Bayer working to get right pharma mix in China, emerging markets

Third-quarter emerging markets business at a 2% currency-adjusted gain was slow going, but Bayer Healthcare executives on the Oct. 29 earnings call said there was "nothing wrong" in those geographies outside of geopolitical and macroeconomic headwinds expected from time to time.

Bayer CEO Marijn Dekkers

"This quarter, emerging market sales demonstrated a smaller growth momentum following the overall geopolitical and macroeconomic situation in key emerging markets like Russia and China," said Chairman and CEO Marijn Dekkers.

In China particularly, Werner Baumann, chairman of Bayer HealthCare, said that the Merck ($MRK) consumer acquisition and OTC company--China's Dihon Pharmaceutical--buy needed time and attention to figure out.

"In China we have a second compounding effect, if you want, so that is one of the countries where integration of our new businesses has been the hardest and the most complex," Baumann said.

Bayer HealthCare Chairman Werner Baumann

"Because it was not only the Merck business that had to be combined with ours but also the Dihon business, because both acquisitions kind of happened at the same time. And we have combined these businesses also with, let's say, some impact on underlying performance that typically caused disruption. That hit in quarter one. We have seen sequential improvement of our businesses since quarter one, but we are not quite back to normal yet."

Bayer bought Dihon Pharmaceutical Group in 2013 and Merck's OTC business last year.

Baumann subsequently gave the currency-adjusted growth rate in China for pharma.

"On pharma growth quarter three, currency and portfolio adjusted--it's actually only currency adjusted; there is no portfolio in there--3.7% year-over-year. For the first 9 months, growth is 7.6%, also currency adjusted."

But Asia-Pacific stood out for the company in pharmaceuticals, with currency-adjusted sales up 11% to €953 million.

- here's the earnings release