Business Development by Segment

Pharmaceuticals

Key Data – Pharmaceuticals

 

 

Q2 2017

 

Q2 2018

 

Change1

 

H1 2017

 

H1 2018

 

Change1

 

 

€ million

 

€ million

 

Reported %

Fx & p adj. %

 

€ million

 

€ million

 

Reported %

Fx & p adj. %

Fx & p adj. = currency- and portfolio-adjusted

1

For definition see Annual Report 2017, Chapter “Alternative Performance Measures Used by the Bayer Group.”

Sales

 

4,304

 

4,217

 

−2.0

+3.1

 

8,567

 

8,292

 

−3.2

+3.0

Change in sales1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Volume

 

+4.7%

 

+5.8%

 

 

 

 

+6.2%

 

+5.7%

 

 

 

Price

 

−0.3%

 

−2.7%

 

 

 

 

−0.4%

 

−2.7%

 

 

 

Currency

 

+0.5%

 

−4.9%

 

 

 

 

+1.4%

 

−6.0%

 

 

 

Portfolio

 

0.0%

 

−0.2%

 

 

 

 

0.0%

 

−0.2%

 

 

 

Sales by region

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Europe / Middle East / Africa

 

1,647

 

1,653

 

+0.4

+3.2

 

3,253

 

3,264

 

+0.3

+2.9

North America

 

1,101

 

992

 

−9.9

−3.3

 

2,174

 

1,915

 

−11.9

−2.8

Asia / Pacific

 

1,290

 

1,323

 

+2.6

+6.8

 

2,602

 

2,626

 

+0.9

+7.3

Latin America

 

266

 

249

 

−6.4

+10.5

 

538

 

487

 

−9.5

+6.5

EBITDA1

 

1,474

 

1,350

 

−8.4

 

 

2,973

 

2,764

 

−7.0

 

Special items1

 

(7)

 

(13)

 

 

 

 

(10)

 

(14)

 

 

 

EBITDA before special items1

 

1,481

 

1,363

 

−8.0

 

 

2,983

 

2,778

 

−6.9

 

EBITDA margin before special items1

 

34.4%

 

32.3%

 

 

 

 

34.8%

 

33.5%

 

 

 

EBIT1

 

1,102

 

1,053

 

−4.4

 

 

2,321

 

2,216

 

−4.5

 

Special items1

 

(120)

 

(56)

 

 

 

 

(156)

 

(57)

 

 

 

EBIT before special items1

 

1,222

 

1,109

 

−9.2

 

 

2,477

 

2,273

 

−8.2

 

Net cash provided by operating activities

 

528

 

629

 

+19.1

 

 

1,501

 

1,861

 

+24.0

 

Second quarter of 2018

Sales

Sales of Pharmaceuticals rose by 3.1% (Fx & portfolio adj.) to €4,217 million in the second quarter of 2018. Our key growth products Xarelto™, Eylea™, Xofigo™, Stivarga™ and Adempas™ maintained their strong performance overall, with their combined sales rising by 13.2% (Fx and portfolio adj.) to €1,691 million (Q2 2017: €1,555 million). Combined sales of the 15 best-selling Pharmaceuticals products advanced by 4.8% (Fx & portfolio adj.). Sales of Kogenate™ again declined significantly, impacted by the termination of an agreement with a distribution partner at the end of 2017. After adjusting for this effect, sales of Pharmaceuticals rose by 4.2% (Fx & portfolio adj.). As expected, sales were also held back by temporary supply disruptions for some of our established products, such as Adalat™ and Aspirin™, as was the case in the first quarter.

Best-Selling Pharmaceuticals Products

 

 

Q2 2017

 

Q2 2018

 

Change1

 

H1 2017

 

H1 2018

 

Change1

 

 

€ million

 

€ million

 

Reported %

Fx & p adj. %

 

€ million

 

€ million

 

Reported %

Fx & p adj. %

Fx & p adj. = currency- and portfolio-adjusted

1

For definition see Annual Report 2017, Chapter “Alternative Performance Measures Used by the Bayer Group.”

2

Marketing rights owned by an affiliate of Johnson & Johnson, U.S.A.; transactional effects had a negative impact of €10 million.

3

Marketing rights owned by Regeneron Pharmaceuticals Inc., U.S.A.

Xarelto™

 

834

 

891

 

+6.8

+10.6

 

1,585

 

1,705

 

+7.6

+11.7

of which U.S.A.2

 

117

 

126

 

+7.7

+7.2

 

203

 

209

 

+3.0

+3.0

Eylea™

 

458

 

540

 

+17.9

+22.5

 

904

 

1,044

 

+15.5

+20.9

of which U.S.A.3

 

0

 

0

 

.

