07.29.15
$2.8 Billion ($20B total)
KEY EXECUTIVES:
Marijn Dekkers, Ph.D., Board Chairman & CEO, Bayer AG
Werner Baumann, Chairman & CEO, Bayer HealthCare
Michael Devoy, M.D., Chief Medical Officer, Bayer HealthCare
Jörg Möller, M.D., Head, Bayer HealthCare Global Development
Axel Bouchon, Ph.D., Head, Business Development & Licensing, Bayer HealthCare
Alan Main, Head, Bayer Medical Care
Erica L. Mann, Head, Bayer Consumer Care
NO. OF EMPLOYEES: 60,700 (Bayer HealthCare total)
GLOBAL HEADQUEARTERS: Leverkusen, Germany
Bayer AG. It’s as ubiquitous a brand name in the consumer healthcare sector as Johnson & Johnson’s Band-Aid bandages or Tylenol. Though many pain-relievers now flood the market, Bayer aspirin, undoubtedly the venerable firm’s most recognizable product, has been in production since the 1890s—rebranded more recently as the “wonder drug” for what the company touts as its cardiovascular benefits, particularly during the onset of a heart attack. Sales of Bayer’s aspirin products—in its different forms—accounted for approximately $1.13 billion for the company’s HealthCare division in fiscal 2014 (ended Dec. 31), up about 2 percent in euros compared with 2013.
But the company’s HealthCare division—which is divided into Pharmaceutical and Consumer Heath (which includes Consumer Care, Animal Health and Medical Care) units—is built on much more than aspirin sales, which is bound to be a source of pain relief for executives with the Leverkusen, Germany-based conglomerate. A strong pharmaceutical portfolio drives performance at Bayer’s HealthCare division. Prescription medications such as the recently commercialized blood thinner Xarelto or Eylea, which is prescribed for wet age-related macular degeneration, macular edema, diabetic macular edema and diabetic retinopathy, are the company’s current cash cows. Fiscal 2014 sales for Xarelto were up nearly 77 percent to 1.68 billion euros ($2.04 billion) in 2014, and Eylea revenue was up 128 percent to 759 million euros ($922.5 million).
In 2014, sales for the overall HealthCare division rose by 5.6 percent to 19.98 billion euros (approximately $24.3 billion), and made up the largest share (47 percent) of Bayer’s business. The growth, according to the company’s brass, was fueled by newly launched pharmaceutical products. Sales for the Consumer Health division came in “slightly ahead” of the prior year, officials reported.
The Pharmaceutical division brought in 12.1 billion euros ($14.7 billion), up 11.2 percent. The performance was driven by drug releases. Newly launched drugs Xarelto, Eylea, Stivarga, Xofig and Adempas, posted combined sales of 2.91 billion euros ($3.54 billion). The largest growth sectors globally were China, the United States and Western Europe. Sales for the Consumer Health segment advanced by 2.1 percent to 7.92 million euros ($9.63 billion). The Consumer Care and Animal Health divisions achieved sales gains, especially in emerging markets. Sales for the Medical Care division declined—particularly in the United States and Europe, company officials noted.
Sales of the Medical Care division, where the company’s medical device technology is categorized, fell by 3.7 percent to 2.36 million euros (approximately $2.87 billion). Sales of the Diabetes Care business declined overall despite positive growth in emerging markets. Sales of the Contour line of blood glucose meters were off 8.9 percent down to 658 million euros ($800 million), especially in the United States, “due to reimbursement pressure and price decreases, mainly in the first half of the year,” Bayer officials said. Sales of contrast agents and medical equipment in the firm’s radiology business were flat with the prior-year period on a currency-adjusted basis.
The big news for Bayer’s HealthCare division was a sizeable purchase to beef up its over-the-counter (OTC) drug offerings. On Oct. 1, Bayer completed the acquisition of the consumer care business of the U.S. pharmaceuticals group Merck & Co. Inc. (Whitehouse Station, N.J.). The purchase price was $14.2 billion.
“This acquisition is a milestone for Bayer and we intend to continue the expansion of our attractive over-the-counter business both through organic growth and bolt-on acquisitions,” said Bayer CEO Marijn Dekkers.
The combined consumer care business is headed by Erica Mann, member of the Bayer HealthCare Executive Committee and responsible for the Consumer Care division.
The acquisition will give Bayer the global number two position in non-prescription medication—behind the combined OTC businesses of Novartis and GlaxoSmithKline, following the completion of their announced joint venture in 2015, and ahead of the world’s previous industry leader Johnson & Johnson.
