Bayer decides it's time to stick research and development together
- Bayer AG is gathering up its various research and development operations and putting them into a single unit, representing the latest structural change for the rapidly evolving German drugmaker.
- The new unit will conduct all R&D efforts for Bayer's five core therapeutic areas: cardiology, gynecology, hematology, oncology and ophthalmology. Joerg Moeller, currently in charge of development for the company's pharmaceuticals division, will serve as head of R&D starting Jan. 1.
- Bayer's Head of Drug Discovery Andreas Busch, on the other hand, will leave to "pursue a new career opportunity at another company," according to a Wednesday statement.
What do restructuring and polyethylene glycol mixed with some sort of solvent have in common? They're both popular "solutions" for pharmaceutical developers. In the wake of pricing pressures and increased competition, many companies as of late have turned to reorganizing their businesses to protect franchises and support their bottom lines.
Eli Lilly & Co., for instance, announced in September it would be laying off or giving voluntary retirement to 3,500 employees, a move that followed the clinical failure of its highly anticipated Alzheimer's drug as well as patent expiries for several key products, including Zyprexa (olanzapine) and Cymbalta (duloxetine). Boehringer Ingelheim GmBH, Novo Nordisk A/S and other large pharmaceutical organizations have cut hundreds of jobs over the past couple years as part of their respective restructurings.
Additionally, drugmakers have shuffled around or sold off different units to sharpen focus on their core business. Novartis AG is one of the more notable examples of this, with its recent move to organize the company into three separate segments — Innovative Medicines, for novel drugs; Sandoz, for generics and biosimilars; and Alcon, for eye treatments.
Bayer AG also falls into the trend. Earlier this year, Robert LaCaze became the head of Bayer's newly created oncology strategic business unit in its pharmaceuticals division. Bayer developed the unit as cancer drug development reached a fever pitch across the industry.
While no blockbusters, the company's main oncology drugs have been growing; during the third quarter, Xofigo (radium Ra 223 dichloride) sales rose nearly 25% year over year to €102 million (about $122 million) when factoring in foreign exchange rates, while Stivarga (regorafenib) climbed more than 27% year over year to €77 million (about $92 million).
Merging its research and development units will further shake up the company's organizational structure.
"The combined organization will enable us to seamlessly steer all the important activities of Research and Development, with a single objective to further enhance the delivery of much needed new treatment options to patients," Dieter Weinand, president of Bayer's pharmaceuticals division, said of the company's new R&D unit.
"Joerg has an exceptional track record of bringing new medicines to patients, which have the potential to increase their quality of life and address serious medical conditions, and I trust that our team will be even more successful in doing so together under his leadership," he added.
Overall, restructuring activities have cost Bayer €42 million (about $50 million) during the first nine months of 2017, though its pharmaceuticals division was a small piece of that. The company is still working on integrating Monsanto Co., and has also been preoccupied spinning out its Covestro plastics business.
As for R&D, Bayer sports a lengthy pipeline and has increased investments into advancing those drugs. The company spent €4.7 billion (about $5.6 billion) on R&D in 2016, up more than 9% from the year prior.
- Bayer AG Press release
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