DRUGMAKER Bayer’s new chief executive damped market expectations for underlying profit for the next two years as generic rivals weigh on its top-selling pharmaceuticals and after writing down some drug research projects.
Germany’s largest drugmaker said yesterday it expects earnings before interest, taxes, depreciation and amortisation (Ebitda) to rise “toward” €7.5bn ($6.4bn) this year and to reach about €8bn in 2012.
Analysts had factored in figures of €7.8bn and €8.5bn for 2011 and 2012, respectively.
Sales from Bayer’s multiple sclerosis injection Betaferon are threatened by Novartis’s oral alternative as well as generic copies. Copycat versions of its Yasmin birth-control pill are also dampening revenue prospects.
That prompted chief executive Marijn Dekkers to launch a round of job cuts shortly after taking over in October. He said yesterday that strained healthcare budgets would continue to be an additional burden on the business.
“We expect (health system) reforms to have a significant negative impact in 2011 as well,” said Dekkers.
Growth this year will likely be driven by a recovery from pesticides and chemicals, while a boost from a new drug will not kick in before next year.
The drugs to chemicals group is pinning hopes on its anti-blood-clotting pill Xarelto which in November was shown to have mass-market potential in a late-stage trial.
City A.M. Reporter