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Bayer Group: Biggest share price drop in at least 32 years

Photo: Wolfgang Rattay / REUTERS

At the pharmaceutical and agricultural group Bayer, the streak of bad luck continues. In addition to another defeat in the glyphosate lawsuits in the USA, the Leverkusen-based company now also has to accept a bitter setback in research with its drug hopeful Asundexian. On the stock market, investors reacted with shock: Bayer's shares in the leading Dax index rushed down by almost 19 percent in early trading. This is the biggest price drop in at least 32 years.

As a result, the market capitalization of the aspirin manufacturer shrank by about 7.6 billion euros. Asundexian was the pearl in Bayer's pharmaceutical pipeline, and without the active ingredient, the Pharmaceuticals division would be without sustainable growth," said fund manager Markus Manns of major shareholder Union Investment. Shaping the new beginning will therefore be a Herculean task for CEO Bill Anderson."

Gloomy prospects

Bayer had announced on Monday night that it would prematurely discontinue a crucial phase III study with asundexian due to a lack of efficacy on the recommendation of an independent control panel. In the 18,000-participant study, the drug was compared to the anticoagulant Eliquis from competitors Bristol-Myers, Squibb and Pfizer in patients with atrial fibrillation and stroke risk. Asundexian's efficacy was inferior to that of the control arm of the study. The company wants to further analyze the data to better understand the result.

For Bayer, the novel anticoagulant was the greatest hope in its pharmaceutical research. According to earlier information, the group believed that Asundexian alone had a peak sales potential of more than five billion euros, more than any other of its drugs. Bayer declined to comment on this forecast when asked on Monday.

The drug was supposed to be ready for the market in 2026 and, according to initial data, had led to significantly lower bleeding rates than the competing product Eliquis. At the beginning of November, Bayer expanded its study program, which includes a total of almost 30,000 patients in more than 40 countries. However, the recruitment of participants for this study has not yet begun. It was actually intended to supplement the study, which has now been discontinued. The Phase III Stroke study with 9300 subjects, in which Asundexian is being tested for the prevention of ischemic stroke, is to continue.

For the Leverkusen-based company, the supply from the pharmaceutical pipeline is essential, as the patents of its blockbusters – the anticoagulant Xarelto and the ophthalmic drug Eylea – expire in the middle of the decade. For a long time, analysts considered the pipeline to be too weak to compensate for revenue shortfalls after the patent expiration of the top drugs. But with Asundexian, the mood had changed. The premature termination of the study, which has now been announced, comes as a complete surprise. As a result, Bayer's pharmaceuticals business faces significant challenges, Barclays analysts explained.