Business Development by Segment

Pharmaceuticals

Key Data – Pharmaceuticals

 

 

Q3 2017

 

Q3 2018

 

Change1

 

9M 2017

 

9M 2018

 

Change1

 

 

€ million

 

€ million

 

Reported %

Fx & p adj. %

 

€ million

 

€ million

 

Reported %

Fx & p adj. %

Fx & p adj. = currency- and portfolio-adjusted

1

For definition see Annual Report 2017, Chapter “Alternative Performance Measures Used by the Bayer Group.”

Sales

 

4,065

 

4,163

 

+2.4

+4.8

 

12,632

 

12,455

 

−1.4

+3.6

Change in sales1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Volume

 

+2.4%

 

+7.1%

 

 

 

 

+4.9%

 

+6.2%

 

 

 

Price

 

−0.1%

 

−2.3%

 

 

 

 

−0.3%

 

−2.6%

 

 

 

Currency

 

−4.3%

 

−2.1%

 

 

 

 

−0.6%

 

−4.8%

 

 

 

Portfolio

 

−0.1%

 

−0.3%

 

 

 

 

0.0%

 

−0.2%

 

 

 

Sales by region

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Europe / Middle East / Africa

 

1,548

 

1,627

 

+5.1

+7.4

 

4,801

 

4,891

 

+1.9

+4.3

North America

 

1,028

 

1,031

 

+0.3

+0.5

 

3,202

 

2,946

 

−8.0

−1.7

Asia / Pacific

 

1,223

 

1,268

 

+3.7

+4.6

 

3,825

 

3,894

 

+1.8

+6.4

Latin America

 

266

 

237

 

−10.9

+7.1

 

804

 

724

 

−10.0

+6.7

EBITDA1

 

1,496

 

1,538

 

+2.8

 

 

4,469

 

4,302

 

−3.7

 

Special items1

 

3

 

(16)

 

 

 

 

(7)

 

(30)

 

 

 

EBITDA before special items1

 

1,493

 

1,554

 

+4.1

 

 

4,476

 

4,332

 

−3.2

 

EBITDA margin before special items1

 

36.7%

 

37.3%

 

 

 

 

35.4%

 

34.8%

 

 

 

EBIT1

 

1,209

 

1,299

 

+7.4

 

 

3,530

 

3,515

 

−0.4

 

Special items1

 

3

 

(16)

 

 

 

 

(153)

 

(73)

 

 

 

EBIT before special items1

 

1,206

 

1,315

 

+9.0

 

 

3,683

 

3,588

 

−2.6

 

Net cash provided by operating activities

 

1,036

 

928

 

−10.4

 

 

2,537

 

2,789

 

+9.9

 

Third quarter of 2018

Sales

Sales of Pharmaceuticals rose by an encouraging 4.8% (Fx & portfolio adj.) to €4,163 million in the third quarter of 2018 (Q3 2017: €4,065 million). Our key growth products Xarelto™, Eylea™, Xofigo™, Stivarga™ and Adempas™ once again showed strong performance overall, with their combined sales rising by 15.7% (Fx & portfolio adj.) to €1,730 million (Q3 2017: €1,522 million). Combined sales of the 15 best-selling Pharmaceuticals products advanced by 7.8% (Fx & portfolio adj.). All regions contributed to this growth on a currency- and portfolio-adjusted basis, with an especially positive development registered in Europe and China. Sales were held back by expected temporary supply disruptions for some of our established products, such as Adalat™ and Aspirin™ Cardio, as was the case in the first six months.

Best-Selling Pharmaceuticals Products

 

 

Q3 2017

 

Q3 2018

 

Change1

 

9M 2017

 

9M 2018

 

Change1

 

 

€ million

 

€ million

 

Reported %

Fx & p adj. %

 

€ million

 

€ million

 

Reported %

Fx & p adj. %

Fx & p adj. = currency- and portfolio-adjusted

1

For definition see Annual Report 2017, Chapter “Alternative Performance Measures Used by the Bayer Group.”

2

Marketing rights owned by an affiliate of Johnson & Johnson, U.S.A.; transactional effects had a positive impact of around €1 million.

3

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

Xarelto™

 

799

 

933

 

+16.8

+18.8

 

2,384

 

2,638

 

+10.7

+14.1

of which U.S.A.2

 

138

 

140

 

+1.4

+1.5

 

341

 

349

 

+2.3

+2.4

Eylea™

 

469

 

541

 

+15.4

+17.9

 

1,373

 

1,585

 

+15.4

+19.8

of which U.S.A.3

 

0

 

0

 

.

.

 

0

 

0

 

.

.

Xofigo™

 

102

 

89

 

−12.7

−13.0

 

307

 

270

 

−12.1

−6.8

of which U.S.A.

