Bayer reports good 2010 results overall
Pharmaceuticals sales rise by 4.2% to €10.9bn, but slide in North America from generic competition
Bayer’s net income in the fourth quarter was hit by special charges, including a write-down of €405m relating to dropping the Schering brand name.
The German pharmaceuticals and chemicals giant said its net loss for the fourth quarter was €145m, down from a net profit of €153m in the final three months of 2009. Sales rose 14.5% to €9bn.
For the full year, Bayer posted sales of €35.1bn, the highest figure in its history. Net income was held back by special charges of €1.7bn, including the Schering brand loss, litigation and restructuring charges, coming in at €1.3bn, down 4.3% year-on-year.
Bayer’s HealthCare subgroup reported sales of €16.9bn for the full year, up 5.8%.
The pharmaceuticals segment increased sales by 4.2% to €10.9bn, seeing particular growth in the Asia/Pacific and Latin America/Africa/Middle East regions.
By contrast, sales were down in North America, mainly owing to generic competition for YAZ oral contraceptives. Health system reforms in various countries also had a negative impact.
Among Bayer’s best-selling pharmaceutical products, haemophilia drug Kogenate exceeded €1bn for the first time after a currency-adjusted 10.3% increase in sales. Strong gains were also registered by cancer drug Nexavar (up 11.7%). Sales of multiple sclerosis drug Betaferon/Betaseron were down by 5% year-on-year.
Sales in the Consumer Health segment climbed by 8.8% to €6bn, with all regions – especially North America – contributing to this growth.
‘2010 was a good year for us overall,’ said Bayer chairman Marijn Dekkers. ‘We are confident for this year, which has gotten off to a successful start.’
In 2010, the company increased its r&d expenditure by more than 11% to a record level of nearly €3.1bn, and expects to match this in 2011.
Dekkers stressed how important it is that Bayer invests more heavily and more rigorously in its potential for growth and innovation. He said the aim is to free up the necessary funds by carefully re-allocating resources, supported by efficiency and cost-containment measures, including the b1bn package of cost-cutting measures announced in November 2010 that will lead to around 2,000 job cuts by 2012.
‘The principle here is: more innovation and less administration,’ Dekkers said.
He added that Bayer is investing in a ‘highly promising product pipeline’, which includes anticoagulant Xarelto. In January, Bayer submitted marketing authorisations in the EU and the US to broaden the use of Xarelto for stroke prevention in non-valvular atrial fibrillation and in the EU for the treatment and secondary prevention of deep vein thrombosis.
‘These chronic indications are where the market potential of Xarelto lies,’ said Dekkers. ‘We believe Xarelto has a peak annual sales potential of more than €2bn.’
Bayer aims to increase the proportion of female managers in the Group to 30% by 2015 – the global figure currently being just over 20%.
Provided that the economy steadily improves, for the full year 2011, Dekkers expects to see currency- and portfolio adjusted sales growth of between 4–6% to €35–36bn. The Group aims to increase EBITDA before special items towards €7.5bn.