Bayer CEO backs group’s diversified structure

 Bayer chief executive reaffirmed his support for a corporate structure made up of healthcare, crop science and animal health businesses, after analysts called for a breakup to shore up its flagging share price.

Shares in drugmaker Bayer, which bought Monsanto for $63 billion (£48.4 billion) , have lost more than 25 percent since a U.S. jury in August found its glyphosate-based weedkillers responsible for a man’s terminal cancer, with more than 8,700 plaintiffs also seeking damages.

“We have announced our strategy in September 2014, which has not changed to date,” Chief Executive Werner Baumann told journalists in St. Louis at the former Monsanto headquarters where Bayer’s seed business is now based.

“As before, we have animal health, pharmaceuticals, plant (science) and consumer (health). In terms of profitability, the individual divisions can hold their own against stock-market listed companies,” he said.

If there were significant changes in the results or the attractiveness of the businesses, management would have to look into it, “but we are not seeing that here,” he added.

Baumann said he would unveil “measures to enhance group performance” at the group’s Dec. 5 capital markets day. He also plans to give investors a strategic update and issue 2022 targets.

Analysts at Bernstein Research and at brokerage Baader Helvea last month suggested in separate notes that Bayer should sell its Animal Health unit, which could be valued at up to 7 billion euros ($8 billion), and separate Crop Science from the remaining Healthcare businesses to shore up Bayer’s share price.

“You don’t have to believe everything that’s being written,” Baumann said, when asked about the notes.

Bloomberg last month cited sources as saying that Bayer, the inventor of aspirin and the maker of Yasmin birth control pills, was considering strategic options for the Animal Health unit.

Bayer in 2014 decided to separately list its plastics business, now known as Covestro, and to gradually sell the shares to focus on life sciences, with the genetics behind human, animal and plant biology as a common denominator.

Baumann also said that Bayer’s consumer care products business, with brands including Coppertone sun screen and Dr. Scholl’s foot care products, was improving.

“We are optimistic, as regards the recovery of the consumer business in the second half,” he said.

The unit failed to stem falling sales in the second quarter as U.S. consumers switched from drugstores to online shops to seek cheaper products.

Bayer is the only major drugmaker with a farming supplies business, while healthcare rivals have pursued deals to focus rather than diversify their businesses.

Pharma majors Pfizer and Eli Lilly have successfully floated their veterinary medicine units on the stock market as independent entities.

https://www.marketscreener.com/BAYER-436063/news/Bayer-CEO-backs-group-s-diversified-structure-27532365/

Bayer: CEO says would consider glyphosate settlement depending on cost

Bayer chief executive said this week the company might consider settling lawsuits over Monsanto’s glyphosate-containing weed-killers depending on how high court costs rise, but stressed it remained focussed on defending the combined company against claims they cause cancer.

Bayer acquired Monsanto this year for $63 billion (£48.4 billion).

“If we can settle nuisances at some point where the defence costs in preparing cases are higher than potential settlement amounts, we will of course consider it from an economic standpoint,” CEO Werner Baumann told reporters when asked whether there was any scenario in which Bayer would consider settling.

He added: “We will resolutely and with all means defend ourselves in this (glyphosate) litigation.”

Baumann was speaking on Monday to German media invited to visit Bayer’s new operations in the former research and development facilities of Monsanto in St. Louis, Missouri. The remarks, made on Monday, were embargoed to the end of the week to allow media to return home.

Shares in Bayer have lost 25 percent in value since Aug. 10, when a San Francisco jury awarded $289 million to Dewayne Johnson on grounds Monsanto failed to warn the school groundskeeper and other consumers of the cancer risks posed by glyphosate-based RoundUp and Ranger Pro.

Johnson has terminal non-Hodgkin’s lymphoma that he alleges was caused by the herbicides.

A judge later reduced the award to $78 million.

Bayer denies that glyphosate causes cancer and says decades of scientific studies and real-world use have shown the chemical to be safe for human use. The company is appealing the findings.

The number of glyphosate cases that Bayer faces across the United States has jumped to more than 8,700, prompting concerns among investors about the impact of litigation costs on Bayer’s bottom line.

Baumann expressed confidence that Bayer could handle the litigation, and cited its “inexpensive” $12 million settlement of 4,000 lawsuits over its contraceptive Mirena device.

