Bayer today said that it plans to sharpen its focus on innovation in its life science businesses, which include HealthCare and CropScience. “Overall, we expect the R&D-to-sales ratio to increase in the coming years,” said chairman Marijn Dekkers addressing journalists at Bayer’s perspective on innovation 2014 press forum in Leverkusen. The research and development budget in the life science businesses this year amounts to €3.2 billion ($4 billion). Bayer HealthCare accounts for 70% of this total and Bayer CropScience for 30%. The MaterialScience business, which is being separated and floated on the stock exchange, was not included in the presentations. Dekkers said that as a world-class life science company, Bayer will continue to target attractive markets with high growth rates, and in following this course, it has very good prospects for the future.
The company, which has more than 13,000 employees in R&D, 61% of them in HealthCare and 39% in CropScience, has made major progress in both businesses. In the pharmaceuticals segment, Bayer has successfully completed 25 Phase III clinical studies since 2010, and at CropScience introduced 30 new active ingredients to the market between 2000 and 2013. Last year alone, Bayer applied for 500 patents in life sciences.
Dekkers said that developing new products is critical to the success of the life science businesses. Equally as important, however, is the ability to market products and gain market shares. In the pharmaceuticals business, Bayer is one of the fastest-growing global companies, with leading positions in key indications. In the over-the-counter (OTC) products business, the company is ranked number two in the world. Bayer is also strong in agricultural chemicals. “We are one of the fastest-growing crop science companies,” Dekkers said. CropScience occupies second place worldwide in crop protection. The seeds business is currently ranked 7th globally, and is to be further expanded in the future.
“Our business models, whether in HealthCare or CropScience, have many similarities,” Dekkers said. These include an excellent research organization, strong growth and innovative marketing. Bayer is a trendsetter in research-intensive fields, he said.
Dekkers listed a number of important pharmaceutical products as examples. With the anticoagulant Xarelto, for instance, an estimated two out of every three strokes could be prevented compared with patients who take no anticoagulant medication. New therapies made possible by Bayer products also include improving the failing vision that accompanies some eye diseases with Eylea, inhibiting tumor growth in certain types of cancer with Stivarga and Xofigo, and improving the lives of people with certain lung diseases with Adempas. These five products alone have an annual peak sales potential of at least €7.5 billion.
“The success of our recent product introductions has created great growth momentum for us,” Dekkers added. The pharmaceuticals pipeline currently contains 57 projects, of which 20 are in Phase I clinical testing, 19 in Phase II and 18 in Phase III. Among these projects are five, new, promising active ingredient candidates, which should be ready by 2015 for a decision on advancement to Phase III. Three of these projects are in the fields of cardiology and hematology, their objective is to improve treatment options for renal anemia and heart disease.
New in Phase III is an active ingredient for treating patients with prostate cancer. Bayer entered into an agreement with the pharma company Orion Corporation (Espoo, Finland) concerning the global development and marketing of the development candidate ODM-201. This novel androgen receptor modulator in tablet form is currently in clinical development. Bayer plans to invest over €500 million to expand production capacities at its German sites at Wuppertal and Leverkusen.
Bayer recently strengthened its OTC business by acquiring the consumer care operation of Merck & Co. in United States, and Dihon Pharmaceuticals in China. Dekkers said that this segment has been growing more strongly than the market for many years. The aim over the next two years is to launch innovative products on the market, further expand business in growth markets and fully exploit potential synergies arising from acquisitions.
Dekkers also discussed the need to increase agricultural yields to meet the needs of the growing global population. “We need new and better ways to boost agricultural yields if we are to have an adequate food supply in the future.” For instance, the fungicide Luna supports the safe control of fungal infections in various fruit and vegetable varieties, such as powdery mildew and storage rot. Adengo, a herbicide for corn, controls numerous grasses and weeds. Corn is not only indispensable as animal feed, it also is found in many foods on our tables every day. Innovative herbicides like Adengo are therefore important for feeding the growing global population, he said.
Over the next few years, the R&D development pipeline for crop protection and seeds & traits should produce new market innovations. Depending on approvals from the regulatory authorities, Dekkers estimates the annual peak sales potential at a minimum of €4 billion for products introduced to the market between 2011 and 2016.
By Natasha Alperowicz