The consumer care business acquired from Merck primarily comprises products in the cold, allergy, sinus and flu; dermatology (including sun care); foot health; and gastrointestinal categories. The most important brands are Claritin (allergy), Coppertone (sun care), MiraLAX (gastrointestinal), Afrin (cold) and—in North and Latin America—Dr. Scholl’s (foot care). These brands complement Bayer’s existing OTC portfolio, which includes brands such as aspirin and Aleve, One A Day vitamins, and cough-and-cold products such as Alka-Seltzer Plus.
On the medical device side, Bayer was more in more of a mood to divest than to acquire. Late in 2014, rumors began to swirl that the company was looking to sell is diabetes care business. In June this year, it was announced that Panasonic Healthcare Holdings would by the diabetes care business for 1.02 billion euros, about $1.15 billion.
The Diabetes Care business of Bayer HealthCare makes blood glucose monitoring systems, lancing devices and diabetes management software. The sale will include the leading Contour portfolio of blood glucose monitoring meters and strips, as well as other products such as Breeze 2, Elite and Microlet lancing devices.
Bayer Diabetes Care, has marketed and sold products manufactured by Panasonic Healthcare for decades and is the exclusive sales and distribution partner for Panasonic’s Contour Next line of products. Tokyo, Japan-based Panasonic Healthcare was spun off from the Panasonic Corporation in 2014 and is owned 80 percent by the New York, N.Y.-based private equity firm Kohlberg Kravis Roberts (KKR) and 20 percent owned by Panasonic.
“Since first taking steps to becoming an independent healthcare company from Panasonic Corporation through KKR’s investment, it has been our key management objective to form strong partnerships with strategically pivotal companies,” Kenji Yamane, the Panasonic Healthcare president, said in a news release. “For more than 20 years, BDC (Bayer Diabetes Care) has been our flagship partnership with whom we share complementary goals.”
“We are confident that the sale of our Diabetes Care business to our long-standing partner Panasonic Healthcare, with the strong backing of KKR, will support the long-term sustainability of this portfolio,” said Werner Baumann, member of the board of management of Bayer and CEO of Bayer HealthCare.
The transaction is expected to close in the first quarter of 2016 and is subject to regulatory approval.
Diabetes technology wasn’t the only device-related business on the chopping block.
In 2014, Marlborough, Mass.-based Boston Scientific Corp. bought the interventional device division at Bayer AG for $415 million in a move that will expand the medical device maker’s portfolio of coronary and peripheral vascular disease treatment technologies.
The sale gave Boston Scientific the rights to AngioJet, a thrombectomy device; JetStream, an atherectomy technology; and Fetch 2, an aspiration catheter. Bayer Interventional became part of the existing Boston Scientific Peripheral Interventions business.
“The addition of Bayer Interventional will expand our commercial footprint and enhance our ability to provide physicians and healthcare systems with a complete portfolio of solutions to treat challenging vascular conditions,” said Jeff Mirviss, president, Peripheral Interventions, Boston Scientific. “We believe this acquisition will accelerate the growth of our Peripheral Interventions business and strengthen our position as a global leader in peripheral therapies.”
Though not part of the company’s HealthCare unit, Bayer’s MaterialScience division released in 2014 in the United States a polyurethane-based adhesive based on its BaymedixA raw material.
Targeted for skin adherence in wound care and biosensor applications, the product is touted as a “skin-friendly” adhesive that offers adjustable adhesive strengths, hydroselectivity and gentle removal that is comparable to silicone adhesives. Additionally, BaymedixA raw material offers high breathability and is compatible with common sterilization technologies.
Bayer’s range of materials for the wound care market includes polyurethane raw materials for wound dressings and thermoplastic films engineered for protective coverings.
Bayer recently unveiled an aliphatic polyurethane foam based on wwBaymedix FP reactive foam technology. This raw material enables the production of “very smooth and conformable foams that are non-yellowing. They maintain their white color over time. With high absorption rates and great fluid retention capability, these foams fit the moisture management requirements of advanced wound dressings very well,” according to company officials. The films, made from thermoplastic polyurethane, are made for use as soft, thin-film protective coverings that control water vapor transmission and are highly flexible, with a matte surface. This ensures comfortable wear and unobtrusive wound coverage. The company manufactures high-tech polymer materials; the main segments served are the automotive, electrical and electronics, construction, medical, and sports and leisure.
Bayer AG is divided into three independently managed units: HealthCare, CropScience and MaterialScience. Bayer’s total revenue for fiscal 2014 was 42.2 billion euros ($51.3 billion), up from 40.1 billion euros in 2013. A total of 302 companies were fully consolidated under the Bayer corporate umbrella in 2014. North America is the company’s largest overall market, accounting for 10.25 billion euros ($12.46 billion) in 2014.
