Schering acquisition boosts Bayer’s 2006 turnover figures
pharmafile | March 22, 2007 | News story | Sales and Marketing |
Bayer HealthCare's turnover rose 46% to €11.7 billion on the back of Bayer Group's acquisition of Schering last year.
As a result of the purchase, its pharmaceuticals business was up nearly 84% to €7.5bn.
Sales of former Schering drugs Yasmin – the world's biggest-selling oral contraceptive – and multiple sclerosis brand Betaferon/Betaseron were both up, as were sales for erectile dysfunction treatment Levitra and haemophilia drug Kogenate. Cancer drug Nexavar, which only received the green light from European regulators to treat advanced renal cell carcinoma last August, managed sales of €130m.
Turnover at the Consumer Health division was up 8.1% to €4.2m, while at Consumer Care which houses Bayer's non-prescription medicines – sales rose 7.5%. As a whole, Bayer Group saw sales climb 17% to €28.9bn last year, up from €24.7bn in 2005. But when €3bn in revenue from Schering is factored in, the rise was just over 5%. Group net profit was €1.7bn.
But Schering has come at a cost, with earnings in 2006 clipped by charges of €273m related to its acquisition and integration into Bayer, €200m in restructuring expenses and €172m in legal charges alone. The acquisition of Schering, which will be folded into the pharma division of Bayer HealthCare, has also heralded massive job losses across the two German companies.
Analysts will be watching closely to see that Bayer can keep the promises it has made in terms of 'synergies', with the redundancy programme aimed at saving €700m annually from 2009. Around 6,100 jobs will be slashed worldwide, including 3,150 in Europe, 1,000 in the US, 750 in the Asia, Pacific and Japan region as well as 1,200 jobs in Latin America and Canada.
Global research and development functions, production and administration will all be hit, with job losses expected to provide half of the savings. The other half is expected to come from the consolidation of processes and systems worldwide. The new corporation unveiled radical changes to its 70 R&D sites in Germany and the US at the end of last year, consolidating operations into three sites: Berlin and Wuppertal in Germany and Berkeley in California.
