Bayer: Well-stocked product pipeline

New technologies and products presented at the Perspective on Innovation 2010:

2010: planned expenditures of EUR 3.1 billion for research and development / Pharmaceutical pipeline well stocked with currently more than 50 projects in all clinical phases / CropScience to introduce six new substances by 2012 and expand BioScience activities / Bayer CEO Dekkers calls for more acceptance of industrial projects and new technologies


Leverkusen, – The Bayer Group aims to invest its resources as a whole more consistently in growth and innovation capability. “We have a very successful record in innovation,” Management Board Chairman Dr. Marijn Dekkers said on Wednesday in front of around 140 journalists at the press forum “Bayer’s Perspective on Innovation 2010” in Leverkusen. “Our research and development spending will likely rise to a record EUR 3.1 billion in 2010 – an increase of 13 percent.” Bayer’s research and development budget has been the largest in the chemical and pharmaceutical industry in Germany for many years, Dekkers added. “We will continue to support our good research and development in the future. For the coming year we are planning a budget corresponding to 2010’s record level,” Dekkers remarked.

The Bayer Chairman explained that the company’s innovations help patients, farmers and other customers all over the world. “And as a company we need these innovations too. They are our lifeblood. To compete successfully, we depend on their development and their marketing.” However, Dekkers said there are also developments that he is concerned about. First is the question of whether society will be prepared to pay an appropriate price for innovations in the future as well. He said this applies particularly to HealthCare. Here, it is often difficult to determine the value of a product, the Bayer Chairman stated, explaining that costs and profits are not the only factor. “It is also a question of how much value a society places on the health – or longer life – of individuals. These are legitimate questions that we must intensively address. We will only be able to successfully develop new products in the future if we find positive answers to these questions,” Dekkers said.

According to the Management Board Chairman, the lack of acceptance for new technologies also poses problems. “Here emotions and fears are often stoked without any scientific basis.” These days, anyone in Germany intending to construct a new industrial facility or introduce a new technology to the market can expect to encounter considerable public resistance, he said. “This is because it is completely underestimated what this means for Germany as a base for industry and for the quality of life, and therefore ultimately for jobs,” Dekkers said. Companies must do all in their power to dispel people’s reservations against industrial activity and new technologies, he continued, adding, however, that this also involves an obligation on the part of the politicians and the authorities to safeguard objectivity and transparency – as well as create technology-friendly framework conditions.

As an example, Dekkers referred to the debate surrounding green genetic engineering. This technology is an innovative breeding method with tremendous potential, he said, stressing that its safety has been proven through many years of practice in numerous regions of the world. Nonetheless, it faces major regulatory obstacles in Europe. “What this shows me is that politicians should take the concerns of the population seriously, but should not be driven by these concerns. Assessments should be made on the basis of facts, not fears,” Dekkers stated.

Solutions for the major challenges of the future

“Those focusing on innovation thus need a lot of patience – and a lot of money,” continued the Management Board Chairman. After all, he explained, a very high level of investment is needed both for research and development and for marketing, an aspect that is often underestimated. HealthCare accounts for the biggest share of planned expenditures for research and development in 2010, at 67 percent; most of this money is being spent on projects undergoing Phase III clinical development. “Our pharmaceutical pipeline is well stocked, with currently more than 50 projects in all clinical phases,” said Dekkers. CropScience comes next with a 25 percent share of the overall research budget. Between 2000 and 2009, that subgroup launched 23 new crop protection active substances, with six more to follow by 2012. In addition, the fast-growing BioScience business is pursuing 60 projects for improved plant traits and seed. MaterialScience, too, is developing numerous new products and applications. Accounting for seven percent of the total budget, MaterialScience is still spending around EUR 230 million on R&D. “We consider it a success that more than 20 percent of sales at MaterialScience are generated with products launched since 2005.”

“Without any doubt, innovation is part of Bayer’s DNA,” said the Management Board Chairman. “Our 12,500 or so employees in research and development play a central role in this endeavor.” The company provides solutions to the major challenges of the future, Dekkers emphasized. He said the world population is set to grow from nearly seven billion today to more than nine billion in 2050. Furthermore, life expectancy is rising. In concrete terms, this means that the need for health services will increase – from the diagnosis to the treatment of diseases. “We address this trend with our HealthCare business,” said Dekkers, adding that healthy food for the growing world population must also be ensured – despite the fact that growing acreages are limited. Here, the CropScience business offers solutions for an increase in productivity, he explained. What’s more, a more efficient approach to the use of energy and resources must be adopted – while the standard of living in the emerging economies improves. “With high-tech materials, our MaterialScience business makes numerous contributions here,” Dekkers explained.

Bayer HealthCare: Focus on diseases requiring highly innovative solutions

Among Bayer’s outstanding developments in the area of HealthCare is the anticoagulant Xarelto® (active ingredient: rivaroxaban), which is currently the most intensively investigated oral Factor Xa inhibitor in clinical development. It is planned for more than 65,000 patients to take part in the clinical development program for Xarelto®. In addition to the regulatory approval already granted in more than 100 countries for prophylaxis of venous thromboembolism following elective hip or knee joint replacement surgery in adults, the recently evaluated ROCKET-AF study on stroke prevention in atrial fibrillation demonstrated that treatment with Xarelto® more effectively reduces the risk of stroke than the current standard therapy with warfarin. This Phase III study thus showed once more that Xarelto® has considerable benefits compared to standard therapies. “This innovative pharmaceutical has peak annual sales potential of more than EUR 2 billion,” said Dr. Wolfgang Plischke, the member of Bayer AG’s Board of Management responsible for Innovation, Technology and Environment.