Bayer also won five of six trials over its best-selling bloodthinner Xarelto, over which it faces 24,000 U.S. lawsuits. The sixth jury found in favour of a plaintiff, but a judge later overturned the decision.

“Due to our exposure as a pharmaceutical company, we have the experience to defend those (glyphosate) cases,” he said.

Baumann said the company’s legal strategy had been revised following the integration of Bayer and Monsanto in mid-August.

He declined to provide details, but recent court filings reveal some of the steps the company has taken.

Last week, Bayer added the attorneys from law firm Arnold & Portner who won the Xarelto cases for the company to its glyphosate defence team.

It is also trying to change the juror selection process for upcoming trials.

In filings last week in San Francisco federal court, where a new glyphosate trial is scheduled to begin on Feb. 25, 2019, Bayer said the “jury pool likely has grown more hostile” due to negative media coverage following the Johnson verdict.

Michael Miller, one of the attorneys for the plaintiff, said the company’s claims were “hypocritical beyond belief” given its own efforts to control the message on glyphosate, most recently in a full-page advertisement in the Washington Post.

Bayer has asked U.S. District Judge Vince Chhabria, who is overseeing the San Francisco case and some 580 others, to significantly expand the jury pool and question prospective jurors about their knowledge of the media coverage of the cases. Chhabria is expected to decide on the requests in December.

https://www.marketscreener.com/BAYER-436063/news/Bayer-CEO-says-would-consider-glyphosate-settlement-depending-on-costs-27532397/

Adverum price target lowered to $8 from $12 at Piper Jaffray

Adverum price target lowered to $8 from $12 at Piper Jaffray. Piper Jaffray analyst Tyler Van lowered his price target for Adverum Biotechnologies to $8 after the company announced the discontinuation of lead candidate ADVM043 for A1AT deficiency citing failure to achieve clinically relevant therapeutic protein levels. Additionally, because it uses the same vector, the ADVM053 program for hereditary angioedema is now on hold with an expected update in the first half of next year, Van Buren tells investors in a research note. The analyst says that while disappointing, Adverum has above $3 per share in cash. His new price target does provide some value for the ADVM022 program for wet AMD. The analyst keeps an Overweight rating on Adverum Biotechnologies.
https://thefly.com/landingPageNews.php?id=2816295

Puma Biotec downgraded to Underweight from Overweight at JPMorgan

JPMorgan analyst Cory Kasimov double downgraded Puma Biotechnology to Underweight from Overweight and cut his price target for the shares to $23 from $83 following last night’s Q3 results. The analyst cites “significantly tempered” Nerlynx expectations for the downgrade following the revenue miss in Q3.
https://thefly.com/landingPageNews.php?id=2816303

Dr. Reddy’s says FDA finds more issues at oncology drug plant

The FDA continues to find issues with Dr. Reddy’s oncology formulation facility in Duvvada, India, one of three facilities cited in a scathing warning letter. The Indian drugmaker said an inspection in September resulted in eight observations.

The acknowledgment (PDF) came in a press release to the Bombay Stock Exchange Tuesday, but it gave no details about the nature of the FDA’s concerns about the facility in Visakhapatnam. The statement said only that the company was addressing the observations.

The FDA in the 2015 warning letter raised a number of issues about the potential for contamination at the facility in the way that employees handled vials. A follow-up inspection in 2017 found more than a dozen issues, some of them repeats.

Dr. Reddy’s has pending ANDAs for generic cancer drugs to be produced at the plant but has been prevented from launching any of them by the FDA citation. The stranglehold by the regulator has taken a toll on Dr. Reddy’s finances, and the Indian drugmaker has responded by selling off some assets and cutting costs.

The drugmaker in October sold its API manufacturing plant in Jeedimetla, Hyderabad to Therapiva, a joint venture of Abu Dhabi-based Neopharma and India’s Laxai Life Sciences, an emerging generics company. No terms were disclosed. In September,  Neopharma bought a 390,000-square-foot antibiotic manufacturing plant in Bristol, Tennessee.

https://www.fiercepharma.com/manufacturing/dr-reddy-s-says-fda-finds-more-issues-at-oncology-drug-plant

AbbVie offers up 80% Humira discount in EU tender market to hold off biosimilars

How far is AbbVie willing to go to fend off the new Humira biosimilars in Europe? Quite far, apparently, judging by the enormous discount it offered to win a government contract.

