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Bayer (BAYRY) Banks on Pipeline Progress Amid Challenges

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Bayer AG (BAYRY - Free Report) presented the latest developments on the road to transform its pharma business to drive growth on its annual Pharma Media Day 2024.

The company is now primarily focused on four core therapeutic areas (cardiovascular diseases, oncology, immunology and neurology & rare diseases).

In 2023, Bayer advanced its pipeline with eight investigational new drug (IND) applications. Four assets are expected to advance to phase II by the end of 2024.

The company reported consistently positive top-line data on the pipeline candidate elinzanetant across three phase III studies, OASIS 1, 2 and 3. The candidate is the first dual neurokinin-1,3 (NK-1,3) receptor antagonist in development as an oral, once-daily, non-hormonal treatment of moderate to severe vasomotor symptoms associated with menopause. Bayer will submit data from these studies to regulatory bodies and expects to launch the drug in 2025.

Elinzanetant is a key candidate in Bayer’s pipeline. The successful development and commercialization of elinzanetant is imperative to Bayer, given the recent setbacks.

The key drug Nubeqa maintains momentum in prostate cancer indication and is on track to reach blockbuster status in 2024. The candidate is being evaluated in other indications.

The company is looking to strengthen its portfolio/pipeline through acquisitions and collaborations. 

Bayer has strengthened its pharmaceutical research and pipeline in the field of small molecules and precision therapeutics with the acquisition of Vividion.  Vividion advanced the first two high-profile cancer programs, a KEAP 1 activator and STAT3 inhibitor into phase I development in the last six months.

The FDA granted Breakthrough Therapy designation to the pipeline candidate BAY 2927088 in February for the treatment of adult patients with unresectable or metastatic non-small cell lung cancer harboring activating HER2 (ERBB2) mutations.

Bayer recently collaborated with Thermo Fisher Scientific Inc. and announced a collaboration to co-develop next-generation sequencing-based companion diagnostic assays for Bayer’s growing precision oncology portfolio.

Bayer, together with its subsidiaries BlueRock and AskBio, is also developing preclinical and clinical cell and gene therapies. The development pipeline comprises seven cell therapy and gene therapy programs in different stages of clinical development.

AskBio’s gene therapy candidate, AB-1002, for the treatment of congestive heart failure, recently advanced to mid-stage to evaluate its efficacy and safety.

BlueRock Therapeutics recently released positive 18-month data from the stem cell-derived investigational therapy bemdaneprocel (BRT-DA01) in patients with Parkinson’s disease. Plans to initiate a phase II study in 2024 are on track. An additional gene therapy candidate in patients with Parkinson’s disease is expected to enter phase II later this year.

The approval of Eylea (aflibercept) 8 mg in key markets such as the European Union, Japan, Canada and the UK earlier this year has strengthened its portfolio.

Another key growth driver is Kerendia / Firialta (finerenone), approved for the treatment of chronic kidney disease associated with type 2 diabetes. The drug is performing well in the United States, China and Mexico. Bayer believes the drug has blockbuster potential.

Pipeline setbacks and regulatory setbacks have weighed on the stock in recent times. The late-stage study, OCEANIC-AF, investigating asundexian compared with direct oral anticoagulant Eliquis (apixaban) in patients with atrial fibrillation and at risk for stroke, was stopped early due to the lack of efficacy. This was a major setback, given the candidate’s potential.

Pfizer (PFE - Free Report) has collaborated with Bristol Myers Squibb for Eliquis.

Moreover, one of the top drugs in the pharmaceutical division, Xarelto, is facing generic competition. The ongoing glyphosate litigation in the United States has adversely impacted Bayer’s cash position due to high legal costs.

Following a review of the company’s capital allocation priorities to reduce debt, BAYRY plans to amend its dividend policy to pay out only the legally required minimum for three years.

Bayer recently acquired marketing rights for the cardiovascular candidate acoramidis in Europe from BridgeBio (BBIO - Free Report) . The rights were acquired from Eidos Therapeutics Inc., BridgeBio International GmbH and BridgeBio Europe B.V.

A new drug application for acoramidis has been filed with the FDA, and the regulatory body has set a target action date of Nov 29, 2024 for the same. Per the terms of the agreement, BridgeBio and the affiliates will receive an upfront payment of $310 million from Bayer.

Upon potential approval, acoramidis will compete with Pfizer’s Vyndaqel.

In light of these challenges, Bayer is implementing a new operating model to reduce hierarchies, eliminate bureaucracy, streamline structures and accelerate decision-making processes. The company is also undertaking significant job cuts.


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