Emerging Markets Earnings: Strong Showing For Bayer Despite China Nexavar Hiccup
This article was originally published in PharmAsia News
Executive Summary
Bayer slowly but surely nears the halfway mark for the proportion of overall sales from emerging markets with double-digit growth in the third quarter, though the company faced some hiccups related to Nexavar stocks in China
In a recurring feature, PharmAsia News combs through quarterly earnings reports to bring you highlights on emerging markets, for Part 12, see: (Also see "Emerging Markets Earnings: Teva Moves On With Russia, LatAm In Focus" - Scrip, 11 Nov, 2014.)
Bayer AG is approaching the halfway mark for sales from emerging markets, posting double digit growth in the third quarter in those geographies (Also see "Emerging Markets Earnings Roundup: Bayer (Part 9)" - Scrip, 5 Aug, 2014.).
Overall, third quarter earnings rose 1.4% to €2.01 billion with full-year sales seen at €42 billion ($53 billion) and earnings before interest, taxes, depreciation, amortization and special items will rise by a mid-single-digit percentage, the company said in its earnings release and call on Oct. 30.
Sales rose 5.6% to €10.19 billion in the quarter.
For CEO Marijn Dekkers, one of the most important figures was surging sales from emerging markets.
“From a regional perspective, we generated 41% of our Q3 sales in the emerging markets. Sales growth in these countries was, again, in the double-digit range, up by 12%.” – CEO Marijn Dekkers
“From a regional perspective, we generated 41% of our Q3 sales in the emerging markets,” Dekkers said on the earnings call. “Sales growth in these countries was, again, in the double-digit range, up by 12%.”
“Latin America showed the highest growth rate, with sales up 15%. Sales in Eastern Europe advanced by 12% and in emerging Asia, by 11%, with all sub-groups contributing in these regions. Sales of Aspirin Cardio rose by 13% and sales of Adalat (nifedipine) by 7%, both products benefiting from volume increases in China.”
Nexavar Hiccups In China
However, Olivier Brandicourt, chairman of Bayer HealthCare Pharmaceuticals AG, noted the performance of Nexavar (sorafenib), which saw a quarterly sales drop of 4% in part because of pricing pressure in Europe, but also stock adjustments in China.
“The fact that we put in place in China a revised patient access program, to increase access but, at the same time, that triggered reductions in net income for all new patients, which are prescribed the product,” Brandicourt explained (Also see "U.K. Cancer Drug Fund May Shift To ‘Coverage With Evidence Development’-Style Approach" - Pink Sheet, 29 Aug, 2014.).
“But, of course, we should increase volume expansion, right, over time. So, in fact, for Nexavar, we are still confirming our guidance for the full year at mid to high single-digit percentage points.”