A further active substance from Bayer’s cardiovascular research also has the potential to decisively improve therapy of a life-threatening disease: riociguat is an innovative, orally administered substance currently being investigated in Phase III trials as a potential new treatment approach for pulmonary arterial hypertension (PAH) and chronic thromboembolic pulmonary hypertension (CTEPH). There is a high unmet medical need for pulmonary hypertension (PH) therapy. Clinical experience has shown that approximately one quarter of PH patients die within two years of the diagnosis.

In addition, the company is working on promising young active substances that could potentially treat serious cardiovascular disorders such as anemia in chronic kidney disease and worsening chronic cardiac insufficiency with kidney damage or diabetes.

Progress has also been made in the indication cancer: “Alongside the drug product Nexavar®, approved for the treatment of kidney and liver cancer and currently being investigated in more than 200 clinical studies with regard to its use in treating other forms of cancer, Bayer has also expanded its research activities in the field of oncology,” said Plischke. Examples listed by Plischke in this connection included Phase III trials involving Alpharadin for therapy of bone metastases in hormone refractory prostate carcinoma and regorafenib for treatment of colorectal cancer.

In Phase III trials, the substance VEGF Trap-Eye for treatment of wet age-related macular degeneration reached the primary endpoint – maintained vision – in all regimens of the product, including dosing every two months, compared to the current standard of care dosed every month.

Bayer CropScience: Safeguarding nutrition for a growing world population

Bayer CropScience too is backing innovations: By 2012 the subgroup wants to bring to market six new active substances with sales potential totaling more than EUR 1 billion. Current examples include the fungicides fluopyram, bixafen and penflufen, which have combined sales potential of some EUR 600 million. The innovative cereals fungicide bixafen was developed specifically for foliar application to combat speckled leaf blotch and brown rust in cereal and canola crops. Fluopyram can be used in more than 70 crops to fight gray mold, powdery mildew and other especially problematic fungal diseases. In the area of seed treatment, penflufen demonstrates outstanding disease control. All three active substances each offer additional benefits beyond their fungicidal effect, such as yield increases, improved storage suitability and a longer storage life for harvested goods, or enhanced plant vitality.

Another fast-growing market is high-quality seed. Since 2002, Bayer BioScience has grown by a rate of 11 percent annually, and this unit continues to focus on expanding its business. To achieve this, BioScience plans intensive investment in property, plant and equipment and research activities in the coming years. “We aim to introduce numerous innovations to the market. In BioScience, for example, we are working on a variety of rice that can better withstand flooding or salinization,” Plischke reported.

Bayer MaterialScience: “From Megatrends to Business”

Bayer MaterialScience works closely with customers and external partners to develop new products and applications, as well as ultra-modern technologies and production processes – while minimizing energy consumption and making use of alternative raw material sources.

For example, the waste product and climate gas carbon dioxide (CO2) could be used as a raw material for high-tech materials in the future, thus replacing a portion of conventional fossil-based raw materials. In the “Dream Production” project, Bayer is working with RWTH Aachen University and other partners to realize the catalytic conversion of CO2 on a pilot plant scale for the first time.

Bayer is also working intensively on new materials to produce energy from renewable sources. The current product spectrum ranges from polyurethane sheathing for solar modules with integrated assembly systems to a sandwich composite of polycarbonate sheets with solar cells. What’s more, Bayer materials also help to substantially reduce energy consumption and thus the emission of the greenhouse gas carbon dioxide in applications such as automotive engineering or thermal insulation in buildings and refrigerated appliances.

Bayer is also a technological leader in the field of electroactive polymers for the consumer electronics industry. Its high-tech materials are used in the development, design and manufacture of actuators and sensing components, offering unique opportunities: they provide touchscreen panels with “awareness through touch” by creating authentic tactile feedback.

Collaborations and strategic partnerships for excellence in research

Board member Plischke underlined the central significance of excellence in research and an international alignment in research as the basis of all innovations. “We are intensifying our own international research activities with “science hubs” in San Francisco, Research Triangle Park, Beijing and Shanghai. These hubs give us an outstanding foundation for collaborations with external partners.” Added Plischke: “What’s more, we are continuously strengthening our relations with universities – in part through more than 900 close contacts to leading scientists around the world.”

Bayer: Science For A Better Life

Bayer is a global enterprise with core competencies in the fields of health care, nutrition and high-tech materials. The company’s products and services are designed to benefit people and improve their quality of life. At the same time Bayer creates value through innovation, growth and improved earning power. The Group is committed to the principles of sustainable development and to its role as a socially and ethically responsible corporate citizen. Economy, ecology and social commitment are corporate policy objectives of equal rank. In fiscal 2009, Bayer employed 108,400 people and recorded sales of EUR 31.2 billion. Capital expenditures amounted to EUR 1.7 billion, R&D expenses to EUR 2.7 billion. For more information on Bayer, go to www.bayer.com.