Despite rough quarter, Bayer's duo of Nubeqa and Kerendia continue to excel

As Bayer presented its first-quarter earnings, much of the focus centered on the company’s struggling agricultural sector, which has been hindered by the poor performance of its glyphosate-based weedkillers.

Somewhat under the radar is Bayer’s pharma business, which could use a boost as well. On the company’s list of best-selling medicines, seven of the top 10 posted a sales decline (PDF) from the first quarter of last year.

That list doesn't include the aging eye treatment Eylea, which was up 2% on the quarter. Still, the drug posted a sequential (PDF) sales decline of 4% from the fourth quarter of last year.

It all adds up to lots of pressure to perform for Bayer’s most promising new treatments—prostate cancer drug Nubeqa and kidney disease therapy Kerendia.

Bayer’s small dose of good news on Thursday is that both are progressing nicely. The company has projected the drugs will generate 3 billion euros ($3.2 billion) each at peak.

During the first quarter, Nubeqa sales reached 178 million euros ($194 million) for an increase of 134% from the first quarter of last year. Nubeqa was approved in 2019 and gained a combo nod in August of last year to treat metastatic hormone-sensitive prostate cancer (mHSPC).

Additionally, a phase 3 study is underway that could open Nubeqa’s use to patients in an earlier stage of the disease. Bayer has said that Nubeqa has a chance to become the standard of care in the indication.

Meanwhile, Kerendia registered sales of 52 million euros ($57 million), a 372% increase from the first quarter of last year.

The drug, which was approved in July of 2021 for kidney disease related to type 2 diabetes, is seen as a rival to SGLT2 treatments such as Johnson & Johnson’s Invokana and AstraZeneca’s Farxiga. But data from a recent trial showed it can be effective as a combo treatment with SGLT2s, adding heart and kidney benefits.

Overall, Bayer’s revenue from the quarter came in at 14.4 billion euros ($15.7 billion), a 2% decline. The pharma sector played its part in the fall, tallying revenue of 4.4 billion euros, a 5% drop from the first quarter of 2022.

“Quarterly performance was significantly impacted by a temporary weakness in China,” outgoing CEO Werner Baumann said on a conference call. Baumann is set be replaced by Bill Anderson on June 1.

Bauman added that China's COVID outbreak at the beginning of the year led to sales from the key market being cut nearly in half in January, “impacting almost all parts of the portfolio and Xarelto in particular.”

Sales for blood thinner Xarelto were down 13% from the first quarter of 2022 and 22% sequentially.

With the performance, the company believes its 2023 revenue will come in at the lower end of its projected window of €51 billion to €52 billion.

With the report, Bayer's shares had dropped 8% by mid-morning on Thursday.