Some analysts and market watchers worried about Bayer's focus when the drugmaker went after agrochem giant Monsanto in a $66 billion deal last year, and now the company's third-quarter results have confirmed those fears.
The company's pharma results were "messy," according to a Thursday note from Bernstein analyst Jeremy Redenius. The drugmaker reported €8 billion in sales for the group, missing consensus estimates by 6%.
Each of Bayer's top pharma meds missed estimates, according to Bernstein figures, except for eye drug Eylea which came in just ahead of expectations.
Key anticoagulant Xarelto missed consensus by 10%, but the result is "partly explained" by changes in licensing revenues between periods, according to the analyst. Kogenate, a medicine to control bleeding in hemophilia A patients, missed by 24% due to a reduction in a distribution partner's orders, Redenius wrote.
With everything considered, Redenius said it's "not a great quarter" for the drugmaker. Apart from pharma, Bayer's consumer health unit continued to struggle, missing analyst estimates by 7% in the third quarter as U.S. and European sales dragged.
The results follow skepticism from some analysts about the company's pursuit of Monsanto. Last year, Bernstein analyst Ronny Gal said the acquisition was a “lost opportunity to develop the pharma pipeline,” because Bayer can't afford to invest simultaneously in both agriculture and pharma.
He said sales for the company's core pharma products should keep growing for years to come, but that Bayer's pipeline behind current drugs is weak.
Announced last fall, the Monsanto deal has taken a while to finalize. Last month, Bayer asked European regulators for an extension of its review until Jan. 22, according to CNBC. Bayer previously hoped to wrap up the purchase by the end of this year.