.

 

0

 

0

 

.

.

Xofigo™

 

105

 

89

 

−15.2

−9.2

 

205

 

181

 

−11.7

−3.7

of which U.S.A.

 

62

 

52

 

−16.1

−10.3

 

124

 

103

 

−16.9

−7.1

Adempas™

 

75

 

89

 

+18.7

+23.4

 

148

 

170

 

+14.9

+22.3

of which U.S.A.

 

38

 

41

 

+7.9

+16.2

 

76

 

78

 

+2.6

+15.5

Stivarga™

 

83

 

82

 

−1.2

+7.5

 

158

 

152

 

−3.8

+5.5

of which U.S.A.

 

46

 

41

 

−10.9

−4.8

 

85

 

70

 

−17.6

−8.2

Subtotal key growth products

 

1,555

 

1,691

 

+8.7

+13.2

 

3,000

 

3,252

 

+8.4

+13.6

Mirena™ product family

 

276

 

276

 

0.0

+7.4

 

591

 

593

 

+0.3

+10.7

of which U.S.A.

 

176

 

177

 

+0.6

+8.2

 

395

 

401

 

+1.5

+13.7

Kogenate™ / Kovaltry™

 

260

 

213

 

−18.1

−13.7

 

535

 

427

 

−20.2

−14.9

of which U.S.A.

 

91

 

74

 

−18.7

−11.8

 

185

 

154

 

−16.8

−6.5

Nexavar™

 

229

 

193

 

−15.7

−10.5

 

436

 

355

 

−18.6

−12.3

of which U.S.A.

 

86

 

59

 

−31.4

−24.8

 

161

 

102

 

−36.6

−29.1

Adalat™

 

171

 

165

 

−3.5

−1.2

 

345

 

341

 

−1.2

+3.9

of which U.S.A.

 

0

 

0

 

.

.

 

0

 

0

 

.

.

Glucobay™

 

139

 

151

 

+8.6

+10.3

 

297

 

319

 

+7.4

+12.2

of which U.S.A.

 

0

 

1

 

.

.

 

1

 

1

 

.

.

YAZ™ / Yasmin™ / Yasminelle™

 

158

 

159

 

+0.6

+8.2

 

328

 

311

 

−5.2

+3.0

of which U.S.A.

 

25

 

22

 

−12.0

−7.6

 

45

 

37

 

−17.8

−10.1

Aspirin™ Cardio

 

148

 

139

 

−6.1

−3.1

 

305

 

287

 

−5.9

−0.9

of which U.S.A.

 

0

 

0

 

.

.

 

0

 

0

 

.

.

Betaferon™ / Betaseron™

 

185

 

142

 

−23.2

−18.6

 

356

 

272

 

−23.6

−17.6

of which U.S.A.

 

108

 

77

 

−28.7

−22.3

 

202

 

135

 

−33.2

−25.4

Gadavist™ / Gadovist™

 

97

 

103

 

+6.2

+13.0

 

186

 

190

 

+2.2

+9.0

of which U.S.A.

 

34

 

38

 

+11.8

+21.8

 

61

 

63

 

+3.3

+15.2

Avalox™ / Avelox™

 

87

 

77

 

−11.5

−6.6

 

187

 

174

 

−7.0

−1.2

of which U.S.A.

 

2

 

0

 

.

.

 

5

 

3

 

.

.

Total best-selling products

 

3,305

 

3,309

 

+0.1

+4.8

 

6,566

 

6,521

 

−0.7

+5.3

Proportion of Pharmaceuticals sales

 

77%

 

78%

 

 

 

 

77%

 

79%

 

 

 

Total best-selling products in U.S.A.

 

785

 

708

 

−9.8

−4.0

 

1,543

 

1,356

 

