Bayer CEO says recovery on track as key drug products shine

Bayer has joined its peers among European drugmakers with a hike in pharma forecasts for the year, as it recorded a rise in group sales, but lower profits for the second quarter.

Total revenues came in at €11.1 billion ($12.2 billion) in the quarter, ahead of analyst consensus estimates, with pharma leading the charge as it recorded sales up 4.5% to €4.61 billion. There were also modest gains for the company's consumer health and crop science divisions, although restructuring costs dragged down earnings by 16.5% to €2.11 billion.

Among pharma watchers, all eyes are currently on key pharma prospects Kerendia (finerenone) for chronic kidney disease and prostate cancer therapy Nubeqa (darolutamide) and they did not disappoint, growing 73% to €115 million and 90% to €380 million, respectively.

Notably, the growth has come ahead of potential regulatory approvals for new indications – already backed up by positive phase 3 trial data – that Bayer predicts could drive annual sales to €3 billion or more for both medicines.

Ophthalmology blockbuster Eylea (aflibercept) also stood up well despite more intense competition in its key indications from biosimilars and other newer therapies, rising 8% to €834 million. However, Bayer's top-selling pharma product Xarelto (rivaroxaban), an anticoagulant, continued to succumb to generic competition with a near-11% fall to €904 million.

The solid quarter is important for Bayer as it tries to rebuild under chief executive Bill Anderson, who was brought in to steady the ship after a torrid few years marked by patent losses, litigation, high debt levels, and a bloated management structure.

He said this morning that pharma has in the last three months "taken big steps toward filling the mid-stage pipeline, expanding labels, and advancing late-stage assets," alluding to the new Kerendia and Nubeqa trials, as well as new menopause symptom treatment elinzanetant and acoramidis for ATTR cardiomyopathy, which could reach the market next year.

Anderson's drive to reduce costs is also bearing fruit, with job reductions now reaching 3,200 from 1,500 at the end of the first quarter, including a 10% reduction in senior roles – around 300 people – that is part of his drive to remove layers of management at the group.

Bayer remains on track to achieve its target of cost savings of €500 million this year and €2 billion by 2026, said Anderson this morning.

"One of the central commitments we made […] is that this organisation will consistently perform while simultaneously addressing the longer-term roadblocks holding us back," he remarked. "The 154 days since March 5th have been pretty good evidence that we can do both."

Bayer's pharma division now expects growth of 0%-3% this year, an upgrade on its earlier prediction of -4%-0%. Other European pharma groups, including AstraZeneca, GSK, Roche, and Sanofi, have all also upgraded their revenue forecasts after a strong first half.