either.

BMI Research’s Craig Smith has voiced similar concerns, cautioning that “this deal could significantly weaken” Bayer’s “capacity to grow within the pharmaceuticals space”–especially considering that the Leverkeusen-based company already spends less than its Big Pharma peers do on R&D.

Bayer, however, also has other businesses on the healthcare side that it expects to contribute–including the lagging consumer health unit, which it predicts will see average annual sales growth of between 4% and 5% by the end of 2018. The company also wants “to continue growing the animal health business,” a division that’s popped up in near-constant divestment rumors over the past few years.

Even with the near-term growth promised on the pharma side, company’s recent integration track record may have some investors fretting. Joining hands with Merck’s consumer unit has been a bumpy road, and Bayer is still feeling its effects: The drugmaker says it underestimated the risk from emerging markets volatility related to the 2014 purchase, and the company saw stronger business disruption during the integration than it anticipated, Reuters reported Tuesday.

By Carly Helfand

Source: Fierce Pharma

comments closed

Related News

January 29, 2023

Colorcon, Inc. signs Put agreement with intent to acquire controlled atmosphere packaging specialist Airnov Healthcare Packaging

Life sciences

Airnov provides critical healthcare industries with high-quality, controlled atmosphere packaging, to protect their products from moisture and oxygen. The business has manufacturing facilities in the USA, France, China and India and employs around 700 people.

January 29, 2023

Takeda pledges up to $1.13B for rights to Hutchmed’s cancer drug fruquintinib outside of China

Life sciences

Takeda of Japan has partnered with Hong Kong-based Hutchmed, gaining the commercial rights to colorectal cancer drug fruquintinib outside of China for $400 million up front, plus $730 million in potential milestone payments. Takeda also will help develop fruquintinib, which can be applied to subtypes of refractory metastatic colorectal cancer, regardless of biomarker status, the companies said.

January 29, 2023

Vir taps Bayer dealmaker Marianne De Backer as its next CEO

Life sciences

On April 3, Scangos, who’s been chief executive officer at Vir since the start of 2017, will hand over the reins to Marianne De Backer, Ph.D. De Backer comes over from Bayer, where she currently heads up pharmaceutical strategy, business development and licensing. Alongside her CEO appointment, De Backer is set to join Vir’s board of directors, the company said Wednesday.

How can we help you?

We're easy to reach