Bayer
raises sales targets for top-selling drugs after
Monsanto deal
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[September 20, 2016]
By Ludwig Burger
FRANKFURT (Reuters) - German drugmaker
Bayer said its two best-selling drugs had a higher annual peak sales
potential than previously targeted, after the agreed $66 billion
takeover of Monsanto stirred criticism it might neglect its
pharmaceuticals business.
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Bayer now expects annual peak sales of more than 5 billion euros
($5.6 billion) for stroke prevention pill Xarelto, jointly sold with
Johnson & Johnson <JNJ.N>, where it had previously seen about 3.5
billion.
For the eye medicine Eylea, jointly developed with Regeneron <REGN.O>,
it now sees peak sales potential of more than 2.5 billion euros, up
from at least 1.5 billion previously.
Also underpinned by cancer drug Xofigo and pulmonary hypertension
treatment Adempas, the group's prescription drugs unit aims to
increase earnings before interest, taxes, depreciation and
amortisation (EBITDA), adjusted for special items, to 32-34 percent
of sales in 2018, up from 30.1 percent last year.
The smaller animal health unit could also slightly increase margins,
Bayer said.
In consumer health, previously boosted by the acquisition of brands
from Merck & Co, it now sees sales adjusted for currency swings
growing by between 4 and 5 percent by the end of 2018 and an
adjusted EBITDA margin of about 25 percent, up from 24 percent in
2015.
Bayer has "underestimated the country risk from Emerging Markets
volatility", the company said in presentation slides.
It also cited "stronger business disruption than anticipated during
the integration of Merck Consumer Care and Dihon in China",
referring to a Chinese non-prescription drugs unit it acquired in
2014.
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"2018 EBITDA guidance for Pharma and Animal Health may ... offer
some upside against consensus, though the consumer margin guidance
may disappoint slightly," Jefferies analysts said in a note to
investors.
Bayer shares were seen 1.5 percent higher in premarket trading at
brokerage Lang & Schwarz, where the overall German market was seen
little changed ahead of the official market open at 0700 GMT.
(Reporting by Ludwig Burger; editing by Tina Bellon and Jason Neely)
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