Bayer posts more than 10-percent rise in Q2 drug sales; lifts annual guidance

Bayer announced Tuesday that second-quarter sales from its prescription drug business rose 10.5 percent to 2.7 billion euros ($3.3 billion) over the year-ago period, with growth coming mainly from North America and the emerging markets, especially China. Revenue from the company's overall HealthCare unit jumped 10 percent year-over-year to 4.6 billion euros ($5 billion), with chairman Marijn Dekkers noting that "the gratifying business in the emerging markets contributed particularly to this development."

Sales of pharmaceuticals in North America jumped 24.5 percent in the three-month period to 605 million euros ($743 million), while the company noted that there "were slight declines in Europe, particularly in Western Europe." Sales of prescription medicines in Europe slipped 2.4 percent to 893 million euros ($1.1 billion). "The numbers look very strong," commented Bankhaus Metzler analyst Sebastian Frericks, adding that the HealthCare unit in particular performed better than expected.

The company noted that in the quarter, sales of Betaferon jumped 16.8 percent to 319 million euros ($392 million), mainly due to price increases and the release of provisions for discounts in the US. Revenue from Kogenate rose 10.3 percent versus the year-ago period to 289 million euros ($355 million), while sales of the YAZ product line fell 3.4 percent to 254 million euros ($312 million). Bayer noted that revenue for the oral contraceptives was "hampered" by generic competition, especially in Western Europe and North America, with sales rising in Japan. In addition, revenue from Nexavar climbed 14 percent to 195 million euros ($239 million).

Xarelto, which Bayer markets with partner Johnson & Johnson, generated second-quarter sales of 68 million euros ($84 million). Frericks said that quarterly revenue from the anticoagulant was in line with expectations, adding that the drug will generate sales of about 300 million euros ($368 million) this year.

Overall company sales in the second quarter rose 10 percent to 10.2 billion euros ($12.5 billion), beating analyst estimates of 9.8 billion euros ($11.9 billion), although profit slipped 33.9 percent to 494 million euros ($607 million). The drugmaker indicated that the quarter included charges of 762 million euros ($936 million), with 496 million euros ($609 million) of this related to risk provisions for litigation in connection with YAZ and Yasmin, "of which Bayer is currently aware and which it considers to be worthy of settlement." The results beat expectations despite the high one-time charges, remarked DZ Bank analyst Peter Spengler.

"In view of the strong business performance, we are raising our guidance for the full year 2012," Dekkers noted, with the company now expecting overall sales to rise about 4 percent to 5 percent, from an earlier estimate of about 3 percent. This would result in revenue of between 39 billion euros ($47.9 billion) and 40 billion euros ($49.1 billion), compared with the earlier forecast of 37 billion euros ($45.4 billion). Meanwhile, sales of prescription drugs in 2012 are now predicted to move slightly higher, whereas an earlier estimate had sales remaining stable or moving slightly higher.

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