Bayer eases partnership stance
A significant change in direction for Bayer's pharmaceuticals business has been signalled by Werner Wenning, chairman of the board of management. Presenting the company's third quarter results, he acknowledged that following a detailed analysis Bayer is not capable of exhausting the full potential of its pharmaceuticals business alone and is looking to combine its pharma activities with those of another company. However, he strenuously denied any intention to sell off the pharma business.
Bayer has been on the look-out for a partner for some time, but was previously intent on occupying the driving seat in any joint venture. Now, however, Wenning admits that the company 'can no longer realistically expect to have a majority interest in a partnership that would at the same time benefit our business.' He added that 'good and constructive discussions' are currently underway with a potential partner.
Although pharmaceuticals is the most important value driver in the company's healthcare portfolio, it is finding it hard to compete with the major players in the global pharma market and currently ranks sixteenth in the world.
A major factor in the apparent relaxation of Bayer's stance is undoubtedly the sales shortfall caused by the withdrawal of Lipobay/Baycol last year. This alone depressed the group's third quarter sales value by some 2% or €381m ($384m), further compounded by lower sales of Cipro and Adalat. Sales in the healthcare business area in the third quarter fell by €118m ($119m) or 5% to €2.279bn ($2.295bn). Over the first nine months of the year, business was down by 9%.
Meanwhile the restructuring initiative launched in May to improve long-term competitiveness in the pharma sector continues and savings of €400m ($403m) are expected to be achieved by the end of 2004.
To maximise the value of its pharma business Bayer is refocusing its development activities. In future it will concentrate its research on anti-infectives, cardiovascular risk management and its new specialist field of cancer drugs. It is discontinuing its faropenem and camptothecin products as the results of clinical trials make it unlikely that these drugs could be marketed successfully, and is looking to outlicense its development projects PDE IV for respiratory infections and IL4 for asthma. Future r&d spending will be cut to below 20% of sales.
• Dr Frank Morich, who was to have been the chairman of the board of management of the future Bayer HealthCare, has left the company by mutual agreement. His replacement is Rolf Classon, who was previously a member of the subgroup's executive committee, with responsibility for strategy and business development. He was also head of the diagnostics division of Bayer Healthcare, a role assumed by Dr Wolfgang Hartwig.