Bayer's Q2 prescription drug sales rise 4.9%, warns over "increasingly ambitious" full-year targets

Headline results for the second quarter:

Prescription drug sales

€4.4 billion ($4.9 billion)

+4.9%

Revenue

€11.5 billion ($12.8 billion; forecasts of €11.6 billion)

+21.2%

Profit

€404 million ($451 million)

-49.1%

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

"Bayer is on track in its operational business," remarked CEO Werner Baumann, adding "at pharmaceuticals we recorded encouraging growth." However, the executive noted that its current guidance for 2019 "is becoming increasingly ambitious," due to the challenging environment for its crop science business.

Other results:

  • Xarelto: €1 billion ($1.1 billion), +13%, primarily due to expanded volumes in China and Europe/Middle East/Africa
  • Eylea: €604 million ($674 million), +11.9%, with growth in all regions
  • Kogenate: €221 million ($246 million), +3.8%
  • Nexavar: €177 million ($197 million), -8.3%, mainly due to the competitive market environments in the US and Japan
  • Betaferon/Betaseron: €120 million ($134 million), -15.5%, primarily as a result of "strong" competition in the US
  • Stivarga: €103 million ($115 million), +25.6%, boosted by higher volumes in China and Russia
  • Adempas: €101 million ($113 million), +13.5%, driven by business in the US and Europe
  • Consumer health sales: €1.4 billion ($1.6 billion), +2.1%, with the strongest growth seen in Latin America

Looking ahead:

Bayer confirmed its annual outlook for 2019, with sales expected to be around €46 billion ($51.3 billion), representing growth of around 4%. Meanwhile, earnings are still predicted to reach approximately €12.2 billion ($13.6 billion).

What analysts said:

Gunther Zechmann of Bernstein Research suggested that investors would likely grow dubious of the maintained guidance, while Bloomberg Intelligence analyst Mustaq Rahaman said "this set of results will do little to stem calls for more dramatic action including a split."

However, Dennis Berzhanin of Pareto Securities remarked "if Bayer just had the pharma business, the stock would be super risky, because the pharma business has some medium to long-term concerns." Berzhanin added "yes, they're having short-term problems right now with crop science, but it reduces the risk of the company in general and supports their growth going forward."

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