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Bayer expands US business

International Business
Sun, 03 Apr 2016

New York: The German conglomerate that invented aspirin over a century ago wants to take over much more of the medicine cabinet.

Bayer AG is boosting its presence and brand in the US, the world’s biggest medicine market. Bayer is increasing everything from marketing and research operations in the US to the number of its non-prescription medicines in pharmacies and grocery stores.

The US expansion is part of the 153-year-old company’s transformation from a chemical-and-dye manufacturer, a business it spun off last year, to a pure “life sciences” company focused on the health of people, pets and plants.

“I hope that over the next few years, people will learn that Bayer is more than aspirin,” Bayer’s US president and head of pharmaceuticals for the Americas Phil Blake said in an interview at its US headquarters in Whippany, New Jersey.

Bayer’s strategy is a departure in an industry in which companies typically swim together in the same direction. Bayer is focused on expanding in the US, while other top drugmakers are concentrating on increasing sales and manufacturing in Asia and other developing markets.

The world’s 14th-biggest drugmaker already sees signs its strategy is paying off. Last year, Bayer’s sales jumped 28 per cent to about $14 billion in the US and Canada, where consumer health sales soared 66pc and prescription drug sales jumped 23pc. Global revenue rose 12pc to nearly $51bn.

“The US is the most important country for Bayer,” said global innovation chief Kemal Malik.

Bayer, based in Leverkusen, Germany, boosted its research budget last year 21pc to $4.7bn. And it’s doing more in two areas rivals have mostly abandoned despite huge unmet need and millions of patients: heart disease and women’s health.

Bayer is doing more research collaborations in the US, like its deal with Johns Hopkins University to develop medicines for vision-damaging diseases. It also has a partnership with Massachusetts startup CRISPR Therapeutics, to develop new therapies for blood disorders, blindness and other conditions.

Across the US, Bayer has been hiring hundreds of scientists, factory workers and salespeople, and enlarging or building new research labs, offices and medicine factories.

A key part of Bayer’s US strategy is expanding its consumer health business.

That’s been driven by its 2014 purchase of Merck & Company’s consumer health unit for $14.2bn. The combined business vaulted to No 1 in US consumer health sales, surpassing Johnson & Johnson.

Iconic Bayer aspirin, patented in 1899, holds 62pc of US market share among aspirin brands. Sales are still growing, up 7 percent last year to $520 million worldwide.

Bayer now markets 170 consumer health products, 17 with annual sales topping $100m. Those include Bayer’s own One A Day and Flintstones vitamins, Aleve pain reliever, Alka-Seltzer and Phillips’ Colon Health, plus former Merck products including Claritin, Coppertone and Dr Scholl’s foot products. 

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