KEY EXECUTIVES:
Marijn Dekkers, Ph.D., Board Chairman & CEO, Bayer AG
Werner Baumann, Chairman & CEO, Bayer HealthCare
Michael Devoy, M.D., Chief Medical Officer, Bayer HealthCare
Jörg Möller, M.D., Head, Bayer HealthCare Global Development
Axel Bouchon, Ph.D., Head, Business Development & Licensing, Bayer HealthCare
Alan Main, Head, Bayer Medical Care
Erica L. Mann, Head, Bayer Consumer Care
NO. OF EMPLOYEES: 60,700 (Bayer HealthCare total)
GLOBAL HEADQUEARTERS: Leverkusen, Germany
Bayer AG. It’s as ubiquitous a brand name in the consumer healthcare sector as Johnson & Johnson’s Band-Aid bandages or Tylenol. Though many pain-relievers now flood the market, Bayer aspirin, undoubtedly the venerable firm’s most recognizable product, has been in production since the 1890s—rebranded more recently as the “wonder drug” for what the company touts as its cardiovascular benefits, particularly during the onset of a heart attack. Sales of Bayer’s aspirin products—in its different forms—accounted for approximately $1.13 billion for the company’s HealthCare division in fiscal 2014 (ended Dec. 31), up about 2 percent in euros compared with 2013.
But the company’s HealthCare division—which is divided into Pharmaceutical and Consumer Heath (which includes Consumer Care, Animal Health and Medical Care) units—is built on much more than aspirin sales, which is bound to be a source of pain relief for executives with the Leverkusen, Germany-based conglomerate. A strong pharmaceutical portfolio drives performance at Bayer’s HealthCare division. Prescription medications such as the recently commercialized blood thinner Xarelto or Eylea, which is prescribed for wet age-related macular degeneration, macular edema, diabetic macular edema and diabetic retinopathy, are the company’s current cash cows. Fiscal 2014 sales for Xarelto were up nearly 77 percent to 1.68 billion euros ($2.04 billion) in 2014, and Eylea revenue was up 128 percent to 759 million euros ($922.5 million).
In 2014, sales for the overall HealthCare division rose by 5.6 percent to 19.98 billion euros (approximately $24.3 billion), and made up the largest share (47 percent) of Bayer’s business. The growth, according to the company’s brass, was fueled by newly launched pharmaceutical products. Sales for the Consumer Health division came in “slightly ahead” of the prior year, officials reported.
The Pharmaceutical division brought in 12.1 billion euros ($14.7 billion), up 11.2 percent. The performance was driven by drug releases. Newly launched drugs Xarelto, Eylea, Stivarga, Xofig and Adempas, posted combined sales of 2.91 billion euros ($3.54 billion). The largest growth sectors globally were China, the United States and Western Europe. Sales for the Consumer Health segment advanced by 2.1 percent to 7.92 million euros ($9.63 billion). The Consumer Care and Animal Health divisions achieved sales gains, especially in emerging markets. Sales for the Medical Care division declined—particularly in the United States and Europe, company officials noted.
Sales of the Medical Care division, where the company’s medical device technology is categorized, fell by 3.7 percent to 2.36 million euros (approximately $2.87 billion). Sales of the Diabetes Care business declined overall despite positive growth in emerging markets. Sales of the Contour line of blood glucose meters were off 8.9 percent down to 658 million euros ($800 million), especially in the United States, “due to reimbursement pressure and price decreases, mainly in the first half of the year,” Bayer officials said. Sales of contrast agents and medical equipment in the firm’s radiology business were flat with the prior-year period on a currency-adjusted basis.
The big news for Bayer’s HealthCare division was a sizeable purchase to beef up its over-the-counter (OTC) drug offerings. On Oct. 1, Bayer completed the acquisition of the consumer care business of the U.S. pharmaceuticals group Merck & Co. Inc. (Whitehouse Station, N.J.). The purchase price was $14.2 billion.
“This acquisition is a milestone for Bayer and we intend to continue the expansion of our attractive over-the-counter business both through organic growth and bolt-on acquisitions,” said Bayer CEO Marijn Dekkers.
The combined consumer care business is headed by Erica Mann, member of the Bayer HealthCare Executive Committee and responsible for the Consumer Care division.
The acquisition will give Bayer the global number two position in non-prescription medication—behind the combined OTC businesses of Novartis and GlaxoSmithKline, following the completion of their announced joint venture in 2015, and ahead of the world’s previous industry leader Johnson & Johnson.
