(Bloomberg) -- Bayer AG’s revenue will not plummet even though the company is facing patent expiries for some blockbuster drugs, according to its pharma head.
“The patent cliff is more of a dent than a cliff,” Stefan Oelrich said in an interview Thursday. “I believe that this will be proven in the course of the year.”
The German group is racing to offset a decline in revenue as blood thinner Xarelto and eye medicine Eylea lose patent protection. This will open the company up to competition from cheaper generic versions of the medicines.
Oelrich said strong demand for prostate cancer drug Nubeqa and kidney therapy Kerendia will help offset some of the decline. The company has also developed a higher dose version of Eylea, which will help cushion the impact of generic competition.
While the next two years will be challenging, overall pharma sales should remain stable, he said.
Bayer is in the midst of a turnaround led by Chief Executive Officer Bill Anderson, who wants to revamp the operations of the troubled conglomerate, which is bogged down by litigation linked to a weedkiller gained as part of the takeover of Monsanto.
Revitalising the pharma unit is crucial to Anderson’s plan and Bayer is counting on growth from existing drugs and expected launches for new menopause treatment elinzanetant and heart medicine acoramidis.
“The clear plan is that once this Xarelto effect has washed out, we will grow from then on,” Oelrich said. “In principle, we have to expect growth again from 2027.”
What Bloomberg Intelligence Says
“Bayer’s pharma sales will remain flat at best through 2027 on staggered generic erosion to Xarelto, while conversions to a new formulation will be key to managing headwinds to Eylea. Upcoming and recent drug launches, which include Nubeqa, provide topline relief, though the negative product mix will drag divisional margin over the period.”
- Michael Shah, Bloomberg Intelligence
Bayer suffered a major setback when Asundexian, once billed as Xarelto’s successor, failed a late stage trial. But Oelrich said the treatment still has blockbuster potential as a drug for preventing strokes, with late-stage data for this indication due next fall.
Bayer continues to have appetite for deals between €1 billion ($1 billion) and €5 billion, Oelrich said, as it rebuilds the pipeline of new medicines. However, he said the “sweet spot” is at the lower end of the range with promising medicines still in the earlier stages of development.
©2024 Bloomberg L.P.