Business Development by Segment

Pharmaceuticals

Market growth below the prior-year level

In 2016, growth in the pharmaceuticals market slowed to 6% (2015: 10%). Growth in demand weakened particularly in the United States, but also in Europe and Japan. The pace of growth held steady in Asian and Latin American markets.

Key Data – Pharmaceuticals

 

 

Q4 2015

Q4 2016

Change

 

2015

2016

Change

 

 

€ million

€ million

Repor­ted %

Fx & p adj. %

 

€ million

€ million

Repor­ted %

Fx & p adj. %

2015 figures restated; Fx & p adj. = currency- and portfolio-adjusted; Fx adj. = currency-adjusted

1

For definition see Chapter “Alternative Performance Measures Used by the Bayer Group.”

Sales

 

3,986

4,275

+7.3

+7.1

 

15,308

16,420

+7.3

+8.7

Change in sales

 

 

 

 

 

 

 

 

 

 

Volume

 

+9.2%

+7.2%

 

 

 

+9.1%

+9.0%

 

 

Price

 

−0.6%

−0.1%

 

 

 

0.0%

−0.3%

 

 

Currency

 

+0.2%

+0.2%

 

 

 

+4.6%

−1.4%

 

 

Portfolio

 

0.0%

0.0%

 

 

 

−0.4%

0.0%

 

 

 

 

€ million

€ million

Repor­ted %

Fx adj. %

 

€ million

€ million

Repor­ted %

Fx adj. %

Sales by region

 

 

 

 

 

 

 

 

 

 

Europe / Middle East / Africa

 

1,618

1,684

+4.1

+6.0

 

5,981

6,417

+7.3

+9.7

North America

 

972

1,107

+13.9

+12.6

 

3,937

4,194

+6.5

+6.7

Asia / Pacific

 

1,121

1,203

+7.3

+3.6

 

4,319

4,775

+10.6

+8.6

Latin America

 

275

281

+2.2

+8.0

 

1,071

1,034

−3.5

+11.0

EBITDA1

 

949

1,065

+12.2

 

 

4,375

5,084

+16.2

 

Special items

 

(136)

(152)

 

 

 

(241)

(167)

 

 

EBITDA before special items1

 

1,085

1,217

+12.2

 

 

4,616

5,251

+13.8

 

EBITDA margin before special items1

 

27.2%

28.5%

 

 

 

30.2%

32.0%

 

 

EBIT

 

569

606

+6.5

 

 

3,028

3,389

+11.9

 

Special items

 

(190)

(310)

 

 

 

(299)

(558)

 

 

EBIT before special items1

 

759

916

+20.7

 

 

3,327

3,947

+18.6

 

Net cash provided by operating activities

 

911

1,326

+45.6

 

 

3,157

3,368

+6.7

 

+8.7%

growth in sales at Pharmaceuticals (Fx & portfolio adj.)

Significant increase in sales

Sales of Pharmaceuticals rose by an encouraging 8.7% (Fx & portfolio adj.) to €16,420 million in 2016, driven mainly by our key growth products. Xarelto™, Eylea™, Stivarga™, Xofigo™ and Adempas™ posted total combined sales of €5,413 million (2015: €4,231 million). The Pharmaceuticals business expanded noticeably in all regions.

Best-Selling Pharmaceuticals Products

 

 

Q4 2015

Q4 2016

Change

 

2015

2016

Change

 

 

€ million

€ million

Repor­ted %

Fx adj. %

 

€ million

€ million

Repor­ted %

Fx adj. %

Fx adj. = currency-adjusted

1

Marketing rights owned by Regeneron Pharmaceuticals Inc., U.S.A.

Xarelto™

 

650

836

+28.6

+27.9

 

2,252

2,928

+30.0

+30.8

of which U.S.A.

 

122

161

+32.0

+32.6

 

393

489

+24.4

+24.5

Eylea™

 

354

426

+20.3

+20.9

 

1,228

1,625

+32.3

+33.0

of which U.S.A.1

 

0

0

.

.

 

0

0

.

.

