Bayer's 'sobering' 2001 figures caused by pharma problems

Published: 18-Apr-2002


Global economic weakness and problems in its pharmaceuticals business were blamed by Dr Manfred Schneider for a set of 'sobering' 2001 results at Bayer. The company had to contend with 'problems and challenges on an unprecedented scale,' said the ceo, who steps down this year in favour of Werner Wenning, currently the chief financial officer. The group's net operating result fell by 51% to €1.6bn (US$1.4bn) and net income by 47% to €965m ($848m); sales from continuing operations rose by just 1% to €28.9bn ($25.4bn)

Healthcare sales were relatively stable, down by only 2% to €9.8bn ($8.6bn), but the operating result, which fell by 48% to €771m ($677m), bore the brunt of the Lipobay/Baycol market withdrawal and the continuing manufacturing difficulties for biological products. The negative effect of the withdrawal was put at €449m ($395m) and that of the Kogenate production problems at €500m ($440m).

However, Schneider said he expects a significant boost in both output and earnings in 2002 as the Kogenate production problems at Bayer's site in Berkeley, Callifornia, are 'almost entirely solved' and utilisation is expected to reach 100% during the current year. The outlook is also bright for vardenafil, Bayer's erectile dysfunction treatment. This is expected to be a blockbuster, said Schneider, with sales in excess of €1bn ($$0.9bn) in 2002.

The company has more than doubled the number of development candidates for new drugs over the past three years, and 20 new compounds are now in preclinical testing.

Besides continuing to search for a healthcare partner, Bayer is giving priority to its recently announced reorganisation, which will see the establishment of four legally independent subsidiaries and three service companies under the umbrella of a management holding company. The new subgroups are expected to be operational from 1 July 2002.

Bayer's healthcare business area, consisting of the pharmaceuticals, biological products, consumer care, diagnostics and animal health business groups, will be transferred to Bayer Healthcare AG, the ceo designate of which is Dr Frank Morich. The new subgroup will have more than 30,000 employees and sales of some €11.0bn ($9.7bn) based on current figures.

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