New drugs in hand, Bayer's pharma sales leap ahead

Bayer CEO Marijn Dekkers

Blood thinner Xarelto and eye med Eylea pack a pretty good one-two punch. Those new drugs helped Bayer's pharma sales climb 9.4% in 2013, and they're not stopping: They'll ultimately lead a group of 5 recently launched products to sales of 7.5 billion ($10.3 billion) or more, CEO Marijn Dekkers said Friday.

Based on a higher outlook on Xarelto and Eylea's sales potential, that peak sales forecast ups a previous projection of more than 5.5 billion for the group, which includes cancer therapies Stivarga and Xofigo and pulmonary hypertension treatment Adempas. Bayer now expects peak sales of Xarelto to reach 3.5 billion and those of Eylea to hit at least 1.5 billion. That's not including the billions of dollars analysts foresee in the U.S., where Johnson & Johnson ($JNJ) and Regeneron ($REGN) market the two, respectively.

"In light of this very positive performance, we have now significantly increased our estimate of the combined peak annual sales potential of these five products," Dekkers said in a statement.

But those drugs accounted for just a piece of pharma's 11.2 billion sales haul for the year, which helped Bayer HealthCare achieve 1.7% sales growth overall and EBITDA of 5.3 billion. Established meds chipped in as well, with blood-clotting med Kogenate helping lead the way; its revenue haul grew 6.4% in 2013 thanks to higher sales volumes, the company said.

Consumer Care "also saw positive sales development," Dekkers noted, and those sales are about to see some expansion of their own. Thursday, Bayer announced its pickup of Chinese OTC maker Dihon Pharmaceutical Group, a deal the German company says will move it into a leading position among multinational drugmakers in China's OTC industry. It's part of Bayer's strategy to grow its consumer division through bolt-on deals, and there could be another major one ahead: As rumor has it, the company's got its eye on Merck's ($MRK) consumer unit, which could attract bids of up to $12 billion.

Overall, HealthCare's performance offset some of the struggles faced by the company's plastics division, Material Science, and it should in the eyes of investors, too, according to Berenberg Bank analyst Alistair Campbell. "While the near-term guidance is disappointing and near-term consensus will have to come down, the long-term story is robust and intact," he wrote in a report seen by Bloomberg.

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