 

59

 

54

 

−8.5

−9.0

 

183

 

157

 

−14.2

−7.7

Adempas™

 

75

 

90

 

+20.0

+22.1

 

223

 

260

 

+16.6

+22.3

of which U.S.A.

 

38

 

44

 

+15.8

+13.6

 

114

 

122

 

+7.0

+14.9

Stivarga™

 

77

 

77

 

0.0

+1.9

 

235

 

229

 

−2.6

+4.3

of which U.S.A.

 

40

 

37

 

−7.5

−10.1

 

125

 

107

 

−14.4

−8.8

Subtotal key growth products

 

1,522

 

1,730

 

+13.7

+15.7

 

4,522

 

4,982

 

+10.2

+14.3

Mirena™ product family

 

280

 

280

 

0.0

+0.6

 

871

 

873

 

+0.2

+7.4

of which U.S.A.

 

190

 

185

 

−2.6

−3.0

 

585

 

586

 

+0.2

+8.3

Kogenate™ / Kovaltry™ / Jivi™

 

215

 

212

 

−1.4

−1.0

 

750

 

639

 

−14.8

−10.9

of which U.S.A.

 

69

 

79

 

+14.5

+13.2

 

254

 

233

 

−8.3

−1.2

Nexavar™

 

194

 

180

 

−7.2

−5.0

 

630

 

535

 

−15.1

−10.1

of which U.S.A.

 

66

 

60

 

−9.1

−11.4

 

227

 

162

 

−28.6

−23.9

Adalat™

 

156

 

143

 

−8.3

−6.4

 

501

 

484

 

−3.4

+0.7

of which U.S.A.

 

0

 

0

 

.

.

 

0

 

0

 

.

.

YAZ™ / Yasmin™ / Yasminelle™

 

167

 

167

 

0.0

+6.1

 

495

 

478

 

−3.4

+4.1

of which U.S.A.

 

24

 

20

 

−16.7

−16.0

 

69

 

57

 

−17.4

−12.1

Glucobay™

 

136

 

154

 

+13.2

+14.3

 

433

 

473

 

+9.2

+12.8

of which U.S.A.

 

1

 

0

 

.

.

 

2

 

1

 

.

.

Aspirin™ Cardio

 

139

 

133

 

−4.3

−0.5

 

444

 

420

 

−5.4

−0.8

of which U.S.A.

 

0

 

0

 

.

.

 

0

 

0

 

.

.

Betaferon™ / Betaseron™

 

143

 

133

 

−7.0

−6.2

 

499

 

405

 

−18.8

−14.3

of which U.S.A.

 

75

 

71

 

−5.3

−6.8

 

277

 

206

 

−25.6

−20.3

Gadavist™ / Gadovist™

 

90

 

89

 

−1.1

+1.0

 

276

 

279

 

+1.1

+6.4

of which U.S.A.

 

30

 

29

 

−3.3

−4.7

 

91

 

92

 

+1.1

+8.7

Stellant™

 

82

 

87

 

+6.1

+6.4

 

252

 

250

 

−0.8

+5.0

of which U.S.A.

 

58

 

63

 

+8.6

+7.7

 

179

 

175

 

−2.2

+5.0

Total best-selling products

 

3,124

 

3,308

 

+5.9

+7.8

 

9,673

 

9,818

 

+1.5

+6.2

Proportion of Pharmaceuticals sales

 

77%

 

79%

 

 

 

 

77%

 

79%

 

 

 

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

 

788

 

782

 

−0.8

−1.6

 

2,447

 

2,247

 

