Business Development by Segment

Pharmaceuticals

Key Data – Pharmaceuticals

 

 

Q2 2016

Q2 2017

 

Change

 

H1 2016

H1 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

 

4,104

4,304

 

+4.9

+4.4

 

7,993

8,567

 

+7.2

+5.8

Change in sales1

 

 

 

 

 

 

 

 

 

 

 

 

Volume

 

+9.6%

+4.7%

 

 

 

 

+11.1%

+6.2%

 

 

 

Price

 

−1.2%

−0.3%

 

 

 

 

−0.9%

−0.4%

 

 

 

Currency

 

−2.9%

+0.5%

 

 

 

 

−2.9%

+1.4%

 

 

 

Portfolio

 

0.0%

0.0%

 

 

 

 

0.0%

0.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

€ million

€ million

 

Reported %

Fx adj. %

 

€ million

€ million

 

Reported %

Fx adj. %

Sales by region

 

 

 

 

 

 

 

 

 

 

 

 

Europe / Middle East / Africa

 

1.602

1,647

 

+2.8

+3.3

 

3,144

3,253

 

+3.5

+3.6

North America

 

1,027

1,101

 

+7.2

+5.3

 

2,016

2,174

 

+7.8

+5.1

Asia / Pacific

 

1,219

1,290

 

+5.8

+5.7

 

2,349

2,602

 

+10.8

+9.5

Latin America

 

256

266

 

+3.9

+1.6

 

484

538

 

+11.2

+5.8

EBITDA1

 

1,342

1,474

 

+9.8

 

 

2,603

2,973

 

+14.2

 

Special items1

 

(10)

(7)

 

 

 

 

(10)

(10)

 

 

 

EBITDA before special items1

 

1,352

1,481

 

+9.5

 

 

2,613

2,983

 

+14.2

 

EBITDA margin before special items1

 

32.9%

34.4%

 

 

 

 

32.7%

34.8%

 

 

 

EBIT1

 

988

1,102

 

+11.5

 

 

1,686

2,321

 

+37.7

 

Special items1

 

(11)

(120)

 

 

 

 

(242)

(156)

 

 

 

EBIT before special items1

 

999

1,222

 

+22.3

 

 

1,928

2,477

 

+28.5

 

Net cash provided by operating activities

 

310

528

 

+70.3

 

 

1,044

1,501

 

+43.8

 

Second quarter of 2017

Sales

Sales of Pharmaceuticals increased by 4.4% (Fx & portfolio adj.) to €4,304 million in the second quarter of 2017. Our key growth products Xarelto™, Eylea™, Xofigo™, Stivarga™ and Adempas™ once again delivered strong performance, with their combined sales rising by 16.6% (Fx adj.) to €1,555 million (Q2 2016: €1,332 million). Combined sales of the 15 best-selling Pharmaceuticals products advanced by 7.7% (Fx adj.). Our Pharmaceuticals business expanded in all regions.

Best-Selling Pharmaceuticals Products

 

 

Q2 2016

Q2 2017

 

Change

 

H1 2016

H1 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™

 

703

834

 

+18.6

+18.4

 

1,320

1,585

 

+20.1

+19.0

of which U.S.A.2

 

103

117

 

+13.6

+13.1

 

189

203

 

+7.4

+7.2

Eylea™

 

418

458

 

+9.6

+10.6

 

790

904

 

+14.4

+14.7

of which U.S.A.3

 

0

0

 

.

.

 

0

0

 

.

.

Xofigo™

 

81

105

 

+29.6

+28.0

 

156

205

 

+31.4

+29.2

of which U.S.A.

 

56

62

 

+10.7

+7.6

 

106

124

 

+17.0

+12.8

Stivarga™

 

67

83

 

+23.9

+20.8

 

134

158

 

+17.9

+14.9

of which U.S.A.

 

33

46

 

+39.4

+35.9

 

68

85

 

+25.0

+21.0

Adempas™

 

63

75

 

+19.0

+17.9

 

119

148

 

+24.4

+22.2

of which U.S.A.

 

30

38

 

+26.7

+24.1

 

56

76

 

+35.7

+31.8

Total key growth products

 

1,332

1,555

 

+16.7

+16.6

 

2,519

3,000

 

+19.1

+18.2

 

 

 

 

 

 

 

 

 

 

 

 

 

Mirena™ product family

 

258

276

 

+7.0

+4.5

 

506

591

 

+16.8

+13.4

of which U.S.A.

 

168

176

 

+4.8

+2.2

 

337

395

 

+17.2

+13.6

Kogenate™ / Kovaltry™

 

280

260

 

−7.1

−7.7

 

576

535

 

−7.1

−8.1

of which U.S.A.

 

87

91

 

+4.6

+2.8

 

183

185

 

+1.1

−1.3

Nexavar™

 

221

229

 

+3.6

+2.1

 

434

436

 

+0.5

−1.7

of which U.S.A.

 

78

86

 

+10.3

+5.9

 

159

161

 

+1.3

−2.2

Betaferon™ / Betaseron™

 

196

185

 

−5.6

−6.4

 

386

356

 

−7.8

−9.2

of which U.S.A.

 

111

108

 

−2.7

−4.1

 

211

202

 

−4.3

−6.6

Adalat™

 

161

171

 

+6.2

+7.3

 

321

345

 

+7.5

+7.9

of which U.S.A.

 

0

0

 

.

.

 

1

0

 

.

.

YAZ™ / Yasmin™ / Yasminelle™

 

166

158

 

−4.8

−6.3

 

338

328

 

−3.0

−6.8

of which U.S.A.

