Bayer AG (ADR) (NASDAQOTH:BAYRY)

CAPS Rating: 3 out of 5

The Company offers products, including ethical pharmaceuticals and other health care products, agricultural products and polymers.

Recs

5
Player Avatar NetscribePhrmtcl (97.46) Submitted: 1/31/2007 6:55:17 AM : Outperform Start Price: $51.65 BAYRY Score: +131.73

Bayer AG, which created aspirin, is involved worldwide in the discovery, development and marketing of several essential healthcare products, agricultural products for crop protection and animal health and specialty materials.

The company was able to record a strong top line growth of 26% in the third quarter purely driven by favorable acquisition of Schering AG. Its healthcare segment would continue to drive its top line in the upcoming year as the company does not have too many worries about patent expiries in the near future except for one of its key drug called Adalat.

Moreover, its newly launched drug Nexavar for the treatment of advanced renal cell carcinoma has received promising response. Nexavar is also undergoing clinical trial for several other indications like Melanoma and kidney cancer and looking at the rapidly growth market for oncology; this drug is set to emerge as a potential blockbuster in the years to come.

The company has decent product pipeline with major investigational drugs like Rivaroxaban and BAY 79-4980. Rivaroxaban for the treatment of thrombosis which is undergoing early Phase III trial is not expected to hit the market before 2010. Although this investigational drug has huge market opportunity, one cannot be certain about the prospects to this drug as it could face competition from other investigational drugs like Eli Lilly’s LY517717 and Bristol Myers Squibb’s DPC-423 which could be launched around the same time as Rivaroxaban.

As a part of the growth strategy, the company has undertaken collaboration with US biotech company Regeneron to strengthen its specialty pharmaceuticals division. In order to strengthen its OTC consumer business, it has acquired an OTC company in China. It has also recently opened one of its biggest polycarbonate plants in China to exploit the growth potential in a highly promising market. One concern for the company in the year ahead is going to be the challenge to arrest the decline in the sales from CropScience segment. However, the continued growth in healthcare and material science segments are expected to offset the same and drive the company forward.

Member Avatar NetscribePhrmtcl (97.46) Submitted: 4/16/2007 3:13:59 AM
Recs: 0

Recently in Apr. 2007, Bayer and Genzyme Corp. initiated a filing with the US FDA for an expanded use of their Campath cancer drug as a first-line treatment for B-cell chronic lymphocytic leukemia, a type of blood cancer.Nexavar is already approved for kidney tumors. The drug worked so well in trials with liver-cancer patients that, in Feb. 2007, Bayer and Onyx Pharma now seek clearance from US and European regulators. About 19,160 new cases of liver cancer are expected to be diagnosed in the US this year, with most being in men. Nexavar is also being tested for a range of cancers including non-small cell lung cancer and breast cancer.In late Jan. 2007, Bayer’s crop science subsidiary started launching Fluopicolide, one of the newest products in its fungicides portfolio, in major European markets. Infinito was recently given regulatory approval in Poland and Germany, enabling the product registration to be used in Austria as well. Bayer expects Infinito to be registered in further major markets worldwide during 2007 and 2008. During the same period, Bayer received the first regulatory approval for its active ingredient Tembotrione. Marketing authorization is expected in further European countries in 2007.In early Jan. 2007, Bayer completed the sale of its diagnostic division to Siemens Medical Solutions. Bayer Diagnostics and Diagnostic Products Corporation (DPC), acquired in July 2006, were merged into a single business unit on January 1, 2007. The total cost for acquisitions totaled $5.7 billion.A comprehensive growth of 25% in sales was witnessed in 2006; driven mainly by a 83% rise in pharmaceuticals segment, with strength in products like Yasmin, Levitra, Aspirin and Kogenate. Bayer reported a superior launch to the fiscal 2007 with a sound guidance. The company expects an increase of over 10% in sales and the EBITDA, with an improvement in the EBITDA margin, which appears achievable.

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