Kogenate™ / Kovaltry™

 

286

288

+0.7

+0.4

 

1,155

1,166

+1.0

+1.1

of which U.S.A.

 

92

106

+15.2

+13.7

 

370

394

+6.5

+6.0

Mirena™ product family

 

226

268

+18.6

+17.2

 

968

1,043

+7.7

+8.8

of which U.S.A.

 

141

178

+26.2

+23.4

 

639

701

+9.7

+9.3

Nexavar™

 

231

224

−3.0

−3.7

 

892

870

−2.5

−1.6

of which U.S.A.

 

84

80

−4.8

−6.6

 

324

312

−3.7

−4.0

Betaferon™ / Betaseron™

 

190

185

−2.6

−2.9

 

824

734

−10.9

−9.9

of which U.S.A.

 

84

94

+11.9

+10.2

 

394

386

−2.0

−2.1

YAZ™ / Yasmin™ / Yasminelle™

 

168

159

−5.4

−4.5

 

706

678

−4.0

+0.1

of which U.S.A.

 

25

21

−16.0

−14.7

 

134

128

−4.5

−4.4

Adalat™

 

152

147

−3.3

0.0

 

633

624

−1.4

+2.7

of which U.S.A.

 

1

0

.

.

 

4

1

.

.

Aspirin™ Cardio

 

131

135

+3.1

+5.8

 

524

538

+2.7

+7.4

of which U.S.A.

 

0

0

.

.

 

0

0

.

.

Glucobay™

 

142

123

−13.4

−9.8

 

523

515

−1.5

+3.3

of which U.S.A.

 

1

1

.

.

 

2

3

.

.

Avalox™ / Avelox™

 

85

81

−4.7

−0.2

 

379

353

−6.9

−2.0

of which U.S.A.

 

(2)

1

.

.

 

2

5

.

.

Gadavist™ / Gadovist™

 

79

88

+11.4

+11.0

 

290

346

+19.3

+19.7

of which U.S.A.

 

21

24

+14.3

+14.5

 

86

104

+20.9

+20.5

Xofigo™

 

69

90

+30.4

+29.7

 

257

331

+28.8

+29.3

of which U.S.A.

 

47

59

+25.5

+25.7

 

182

225

+23.6

+23.6

Ultravist™

 

83

80

−3.6

−1.9

 

318

316

−0.6

+3.5

of which U.S.A.

 

2

2

.

−2.5

 

6

6

.

+1.2

Stivarga™

 

77

77

.

−2.2

 

313

275

−12.1

−11.7

of which U.S.A.

 

43

42

−2.3

−6.9

 

181

142

−21.5

−22.0

Total best-selling products

 

2,923

3,207

+9.7

+10.0

 

11,262

12,342

+9.6

+11.3

Proportion of Pharmaceuticals sales

 

73%

75%

 

 

 

74%

75%

 

 

Total best-selling products in U.S.A.

 

661

769

 

 

 

2,717

2,896

 

 

+28.6%

growth in sales of our key growth products (Fx adj.)

