Once again, Bayer's new drugs power pharma sales upward

Eye drug Eylea and blood thinner Xarelto are pretty good products for any drugmaker to have in its lineup, and Bayer's got them both. Sales of those new stars have been plentiful, and they helped the German company raise earnings 7.7% for the third quarter, the company announced Thursday.

Bayer CEO Marijn Dekkers

Profits climbed to €1.98 billion ($2.7 billion) from €1.84 billion the year prior, topping analyst expectations of €1.87 billion. While overall revenue stayed level at €9.64 billion, pharmaceutical sales grew by 3.1% to €2.82 billion, with new products responsible for more than €400 million of that. "HealthCare registered encouraging growth, largely due to the outstanding sales performance for our new pharmaceutical products," CEO Marijn Dekkers said in a statement.

The pharma division will help Bayer revenue reach €40 billion this year, according to the company; that total is an update on its previous forecast of €40 billion to €41 billion, with currency effects taking their toll. "We are maintaining our guidance, although it is increasingly ambitious," Dekkers said.

Xarelto has gained quite a bit of ground since winning its key approval--as a stroke preventative in atrial fibrillation patients--in November 2011 in the U.S., followed by a thumbs-up from the EU the next month. It snapped up market share quickly, and by this year, first-half sales totaled €374 million for Bayer and $347 for U.S. partner Johnson & Johnson ($JNJ), amounting to about $847 million overall. Competitor Pradaxa, first-to-market as a warfarin alternative, registered $827 million in that time.

Eylea launched in the EU more recently, scoring approval in November 2012 as a treatment for wet age-related macular degeneration. It brought in €122 million for Bayer in the first half of this year, but if success for Regeneron ($REGN)--which markets the drug in the U.S.--is any indication, there's a whole lot more revenue on the way. Eylea raked in $643.7 million for Tarrytown, NY-based Regeneron in first-half sales after posting $838 million in its first year. And both Bayer and Regeneron are doing their best to expand those totals, producing data to support a slew of other uses and seeking approval for those indications.

But Xarelto and Eylea aren't the only drugs making their mark on Bayer's top line. Newcomer cancer drugs Stivarga and Xofigo posted combined sales of €407 million, up from €82 million this time last year. And older drugs put forth their fair share of growth, too: Sales of blood-clotting blockbuster Kogenate increased by 14.5% on a currency adjusted basis, while fellow blockbuster Nexavar, another cancer drug, turned in growth of 11.1%.

Overall, those drugs canceled out a sales slump for Bayer's plastics division, MaterialScience, an area in which the company is working to cut costs. But problems there won't deter investors from putting money on the pharma up-and-comers, Kepler Cheuvreux analyst Fabian Wenner believes. "People do want to own this for the pharma growth," he told Bloomberg. "Investors don't really care about 2013 anymore." 

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