Bayer: Will Its New CEO Emphasize Growth Strategy in PharmaBy
Bayer made a major leadership move this week, announcing that the former head of Roche Pharmaceuticals will join the company in April and take over as CEO in June. Does that portend further growth plans in the company’s pharma business?
Changing of the guard
Bayer made a key leadership change by appointing Bill Anderson, formerly CEO of Roche’s Pharmaceutical Division, to become CEO (Chairman of the Board of Management) of Bayer, effective June 1, 2023. Anderson will succeed Werner Baumann, currently Bayer’s Chairman of the Board of Management (CEO), who will retire at the end of May 2023 after being with the company for 35 years and who will assist in the leadership transition. Anderson will join Bayer as a member of the Board of Management on April 1, 2023 and will assume the role of Chairman of the Board of Management (CEO) on June 1, 2023.
Anderson has served in various leadership positions in the life-sciences industry over the past 25 years. Most recently, he served as CEO of Roche’s Pharmaceuticals Division. Before this role. he was CEO of Roche’s Genentech. He joined Genentech in 2010, eventually serving as Senior Vice President in the company’s BioOncology Unit. He left this role in 2013 to join Roche Pharmaceuticals, the parent company of Genentech, as Head of Global Product Strategy and Chief Marketing Officer. After serving in this position until 2016, he moved back to Genentech to assume the position of Head of North American Operations before becoming CEO of the company in 2017. In 2019, he became CEO of Roche Pharmaceuticals. Previously, Anderson held several senior leadership positions in general management, product development, and finance at Biogen, and Raychem, a US-based technology and electronics company.
During his time at Biogen, Genentech, and Roche, Anderson was involved in the development and launch of 25 new medicines, including 15 blockbusters. In addition to the US, Anderson has lived and worked in several European countries with postings in the UK, the Netherlands, Belgium, and Switzerland. In his new role with Bayer, he will be based in Leverkusen, Germany.
A change in strategy
The change in leadership at Bayer, bringing in a pharmaceutical executive to lead the company, may portend a more targeted growth plan for the company’s pharmaceutical business.
Baumann was behind Bayer’s $63-billion acquisition of Monsanto, an agrochemical and seed company, in 2018, the largest acquisition in Bayer’s history. The acquisition was a clear test for Baumann, who became Chairman of the board of management of Bayer AG in May 2016 and who continued the company’s strategy to make life sciences the focus of Bayer. Bayer’s strategy to become a pure-play life-sciences company (pharmaceuticals, crop protection, and consumer health) began full force with the company’s decision to spin off its material-science (i.e., polymers) business, an approximate $12.5-billion business, which the company did in 2015 to form a separate, independent company, Covestro, leaving Bayer as a pure-play life sciences company. The acquisition of Monsanto made the company’s crop-protection business the largest piece of Bayer at the time, surpassing its pharmaceuticals business, which had been the company’s largest business prior to the acquisition. Subsequent litigation, however, for Monsanto’s glyphosate-based herbicide, Roundup, and the related costs of that litigation has put that acquisition into question.
In 2021, Bayer posted net sales of EUR 44.08 billion ($47.16 billion). Crop science was its largest segment, accounting for EUR 20.21 billion ($21.62 billion), or 46% of sales, followed by pharmaceuticals at EUR 18.35 billion ($19.63 billion), or 41% of total sales, and consumer health, with sales of EUR 5.29 billion ($5.65 billion), or 12% of total sales.
The naming of Anderson, with a strong background in pharmaceuticals, seems to signal the company’s emphasis of its pharmaceutical business. “We are very excited to welcome Bill Anderson as new CEO of Bayer.” said Prof. Dr. Norbert Winkeljohann, Chairman of the Supervisory Board of Bayer AG, in a February 8, 2023 statement .”He is the ideal candidate to lead Bayer together with the team into a new, successful chapter at a time of a disruptive innovation cycle in biology, chemistry and artificial intelligence. Bill has an outstanding track record of building strong product pipelines and turning biotech breakthroughs into products.”
Bayer’s pharma business
Bayer’s pharmaceutical business is focused on cardiology and women’s healthcare and in its specialty therapeutics, it is focused on oncology, hematology, ophthalmology and in the medium term, cell and gene therapies.
The company had three blockbuster drugs (defined as drugs with sales of $1 billion or more) in 2021. Its top-selling product was Xarelto (rivaroxaban), an anticoagulant, with 2021 sales of EUR 4.74 billion ($5.06 billion). Bayer jointly developed Xarelto with Johnson & Johnson’s Janssen Pharmaceuticals unit, which sells the drug under a licensing agreement in the US.
Its second blockbuster is Eylea (aflibercept) for treating certain retinal diseases, with 2021 sales of EUR 2.92 billion ($3.12 billion). Bayer is partnered with Regeneron Pharmaceuticals, a Tarrytown, New York-based bio/pharmaceutical company, for the drug. Bayer’s third blockbuster is Mirena/Kyleena/Jaydess (levonorgestrel-releasing intrauterine system), a contraceptive with 2021 sales of EUR 1.17 billion ($1.25 billion).
The company sees peak-sale blockbuster potential for several key products in its late-stage pipeline and recent launches. The most notable examples are: its cancer drug, Nubeqa (darolutamide); its cardiovascular medicines, Verquvo (vericiguat) with whom it is partnered with Merck & Co., and Kerendia (finerenone); and its development candidate elinzanetant in women’s healthcare.
The company is also building its position in cell and gene therapies with several key acquisitions in recent years. Last June (June 2022), BlueRock Therapeutics, a clinical-stage bio/pharmaceutical company and subsidiary of Bayer, established a new site for cell therapy innovation on Bayer’s campus in Berlin, Germany. Following a 2016 joint venture with Versant Ventures to establish BlueRock Therapeutics, Bayer acquired BlueRock in 2019. In 2020, Bayer acquired Asklepios BioPharmaceutical (AskBio), a gene-therapy company, which now operates as a subsidiary of Bayer, in a $4-billion deal ($2 billion upfront and $2 billion in milestone payments). Last year (2022), Bayer signed a licensing agreement for gene-editing technologies based on CRISPR systems to develop in vivo gene-editing therapies with Mammoth Biosciences, which was co-founded by the Nobel Prize Laureate, Dr. Jennifer Doudna, who received the Nobel Prize in Chemistry in 2020 for her work in CRISPR-Cas gene-editing technology.
In 2021, Bayer made several deals to boost its position in oncology and immunology. The company acquired Vividion Therapeutics, a San Diego, California-based bio/pharmaceutical company focused on cancers and immune disorders, in a deal worth up to $2 billion ($1.5 billion upfront and up to $500 million in milestone payments). The acquisition strengthened Bayer’s drug-discovery capabilities with a chemoproteomics platform. Vividion’s approach identifies previously unknown binding pockets in undruggable targets to identify selective small-molecule therapeutics targeting undruggable targets in oncology and immunology. Vividion’s lead programs include multiple oncology and immunology targets, with ongoing efforts on a transcription factor NRF2 antagonist for the potential treatment of NRF2 mutant cancers, as well as NRF2 activators for various inflammatory diseases, such as irritable bowel disease.
Also in 2021, Bayer acquired two companies to increase its position in oncology: Noria Therapeutics, a company focused on the development of targeted alpha therapeutics and theranostic agents, and PSMA Therapeutics, a subsidiary of Noria, which is focused on prostate-specific membrane antigen-(PSMA) targeting radiotherapeutics. Through the acquisitions, Bayer gained exclusive rights to a differentiated alpha radionuclide investigational compound based on actinium-225 and a small-molecule drug directed toward PSMA.