From The Economist, March 7:
The Aspirin-maker is suffering from complications of its acquisition of Monsanto
ON MARCH 6TH 1899 acetylsalicylic acid, better known as Aspirin, was registered at the imperial patent office in Berlin. The first-ever synthetic drug went on to become one of the world’s most successful medicines. On Aspirin’s 125th birthday its maker, Bayer, is in no mood for schnapps. In the run-up to the presentation of its new strategy and annual results on March 5th, analysts and investors speculated about the radical surgery that Bill Anderson, the newish chief executive, might announce in order to quell chronic crises facing Bayer. Would he, perhaps, split its drug and crop-science businesses? Or spin off the consumer-health unit, which makes Aspirin and other non-prescription staples? “Not now,” Mr Anderson said. But, he clarified, this does not mean “never”.
Bayer certainly needs more than a painkiller. Last year it made a net loss of almost €3bn ($3.2bn). Sales fell by 6%. It has torched 70% in shareholder value since June 2018, when it completed the acquisition of Monsanto, an American agrochemical giant (see chart). If the company is to recover, Mr Anderson must first and foremost undo that deal’s toxic legacy.
The $63bn Bayer splurged on Monsanto turned out to be just a downpayment. Lawsuits from Americans who claim that Monsanto’s blockbuster weedkiller, Roundup, causes cancer have forced Bayer to disburse $9.5bn in settlements with more than 100,000 plaintiffs. It has set aside $6bn for further payouts. The deal also saddled the company with stomach-churning debt. It owes creditors a net €35bn.
All this may have made it harder to replenish its dwindling drug pipeline. The patents for two bestsellers, Eylea, an eye drug, and Xarelto, a blood-thinner, expire in 2025 and 2026 respectively....
....MUCH MORE
From our most recent post on Bayer, January 28's "Bayer ordered to pay $2.25 billion after jury links herbicide Roundup to cancer" back through 2019's "Ahead of Tomorrow's Q3 Report: "Agricultural Venture Capital at Bayer"":
Except for the fact the company bought Monsanto with its top-selling Roundup pesticide brand, for $63 billion, despite the fact Germany itself is going to outlaw the stuff, except for the $289 million initial verdict on a cancer case,* everything is going swimmingly....And even earlier, this has been a corporate horror story.
November 2023
Wounded Giant: Bayer Has Problems Beyond Monsanto Jury Awards
The Monsanto acquisition ranks with AOL Time-Warner as one of the worst deals in history....January 2019
