Business Development by Segment

Pharmaceuticals

Key Data – Pharmaceuticals

 

 

Q3 2016

Q3 2017

 

Change

 

9M 2016

9M 2017

 

Change

 

 

€ million

€ million

 

Reported %

Fx & p adj. %

 

€ million

€ million

 

Reported %

Fx & p adj. %

2016 figures restated; Fx & p adj. = currency- and portfolio-adjusted; Fx adj. = currency-adjusted

1

For definition see Annual Report 2016, Chapter “Alternative Performance Measures Used by the Bayer Group.”

Sales

 

4,152

4,065

 

−2.1

+2.3

 

12,145

12,632

 

+4.0

+4.6

Change in sales1

 

 

 

 

 

 

 

 

 

 

 

 

Volume

 

+6.9%

+2.4%

 

 

 

 

+9.6%

+4.9%

 

 

 

Price

 

+0.7%

−0.1%

 

 

 

 

−0.3%

−0.3%

 

 

 

Currency

 

−0.3%

−4.3%

 

 

 

 

−2.0%

−0.6%

 

 

 

Portfolio

 

0.0%

−0.1%

 

 

 

 

0.0%

0.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

€ million

€ million

 

Reported %

Fx adj. %

 

€ million

€ million

 

Reported %

Fx adj. %

Sales by region

 

 

 

 

 

 

 

 

 

 

 

 

Europe / Middle East / Africa

 

1,589

1,548

 

−2.6

−1.3

 

4,733

4,801

 

+1.4

+1.9

North America

 

1,071

1,028

 

−4.0

−0.4

 

3,087

3,202

 

+3.7

+3.2

Asia / Pacific

 

1,223

1,223

 

0.0

+8.2

 

3,572

3,825

 

+7.1

+9.0

Latin America

 

269

266

 

−1.1

+6.7

 

753

804

 

+6.8

+6.1

EBITDA1

 

1,416

1,496

 

+5.6

 

 

4,019

4,469

 

+11.2

 

Special items1

 

(5)

3

 

 

 

 

(15)

(7)

 

 

 

EBITDA before special items1

 

1,421

1,493

 

+5.1

 

 

4,034

4,476

 

+11.0

 

EBITDA margin before special items1

 

34.2%

36.7%

 

 

 

 

33.2%

35.4%

 

 

 

EBIT1

 

1,097

1,209

 

+10.2

 

 

2,783

3,530

 

+26.8

 

Special items1

 

(6)

3

 

 

 

 

(248)

(153)

 

 

 

EBIT before special items1

 

1,103

1,206

 

+9.3

 

 

3,031

3,683

 

+21.5

 

Net cash provided by operating activities

 

998

1,036

 

+3.8

 

 

2,042

2,537

 

+24.2

 

Third quarter of 2017

Sales

Sales of Pharmaceuticals increased by 2.3% (Fx & portfolio adj.) to €4,065 million in the third quarter of 2017. Our key growth products Xarelto™, Eylea™, Xofigo™, Stivarga™ and Adempas™ once again delivered strong performance, with their combined sales rising by 13.2% (Fx adj.) to €1,522 million (Q3 2016: €1,395 million). Combined sales of the 15 best-selling Pharmaceuticals products advanced by 4.7% (Fx adj.). We registered a marked decline in sales in our business with Kogenate™, which was due in particular to a distribution partner placing a lower volume of orders for the active ingredient. After adjusting for this effect, sales of Pharmaceuticals rose by 4.4% (Fx & portfolio adj.).

Best-Selling Pharmaceuticals Products

 

 

Q3 2016

Q3 2017

 

Change

 

9M 2016

9M 2017

 

Change

 

 

€ million

€ million

 

Reported %

Fx adj.1 %

 

€ million

€ million

 

Reported %

Fx adj.1 %

1

Fx adj. = currency-adjusted; for definition see Annual Report 2016, Chapter “Alternative Performance Measures Used by the Bayer Group.”

2

Marketing rights owned by an affiliate of Johnson & Johnson, U.S.A.

3

Marketing rights owned by Regeneron Pharmaceuticals Inc., U.S.A.

Xarelto™

 

772

799

 

+3.5

+6.6

 

2,092

2,384

 

+14.0

+14.4

of which U.S.A.2

 

139

138

 

−0.7

−0.4

 

328

341

 

+4.0

+4.0

Eylea™

 

409

469

 

+14.7

+19.9

 

1,199

1,373

 

+14.5

+16.5

of which U.S.A.3

 

0

0

 

.

