Bayer’s anticoagulant Xarelto is a billion-dollar business. But the patent protection is expiring and Bayer is now facing a setback in its search for the next blockbuster.
Problems are piling up at the pharmaceutical and agricultural group Bayer. First, a US jury recently sentenced Bayer to pay more than 1.5 billion US dollars (1.4 billion euros) in a glyphosate trial, then on Monday night there was bad news from the pharmaceutical division: a study on a preparation called Asundexian was stopped early.
The anticoagulant was a great source of hope. It was supposed to be the successor to the previous box office hit Xarelto. The company’s current situation was viewed with great skepticism on the stock market, and the price fell by a quarter by early Monday afternoon.
The company said Asundexian was less effective than standard treatment. Bayer will continue to analyze the data. The company recently expanded the Phase III study program for Asundexian. According to previous information, the anticoagulant should bring top annual revenue of more than five billion euros in the long term.
Looking for a successor for Xarelto
In a phase III study, the testing of a preparation is already relatively advanced. If such a study turns out well, approval becomes within reach – and with it the prospect of booming business in the billion-dollar market of an aging society in which demand for such drugs is increasing. Xarelto has been a bestseller for a long time – older patients in particular take the drug long-term to reduce their risk of stroke and other health risks.
Pharmaceutical companies develop a large number of preparations, but only a few of them make it to approval. They need blockbusters to finance work on other drugs and thereby remain innovative and competitive. The sale of Xarelto packs brought Bayer three billion euros into its coffers in the first nine months of this year, a good quarter of its total pharmaceutical revenue. It is the biggest revenue generator among medications.
Patent protection expires
However, an end to the highly profitable business with Xarelto is in sight. Patent protection will gradually expire in the coming years; this has already happened in Brazil. The financial signs for this business are correspondingly negative; in the first nine months of 2023, Xarelto sales fell by 8.4 percent compared to the same period last year. Bayer justifies this with price pressure from competitors. They bring copycat products onto the market that are significantly cheaper.
The pressure is correspondingly high to be able to bring a better alternative into the race as soon as possible. Hopes lay with Asundexian, and Bayer’s management was confident. In the annual report for 2022 published in February, the preparation is mentioned as a central example of innovative products in which there is “pleasant progress”. The work on Asundexian is “one of the largest Phase III projects we have undertaken to date,” it says. But hopes for the potential blockbuster are now bursting like a soap bubble.
Billion dollar verdict on glyphosate
A legal dispute had already caused bad news for Bayer on Friday: A jury at the federal court in Jefferson City (Missouri) sentenced the German company to pay a total of more than 1.5 billion US dollars to three former users of the weed killer Roundup, which contains glyphosate. The plaintiffs blamed the product for their cancer. In the United States, juries often award large sums to plaintiffs, which in many cases are later significantly reduced by judges. Bayer was subsequently convinced that the verdict would not stand. An appeal will be lodged.
Bayer brought the problems surrounding the weed killer Roundup, which contains glyphosate, into its house in 2018 with the more than $60 billion takeover of Monsanto. In the same year, the first judgment against the DAX group followed, which set off a wave of lawsuits in the USA. In 2020, Bayer launched a billion-dollar program to settle the majority of the lawsuits – without admitting liability. Bayer has already processed the majority of the lawsuits.
Source: Stern
