Bayer strives to improve lives with innovative products

Group plans to boost China presence, expand business and fully exploit synergies

Germany-based Bayer AG plans to boost its presence in China by improving its innovation capacity and increasing production facilities, company executives said.

"We have made alliances with the two best universities in China, Peking and Tsinghua universities, which led to productive interactions on a number of levels and unchallengeable successes in China," said Kemal Malik, the board member responsible for innovation.

Bayer increased its global research and development investment to 3.2 billion euros ($3.9 billion) this year and its innovation projects in China are in full swing.

At Tsinghua University, the company has focused on different research aspects of innovative drug discovery. At Peking University, translational research are being made.

In terms of production, in November 1997 Bayer HealthCare started building its pharmaceutical manufacturing facility in Beijing.

This year, Bayer HealthCare invested an additional 100 million euros to increase the production capacity of the facility significantly.

This is expected to help ensure a reliable supply of high-quality products to meet the domestic demand for Bayer HealthCare's products.

This year the company also poured 3.6 billion yuan ($590 million) into acquiring leading local traditional Chinese medicine firm, Dihon, which is a privately held pharmaceutical company specializing primarily in over-the-counter dermatology products and herbal TCM products for various women's health indications.

Marijin Dekkers, chairman of the board of management of Bayer AG, pointed out that the move, which was mirrored in the United States with the acquisition of Merck, was part of Bayer's efforts to cement its foothold as a leader in OTC products.

He said that the segment has grown more strongly than it had for many years.

"Bayer has been very successful in this area with its long-term brand development strategies. The aim over the next two years is to launch innovative products on the market, further expand business in growth markets and fully exploit potential synergies arising from acquisitions," Dekkers said.

Global reach

The group plans to sharpen its focus on innovation in its life science businesses, healthcare and crop science.

"Overall, we expect the R&D-to-sales ratio to increase in the coming years," said Dekkers.

Of the 3.2 billion euro budget, Bayer HealthCare accounts for 70 percent and Bayer CropScience for 30 percent.

Dekkers said that as a world-class life science company, Bayer will continue to target attractive markets with high growth rates and in following this course, prospects would remain bright.

He explained that the company has more than 13,000 employees involved in research and development, of which 61 percent are in the healthcare sector and 39 percent in the crop science sector.

Dekkers said that developing new products was critical to the success of the life science businesses.

In the pharmaceuticals business, Bayer is one of the fastest-growing global companies, with leading positions as key indicators.

In the OTC products business, the company is ranked number two in the world. Bayer is also strong in the agriculture business. "We are one of the fastest-growing crop science companies," said Dekkers.

The company's crop science work is ranked second place worldwide for crop protection. The seed business is ranked seventh globally and is expected to be further expanded in the future.

"Our business models, whether in healthcare or crop science, have many similarities," Dekkers said.

The similarities include excellent research organization, strong growth and innovative marketing. Bayer is a trendsetter in research-intensive fields, according to Dekkers.

"Our processes begin in the lab and the benefits end up with the customer. We enable doctors to help patients, farmers to help feed the world and veterinarians to help animals. This is all in line with our mission: Bayer: Science for a better life," said the board chairman.

New treatment options

Dekkers listed a number of important pharmaceutical products as examples.

Anticoagulant Xarelto, for instance, helps prevent an estimated two out of every three strokes compared with patients who take no anticoagulant medication. "This not only impacts the patient's life, but that of his or her family," Dekkers said.

New therapies made possible by Bayer products also include improving failing vision that accompanies some eye diseases with Eylea, inhibiting tumor growth in certain types of cancer with Stivarga and Xofigo, and improving the lives of people with certain lung diseases with Adempas.

These five products alone have an annual peak sales potential of at least 7.5 billion euros, according to Dekkers.

"The success of our recent product introductions has created great growth momentum for us," he added.

Bayer's pharmaceutical pipeline currently contains 57 projects, of which 20 are in phase I clinical testing, 19 in phase II and 18 in phase III.

Among these projects are five new, promising active ingredient candidates, which should be ready by 2015 for a decision on advancement to phase III.

Increasing crop yields

Dekkers said that crop science products also made people's lives easier.

For instance, the fungicide Luna supports the safe control of fungal infections in various fruit and vegetable varieties, such as powdery mildew and storage rot.

Adengo, a herbicide for corn, controls several grasses and weeds. Corn is not only indispensable as animal feed but is in many everyday foods on our tables. Innovative herbicides like Adengo are therefore important for feeding the growing global population.

"Like in the pharmaceutical business, new products are also very important in the agricultural business," Dekkers said. During the next few years, the research and development pipeline for crop protection and seeds and traits should produce new market innovations.

Depending on approvals from the regulatory authorities, Dekkers estimated the annual peak sales potential for products introduced to the market between 2011 and 2016 would be a minimum of 4 billion euros.

Human, animal and plant research

In the future, Bayer wants to exploit synergies in the fields of human, animal and plant health, explained Malik.

In the course of evolution, the processes inside living organisms have remained surprisingly similar. One aspect shared by all organisms is that their genetic information is stored in the form of DNA.

While people, animals and plants differ considerably in appearance, the differences in their underlying "blueprints" are not all that dramatic. In the human population, 99.5 to 100 percent of all genes are identical. Only minimal sequence differences exist, which make people unique.

Humans even share more than 90 percent of their DNA with cats and as much as half with fruit flies. The almost 20 percent of genes that humans have in common with plants offer new starting points for research projects, which are developed in interdisciplinary collaborations within the Bayer Group in the areas of common mechanisms of action and platform technologies.

One research project dealing with energy production in cells has already shown initial success. It started with three new product families for treating fungal infections in plants (fungicides).

A team of researchers used them as a basis for developing the new nematicide Velum/Verango, which protects crops against nematodes in the soil and was launched in the market this year.

Infection with a wide variety of worm species is also a problem in livestock and pets, so animal health researchers are trying to identify potential active ingredients with the same action mechanism.

It was also discovered that this method of energy production in cells may also be relevant in the growth of cancer cells.

Bayer researchers succeeded in demonstrating in vitro that specific types of melanoma react sensitively to the inhibition of the mitochondrial energy supply. "This is a perfect example of the synergies among the life sciences," Malik said.

Another building block of Bayer's innovation activities is external partnerships.

Malik pointed out that the company's health care and crop science maintain some 850 partnerships worldwide.
 

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