.

 

0

0

 

.

.

Xofigo™

 

85

102

 

+20.0

+24.9

 

241

307

 

+27.4

+27.7

of which U.S.A.

 

60

59

 

−1.7

+5.1

 

166

183

 

+10.2

+10.1

Stivarga™

 

64

77

 

+20.3

+27.7

 

198

235

 

+18.7

+19.0

of which U.S.A.

 

32

40

 

+25.0

+31.3

 

100

125

 

+25.0

+24.3

Adempas™

 

65

75

 

+15.4

+19.3

 

184

223

 

+21.2

+21.2

of which U.S.A.

 

30

38

 

+26.7

+30.0

 

86

114

 

+32.6

+31.2

Subtotal key growth products

 

1,395

1,522

 

+9.1

+13.2

 

3,914

4,522

 

+15.5

+16.4

Mirena™ product family

 

269

280

 

+4.1

+8.4

 

775

871

 

+12.4

+11.7

of which U.S.A.

 

186

190

 

+2.2

+7.1

 

523

585

 

+11.9

+11.3

Kogenate™ / Kovaltry™

 

302

215

 

−28.8

−25.9

 

878

750

 

−14.6

−14.2

of which U.S.A.

 

105

69

 

−34.3

−30.9

 

288

254

 

−11.8

−12.1

Nexavar™

 

212

194

 

−8.5

−4.2

 

646

630

 

−2.5

−2.5

of which U.S.A.

 

73

66

 

−9.6

−3.1

 

232

227

 

−2.2

−2.5

Adalat™

 

156

156

 

.

.

 

477

501

 

+5.0

+7.8

of which U.S.A.

 

0

0

 

.

.

 

1

0

 

.

.

Betaferon™ / Betaseron™

 

163

143

 

−12.3

−8.8

 

549

499

 

−9.1

−9.1

of which U.S.A.

 

81

75

 

−7.4

−2.9

 

292

277

 

−5.1

−5.6

YAZ™ / Yasmin™ / Yasminelle™

 

181

167

 

−7.7

−2.9

 

519

495

 

−4.6

−5.5

of which U.S.A.

 

36

24

 

−33.3

−30.7

 

107

69

 

−35.5

−35.8

Aspirin™ Cardio

 

128

139

 

+8.6

+13.3

 

403

444

 

+10.2

+11.7

of which U.S.A.

 

0

0

 

.

.

 

0

0

 

.

.

Glucobay™

 

125

136

 

+8.8

+14.6

 

392

433

 

+10.5

+13.3

of which U.S.A.

 

0

1

 

.

.

 

2

2

 

.

.

Gadavist™ / Gadovist™

 

87

90

 

+3.4

+8.2

 

258

276

 

+7.0

+7.5

of which U.S.A.

 

26

30

 

+15.4

+19.6

 

80

91

 

+13.8

+13.4

Avalox™ / Avelox™

 

86

71

 

−17.4

−11.4

 

272

258

 

−5.1

−2.8

of which U.S.A.

 

4

1

 

−75.0

−76.3

 

4

6

 

+50.0

+63.7

Total best-selling products

 

3,104

3,113

 

+0.3

+4.7

 

9,083

9,679

 

+6.6

+7.3

Proportion of Pharmaceuticals sales

 

75%

77%

 

 

 

 

75%

77%

 

 

 

Total best-selling products in U.S.A.

 

772

731

 

−5.3

−1.4

 

2,209

2,274

 

