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Pharma sales help Bayer escape the worst from a bumpy 2017

But the German pharma firm reins in expectations for this year

Bayer Werner Baumann

Weathering a tough fourth quarter in which sales at all its business units experienced single-digit drops, Bayer’s full-year figures saw the group just manage to avoid falling backwards in 2017.

Riding to the group’s rescue was its pharmaceuticals unit, where sales increased by 2.6% to €16.8bn, pulling up the group’s 2017 sales by 0.2% rise to hit €35bn.

They had to overcome weak business development within the group’s interests in consumer heath - down 2.9% in 2017 to €5.9bn - and crop science, with the latter business falling 3.4% to €9.6bn.

Consumer sales were hit by a “persistently weak” performance in the US and the unexpected decision by Chinese authorities to switch two of its skincare brands from OTC to prescription status, causing their sales to fall in the fourth quarter.

Its pharma business was once again led by Bayer’s top-seller Xarelto, with sales of the oral anticoagulant rising 12.6% to €3.6bn, and eye drug Eylea, which was up 6.1% to €1.9bn. Both, however, saw their sales growth slow markedly over the last 12 months.

The two brands, along with cancer drugs Xofigo and Stivarga and pulmonary hypertension treatment Adempas, are seen by the company as its key growth brands.

Together they brought in just over €6.5bn, although Xarelto and Eylea accounted for over 80% of the total.

“Operationally, 2017 was a year of ups and downs,” Bayer CEO Warner Baumann told a news conference in Leverkusen yesterday, adding that it “a year that in some respects wasn’t easy”.

For its pharmaceuticals business the ‘downs’ included several late-stage trial failures towards the end of the year. Among them were a 7,000 patient study of Xarelto in secondary stroke, a combination trial of Eylea and a drug-device combination for pneumonia.

But those failures were tempered by positive results late in the year for larotrectinib, one of two cancer assets licensed from Loxo Oncology in a $1.5bn deal.

Larotrectinib is expected to be filed for US approval within the coming weeks, and the Loxo deal is also an important indicator for Bayer that its massive deal to acquire agrochemical group Monsanto - which it now expects to complete before June - won’t derail its other business units.

“We have always said that we will continue to drive the growth of our Pharmaceuticals, Consumer Health and Animal Health businesses as before,” Baumann told the news conference. “Projects like [the Loxo deal] show that we are keeping our word.”

Looking ahead to 2018, Bayer expects flat sales growth across the group, with pharma sales pegged back to €16.5bn and sales of its five key products slowing to finish the year near the €7bn mark.

Article by
Dominic Tyer

1st March 2018

From: Sales

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