−8.2

−2.3

Sales by product

  • We once again posted robust sales gains for our oral anticoagulant Xarelto™, due mainly to higher volumes in Europe, particularly in Germany, and China. Our license revenues – recognized as sales in the United States, where Xarelto™ is marketed by a subsidiary of Johnson & Johnson – were up slightly year on year.
  • We significantly increased sales of the eye medicine Eylea™ compared with the prior-year quarter, primarily due to higher volumes in Europe and Canada. We also benefited from the differentiated clinical profile of Eylea™ compared with rival products.
  • We registered a significant decline in sales of our cancer drug Xofigo™ that was attributable to lower volumes particularly in the United States and Japan. This was mainly due to the Phase III trial of radium-223 dichloride in combination with abiraterone acetate and prednisone / prednisolone being halted prematurely in November 2017.
  • Business with our pulmonary hypertension treatment Adempas™ expanded significantly due to positive business development in the United States and Europe. As in the past, sales reflected the proportionate recognition of the upfront and milestone payments resulting from the sGC collaboration with Merck & Co., United States.
  • We registered a slight increase in sales of our cancer drug Stivarga™ on a currency- and portfolio-adjusted basis, primarily in China, where we continued to benefit from the market launches undertaken in previous years. In the United States, however, sales were down due to a highly competitive market environment.
  • Sales of the hormone-releasing intrauterine devices of the Mirena™ product family (Mirena™, Kyleena™ and Jaydess™ / Skyla™) were flat with the prior-year quarter. Business in China, Canada and Brazil benefited from a considerable expansion of volumes, while sales declined in the United States due to lower demand.
  • Sales of our Kogenate™ / Kovaltry™ / Jivi™ blood-clotting medicines came in slightly below the level of the prior-year quarter. Sales declines for Kogenate™ were almost completely offset by encouraging sales gains for Kovaltry™.
  • Sales of our cancer drug Nexavar™ declined in the face of continuing high competitive pressure in the United States and Japan. Strong sales growth in China was not sufficient to offset this effect.
  • Sales were down for Adalat™, our product to treat hypertension and coronary heart disease. Expanded volumes in China did not suffice to compensate for declines in Japan and Canada.
  • Sales of our YAZ™ / Yasmin™ / Yasminelle™ line of oral contraceptives saw encouraging development on a currency- and portfolio-adjusted basis. This was primarily attributable to good business development in China and Japan following a product line extension in those countries in the previous year to include YAZ™ Flex, which more than offset the lower demand in the United States.
  • We posted strong gains for our diabetes treatment Glucobay™ that were driven by a robust expansion of volumes in China.
  • Sales of our Aspirin™ Cardio product for the secondary prevention of heart attacks were level with the prior-year quarter on a currency- and portfolio-adjusted basis. Gains in China stood against declines in Europe.
  • The decline in sales of our multiple sclerosis treatment Betaferon™ / Betaseron™ was mainly attributable to the competitive market environment in the United States.
  • Business with our Stellant™ contrast agent injection system benefited from higher volumes, particularly in the United States.

Earnings

EBITDA before special items of Pharmaceuticals rose by 4.1% to €1,554 million in the third quarter of 2018 (Q3 2017: €1,493 million). Adjusted for negative currency effects in the amount of €73 million, earnings were up by 9.0%. This increase was predominantly attributable to the very good development of business – especially for our key growth products – and to income of approximately €190 million from a Xarelto™ development collaboration with Janssen Research & Development, LLC, a subsidiary of Johnson & Johnson. The principal negative effects on earnings resulted from temporary supply disruptions and an increase in the cost of goods sold. In addition, the prior-year figure included a one-time gain in the mid-double-digit millions.

EBIT advanced by 7.4% to €1,299 million, after special charges of €16 million (Q3 2017: special gains of €3 million) resulting from expenses of €10 million in connection with the deconsolidation of a company in Venezuela and from expenses of €6 million for restructuring measures.

Special Items1 Pharmaceuticals

 

 

EBIT Q3 2017

EBIT Q3 2018

 

EBIT 9M 2017

EBIT 9M 2018

 

EBITDA Q3 2017

EBITDA Q3 2018

 

EBITDA 9M 2017

EBITDA 9M 2018

 

 

€ million

€ million

 

€ million

€ million

 

€ million

€ million

 

€ million

€ million

1

For definition see Annual Report 2017, Chapter “Alternative Performance Measures Used by the Bayer Group.”

Restructuring

 

(2)

(6)

 

(7)

(20)

 

(2)

(6)

 

(6)

(20)

Impairment losses / reversals

 

5

 

(146)

(43)

 

5

 

(1)

Other

 

(10)

 

(10)

 

(10)

 

(10)

Total special items

 

3

(16)

 

(153)

(73)

 

3

(16)

 

(7)

(30)

First nine months of 2018

Sales

Sales of Pharmaceuticals rose by 3.6% (Fx & portfolio adj.) in the first nine months of 2018, to €12,455 million. Our key growth products delivered strong performance, with their combined sales rising by 14.3% (Fx & portfolio adj.) to €4,982 million (9M 2017: €4,522 million). Our business with Kogenate™ was negatively impacted by the absence of orders from a distribution partner. After adjusting for this effect, sales of Pharmaceuticals rose by +4.5% (Fx & portfolio adj.).

Earnings

EBITDA before special items declined by 3.2% in the first nine months of 2018, to €4,332 million (9M 2017: €4,476 million). Adjusted for negative currency effects of €196 million, earnings advanced by 1.2%. Earnings were primarily held back by a higher cost of goods sold, selling expenses and effects relating to temporary supply disruptions. Positive contributions predominantly resulted from a substantial increase in volumes, especially for our key growth products, as well as lower expenses for research and development due to the aforementioned income from a development collaboration.

EBIT declined by 0.4% to €3,515 million. Special charges amounted to €73 million (9M 2017: €153 million) and primarily comprised €43 million in impairment losses on intangible assets and €20 million in expenses for restructuring measures.

Compare to Last Year