Eine Laborantin sichtet Gewebepräparate mit Tumorproben zunächst mit bloßem Auge. Anschließend durchlaufen die Proben zahlreiche weitere Analysen. --------------------------------------------- A lab technician first inspects tissue samples with the naked eye. The tumor samples then undergo additional analytical tests.

Bayer will use the billions it expects to raise from the initial public offering of its plastic business to pay down debt and to make acquisitions, with chief executive Marijn Dekkers pointing to over-the-counter healthcare as an “obvious consolidation play”.

The German drugmaker is making a decisive shift away from its roots as a drugs and chemicals conglomerate with a planned float of its material science division, which has an estimated equity value of at least €8bn.

The float, which will take place by 2016, will release funds that could allow Bayer to strengthen its position in a highly fragmented consumer healthcare market.

Bayer closed the $14.2bn acquisition of Merck’s over-the-counter business on October 1, in a move that strengthened its core divisions.

Mr Dekkers told the Financial Times that once the business had reduced debt, which stands at around €20bn, he would seek acquisitions.

He said: “I think in OTC we’re going to see more consolidation there. We believe that critical mass is important. You need to be a large player there. If you don’t participate in consolidation you fall behind, and that is competitively dangerous.”

There are still various different suppliers to the shelves of high street pharmacies such as Boots in the UK, Mr Dekkers pointed out.

“That means that nobody has really optimised their relationship with Boots yet. So that’s an obvious consolidation play going forward.”

Consumer healthcare looks primed for long-term growth in demand from ageing populations in developed markets and the newly-affluent middle classes of the developing world.

Bayer is not alone is seeking to bolster its position in the fragmented sector. The UK’s GlaxoSmithKline is in the process of forming a joint-venture with Novartis of Switzerland spanning from toothpaste to painkillers. Ireland-based Perrigo this month agreed a €3.6bn acquisition of Omega Pharma of Belgium that will catapult it into the top five global over-the-counter drugmakers.

Bayer’s origins in consumer healthcare date back to 1899 when it registered a patent for acetylsalicylic acid under the brand name Aspirin. However, in its early days, the company, founded in 1863, was best known for making brilliant synthetic dyes to colour silk dresses – a heritage Bayer is now moving away from.

Marijn Dekkers, member of the board of management of Bayer AG and the company's designated chief executive officer, poses prior to a news conference in Leverkusen, Germany, on Friday, Feb. 26, 2010. Bayer AG said fourth-quarter profit rose 44 percent as demand for plastics recovered and sales climbed at its health unit. Photographer: Wolfgang von Brauchitsch/Bloomberg *** Local Caption *** Marijn Dekkers
Marijn Dekkers

“Once we move on with material science, every product we make ends up in the cell of a living species and regulates their processes,” said Mr Dekkers, pictured.

He added that big is beautiful, allowing Bayer to achieve research synergies. He gave the example of Stivarga, a drug developed to treat intestinal cancer that may now become the basis for an eye-drop to treat macular degeneration. The teams working on these conditions “use the same bathroom”, he said.

“They get so much exposure to each other that at some point somebody says, why don’t we try this? It seems logical. If this had been two different companies we might never have had that interchange.”

Analysts have welcomed the decision to make the flotation of the material science business Bayer’s preferred option. The alternative is a spin-off in which Bayer investors receive shares in the new business. This would not bring in cash.

The decision reflects the higher margins and growth of Bayer’s core drugs and life sciences divisions, which span human, animal and plant health.

In healthcare, the unit that covers pharmaceuticals and consumer health, earnings before interest, tax, depreciation and amortisation margin rose from 27.5 per cent on sales of €18.6bn in 2012 to 28.2 per cent on sales of nearly €19bn in 2013.

In material science, which makes high-tech polymers used for cars, home insulation and electronic equipment, ebitda margins declined from 11 per cent on sales of €11.5bn in 2012 to 9.5 per cent on sales of €11.2bn in 2013.

Analysts at Citi forecast that profit margins within Bayer’s pharmaceutical business, currently around 31 per cent, can increase to around 39 per cent by 2018.

Citi analyst Andrew Baum noted that this reflected the increasing contribution from five new products: the thrombosis drug Xarelto, which is Bayer’s bestselling pharmaceutical product; the cancer treatments Xofigo and Stivarga; the eye disease treatment Eylea, and cardiovascular drug Adempas.

However, in July, Xarelto was the most heavily advertised drug by US lawyers seeking mass tort clients, according to the Silverstein Group, a consulting firm that tracks advertising spending by law firms.

Mr Dekkers, whose tennis partner uses the drug, said he is confident of Xarelto’s risk/benefit profile.

“The benefits in the case of Xarelto clearly outweigh the risks. Doctors are made 100 per cent aware of that profile. They make the decision on the basis of what they know about the profile of drug and what they know about the patient.”

Mr Dekkers said the company planned to invest more in immuno-oncology, therapies that use the immune system to treat cancer, but accepts that the German drugmaker is lagging behind rivals here.

“There are other companies that have a stronger specialisation,” he said. “We are doing our own work on it, but not as the new religion.”

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