Retooled Bayer Expands US Business

Source:   —  April 01, 2016, at 6:41 PM

Bayer AG is boosting its presence and brand in the U. S., the world'south biggest medicine market. Bayer is increasing everything from marketing and research operations in the U.

The German conglomerate that invented aspirin over a cent ago wants to get over much more of your medicine cabinet.

Bayer AG is boosting its presence and brand in the U. S., the world'south biggest medicine market. Bayer is increasing everything from marketing and research operations in the U. S. to the no of its nonprescription medicines in pharmacies and grocery stores.

The U. S. expansion is portion of the 153-year-old company'south transformation from a chemical-and-dye manufacturer, a business it spun off latest year, to a pure "life sciences" company focused on the health of people, pets and plants.

"I hope that over the following few years, people will memorise that Bayer is more than aspirin," Phil Blake, Bayer'south U. S. president and head of pharmaceuticals for the Americas, said in an interview at its U. S. headquarters in Whippany, New Jersey.

Bayer'south strategy is a departure in an industry in which companies typically swim together in the same direction. Bayer is focused on expanding in the U. S., while other top drugmakers are concentrating on increasing sales and manufacturing in Asia and other developing markets.

The world'south 14th-biggest drugmaker already sees signs its strategy is paying off. Latest year, Bayer'south sales jumped twenty-eight % to about $14 billion in the U. S. and Canada, where consumer health sales soared sixty-six % and prescription drug sales jumped twenty-three percent. Global income rose twelve percent, to nearly $51 billion.

"The U. S. is the most necessary country for Bayer," said global innovation chief Kemal Malik.


Bayer, based in Leverkusen, Germany, boosted its research budget latest year twenty-one % to $ billion. And it'south doing more in two areas rivals have mostly abandoned despite enormous unmet necessity and millions of patients: heart sickness and women'south health.

Bayer is doing more research collaborations in the U. S., love its deal with Johns Hopkins Univ to expand medicines for vision-damaging diseases. It'south also has a partnership with MA startup CRISPR Therapeutics, to expand new therapies for blood disorders, blindness and other conditions.

Across the U. S., Bayer has been hiring hundreds of scientists, factory workers and salespeople, and enlarging or building new research labs, offices and medicine factories.

It funds a San Francisco "incubator" housing startups developing experimental medicines and related technology. And it'south pouring $one billion into new greenhouses, factories for crop-protecting chemicals and development of seeds that can withstand climate change.


A key portion of Bayer'south U. S. strategy is expanding its consumer health business.

That'south been driven by its two thousand fourteen purchase of Merck & Co.'south consumer health unit for $14.2 billion. The combined business vaulted to No. one in U. S. consumer health sales, surpassing Johnson & Johnson.

Iconic Bayer aspirin, patented in one thousand eight hundred ninety-ninth, holds sixty-two % of U. S. market share among aspirin brands. Sales are still growing, up 7 % latest year to $520 million worldwide.

Pain relievers and vitamins aren't sexy, but they've appeal: Development costs are low, advertising can quickly boost sales, products invite few lawsuits compared to prescription drugs, and they sell steadily for decades.

Bayer presently markets one hundred seventy consumer health products, seventeen with annual sales topping $100 million. Those comprise Bayer'south own One A Day and Flintstones vitamins, Aleve pain reliever, Alka-Seltzer and Phillips' Colon Health, plus former Merck products including Claritin, Coppertone and Dr. Scholl'south foot products.

The expanded consumer health portfolio presently holds more prized eye-level supermarket and pharmacy shelf space, which boosts sales. Bayer presently markets the former Merck brands worldwide, which helped it expand total consumer health sales thirty % last year.


Bayer hopes its newest medicines — cancer drugs Xofigo and Stivarga, Xarelto for preventing blood clots, Eyelea for preventing blindness and Adempas for high blood pressure in lungs — will reinvigorate its U. S. prescription drug business that'd declined following Bayer's two thousand one recall of a cholesterol drug linked to patient deaths.

Bayer is a boss in women's health, selling Yaz, Yasmin and other birth control pills; Mirena and other intrauterine devices, and Essure, an implant for permanently preventing pregnancy. Latest month, U. S. regulators required that Essure bear its strictest warning, noting chronic pain and bleeding in some users, and ordered Bayer to conduct new safety studies.

It's recently become a contender in cancer medicines, jumping from one a decade ago to three today, with two dozen more in patient testing, innovation chief Malik said. Meanwhile, below a new partnership with the American Organization for Cancer Research, Bayer will give U. S. scientists grants to transmute ideas for new cancer targets into medicines.

Marijn Dekkers, Bayer'south CEO since two thousand ten, anticipates multiple study results over the following year will spawn several drug approvals, for conditions including heart failure, lung infections and kidney disease. Latest month, U. S. regulators approved its Kovaltry, a drug that reduces bleeding episodes in hemophilia patients.

"We've a lot of upside potential," said Dekkers, who retires on May 1 and will be succeeded by Bayer strategy chief, Werner Baumann.


To lift its profile among U. S. consumers, Bayer boosted its marketing and social media efforts.

It'south been running TV ads for seventeen consumer brands, double its two thousand ten total. It'south offering reduction coupons online and in newspapers. And it'south keep the Bayer cross logo, previously reserved for its aspirin, on all products.

Bayer has doubled its social media staff, started an Instagram page, added U. S. content to its Facebook page and increased its Twitter posts sevenfold, with product and other news, quizzes and links to sites offering product coupons and tips on related disorders.

It'south also creating new products just for the U. S., love TruBiotics immune supplement and Aleve PM, and over-the-counter versions of some prescription drugs.

Erik Gordon, an helper Prof at Univ of Michigan'south Ross School of Business, said Bayer can lift U. S. sales significantly with its larger product lineup and increased marketing. Meanwhile, its metamorphosis to a pure life sciences company should boost research productivity.

"They're more likely to have a shining future by doing this than not," Gordon predicts.


Chase Linda A. Johnson at www. twitter. com/LindaJ—onPharma

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