−12.1

−3.2

Sales by product

  • Sales of our oral anticoagulant Xarelto™ once again rose significantly, driven by higher volumes in Europe, Japan and China. Our license revenues – recognized as sales – in the United States, where Xarelto™ is marketed by a subsidiary of Johnson & Johnson, also developed positively.
  • We recorded substantial sales gains for our eye medicine Eylea™, due primarily to expanded volumes in Europe, Japan and Canada. Among other things, the differentiated clinical profile of Eylea™ had a positive impact.
  • Sales of our cancer drug Xofigo™ declined markedly as a result of lower volumes in the United States, Japan and other countries. This was also partly due to the Phase III trial of radium Ra 223 dichloride in combination with abiraterone acetate and prednisone / prednisolone being halted prematurely in November 2017.
  • Sales of our pulmonary hypertension treatment Adempas™ increased significantly due to positive business development in the United States and Europe. As in the past, sales reflected the proportionate recognition of the upfront and milestone payments resulting from the sGC collaboration with Merck & Co., United States.
  • We posted encouraging growth in sales of our cancer drug Stivarga™ on a currency- and portfolio-adjusted basis. The increase resulted primarily from expanded volumes in Japan and China, where we benefited from the market launches in previous years. By contrast, sales in the United States came in below the level of the prior-year quarter due to intensified competitive pressure.
  • Sales of the hormone-releasing intrauterine devices of the Mirena™ product family (Mirena™, Kyleena™ and Jaydess™ / Skyla™) increased, especially in the United States, with the successful launch of Kyleena™ continuing to have a positive impact on sales.
  • We again registered significant sales declines for our Kogenate™ / Kovaltry™ blood-clotting medicines that resulted from the termination of an agreement with a distribution partner at the end of 2017. Adjusted for this effect, sales rose by 3.2% (Fx & portfolio adj.).
  • Sales of our cancer drug Nexavar™ fell considerably, with intensified competitive pressure in the United States and Japan weighing on performance.
  • We registered a decline in sales of Adalat™, our product for the treatment of hypertension and coronary heart disease, and of Aspirin™ Cardio, which is used for the secondary prevention of heart attacks. The continued strong expansion of volumes in China was not sufficient to offset declines in Europe.
  • We once again recorded encouraging sales gains for our diabetes treatment Glucobay™, with performance driven by expanded volumes in China.
  • Sales of our YAZ™ / Yasmin™ / Yasminelle™ line of oral contraceptives developed very positively, due primarily to good business performance in Russia, China and Japan.
  • Sales of our multiple sclerosis treatment Betaferon™ / Betaseron™ declined significantly. This was mainly due to the competitive market environment in the United States.
  • We posted robust growth in sales of our MRI contrast agent Gadavist™ / Gadovist™ that resulted especially from the good business performance in the United States.
  • We registered a decline in sales of our antibiotic Avalox™ / Avelox™, primarily due to generic competition in the United States.

Earnings

EBITDA before special items of Pharmaceuticals declined by 8.0% to €1,363 million in the second quarter of 2018 (Q2 2017: €1,481 million). Adjusted for negative currency effects in the amount of €54 million, earnings were down by 4.3%. The decline was mainly attributable to higher R&D and selling expenses, as well as to effects relating to temporary supply disruptions. An increase in the cost of goods sold also weighed on earnings. These effects were partly offset by a substantial expansion in volumes for our key growth products.

EBIT declined by 4.4% to €1,053 million, after special charges of €56 million (Q2 2017: €120 million). These comprised €43 million in impairment losses on intangible assets and €13 million in expenses for efficiency improvement measures.

Special Items1 Pharmaceuticals

 

 

EBIT Q2 2017

EBIT Q2 2018

 

EBIT H1 2017

EBIT H1 2018

 

EBITDA Q2 2017

EBITDA Q2 2018

 

EBITDA H1 2017

EBITDA H1 2018

 

 

€ million

€ million

 

€ million

€ million

 

€ million

€ million

 

€ million

€ million

1

For definition see Annual Report 2017, Chapter “Alternative Performance Measures Used by the Bayer Group.”

Restructuring

 

(2)

(13)

 

(5)

(14)

 

(1)

(13)

 

(4)

(14)

Impairment losses / reversals

 

(118)

(43)

 

(151)

(43)

 

(6)

 

(6)

Total special items

 

(120)

(56)

 

(156)

(57)

 

(7)

(13)

 

(10)

(14)

First half of 2018

Sales

Sales of Pharmaceuticals rose by 3.0% (Fx & portfolio adj.) in the first six months of 2018, to €8,292 million. Our key growth products Xarelto™, Eylea™, Stivarga™, Xofigo™ and Adempas™ delivered strong performance, with their combined sales rising by 13.6% (Fx & portfolio adj.) to €3,252 million (H1 2017: €3,000 million). We registered a significant decline in sales of Kogenate™ due to the absence of orders from a distribution partner. After adjusting for this effect, sales of Pharmaceuticals rose by 4.4% (Fx & portfolio adj.).

Earnings

EBITDA before special items decreased by 6.9% in the first half of 2018, to €2,778 million (H1 2017: €2,983 million). Adjusted for negative currency effects in the amount of €123 million, earnings were down by 2.7%. Higher R&D and selling expenses, and a higher cost of goods sold were the primary factors that diminished earnings. Positive contributions primarily came from a substantial increase in volumes, especially for our key growth products.

EBIT declined by 4.5% to €2,216 million. Special charges amounted to €57 million (H1 2017: €156 million) and comprised €43 million in impairment losses on intangible assets and €14 million in expenses for efficiency improvement measures.

Compare to Last Year