 

31

25

 

−19.4

−20.7

 

71

45

 

−36.6

−38.3

Aspirin™ Cardio

 

138

148

 

+7.2

+8.0

 

275

305

 

+10.9

+10.9

of which U.S.A.

 

0

0

 

.

.

 

0

0

 

.

.

Glucobay™

 

128

139

 

+8.6

+10.5

 

267

297

 

+11.2

+12.6

of which U.S.A.

 

1

0

 

.

.

 

2

1

 

.

.

Avalox™ / Avelox™

 

88

87

 

−1.1

+0.1

 

186

187

 

+0.5

+1.2

of which U.S.A.

 

0

2

 

.

.

 

0

5

 

.

.

Gadavist™ / Gadovist™

 

89

97

 

+9.0

+7.9

 

171

186

 

+8.8

+7.1

of which U.S.A.

 

27

34

 

+25.9

+23.7

 

54

61

 

+13.0

+10.4

Total best-selling products

 

3,057

3,305

 

+8.1

+7.7

 

5,979

6,566

 

+9.8

+8.6

Proportion of Pharmaceuticals sales

 

74%

77%

 

 

 

 

75%

77%

 

 

 

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

 

725

785

 

 

 

 

1,437

1,543

 

 

 

Sales by product

  • Our oral anticoagulant Xarelto™ once again achieved strong sales growth, primarily due to an expansion of volumes in Europe and China. Our license revenues – recognized as sales – in the United States, where Xarelto™ is marketed by a subsidiary of Johnson & Johnson, also developed positively.
  • We achieved a significant increase in sales of our eye medicine Eylea™, largely due to higher volumes in Europe and encouraging sales growth in Canada and Australia.
  • We once again recorded substantial sales gains for our cancer drug Xofigo™, with business benefiting from a successful market launch in Japan and growth in the United States and Europe.
  • Sales of our cancer drug Stivarga™ increased substantially, primarily in the United States, where, among other things, we obtained approval for the drug as a second-line treatment for patients with hepatocellular carcinoma.
  • Sales of the pulmonary hypertension treatment Adempas™ advanced significantly on a currency-adjusted basis, and, as in the past, reflected the proportionate recognition of the one-time payment resulting from the sGC collaboration with Merck & Co., United States. Business continued to benefit mainly from positive performance in the United States.
  • We expanded our business with the hormone-releasing intrauterine devices of the Mirena™ product family (Mirena™, Kyleena™ and Jaydess™ / Skyla™), including 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 lower than in the year-earlier quarter, due to order volumes placed by our distribution partner remaining significantly lower.
  • Sales of our cancer drug Nexavar™ edged higher, mainly as a result of positive performance in the United States and China.
  • As expected, business with our multiple sclerosis product Betaferon™ / Betaseron™ declined. This development was triggered in particular by lower demand in the United States and Latin America.
  • Adalat™, our product for the treatment of hypertension and coronary heart disease, once again achieved encouraging sales gains, particularly as a result of higher volumes in China.
  • Sales of our YAZ™ / Yasmin™ / Yasminelle™ line of oral contraceptives were down, primarily due to falling demand in Europe and generic competition in the United States. Positive business development in Asia was insufficient to offset this effect.
  • Sales of our diabetes treatment Glucobay™ and our Aspirin™ Cardio product for the secondary prevention of heart attacks advanced significantly as a result of a persistently favorable market environment in China.
  • We achieved an encouraging increase in sales of our MRI contrast agent Gadovist™, primarily due to the good development of business in the United States.

Earnings

EBITDA before special items of Pharmaceuticals improved by a very encouraging 9.5% to €1,481 million in the second quarter of 2017 (Q2 2016: €1,352 million). Positive earnings effects resulted primarily from higher volumes, while the cost of goods sold and expenses for research and development were lower.

EBIT increased by a substantial 11.5% to €1,102 million, and included special charges of €120 million (Q2 2016: €11 million). These largely comprised €69 million in impairments on intangible assets in the area of oncology (OncoMed), and €49 million in value adjustments in the area of women’s health.

Special Items1 Pharmaceuticals

 

 

EBIT
Q2 2016

EBIT
Q2 2017

 

EBIT H1 2016

EBIT H1 2017

 

EBITDA Q2 2016

EBITDA Q2 2017

 

EBITDA H1 2016

EBITDA H1 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

 

(10)

(2)

 

(12)

(5)

 

(9)

(1)

 

(11)

(4)

Litigations

 

(1)

 

1

 

(1)

 

1

Value adjustments

 

(118)

 

(231)

(151)

 

(6)

 

(6)

Total special items

 

(11)

(120)

 

(242)

(156)

 

(10)

(7)

 

(10)

(10)

First half of 2017

Sales

Sales of Pharmaceuticals rose by 5.8% (Fx & portfolio adj.) to €8,567 million in the first half of 2017. Our key growth products Xarelto™, Eylea™, Stivarga™, Xofigo™ and Adempas™ delivered strong performance, with their combined sales rising by 18.2% (Fx adj.) to €3,000 million (H1 2016: €2,519 million). Pharmaceuticals sales developed positively in all regions.

Earnings

EBITDA before special items improved by a substantial 14.2% in the first half of 2017, to €2,983 million. This positive earnings performance was the result of the good development of business, while the cost of goods sold and expenses for research and development were lower. In addition, selling expenses increased at a slower rate than sales.

EBIT increased substantially, rising by 37.7% to €2,321 million. Special charges amounted to €156 million (H1 2016: €242 million) and were primarily the result of value adjustments.