Humira biosims only launched in Europe in mid-October, and AbbVie is already showing it plans to fight back. Through a government tender process, AbbVie managed to keep its hold in a European market by bidding at an 80% discount, according to a Wednesday note from Bernstein analyst Ronny Gal.

Why AbbVie might have agreed to such a low price is the question, and Gal has a few ideas. First, he wrote, the company will still make money on the deal, thanks to low manufacturing costs. Plus, by aggressively discounting in Europe, AbbVie could protect its U.S. business when copies arrive in a few years, the analyst suggested.

“The objective is to defend the U.S. market by denying the biosimilars in-market experience [in Europe] and then arguing the Europeans ‘chose’ Humira over the biosimilars for quality reasons beyond price,” Gal wrote.

Several biosim players launched Humira copycats in Europe this month after inking previous patent deals with AbbVie. But as Gal sees it, they still need to recoup their R&D investments and couldn’t match AbbVie’s low tender price. Looking forward, Humira biosims may carry discounts of 50% to the brand as payers seek favorable pricing, Gal wrote.

For his part, Evercore ISI analyst Josh Schimmer wrote that tender countries “command super-steep discounts in a ‘winner-take all’ scenario.” Only 15% to 20% of EU markets are structured under such a setup, he wrote. Schimmer added that he’s looking for more commentary from AbbVie on the issue when the company reports third-quarter results on Friday.

Humira was the world’s biggest drug by sales last year, generating $18.4 billion. In Europe, sales were $4 billion. While biosim makers are trying to make inroads in Europe, they’ll have to wait until 2023 before launching in the U.S. under settlements with AbbVie. Boehringer Ingelheim, for its part, hasn’t settled and continues to fight AbbVie’s patent lawsuit.

In the meantime, the biosim hopefuls are racking up FDA nods for their contenders years ahead of their launch dates. Novartis’ Humira biosim, Hyrimoz, won FDA approval Wednesday, following nods for biosimilars from Boehringer and Amgen.

https://www.fiercepharma.com/pharma/abbvie-offers-up-80-humira-discount-eu-tender-market-to-hold-off-biosims-report

Pfizer weighing a $2B women’s health sale: Will it fare better than Allergan?

Earlier this year, Pfizer struck out on a sale of its consumer health unit. But it may be ready to try its hand at another selloff.

The New York drugmaker is weighing options for its women’s health lineup, Bloomberg reportedThursday, citing unnamed sources. The reason? The pharma giant would rather focus its attention on developing therapies with more potential for growth.

According to the report, Pfizer has brought on financial advisers to size up interest from potential suitors. Selling off the portfolio, which generates about $1.2 billion per year, could bring in about $2 billion, the source said, adding that it could draw attention from both private equity players and other drugmakers.

A Pfizer spokesman had not yet returned a request for comment at press time.

If Allergan’s recent women’s health sale struggles are any indication, though, hiving off the unit may not be a cakewalk. After publicly putting his company’s women’s health business—along with its infectious disease unit—on the block in May, Allergan CEO Brent Saunders had a gloomy update for investors Wednesday.

“We have received now the preliminary expression of interest for some of these businesses and they are below what I believe the value of these businesses are,” he said, adding that if offers don’t go up, a sale could be a no-go.

Pfizer certainly knows what that’s like. In March, the top two bidders for its consumer unit withdrew from the sale process, through which Pfizer had hoped to generate $20 billion. The moves prompted the company to hang onto the unit, at least for now.

It’s “tough to dance without a partner,” Credit Suisse analyst Vamil Divan, M.D., wrote in a note to clients at the time.

But considering Pfizer’s long-held enthusiasm for slim-downs, it would be no surprise to see the company try again with a different asset. It kicked off pharma’s divestment craze back in 2012 with the sale of its baby food unit to Nestlé, and it followed up the next year with a spinoff of animal health unit Zoetis.

https://www.fiercepharma.com/pharma/pfizer-weighing-a-women-s-health-sale-report-says-will-it-fare-better-than-allergan