Bayer looks for pharma growth in 2021 as new drugs start to take shape

COVID-19 dragged down Bayer’s pharma performance in 2020, but as the pandemic’s initial grip on sales starts to loosen—and as newer drugs with blockbuster potential kick in—the German drugmaker expects the franchise to grow in 2021.

Bayer’s eye drug Eylea slowed down last year on COVID-19 restrictions, with sales at €2.47 billion, flat year over year. Its birth control line, including Mirena, suffered more, as sales dropped by 8.7% to €1.08 billion.

While the unit’s second- and third-best-selling franchises lagged, its top drug, oral blood thinner Xarelto, did pitch in 12.4% growth, hitting €4.52 billion in sales, thanks to strong increases in China and Europe.

Nevertheless, it was not enough to prevent the German company from posting a 1.5% pharma sales decline after adjusting for currency effects, to €17.24 billion ($21.09 billion) in 2020.

Bayer’s seeing signs of recovery after a low in the second quarter last year, CEO Werner Baumann told reporters on a call Thursday. For example, Eylea sales were slightly up in the fourth quarter, thanks in part to the launch of a prefilled syringe version. The company now expects its 2021 pharma sales to rise by 4% at unchanged exchange rates, and that’s after baking in some Xarelto generic assault in China.

Apart from those blockbuster franchises, some of Bayer’s newer products will likely contribute to that growth. Cancer drug Stivarga grew 18.6% at constant currencies to €475 million in 2020, benefiting from its oral administration as a valuable feature during the pandemic.

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Cancer drug Nubeqa isn’t yet a big enough franchise to deserve separate sales reporting, but it’s one of four new drugs Bayer counts as potential blockbusters. The drug was approved in the U.S. in 2019 for nonmetastatic castration-resistant prostate cancer. Earlier this month, the company said it plans to test adding the drug to standard androgen deprivation therapy in the phase 3 Aranote trial in metastatic hormone-sensitive prostate cancer.

Plus, at the beginning of this year, Bayer and partner Merck & Co. won an FDA green light for Verquvo to treat high-risk patients with chronic heart failure with reduced ejection fraction. It’s another blockbuster candidate on Bayer’s list, though it’s sharing sales 50-50 with Merck.

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Down in Bayer’s pipeline, there’s finerenone, a third blockbuster in the making. The drug recently showed it could pare down the risk of heart events in patients with chronic kidney disease and Type 2 diabetes. The FDA put the drug’s application under priority review, with a decision expected by year-end.

Many physicians value finerenone because it doesn’t affect a patient’s blood sugar level, that it can be used independent of diabetes, Stefan Oelrich, Bayer’s pharma chief, told investors during the company’s Q3 earnings call, citing market research.

“Our focus will be at launch on nephrologists and cardiologists … because they are the ones that we see today that want to have the least to do with the diabetes of that patient,” Stefan Oelrich, Bayer’s pharma chief, said during a separate call with investors. “We really offer them here a clear kidney solution, not a combined solution that addresses many things but really a very targeted therapy. … [W]e believe that’s going to be the market entry."

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But a key item on Bayer’s agenda these days is settling tens of thousands of lawsuits claiming its Roundup weedkiller caused cancer. Of the 125,000 existing plaintiffs, 90,000 have been taken care of as eligible people settled and others were deemed ineligible, Baumann said. These current cases are covered by a settlement of up to $9.6 billion.

Earlier this month, Bayer reached an important revised settlement that aims to cover future claims. It came after U.S. District Judge Vince Chhabria rejected a previous version of the deal.

The new proposal sets aside $2 billion to settle future cases, compared with the previous $1.25 billion. In the original version, the two sides agreed to establish a scientific panel of five experts to decide within four years whether the glyphosate component in Roundup indeed causes cancer. If no causal link is found, the class governing future claims will be barred from suing Bayer.

In the current deal, the scientific panel will only provide evidence but not decide the outcome of the class action. That tweak was designed to specifically address the judge’s concern about delegating the legal causation question to a panel of scientists instead of juries.

The judge has a deadline of March 31 to hold a preliminary hearing, after which he’ll decide whether to approve the new deal, Baumann explained on Thursday's call.

In 2020, Bayer recorded special charges of €10.76 billion for its crop science business in 2020 that mainly stemmed from the provisions set for the Roundup settlement.