Bayer is set to re-focus its business solely on life sciences through the planned separation of its MaterialScience division, which will leave the group and continue as a separate company to be floated on the stock market by 2016.
The move continues a trend for larger pharma companies to trim non-priority parts of their organisation in order to focus on the more profitable aspects.
“Our intention is to create two top global corporations: Bayer as a world-class innovation company in the Life Science businesses, and MaterialScience as a leading player in polymers,” said Bayer’s CEO Marijn Dekkers.
The businesses that will comprise the new Bayer Group are the company’s HealthCare and CropScience divisions. The HealthCare unit will soon be strengthened with the addition of the over-the-counter (OTC) products business of Merck & Co, which Bayer acquired earlier this year.
According to Bayer, these companies had sales of €29bn in 2013 and a staff of nearly 99,000 people, including 29,500 in Germany. The company’s headquarters will remain in Leverkusen.
| Recent pharma divestments and spin outs | |
| Baxter announces Baxalta as biopharma spin out from med tech business | September 2014 |
| Reckitt Benckiser spins out pharma business to focus on health and household goods | July 2014 |
| Merck & Co sells consumer health business to Bayer | May 2014 |
| Novartis buys GSK’s oncology business, sells vaccine business to GSK and sells animal health division to Lilly | April 2014 |
| Actavis sells EU generics businesses to Aurobindo | January 2014 |
| GSK sells Lucozade and Ribena to Suntory Beverage & Food | September 2013 |
| Pfizer announces plan to split business into three parts: one for generics and two for branded medicines | July 2013 |
| Pfizer spins out animal health unit as Zoetis | June 2012 |
Bayer has ambitious plans for its new streamlined business, with intentions to raise R&D spending and strengthen early research at both Bayer Healthcare and Bayer CropScience.
New pharmaceutical products will lead the commercial drive at the new Bayer; the company expects he anticoagulant Xarelto, the eye medicine Eylea, the cancer drugs Stivarga and Xofigo, and the pulmonary hypertension drug Adempas to have combined peak annual sales of at least €7.5bn.
As for the Material Science business, Dekkers said the separate status of the company makes it able to “deploy its existing strength even more rapidly, effectively and flexibly in the global competitive arena”.
MaterialScience, which provides materials to the automotive, construction and electronics industries, has also seen investment with new facilities in China and Germany.
“MaterialScience is a very well positioned business that today operates very modern, competitive, large-scale facilities,” said Dekkers, who noted the independent firm will be Europe’s’ fourth-largest chemical company.
Other pharma companies to have spun out divisions as separate companies in recent years include Abbott, which launched AbbVie to focus on research-driven pharma activities, and Pfizer, which separated its animal health division as Zoetis.