Bayer boosts forecast after strong quarter

GERMAN chemicals and pharmaceuticals giant Bayer yesterday said it had slightly increased its forecast for the whole year, driven by strong sales of prescription drugs.

Results released by the firm showed it had increased profits by 18.8 percent to 1.2 billion ($1.3 billion) between July and September compared with the same period the previous year, on sales of 11.3 billion.

Analysts surveyed by Factset had predicted profits of 1.08 billion.

Based on its performance, Bayer said it would target a “high single-digit percentage increase in adjusted profits per share” for the whole year rather than the “mid-to-high” increase it had in its sights previously.

Growth was driven by the Leverkusenbased firm’s prescription drugs division, which boosted its underlying profit 16.5 percent to 1.1 billion on strong sales.

“Above all it was our new products that booked strong growth,” chief executive Werner Baumann said yesterday.

Anticoagulant Xarelto saw the biggest growth, followed by eye medication Eylea, cancer drugs Xofigo and Stivarga, and Adempas, a treatment for pulmonary hypertension – between them accounting for over a third of the unit’s 4.2 billion in sales. The over-the-counter medications division, which produces household names including Bayer’s 119-year-old Aspirin painkiller and Alka-Seltzer antacids, saw profits fall.

Bayer’s closely watched agrochemicals unit was able to increase profits by almost 8 percent on slightly weaker sales than in the third quarter of 2015.

Revenues in the division were hit by “weak market conditions, especially in Latin America”, CEO Baumann told journalists, pointing also to falling demand for insecticides.

But the firm was able to boost sales of both seeds and fungicides globally.

Bayer’s agriculture activities are in the spotlight as it prepares for a 58.8 billion takeover of US maker of genetically modified seeds and pesticides Monsanto, the biggest ever acquisition by a German company.

“Both businesses fit perfectly together and complement one another wonderfully,” Baumann said.

In its communications since the deal was announced in September, Bayer has emphasised small overlaps between the two firms’ business with an eye to upcoming probes from competition authorities in the US and EU.

Environmental activists and politicians, especially in Europe, have warned that the merger is a “marriage made in hell” that will give the combined firm too much power over farmers and the food chain.