Research, Development, Innovation Bayer Group expenses for research and development amounted to €1,180 million in the third quarter of 2018 (Q3 2017: €1,079 million). R&D spending at Pharmaceuticals benefited from income of approximately €190 million from the aforementioned development collaboration, while expenses at Crop Science increased as a result of the newly acquired business. (XLS:) Download XLS Research and Development Expenses R&D expenses R&D expenses before special items Q3 2017 Q3 2018 Change 9M 2017 9M 2018 Change Q3 2017 Q3 2018 Change 9M 2017 9M 2018 Change € million € million Fx adj. % € million € million Fx adj. % € million € million Fx adj. % € million € million Fx adj. % 1 The currency-adjusted (Fx adj.) changes for Crop Science and the Group do not include the acquired business. Pharmaceuticals 688 479 −30.0 2,107 1,937 −5.3 687 480 −29.8 2,004 1,895 −2.7 Consumer Health 56 58 +2.7 180 168 −2.1 55 56 +2.2 171 168 +3.5 Crop Science1 281 607 −14.9 839 1,254 −3.8 281 587 −22.2 836 1,224 −7.2 Animal Health 35 35 −0.3 106 102 −1.3 34 34 +0.6 105 99 −3.0 Reconciliation 19 1 −90.0 38 20 −45.5 19 1 −90.0 38 20 −45.5 Total Group1 1,079 1,180 −24.5 3,270 3,481 −5.1 1,076 1,158 −26.3 3,154 3,406 −4.1 Pharmaceuticals We are conducting clinical trials with multiple drug candidates from our research and development pipeline. Progress in Phase II clinical projects The following table shows our most important drug candidates currently in Phase II of clinical testing: Research and Development Projects (Phase II)1 Projects Indication 1 As of October 24, 2018 2 Sponsored by Ionis Pharmaceuticals, Inc. The nature of drug discovery and development is such that not all compounds can be expected to meet the predefined project goals. It is possible that any or all of the projects listed above may have to be discontinued due to scientific and / or commercial reasons and will not result in commercialized products. It is also possible that the requisite U.S. Food and Drug Administration (FDA), European Medicines Agency (EMA) or other regulatory approvals will not be granted for these compounds. Moreover, we regularly review our research and development pipeline so that we can give priority to advancing the most promising pharmaceuticals projects. BAY 1093884 (anti-TFPI antibody) Hemophilia Fulacimstat (BAY 1142524, chymase inhibitor) Heart failure Fulacimstat (BAY 1142524, chymase inhibitor) Chronic kidney disease BAY 1193397 (AR alpha 2c rec ant.) Peripheral artery disease (PAD) BAY 1213790 (anti-FXIa antibody) Prevention of thrombosis BAY 1902607 (P2X3 antagonist) Chronic cough BAY 2253651 (TASK channel blocker) Obstructive sleep apnea BAY 2306001 (IONIS-FXIRx)2 Prevention of thrombosis Levonorgestrel (progestin) + indomethacin (NSAID) combi IUS Contraception Radium-223 dichloride (alpha emitter) Multiple myeloma Rogaratinib (pan-FGFR inhibitor) Urothelial cancer Vericiguat (sGC stimulator) Chronic heart failure with preserved (HFpEF) ejection fraction Vilaprisan (S-PRM) Endometriosis Based on the results of a Phase II trial investigating anetumab ravtansine as a second-line monotherapy for malignant mesothelioma, which failed to meet its primary endpoint of progression-free survival, we will not pursue any further studies in this indication. However, anetumab ravtansine will continue to be investigated in various other indications in Phase I studies. In September 2018, the development of the oral AKR1C3 inhibitor to treat endometriosis was discontinued ahead of schedule due to an unfavorable benefit-risk profile. Also in September 2018, the development of neladenoson bialanate, an oral partial adenosine A1 receptor agonist, was discontinued. Two Phase II studies involving heart failure patients did not reach their primary efficacy endpoints. In October 2018, following an interim analysis of available clinical data to date, Bayer decided to not further pursue the development of radium-223 dichloride in breast cancer. Also in October 2018, Bayer presented results of the Phase II study with riociguat in patients with diffuse cutaneous systemic sclerosis (RISE-SSc) at the Annual Meeting of the American College of Rheumatology (ACR). The primary endpoint did not reach statistical significance, while the favorable safety profile of riociguat was confirmed. Bayer and Merck & Co., Inc., United States, have decided to not pursue riociguat any further in the indication diffuse cutaneous systemic sclerosis. Progress in Phase III clinical projects The following table shows our most important drug candidates currently in Phase III of clinical testing: Research and Development Projects (Phase III)1 Projects Indication 1 As of October 24, 2018 2 Sponsored by Janssen Research & Development, LLC. These trials did not meet their primary endpoints. Data are further analyzed and next steps evaluated. 