Sales by product

  • Sales of Xarelto™ increased substantially in 2016, due particularly to expanded volumes in Europe and Japan. We also posted significant gains for our license revenues – recognized as sales – in the United States, where Xarelto™ is marketed by a subsidiary of Johnson & Johnson.
  • We once again recorded strong growth with our eye medicine Eylea™, due especially to the successful development of business in Europe, Canada and Japan.
  • Sales of the blood-clotting medicines Kogenate™ / Kovaltry™ increased slightly, mainly because of the successful introduction of Kovaltry™ in the United States.
  • The considerable increase in sales of the hormone-releasing intrauterine devices of our Mirena™ product family (Mirena™, Jaydess™ / Skyla™ and Kyleena™) resulted particularly from the positive development in prices in the United States and from the introduction of the new low-dose product Kyleena™.
  • We registered a slight decline in sales of our cancer drug Nexavar™ that was chiefly attributable to higher competitive pressure in the United States.
  • The decline in sales of our multiple sclerosis treatment Betaferon™ / Betaseron™ resulted mainly from weaker business performance in Europe and the United States.
  • Currency-adjusted sales of our YAZ™ / Yasmin™ / Yasminelle™ line of oral contraceptives were level with the previous year. Higher demand in China and Russia stood against weaker business development in Europe, Brazil and the United States.
  • Sales of Adalat™, our product to treat hypertension and coronary heart disease, rose slightly compared with the previous year; this was due especially to expanded volumes in China.
  • The increase in sales of Aspirin™ Cardio for the secondary prevention of heart attacks was owed mostly to an improved business situation in China and Latin America.
  • Business with our diabetes treatment Glucobay™ expanded; here we benefited from continuing high demand in China.
  • Sales of our antibiotic Avalox™ / Avelox™ fell slightly. The weak development of business in Canada and Europe was only partly offset by higher demand in China.
  • We once again posted strong growth in sales of our MRI contrast agent Gadavist™ / Gadovist™ that was attributable particularly to the significant expansion of volumes in Japan and the United States.
  • Sales of our cancer drug Xofigo™ advanced substantially, due particularly to the positive development of business in the United States and Europe.
  • Our X-ray contrast agent Ultravist™ posted an increase in sales that resulted mainly from higher volumes in Latin America and Europe.
  • Sales of our cancer drug Stivarga™ were well below the prior-year level, due especially to stronger competition in the United States.
  • Sales of Adempas™ to treat hypertension came in at €254 million (2015: €181 million; Fx adj. +39.3%) and included the proportionate recognition of the one-time payment resulting from the sGC collaboration with Merck & Co., United States, as was previously the case. Business developed especially positively in the United States.

Earnings

In 2016, we raised EBITDA before special items by 13.8% to €5,251 million. The substantial growth in earnings was largely attributable to our very good business development. Significantly higher investments in research and development and negative currency effects of around €65 million had an opposing effect.

EBIT of Pharmaceuticals increased by 11.9% to €3,389 million, including special charges of €558 million (2015: €299 million). These resulted particularly from charges of €401 million associated with Essure™, mainly for impairment losses on intangible assets. Further charges were associated with accounting measures of €88 million in connection with litigations and charges of €69 million for efficiency enhancement programs.

Special Items1 Pharmaceuticals

 

 

EBIT Q4 2015

EBIT Q4 2016

 

EBIT
2015

EBIT
2016

 

EBITDA Q4 2015

EBITDA Q4 2016

 

EBITDA 2015

EBITDA 2016

 

 

€ million

€ million

 

€ million

€ million

 

€ million

€ million

 

€ million

€ million

1

For definition see Chapter “Alternative Performance Measures Used by the Bayer Group.”

Restructuring

 

(132)

(51)

 

(174)

(69)

 

(120)

(51)

 

(158)

(67)

Litigations

 

(2)

(89)

 

(16)

(88)

 

(2)

(89)

 

(16)

(88)

Integration costs

 

 

(2)

 

 

(2)

Impairment losses / impairment loss reversals

 

(43)

(170)

 

(43)

(401)

 

(1)

(12)

 

(1)

(12)

Divestments

 

 

3

 

 

3

Revaluation of other receivables

 

(13)

 

(67)

 

(13)

 

(67)

Total special items

 

(190)

(310)

 

(299)

(558)

 

(136)

(152)

 

(241)

(167)

Online Annex: A 2.2.2-1

limited assurance

The development of Pharmaceuticals in 2016 is shown in the following graphics.

Pharmaceuticals Quarterly Sales

Pharmaceuticals Quarterly Sales (bar chart)Pharmaceuticals Quarterly Sales (bar chart)

2015 figures restated

Pharmaceuticals
Quarterly EBIT

Pharmaceuticals Quarterly EBIT (bar chart)Pharmaceuticals Quarterly EBIT (bar chart)

2015 figures restated

Pharmaceuticals
Quarterly EBITDA before Special Items

Pharmaceuticals Quarterly EBITDA before Special Items (bar chart)Pharmaceuticals Quarterly EBITDA before Special Items (bar chart)

2015 figures restated