Bayer seeks significant expansion of Life Science businesses


Strives for strong sales and margin growth to 2017

Bayer aims to achieve strong sales and earnings growth for its Life Science businesses in the coming years.

The German company says growth to 2017 will be driven mainly by recently launched pharmaceutical products and by its Consumer Care business, which was strengthened last year through the acquisitions of the consumer care business of Merck & Co, US and China-based Dihon Pharmaceutical Group.

'We will continue to invest heavily so that we continue to be successful with innovative products,' said Chief Executive Marijn Dekkers. 'The outlook for our healthcare business is particularly positive thanks to the five pharmaceutical products we recently launched. They have played a crucial role in making us one of the fastest-growing large companies in the pharmaceutical industry.'

Combined sales of the anticoagulant Xarelto, the eye medicine Eylea, the cancer drugs Stivarga and Xofigo, and the pulmonary hypertension drug Adempas are projected to increase towards €4bn in 2015 (2014: €2.9bn), said Dekkers, putting the peak annual sales potential of these products at a total of at least €7.5bn.

Bayer aspires to grow HealthCare sales by an average of 6% a year to 2017 to more than €25bn (2014: €20bn) and to increase the EBITDA margin before special items to 29–31% (2014: 27.5%).

We will continue to invest heavily so that we continue to be successful with innovative products

The company aims to increase Pharmaceuticals sales by approximately 7% each year to 2017, to more than €15bn (2014: €12.1bn) and to achieve an EBITDA margin before special items of between 32–34% (2014: 30.7%) in this division.

Bayer expects the mid- and late-stage projects in its pipeline to make significant progress over the next 12–18 months.

'We want to help improve treatment options for patients in our research areas of cardiology, haematology, oncology and gynaecology,' said Dekkers.

Bayer plans to spend more than €4bn (2014: €3.6bn) on research and development in 2015, with more than 50% of this amount (around €2.2bn) earmarked for the Pharmaceuticals business.

In the Consumer Health segment, sales are projected to rise by an average of around 4% annually to 2017 to more than €10bn (2014: €7.9bn) and the EBITDA margin before special items to between 24–26% (2014: 22.5%) driven by the consumer care business acquired from Merck & Co, US. Dekkers said the integration of this business is well on track, with Bayer now occupying the global number two position in non-prescription (over-the-counter) products.

Sign up for your free email newsletter

'We will now work at full steam on implementing our decision to focus entirely on the Life Science businesses,' said Dekkers. The carve-out, which entails the economic and legal separation of MaterialScience, is to be completed by 31 August this year, and the company floated on the stock market by mid-2016 at the latest. Bayer plans to decide between an IPO and a spin-off in the second half of this year.