Bayer lifts full-year guidance as third-quarter prescription drugs sales jump 10.3 percent

Bayer on Thursday lifted its annual guidance after reporting higher third-quarter net income and sales, driven in part by "robust...growth" for the company's new prescription drugs. Bayer indicated that earnings per share are now predicted to increase by a mid- to high-single-digit percentage in 2014, lifted from an earlier estimate of low- to mid-single-digit percentage growth. Meanwhile, sales are forecast to reach approximately 42 billion euros ($52.8 billion), up from prior guidance of around 41 billion euros ($51.6 billion).

"The strong upward trend in the life science businesses... persisted in the third quarter," commented CEO Marijn Dekkers. Three-monthly sales of prescription drugs jumped 10.3 percent year-over-year to 3 billion euros ($3.8 billion), with Dekkers noting that "growth continued to be driven by...recently launched pharmaceutical products," including Xarelto, Eylea, Stivarga, Xofigo and Adempas. The five drugs generated combined revenue of 750 million euros ($945 million) in the quarter, up from 407 million euros ($512 million) in the year-ago period.

Bayer noted that overall sales in its healthcare unit increased 4.6 percent to just under 5 billion euros ($6.3 billion), with total revenue rising 5.6 percent to 10.2 billion euros ($12.8 billion), topping analyst estimates of 10 billion euros ($12.6 billion). Meanwhile, net income in the quarter climbed 12.7 percent to 826 million euros ($1 billion), beating analyst predictions of 750 million euros ($945 million).

Last month, Bayer confirmed plans to spin-off its MaterialScience business into a separate company and focus solely on its life sciences operations. "We are confident that this strategic decision is good for both Bayer and MaterialScience and will allow both companies to create value in the long term," Dekkers remarked. "They really have two very strong franchises, and margin should definitely be better" after the spin-off, commented Baader Helvea analyst Odile Rundquist.

Earlier this month, Bayer completed the purchase of Merck & Co.'s consumer-care unit for $14.2 billion and also announced a deal in February to acquire Chinese consumer health-care company Dihon Pharmaceutical for an undisclosed sum. Dekkers suggested that Bayer might be open to further acquisitions in the segment, predicting further consolidation in the global consumer care market. "We will be monitoring the situation to see whether we wish to participate," the executive noted.

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