The consumer care business acquired from Merck primarily comprises products in the cold, allergy, sinus and flu; dermatology (including sun care); foot health; and gastrointestinal categories. The most important brands are Claritin (allergy), Coppertone (sun care), MiraLAX (gastrointestinal), Afrin (cold) and—in North and Latin America—Dr. Scholl’s (foot care). These brands complement Bayer’s existing OTC portfolio, which includes brands such as aspirin and Aleve, One A Day vitamins, and cough-and-cold products such as Alka-Seltzer Plus.
On the medical device side, Bayer was more in more of a mood to divest than to acquire. Late in 2014, rumors began to swirl that the company was looking to sell is diabetes care business. In June this year, it was announced that Panasonic Healthcare Holdings would by the diabetes care business for 1.02 billion euros, about $1.15 billion.
The Diabetes Care business of Bayer HealthCare makes blood glucose monitoring systems, lancing devices and diabetes management software. The sale will include the leading Contour portfolio of blood glucose monitoring meters and strips, as well as other products such as Breeze 2, Elite and Microlet lancing devices.
Bayer Diabetes Care, has marketed and sold products manufactured by Panasonic Healthcare for decades and is the exclusive sales and distribution partner for Panasonic’s Contour Next line of products. Tokyo, Japan-based Panasonic Healthcare was spun off from the Panasonic Corporation in 2014 and is owned 80 percent by the New York, N.Y.-based private equity firm Kohlberg Kravis Roberts (KKR) and 20 percent owned by Panasonic.
“Since first taking steps to becoming an independent healthcare company from Panasonic Corporation through KKR’s investment, it has been our key management objective to form strong partnerships with strategically pivotal companies,” Kenji Yamane, the Panasonic Healthcare president, said in a news release. “For more than 20 years, BDC (Bayer Diabetes Care) has been our flagship partnership with whom we share complementary goals.”
“We are confident that the sale of our Diabetes Care business to our long-standing partner Panasonic Healthcare, with the strong backing of KKR, will support the long-term sustainability of this portfolio,” said Werner Baumann, member of the board of management of Bayer and CEO of Bayer HealthCare.
The transaction is expected to close in the first quarter of 2016 and is subject to regulatory approval.
Diabetes technology wasn’t the only device-related business on the chopping block.
In 2014, Marlborough, Mass.-based Boston Scientific Corp. bought the interventional device division at Bayer AG for $415 million in a move that will expand the medical device maker’s portfolio of coronary and peripheral vascular disease treatment technologies.
The sale gave Boston Scientific the rights to AngioJet, a thrombectomy device; JetStream, an atherectomy technology; and Fetch 2, an aspiration catheter. Bayer Interventional became part of the existing Boston Scientific Peripheral Interventions business.
“The addition of Bayer Interventional will expand our commercial footprint and enhance our ability to provide physicians and healthcare systems with a complete portfolio of solutions to treat challenging vascular conditions,” said Jeff Mirviss, president, Peripheral Interventions, Boston Scientific. “We believe this acquisition will accelerate the growth of our Peripheral Interventions business and strengthen our position as a global leader in peripheral therapies.”
Though not part of the company’s HealthCare unit, Bayer’s MaterialScience division released in 2014 in the United States a polyurethane-based adhesive based on its BaymedixA raw material.
Targeted for skin adherence in wound care and biosensor applications, the product is touted as a “skin-friendly” adhesive that offers adjustable adhesive strengths, hydroselectivity and gentle removal that is comparable to silicone adhesives. Additionally, BaymedixA raw material offers high breathability and is compatible with common sterilization technologies.
Bayer’s range of materials for the wound care market includes polyurethane raw materials for wound dressings and thermoplastic films engineered for protective coverings.
Bayer recently unveiled an aliphatic polyurethane foam based on wwBaymedix FP reactive foam technology. This raw material enables the production of “very smooth and conformable foams that are non-yellowing. They maintain their white color over time. With high absorption rates and great fluid retention capability, these foams fit the moisture management requirements of advanced wound dressings very well,” according to company officials. The films, made from thermoplastic polyurethane, are made for use as soft, thin-film protective coverings that control water vapor transmission and are highly flexible, with a matte surface. This ensures comfortable wear and unobtrusive wound coverage. The company manufactures high-tech polymer materials; the main segments served are the automotive, electrical and electronics, construction, medical, and sports and leisure.
Bayer AG is divided into three independently managed units: HealthCare, CropScience and MaterialScience. Bayer’s total revenue for fiscal 2014 was 42.2 billion euros ($51.3 billion), up from 40.1 billion euros in 2013. A total of 302 companies were fully consolidated under the Bayer corporate umbrella in 2014. North America is the company’s largest overall market, accounting for 10.25 billion euros ($12.46 billion) in 2014.
