Bayer On Track for Life Sciences Transformation

Bayer is on track to transform the company into a pure life-sciences company, focused on healthcare and crop science, as the company outlined a proposed schedule for separating it material sciences business into a stand-alone entity. The company plans to float its material science on the stock market as a separate company by mid-2016.

Bayer’s Management Board Chairman Marijn Dekkers stressed that 2014 had also been a very successful year for Bayer from a strategic viewpoint in realizing that transformation. “We last year set a course that will shape the future of our company for the long term. We decided to demerge the material science business and thus initiated our transformation into a pure life science company,” he said in a company statement. According to the Bayer CEO, the stock market flotation of MaterialScience, planned for mid-2016 at the latest, is proceeding on schedule. He said the design phase had since been completed. The legal and organizational structures of the new company have been decided and important management positions filled. The economic and legal separation of MaterialScience, also known as the carve-out, is to be completed by August 31, 2015. In the second half of this year, the company intends to decide whether MaterialScience will be floated on the stock market through an IPO or a spin-off.

“Furthermore, we have expanded the life science businesses through important acquisitions,” Dekkers said. The business with non-prescription products in particular was strengthened through the acquisitions of the consumer care business of Merck & Co., Inc., United States, and Chinese-based Dihon Pharmaceutical Group Co. Ltd. The integration of these two businesses is proceeding according to plan. The acquisition of Norwegian company Algeta ASA, with which Bayer had been collaborating since 2009 in the development and commercialization of the cancer drug, Xofigo (radium Ra 223 dichloride) , was also successfully completed.

The company is anticipating special charges in the region of EUR 700 million ($775 million) in 2015, mainly due to the integration of the acquired consumer care businesses and the planned stock market listing of MaterialScience. Bayer intends to increase research and development spending by about 10% in 2015 to more than EUR 4.0 billion ($4.4 billion). The company has budgeted capital expenditures of about EUR 2.3 billion ($2.5 billion) for property, plant and equipment and EUR 300 million ($333 million) for intangible assets.

For 2015, Bayer said that it expects its healthcare business to achieve sales of approximately EUR 23 billion ($25 billion), corresponding to a mid-single-digit percentage increase on a currency- and portfolio-adjusted basis. In the Pharmaceuticals segment, Bayer expects sales to move ahead by a mid- to high-single-digit percentage on a currency- and portfolio-adjusted basis to approximately EUR 13 billion ($14.0 billion). The company intends to raise sales of the segment’s recently launched products in 2015 toward EUR 4 billion ($4.4 billion).

Source: Bayer

Leave a Reply

Your email address will not be published. Required fields are marked *