3 Sponsored by Merck & Co., Inc., U.S.A. The nature of drug discovery and development is such that not all compounds can be expected to meet the predefined project goals. It is possible that any or all of the projects listed above may have to be discontinued due to scientific and / or commercial reasons and will not result in commercialized products. It is also possible that the requisite U.S. Food and Drug Administration (FDA), European Medicines Agency (EMA) or other regulatory approvals will not be granted for these compounds. Moreover, we regularly review our research and development pipeline so that we can give priority to advancing the most promising pharmaceuticals projects. Copanlisib (PI3K inhibitor) Various forms of non-Hodgkin lymphoma (NHL) Darolutamide (ODM-201, AR antagonist) Castration-resistant nonmetastatic prostate cancer Darolutamide (ODM-201, AR antagonist) Hormone-sensitive metastatic prostate cancer Finerenone (MR antagonist) Diabetic kidney disease Molidustat (HIF-PH inhibitor) Renal anemia Rivaroxaban (FXa inhibitor)2 Anticoagulation in patients with chronic heart failure Rivaroxaban (FXa inhibitor)2 Prevention of venous thromboembolism in high-risk patients after discharge from hospital Rivaroxaban (FXa inhibitor) Peripheral artery disease (PAD) Rivaroxaban (FXa inhibitor) VTE treatment in children Vericiguat (sGC stimulator)3 Chronic heart failure with reduced ejection fraction (HFrEF) Vilaprisan (S-PRM) Symptomatic uterine fibroids In October 2018, the Phase III ARAMIS trial investigating the safety and efficacy of darolutamide in patients with nonmetastatic castration-resistant prostate cancer met its primary endpoint. The substance significantly extended metastasis-free survival compared to placebo, and its safety profile and tolerability were consistent with observations from previous trials. Darolutamide is a novel androgen receptor antagonist for oral treatment of prostate cancer that is being developed jointly by Bayer and the Finnish bio-pharmaceutical company Orion Corporation. The ARASENS trial is currently being conducted in metastatic hormone-sensitive prostate cancer. On the basis of the results of the Phase III ERA-223 trial which were presented at ESMO 2018, Bayer decided to halt work in this indication (use of radium-223 dichloride in combination with abiraterone acetate and prednisone / prednisolone). Bayer had prematurely unblinded the trial in 2017 following reports of an elevated risk of bone fractures and reduced median overall survival in patients treated with this combination. The European, Japanese and U.S. health authorities have concluded their review of the data from the ERA-223 trial and confirmed overall that the risk-benefit profile of Xofigo™ (radium-223 dichloride) remains positive in the approved indication, subject to the required changes to the respective labeling. Filings and approvals The most important drug candidates in the approval process are shown below. Main Products Submitted for Approval1 Projects Indication 1 As of October 24, 2018 2 Submitted by Janssen Research & Development, LLC 3 Loxo Oncology, Inc., is responsible for regulatory activities in the United States, and Bayer for regulatory activities outside the United States. Damoctocog alpha pegol (long-acting rFVIII) Europe: Hemophilia A Rivaroxaban (FXa inhibitor)2 U.S.A.: secondary prophylaxis of acute coronary syndrome (ACS), Rivaroxaban in combination with dual antiplatelet therapy (DAPT), ATLAS trial Larotrectinib (LOXO-101, TRK fusion inhibitor)3 Europe, U.S.A.: Solid tumors with NTRK gene fusions In August 2018, Bayer submitted the marketing authorization application for larotrectinib to the European Medicines Agency (EMA). Larotrectinib was developed for the treatment of cancer patients (adults and children) suffering from locally advanced or metastatic solid tumors with neurotrophic tyrosine receptor kinase (NTRK) gene fusions. Also in August 2018, Bayer received regulatory approval in the United States for damoctocog alfa pegol (tradename: Jivi™), a long-acting hemophilia A product for routine prophylaxis, on-demand treatment and the perioperative management of bleeding in previously treated adults and adolescents who are 12 years of age or older. In September 2018, the product was approved in Japan and the Committee for Medicinal Products for Human Use (CHMP) of the EMA recommended marketing authorization. In October 2018, the U.S. Food and Drug Administration (FDA) approved Xarelto™ (rivaroxaban), 2.5 mg twice daily, plus acetylsalicylic acid (ASA) low-dose once daily to reduce the risk of major cardiovascular events including cardiovascular death, heart attack or stroke in patients with chronic coronary artery disease (CAD) or peripheral artery disease (PAD). This marketing authorization in the United States is based on the results of the COMPASS Phase III clinical study. Crop Science In September, Bayer and Genedata AG, Basel, Switzerland, expanded their longstanding partnership in the digitalization of R&D processes. The expanded agreement includes a license for the Genedata Selector platform to support the processing, storage, analysis and evaluation of genomic data for the development of new innovative fungicides to treat plant disease. Also in September, Bayer opened a state-of-the-art seed processing facility in Pochuiky, Ukraine, which is one of the largest and most innovative of its kind in Europe. The investments in the new plant are part of a long-term plan to expand DEKALB™ corn seed processing in Ukraine and Eastern Europe. Animal Health In September, we signed a global licensing agreement with NeuroCycle Therapeutics, Inc., United States, to advance the development of innovative allergy treatment options for companion animals.