Foreword
Products and customers
The Bayer Group’s focus on innovation and growth has generated products with strong sales in recent years. Our portfolio offers prospects for good economic growth in the future as well.
Profitable products: New developments in the research pipeline
We launched our new cancer drug Nexavar® in the United States at the end of 2005 for the therapy of advanced renal cell carcinoma. It has since received regulatory approval in Mexico and Switzerland too. The Committee for Human Medicinal Products at the European regulatory agency emea has recommended Nexavar® for approval in the e.u. We expect this approval to be granted in the second half of 2006. Further Phase III studies are currently under way in patients with advanced liver cancer, metastasized melanoma and non-small cell bronchial carcinoma. We have received orphan drug status from both the European and the u.s. regulatory agencies for the indication liver cancer; this status confers, among other things, exclusive marketing rights. If Nexavar® is approved in this indications, it could have a sales potential in excess of EUR1 billion.
We expect our oral thrombosis drug, a Factor Xa inhibitor, to have a similar sales potential. The product is currently in Phase III clinical trials for the prevention of venous thrombosis and in Phase II studies for the treatment of venous thrombosis and the prevention of stroke in patients with atrial fibrillation. We expect our hemophilia drug Kogenate® to have a sales potential of EUR1 billion.
Our CropScience business has brought as many as 16 new active ingredients to market since 2000. We anticipate a total sales potential from our CropScience pipeline – including these and a further ten active ingredients scheduled for launch by 2011 – of up to EUR2 billion. Seed dressings and our Environmental Science and BioScience businesses also promise opportunities for above-average growth. Bayer MaterialScience is a world leader with leading-edge technologies, ranking top in polyurethanes and coating raw materials and second in polycarbonates.
Safe products: Early identification and avoidance of risks
We have established comprehensive systems to identify risks associated with our developments at an early stage and to avoid them; these include product evaluations and various forms of product monitoring and field studies carried out by the subgroups.
Evaluations are undertaken as part of a wide variety of programs designed to research the properties of our products and to ensure that they are handled safely. The data obtained in this way are documented in registration dossiers, databases, safety data sheets and instructions for safe use. Our specialists are involved in a large number of expert groups and external bodies to ensure that comprehensive information and in-depth analyses of substances are generated and perpetuated systematically on a regional, national and global level. Before significant investment decisions are made, we carry out systematic analyses of the health and environmental impact of our products and processes. These analyses focus on local production methods and the entire product life cycle from manufacture to disposal. In spite of all our efforts, however, various points of criticism arose in the reporting period 2004/2005.
In connection with the litigation regarding Lipobay/Baycol, some 5,000 lawsuits were still pending worldwide on March 31, 2006, approximately 4,900 of them in the United States (including several class actions). By the same date, Bayer had settled about 3,100 cases worldwide without acknowledging any legal liability, resulting in payments of approximately us$ 1.15 billion. On a voluntary basis and without acknowledging any legal liability, Bayer will continue its policy of trying to agree on fair compensation for people who experienced serious side effects from Lipobay/Baycol. In the United States five cases have been tried to final judgment to date, all of which resulted in verdicts in our favor.
Our quarterly reports contain information on other products which have been the target of criticism, such as ppa and Cipro®.
Sustainable products: Potential for the future
We factor sustainability aspects into the equation when developing all the products in our portfolio. We also set our sights on attaining a specific sustainability advantage in particular areas. In this respect, we concentrate on meeting two major challenges: climate change and global water demand.
Example of renewable energies
The new Bayer plastics for solar energy applications provide this future technology with substantial optimization potential. The polyurethane Bayflex® not only represents a cost- and energy-saving alternative to the existing aluminum frame used in solar modules, it also enables easier and quicker assembly. What’s more, the Bayer material Desmopan® is outstandingly well-suited to the manufacture of solar modules. Desmopan® fulfils the dual function of embedding the silicon cells and bonding with the polycarbonate or glass panels. The material’s properties increase the effectiveness of the solar module manufacturing process.
Example of reduction in water consumption
When we develop new crop protection products we make every effort to see that natural water resources and living organisms in aquatic ecosystems come to as little harm as possible. A very strict evaluation process means that only a fraction of all the potential new products meet the stringent approval criteria. But our concern for the world’s water resources goes far beyond the product development stage; we also pursue an active and comprehensive range of activities to promote good agricultural practice with our products.
Much of the water consumed in Asia is used to grow rice. In the Philippines, rice is either pregerminated and sown directly or, in the traditional method, young rice plants are transplanted to the growing field. Direct sowing is becoming increasingly popular because it involves less work. Bayer CropScience brought the new herbicide RiceStar® Xtra onto the market in 2002. This product is used in both cultivation systems to combat Leptochloa, a type of grass that is difficult to control and has spread widely in recent years. Following the introduction of the new product, the direct-sowing method became established more rapidly as farmers learned to trust its efficacy. Since the direct-sowing method uses about 20 percent less water than the traditional method, our product is also making an indirect contribution to reducing water consumption.
