Bayer's new pharma launches may be soaring, but that wasn't enough to help the German drugmaker meet analysts' profit estimates for Q4. For 2015, the company expects bigger things--but as it moves forward with plans to bid farewell to its plastics unit and competition ramps up for its best-sellers, its consumer health division will need to start pulling its weight.
Q4 earnings sank to €224 million ($254 million), compared with €455 million in the year-ago period. Analysts had expected net profit to climb to €483 million, according to The Wall Street Journal--a miss Bayer blamed in part on costs related to its $14.2 billion pickup of Merck's ($MRK) OTC unit.
|Bayer CEO Marijn Dekkers|
It's not a performance CEO Marijn Dekkers foresees his company repeating. Bayer said Thursday that it predicts adjusted earnings before EBITDA will expand by between 10% and 15% this year on the back of a strong U.S. dollar and growing sales of its top 5 drugs.
Speaking of those 5--blood thinner Xarelto, eye drug Eylea, cancer meds Stivarga and Xofigo, and pulmonary arterial hypertension treatment Adempas--their sales haul will approach €4 billion, Bayer figures, a substantial leap from this year's €2.9 billion tally.
But as Dekkers pointed out in an interview with Bloomberg Television's "Surveillance," Bayer doesn't "aspire to be a pure pharma company" even as it prepares to home in on life sciences. After it divests its plastics business--which could happen through IPO, spinoff or even a sale, if the price is right, Dekkers noted Thursday--it'll still have less risky, patent-dependent businesses to lean on--like consumer health, for instance.
And despite a fourth-quarter OTC showing that analysts found not quite up to par, No. 2 worldwide player Bayer is optimistic about its future in a field where size matters.
"This is the first quarter after an acquisition … It's a transition situation," Dekkers pointed out to Bloomberg TV. "In OTC, critical size actually makes a difference. You go into a drug store and it's about shelf space. Now, we have products like Claritin, Aleve and Aspirin all next to each other, and that is a tremendous advantage."
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