2020 revenue: $25.71 billion (converted from €22.56 billion)
2019 revenue: $26.59 billion (converted from €23.71 billion)
Headquarters: Leverkusen, Germany
While many drugmakers pivoted focus to COVID-19 last year, German conglomerate Bayer was busy putting its ongoing legal battles to bed. Those issues cost CEO Werner Baumann's team a confidence vote in 2019, but come April 2020, Baumann had redeemed himself in investors' eyes.
In May, reports surfaced that Bayer was nearing a $10 billion settlement on tens of thousands of lawsuits claiming the popular herbicide Roundup causes cancer. Bayer picked up the weed killer in its historic $63 billion acquisition of U.S. crop rival Monsanto—a deal which Baumann and then-chairman Werner Wenning personally championed.
Fierce Pharma's annual pharma rankings don't cover Bayer's crop science business, but the company's litigation woes have proved a major focus in recent years—and a particular drag on the conglomerate's pharma unit. With the progress made in 2020, the company's legal headache could now be in the rearview.
In June, the settlement became official, as Bayer pledged to dole out between $10.1 billion and $10.9 billion—the single largest settlement in pharma history—to resolve some 125,000 Roundup lawsuits comprised in the California multidistrict litigation and multiple states. Bayer said the deal would cover around 75% of current Roundup lawsuits, and the company set aside $1.25 billion for claims that had not been resolved.
Early in the year, before relief was in sight for Bayer, chairman Wenning—a staunch supporter of the Monsanto buyout—announced he would hit the exit early. In April, he was replaced by accountant Norbert Winkeljohann, a former chairman at PricewaterhouseCoopers Europe, who joined Bayer’s board in 2018. The appointment signaled a major departure for Bayer, which in the past had named experienced company veterans as chairmen.
Meanwhile, CEO Baumann, who in 2019 received a historic no confidence vote for his role in the Monsanto deal, appeared to be on better footing with investors in 2020.
Top proxy adviser Glass Lewis in April urged shareholders to abstain during a vote on management's actions for the prior year, citing risk around Bayer's Monsanto acquisition, but rival adviser Institutional Shareholder Services endorsed Baumann's team. Both firms supported the no confidence vote in 2019.
At Bayer's annual shareholder meeting that same month, held virtually for the first time due to COVID-19 restrictions, about 92.6% of shareholders’ votes came in favor of ratifying management’s actions for the previous year, while about 7.6% of those present voted to abstain.
One other clue that Baumann's fortunes have turned? In September, Bayer's supervisory board, helmed by new chairman Winkeljohann, decided to extend the CEO's contract by three years to the end of April 2024.
On the pharma front, Bayer has been hustling to diversify its revenue streams before its top-sellers Eylea and Xarelto take a plunge off the patent cliff. In January, the company turned out new data showing prostate cancer med Nubeqa could prolong patients’ lives when used on top of androgen deprivation therapy (ADT).
That positive readout was tempered by some not-so-good news that same month when cost watchdogs in England and Germany rejected Bayer's "tumor-agnostic" cancer med Vitrakvi on pricing and data limitations. Vitrakvi, originally developed by Loxo Oncology, snared U.S. approval in November 2018 and European approval in September 2019.
Bayer, like many drugmakers at the start of 2020, enjoyed a better-than-expected first quarter, thanks in large part to a stockpiling boost from the company's blood thinner Xarelto.
Bayer followed the strong first quarter with a slowdown during the second quarter in a story familiar to many companies during the pandemic age. Even still, macular degeneration stalwart Eylea hung in there, with sales down just 6%. That was a decrease, albeit a much smaller one than the 25% sales slump Roche and Novartis recorded for their rival anti-VEGF med Lucentis.
Also during the second quarter, Bayer and Johnson & Johnson's shared anticoagulant Xarelto ginned up 5% sales growth, benefitting from higher volumes in China, Russia and Germany.
Excluding Bayer's crop science business, the company raked in €22.56 billion ($25.71 billion) in 2020, down slightly from the €23.71 billion ($26.59 billion) it posted in 2019. All told, pharma sales dipped 1.5% to €17.24 billion. Bayer said that COVID-19 restrictions had been particularly unkind to its ophthalmology and women's health businesses—especially in the first half of the year.
Meanwhile, Bayer sought to chip in on the COVID-19 fight in 2020, although its donation of 3 million tablets of the antimalarial hydroxychloroquine turned out to be ill-fated. Early this year, the company said it would help German compatriot CureVac bring its latecomer mRNA vaccine to market.
Elsewhere, Bayer has been plugging away at the restructuring plan it unveiled in 2018. In July, the company received the antitrust go-ahead for its $7.6 billion animal health merger with Elanco, while the company in October said that COVID-19 pressures would force additional cost cuts to the tune of more than €1.5 billion ($1.8 billion) annually by 2024.