Pharma growth a rare positive in 'not an easy year' for Bayer

Continued growth in the Pharmaceuticals unit provided some rare cheer for German life sciences group Bayer (BAYN: DE) as it presented its 2017 financial results.

Pharma sales rose by 4.3% to 16.85 billion euros ($20.6 billion) for the year, helping to ensure marginal growth of 1.5% across the group, to 35.02 billion euros.

Declines in the Consumer Health and Crop Science businesses and a delay in the expected completion of the purchase of the agrochemical company Monsanto – now not expected to happen until the second quarter of 2018 – were likely contributors to the company’s share price taking a 3% hit on Wednesday morning. It was at 95 euros after three-and-a-half hours of trading.

Earnings before interest, taxes, depreciation and amortization (EBITDA) before special items were unchanged for the year at 9.3 billion euros, and core earnings per share (EPS) rose 1% to 6.74 euros.

The quarterly figures made for particularly concerning reading, with sales falling from 8.8 billion euros in the last quarter of 2016, to 8.6 billion euros. This time, pharmaceuticals sales were down too - slipping by 1.4% to at 4.26 billion euros.

EBITDA before special items were down across the group by 1.3%, at 1.78 billion euros, for the fourth quarter of 2017, with core EPS up 28.2% at 1.41 euros.

Bayer predicts its sales and earnings to be unchanged in 2018, with currency losses expected to wipe out any gains that are made.

Werner Baumann, Bayer’s management board chairman, said at Bayer’s press conference on Wednesday that 2017 was “not an easy year” and admitted he was “not happy with our performance”.

He added: “Pharmaceuticals achieved another record year in business operations. Sales and earnings declined at both Consumer Health and Crop Science – in the latter case, however, this development was attributable to the difficult situation in Brazil. Animal Health posted an increase in sales and earnings.

“We remain focused on our objectives and are convinced of our long-term perspective. We therefore have every reason to look to the future with optimism.”

Pharmaceutical product sales

Xarelto (rivaroxaban): Full-year sales of 3.3 billion euros, a 12.6% increase on 2016; fourth-quarter sales of 914 million euros, a 9.3% increase on fourth-quarter 2016.

Eylea (aflibercept): full-year sales of 1.88 billion, a 15.7% increase; fourth-quarter sales of 507 million euros, an increase of 19%.

Xofigo (radium Ra 223 dichloride): full-year sales of 408 million euros, an increase of 23.3%; fourth-quarter sales of 101 million euros, an increase of 12.2%.

Stivarga (regorafenib): full-year sales of 315 million euros, an increase of 14.5%; fourth-quarter sales of 80 million euros, an increase of 3.9%.

Adempas (riociguat): full-year sales of 295 million euros, an increase of 16.1%; fourth-quarter sales of 72 million euros, an increase of 2.9%.