Bayer Lists Potential Blockbuster Drugs, Eyes Emerging Markets

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Bayer AG (BAYRY.PK,BAYZF.PK) listed four drugs in its late-stage development pipeline as having blockbuster potential. The German conglomerate set its goal to successfully commercialize these and to take advantage of business opportunities in emerging markets. The chemicals and drugs group also revealed financial targets for 2014, expecting sales and margin expansion in its life science businesses.

At an investor conference Wednesday, CEO Marijn Dekkers said, "I am optimistic about Bayer's medium-term development overall. -- The main reason why I'm optimistic for our HealthCare subgroup is our well-stocked development pipeline in Pharmaceuticals."

The company revealed the four potential blockbuster medicines in development, which it expects can achieve peak annual sales of 1 billion euros or more. These comprise anticoagulant Xarelto, eye medicine VEGF Trap-Eye, and cancer drugs Alpharadin and regorafenib. Xarelto alone is anticipated to have a peak sales potential of more than 2 billion euros.

Bayer also aims to take advantage of business opportunities in the emerging markets. In the emerging markets as a whole - Asia (excluding Japan), Latin America, Eastern Europe, Africa and the Middle East - pharmaceutical sales are expected to increase by high-single-digit to low-double-digit percentages through 2014 on a currency-adjusted basis.

The company expects sales of Bayer HealthCare to reach about 20 billion euros in 2014, compared with 17.2 billion euros generated in 2011. The subgroup's underlying EBITDA margin, before special items, is anticipated to increase to at least 28 percent from 27.4 percent in 2011.

Pharmaceuticals segment sales are expected to rise to about 11.5 billion euros in 2014 from 9.9 billion euros in 2011. EBITDA margin is anticipated to rise to more than 30 percent from 29.9 percent in 2011.

Consumer Health segment sales are targeted to reach nearly 8.5 billion euros in 2014, compared to the 7.2 billion euros in 2011. Dekkers also expressed his confidence for the CropScience business and said the sales are aimed to reach over 8 billion euros by 2014, up from 7.3 billion euros last year. The company expects EBITDA margin expansion for both these segments.

Bayer MaterialScience also intends to further strengthen its leading position in the market and aims to achieve volume gains in excess of the rate of global GDP growth, the company added.

On Frankfurt's Xetra, Bayer shares are currently trading at 55.08 euros, down 0.99 percent, on a volume of 791 thousand shares.

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