+2.9

+2.6

Sales by product

  • We once again posted sales growth with our oral anticoagulant Xarelto™, particularly in Europe and Asia. Sales in the United States, where Xarelto™ is marketed by a subsidiary of Johnson & Johnson, increased by a double-digit percentage. In contrast, license revenues – recognized as sales – were level with the prior-year quarter, in part due to a shift between reporting periods.
  • Sales of our eye medicine Eylea™ advanced significantly, due particularly to a substantial expansion of volumes in Japan, Europe and Canada.
  • We also posted strong gains for our cancer drug Xofigo™, with business continuing to benefit from a successful market launch in Japan and higher demand in Europe.
  • Business with our cancer drug Stivarga™ expanded significantly, especially in the United States and Japan, mainly reflecting new approval for the drug as a second-line treatment for patients with hepatocellular carcinoma.
  • The pulmonary hypertension treatment Adempas™ showed further strong growth that was chiefly attributable to persisting positive performance in the United States. As in the past, sales of the product reflected the proportionate recognition of the one-time payment resulting from the sGC collaboration with Merck & Co., United States.
  • We registered encouraging growth in sales of the hormone-releasing intrauterine devices of the Mirena™ product family (Mirena™, Kyleena™ and Jaydess™ / Skyla™). This trend mainly reflected higher volumes in the United States, where we continued to benefit from the successful market launch of the Kyleena™ intrauterine device.
  • Sales of our Kogenate™ / Kovaltry™ blood-clotting medicines were significantly lower than in the prior-year quarter overall due primarily to lower order volumes for the active ingredient placed by our distribution partner ahead of the planned contract termination at the end of the year. After adjusting for this effect, sales were flat with the prior-year level.
  • We also registered a decline in sales of our cancer drug Nexavar™ that was mainly the result of lower demand in Germany and the United States.
  • Adalat™, our product for the treatment of hypertension and coronary heart disease, once again achieved sales gains, particularly as a result of expanded volumes in China.
  • The decline in business with our multiple sclerosis product Betaferon™ / Betaseron™ continued in the third quarter of 2017 as a result of lower demand in Europe and the United States.
  • Business with our YAZ™ / Yasmin™ / Yasminelle™ line of oral contraceptives receded slightly, primarily due to generic competition in the United States. Positive business development in Japan, where we benefited from the launch of YAZ™ Flex, was insufficient to offset this effect.
  • We posted substantial sales gains for our Aspirin™ Cardio product for the secondary prevention of heart attacks and for our diabetes treatment Glucobay™ as a result of a persistently favorable market environment in China.
  • There was an encouraging increase in sales of our MRI contrast agent Gadovist™ that was primarily attributable to the positive development of business in the United States and Japan.
  • We posted a sharp decline in sales of our antibiotic Avalox™ / Avelox™ that was mainly the result of lower demand in Europe and the United States.

Earnings

EBITDA before special items of Pharmaceuticals increased by 5.1% to €1,493 million in the third quarter of 2017 (Q3 2016: €1,421 million). This development was largely the result of higher volumes and a lower cost of goods sold. We also recorded a receivable in the mid-double-digit millions as one of our distribution partners for Kogenate™ did not fulfill its purchase obligation, and this had a positive effect on earnings. In contrast, negative currency effects diminished earnings by about €60 million.

EBIT improved by a gratifying 10.2% to €1.209 million after special gains of €3 million (Q3 2016: special charges of €6 million).

Special Items1 Pharmaceuticals

 

 

EBIT
Q3 2016

EBIT
Q3 2017

 

EBIT 9M 2016

EBIT 9M 2017

 

EBITDA Q3 2016

EBITDA Q3 2017

 

EBITDA 9M 2016

EBITDA 9M 2017

 

 

€ million

€ million

 

€ million

€ million

 

€ million

€ million

 

€ million

€ million

1

For definition see Annual Report 2016, Chapter “Alternative Performance Measures Used by the Bayer Group.”

Restructuring

 

(6)

(2)

 

(18)

(7)

 

(5)

(2)

 

(16)

(6)

Litigations

 

 

1

 

 

1

Value adjustments

 

5

 

(231)

(146)

 

5

 

(1)

Total special items

 

(6)

3

 

(248)

(153)

 

(5)

3

 

(15)

(7)

First nine months of 2017

Sales

Sales of Pharmaceuticals rose by 4.6% (Fx & portfolio adj.) in the first nine months of 2017, to €12,632 million. Our key growth products Xarelto™, Eylea™, Stivarga™, Xofigo™ and Adempas™ delivered strong performance, as their combined sales rose by 16.4% (Fx adj.) to €4,522 million (9M 2016: €3,914 million). We registered a marked decline in sales in our business with Kogenate™, which was due to a distribution partner placing a lower volume of orders for the active ingredient. After adjusting for this effect, sales of Pharmaceuticals rose by 5.6% (Fx & portfolio adj.).

Earnings

EBITDA before special items improved by a substantial 11.0% in the first nine months of 2017, to €4,476 million (9M 2016: €4,034 million). The increase in earnings was predominantly due to the good development of business, a lower cost of goods sold, and selling expenses rising at a slower rate than business growth. Currency effects in the amount of around €60 million diminished earnings.

EBIT improved substantially, rising by 26.8% to €3,530 million. Special charges amounted to €153 million (9M 2016: €248 million) and were mainly the result of value adjustments.