Bayer cuts annual sales forecast; third-quarter profit climbs 20.9 percent

Bayer said Thursday alongside its third-quarter financial results that it expects overall sales this year to reach approximately 46 billion euros ($50.4 billion), down from an earlier estimate of 47 billion euros ($51.5 billion), due to shifting exchange rates in the fourth quarter. The company added that it still forecasts high-teens percentage growth in core earnings per share.

According to Bayer, third-quarter profit increased 20.9 percent year-over-year to 999 million euros ($1.1 billion), with overall sales rising 10.7 percent to 11 billion euros ($12.1 billion). Revenue from the company's HealthCare unit surged 19.2 percent to 5.7 billion euros ($6.3 billion), with sales of prescription drugs climbing 14.6 percent to 3.5 billion euros ($3.8 billion). The company said performance in its pharmaceuticals segment "is largely attributable to the good development of our recently launched products," while Xarelto, Eylea, Stivarga, Xofigo and Adempas, which posted combined sales of just under 1.1 billion euros ($1.2 billion) versus 750 million euros ($822 million) in the year-ago period, "continued to experience gratifying growth."

Specifically, quarterly revenue from Xarelto jumped 29.8 percent year-over-year to 571 million euros ($626 million), bolstered by volume increases in Europe and Japan. Bayer noted that "business with Xarelto was also developed positively" in the US, where it is marketed by Johnson & Johnson. Sales of Eylea, which is partnered with Regeneron Pharmaceuticals, surged 69.3 percent year-over-year to 320 million euros ($351 million), "mainly as a result of very good business in Europe and Japan after marketing authorisation was granted in further indications," Bayer stated. In August, Regeneron boosted its 2015 sales growth forecast for the eye drug in the US to between 45 percent and 50 percent.

Sales of Bayer's over-the-counter portfolio increased by 41.6 percent during the quarter to 1.4 billion euros ($1.5 billion), boosted by its purchase of Merck & Co.'s consumer health business in May 2014. Bayer noted that organic growth for its non-prescription drugs was 1.7 percent after subtracting the effects of the Merck acquisition and currency impacts.

Commenting on Bayer's financial results, Warburg Research analyst Ulrich Huwald remarked "this is a good result considering the market environment." However, the analyst cautioned "we shouldn't assume these developments will continue into [the fourth quarter], there is pressure from the global economy and emerging markets."

Last year, Bayer disclosed plans to divest its Material Science business as part of efforts to focus solely on its life sciences division, selling a stake in the unit, now known as Covestro through an initial public offering last month. In February, the company unveiled an initiative to reorganise its corporate structure, with the aim of dividing its life sciences division into pharmaceuticals, consumer health and crop sciences units starting next January.

"The new organisation is aimed at supporting our strategy as a leading life science company and putting us in an even stronger position vis-à-vis our competitors," explained Bayer CEO Marijn Dekkers. The executive added "by focusing on the life sciences businesses, we will concentrate even more intensively in the future on two of the greatest challenges of the 21st century."

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