Profitable products: New developments in the research pipeline
We launched our new cancer drug Nexavar® in the United States at the end of 2005 for the therapy of advanced renal cell carcinoma. It has since received regulatory approval in Mexico and Switzerland too. The Committee for Human Medicinal Products at the European regulatory agency emea has recommended Nexavar® for approval in the e.u. We expect this approval to be granted in the second half of 2006. Further Phase III studies are currently under way in patients with advanced liver cancer, metastasized melanoma and non-small cell bronchial carcinoma. We have received orphan drug status from both the European and the u.s. regulatory agencies for the indication liver cancer; this status confers, among other things, exclusive marketing rights. If Nexavar® is approved in this indications, it could have a sales potential in excess of EUR1 billion.
We expect our oral thrombosis drug, a Factor Xa inhibitor, to have a similar sales potential. The product is currently in Phase III clinical trials for the prevention of venous thrombosis and in Phase II studies for the treatment of venous thrombosis and the prevention of stroke in patients with atrial fibrillation. We expect our hemophilia drug Kogenate® to have a sales potential of EUR1 billion.
Our CropScience business has brought as many as 16 new active ingredients to market since 2000. We anticipate a total sales potential from our CropScience pipeline – including these and a further ten active ingredients scheduled for launch by 2011 – of up to EUR2 billion. Seed dressings and our Environmental Science and BioScience businesses also promise opportunities for above-average growth. Bayer MaterialScience is a world leader with leading-edge technologies, ranking top in polyurethanes and coating raw materials and second in polycarbonates.
Safe products: Early identification and avoidance of risks
We have established comprehensive systems to identify risks associated with our developments at an early stage and to avoid them; these include product evaluations and various forms of product monitoring and field studies carried out by the subgroups.
Evaluations are undertaken as part of a wide variety of programs designed to research the properties of our products and to ensure that they are handled safely. The data obtained in this way are documented in registration dossiers, databases, safety data sheets and instructions for safe use. Our specialists are involved in a large number of expert groups and external bodies to ensure that comprehensive information and in-depth analyses of substances are generated and perpetuated systematically on a regional, national and global level. Before significant investment decisions are made, we carry out systematic analyses of the health and environmental impact of our products and processes. These analyses focus on local production methods and the entire product life cycle from manufacture to disposal. In spite of all our efforts, however, various points of criticism arose in the reporting period 2004/2005. In connection with the litigation regarding Lipobay/Baycol, some 5,000 lawsuits were still pending worldwide on March 31, 2006, approximately 4,900 of them in the United States (including several class actions). By the same date, Bayer had settled about 3,100 cases worldwide without acknowledging any legal liability, resulting in payments of approximately us$ 1.15 billion. On a voluntary basis and without acknowledging any legal liability, Bayer will continue its policy of trying to agree on fair compensation for people who experienced serious side effects from Lipobay/Baycol. In the United States five cases have been tried to final judgment to date, all of which resulted in verdicts in our favor.
Our quarterly reports contain information on other products which have been the target of criticism, such as ppa and Cipro®.
Sustainable products: Potential for the future
We factor sustainability aspects into the equation when developing all the products in our portfolio. We also set our sights on attaining a specific sustainability advantage in particular areas. In this respect, we concentrate on meeting two major challenges: climate change and global water demand.
Example of renewable energies
The new Bayer plastics for solar energy applications provide this future technology with substantial optimization potential. The polyurethane Bayflex® not only represents a cost- and energy-saving alternative to the existing aluminum frame used in solar modules, it also enables easier and quicker assembly. What’s more, the Bayer material Desmopan® is outstandingly well-suited to the manufacture of solar modules. Desmopan® fulfils the dual function of embedding the silicon cells and bonding with the polycarbonate or glass panels. The material’s properties increase the effectiveness of the solar module manufacturing process.
Example of reduction in water consumption
When we develop new crop protection products we make every effort to see that natural water resources and living organisms in aquatic ecosystems come to as little harm as possible. A very strict evaluation process means that only a fraction of all the potential new products meet the stringent approval criteria. But our concern for the world’s water resources goes far beyond the product development stage; we also pursue an active and comprehensive range of activities to promote good agricultural practice with our products.
Much of the water consumed in Asia is used to grow rice. In the Philippines, rice is either pregerminated and sown directly or, in the traditional method, young rice plants are transplanted to the growing field. Direct sowing is becoming increasingly popular because it involves less work. Bayer CropScience brought the new herbicide RiceStar® Xtra onto the market in 2002. This product is used in both cultivation systems to combat Leptochloa, a type of grass that is difficult to control and has spread widely in recent years. Following the introduction of the new product, the direct-sowing method became established more rapidly as farmers learned to trust its efficacy. Since the direct-sowing method uses about 20 percent less water than the traditional method, our product is also making an indirect contribution to reducing water consumption.
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