Bayer (BAYRY) had a very successful 2013 driven by its newly launched products. The German company is awaiting several regulatory decisions and pipeline updates in the coming quarters.
Of Bayer’s three major segments – HealthCare, Crop Science and Material Science - HealthCare is the primary revenue generator for the company. The HealthCare segment has been boosted by the addition of new products like Xarelto, Eylea and Stivarga over the last few quarters. The drugs contributed €259 million, €85 million and €51 million, respectively, in the third quarter of 2013.
Xarelto, a key revenue generator at the HealthCare segment, is approved for several indications including stroke prevention in non-valvular atrial fibrillation, deep vein thrombosis (:DVT), pulmonary embolism (:PE) and reducing the risk of recurrent DVT and PE. Bayer is looking to expand Xarelto’s indication further.
Eye-drug Eylea, which was first approved for treating patients suffering from the neovascular form of age-related macular degeneration (wet AMD), offers significant commercial potential. The drug is also approved for the treatment of macular edema following central retinal vein occlusion (:CRVO). Bayer is further looking to expand the drug’s indication.
Stivarga, another key drug at Bayer, also offers significant commercial potential. The drug is approved for the metastatic colorectal cancer (mCRC) and gastrointestinal stromal tumors (GlST) indications in several countries.
Moreover, the approvals of Xofigo (oncology), Adempas tablets (pulmonary arterial hypertension and chronic thromboembolic pulmonary hypertension) and Lemtrada (multiple sclerosis) are also encouraging. These drugs are also expected to contribute significantly to Bayer’s top line in the coming quarters. The new products are expected to contribute €1.4 billion to segmental sales in 2013 and the figure is expected to reach €2.5 billion in 2015. In view of the strong product portfolio and attractive pipeline we remain optimistic on the long-term prospects at Bayer.
Bayer, a large-cap pharma company, currently carries a Zacks Rank #4 (Sell) reflecting short-term pressure on the stock. Some better-ranked stocks in the large-cap pharma sector include Eli Lilly and Company (LLY), Novartis (NVS) and Roche (RHHBY). All these stocks hold a Zacks Rank #2 (Buy).
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