'New' Bayer will be more flexible

Bayer's delayed listing on the New York Stock Exchange finally went ahead on 24 January, following the reorganisation of its corporate structure. The group is looking to broaden its stockholder base in the US, where investors currently hold about 8% of the capital stock.

Ceo Dr Manfred Schneider said he expects the formation of a management holding company with four independent operating subsidiaries to give the group the flexibility it needs to achieve greater agility in its markets and boost its international competitiveness, as well as facilitating strategic partnerships. The new legal structure is to be introduced on 1 January, 2003.

'We have initiated far-reaching changes which will lead to increased competitiveness, more flexibility and a better performance in all our businesses,' explained Schneider. Preparations for the new structure are already well under way. The plans also include streamlining the portfolio by divesting subsidiaries and affiliates whose activities are considered non-core.

Chief financial officer Werner Wenning described the planned changes as the biggest reorganisation in Bayer's history. 'Focused, balanced and timely decisions will give us a competitive edge,' he said. The new operating units will have the mandate and flexibility to act quickly, resulting in accelerated portfolio and technology development, faster identification of market opportunities and faster response to customer demand.

The €11bn (US$9.6bn) healthcare business is to be developed into one of the leading companies in its field. Bayer is looking for strategic partners – whether for the entire business or for individual business units and special markets. However, Schneider stressed that Bayer intends to remain 'in the driver's seat.'

To boost the efficiency of pharmaceutical r&d, the search for nces has already been placed on a broader footing by setting up a network of alliances rather than establishing and maintaining large-scale capacities for these highly specialised processes.

'We access know-how through long-term alliances with leading biotechnology and high-tech companies,' explained Schneider. 'Our goal is to identify at least 20 new development projects a year and to leverage this high output rapidly into new products.'

The development pipeline currently contains 14 substances in phase I and II clinical trials. There are also 24 substances undergoing preclinical tests.

Meanwhile Bayer has received a firm offer from Israeli pharmaceutical manufacturer Teva Pharmaceutical Industries for its generics business in France, including the production site in Sens. Teva is one of the world's largest generic pharma companies.

However, the generics business does not fit into the core business outlined in Bayer's future corporate strategy, and this offer is said to represent the best development opportunity for the two activities. The offer has been outlined to the Worker's Council as part of the information consultation procedure, prior to the signature of any contractual agreement.