Bayer lower 2008 expectations

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Call it Bad News Bayer. The German company reported a whopping 78 percent drop in profits for the fourth quarter and forecast 2008 sales growth at its lowest level in years. Though 2007 full-year results were actually quite good--sales grew 11.8 percent--shares are down 15 percent since January 1 on a series of disappointing news.

Kidney cancer drug Nexavar failed to boost survival rates in lung cancer patients; the hoped-for indication would have given the drug its "biggest commercial potential," according to analysts, who called the trial results a serious setback. Novartis and Novo Nordisk sued for patent infringement over the hemophilia drug Kogenate.

Two studies in the New England Journal of Medicine showed that patients given Bayer's anti-bleeding med Trasylol (aprotinin) were more likely to die. Legal experts expect a surge of lawsuits.

What to do? Watch and wait, perhaps. The company has an anti-clotting med on its way that could make a big difference to its fortunes. But as BusinessWeek notes, Bayer is one of the last pharma conglomerates and may lack the pharma focus to compete with the likes of Novartis and Pfizer. And it shows no sign of wanting to change that.

- see Bayer's earnings release
- read the story in Business Week
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