Bayer steps up focus on research and development in life sciences

Published: 2-Dec-2014

Will continue to target 'attractive markets with high-growth rates'

Bayer plans in the future to boost investment on research and development in its life science businesses and expects the R&D to sales ratio to increase.

This year's R&D budget in the life science businesses is €3.2bn and of this Bayer HealthCare accounts for 70% and Bayer CropScience for 30%.

Chairman Marijn Dekkers said Bayer would continue to target 'attractive markets with high growth rates, and in following this course, it has very good prospects for the future'.

Of the more than 13,000 people employed by Bayer in R&D, 61% are in HealthCare and 39% in CropScience.

In the pharmaceuticals segment, the company has successfully completed 25 Phase III clinical studies since 2010. Last year alone, Bayer applied for 500 patents in the life sciences.

Bayer is one of the fastest-growing global companies in the pharma sector, with leading positions in key indications. In over-the-counter (OTC) products, the company is ranked number two globally.

The success of our recent product introductions has created great growth momentum for us

Important pharmaceutical products include the anticoagulant Xarelto, eye treatment Eylea, cancer drugs Stivarga and Xofigo, and lung disease treatment Adempas. According to Bayer, these five products alone have an annual peak sales potential of at least €7.5bn.

'The success of our recent product introductions has created great growth momentum for us,' Dekkers added.

Bayer's pipeline currently contains 57 projects, of which 20 are in Phase I clinical testing, 19 in Phase II and 18 in Phase III. Among these are five new and promising active ingredient candidates, which should be ready next year for a decision on advancement to Phase III. Three of these projects are in the fields of cardiology and haematology; their objective being to improve treatment options for renal anaemia and heart disease.

Another project in oncology is showing a promising effect in patients with non-Hodgkin's lymphoma, and in gynecology, Bayer is expecting a new treatment option for symptomatic uterine fibroids.

'All these active ingredient candidates have one thing in common: they are developed from new molecules with a specific active profile,' Dekkers said.

New in Phase III is an active ingredient for treating patients with prostate cancer following Bayer's agreement with Finnish pharmaceuticals company Orion Corporation, concerning the global development and marketing of the ODM-201 drug candidate. This novel androgen receptor modulator in tablet form is currently in clinical development. In September this year, a clinical Phase III study was initiated in men with non-metastatic, castration-resistant, high-risk prostate cancer, who display a rapid rise in prostate-specific antigen (PSA), but as yet no detectable metastases.

Bayer said it is also making good progress with its development products containing recombinant factor VIII (rFVIII) for treating haemophilia. For these products, the company plans to invest more than €500m in expanded production capacities at its German sites in Wuppertal and Leverkusen.

The company also aims to become a leader in over-the-counter products, which it recently strengthened by acquiring the Consumer Care business of Merck & Co in the US, and Dihon Pharmaceuticals in China.

Dekkers said this segment has been growing more strongly than the market for many years and the aim over the next two years is to 'launch innovative products, further expand business in growth markets and exploit potential synergies arising from acquisitions'.

Bayer also wants to exploit the synergies in the fields of human, animal and plant health

Going forward, Bayer also wants to exploit the synergies in the fields of human, animal and plant health, explained Kemal Malik, Bayer Management Board Member responsible for Innovation.

One research project dealing with energy production in cells has already shown initial success. It originated with three new product families for treating fungal infections in plants.

Bayer researchers discovered that this method of energy production may be relevant in the growth of cancer cells. They demonstrated in vitro that specific types of melanoma react sensitively to the inhibition of the mitochondrial energy supply.

Another building block of Bayer's innovation activities is external partnerships.

'In recent years, many innovative research projects began as partnerships with institutes, universities and start-up companies,' added Malik.

'It is no longer possible today for a company to manage all areas of innovation itself. Strategic co-operation agreements and alliances therefore are an integral part of the innovation chain of all successful, research-based companies.'

Strategic co-operation agreements and alliances therefore are an integral part of the innovation chain

Malik said HealthCare and CropScience currently maintain some 850 partnerships. Two more were added in 2014 for advancing 'big data' in the life sciences sector: a cooperation with the Broad Institute – a joint research facility of Harvard University and the Massachusetts Institute of Technology (MIT) in Boston, Massachusetts, US – aims to improve the lives of cancer patients. The Broad Institute is a leader in the fields of genome analysis, oncogenomics and high-throughput biology.

Bayer said innovations are based on an open culture and way of thinking and examples include the Grants4Targets, Grants4Leads and Grants4Apps initiatives at Bayer HealthCare, and the CoLaborator concept in San Francisco, US, and Berlin, Germany.

New strategic venture capital investments provide access to start-ups and future-oriented technologies, while at the same time promoting Bayer's culture of innovation and entrepreneurial spirit. Through an investment in the healthcare fund of Versant Ventures, Bayer HealthCare is participating in pioneering biopharmaceuticals, medical products and other young enterprises in the life sciences.

In addition, together with the German Federal Ministry for Economic Affairs and Energy, the KfW bank group and the private sector, Bayer Health Care is contributing to the German Hightech Gruenderfonds II, which finances promising young start-ups in the life science and healthcare sectors.

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