Bayer lowers revenue forecasts for both drugs and weedkillers

Revenue for the crops unit will probably fall by 5% this year, as prices for the weed killer glyphosate decline, while the pharma unit’s sales will likely stay flat rather than gaining, company said

Prices have stayed stubbornly low for glyphosate-based products, including the controversial weedkiller Roundup.

Bayer has reduced its sales forecasts for its crop science and pharma divisions this year, accounting for the German company’s profit warning last month.

Revenue for the crops unit will probably fall by 5% this year, as prices for the weed killer glyphosate decline, while the pharma unit’s sales will likely stay flat rather than gaining, it said. 

Bayer is giving more details about the forces driving last month’s cut to its 2023 financial targets. That was one of the first big moves from chief executive Bill Anderson, who took over in June and is trying to breathe fresh life into the crisis-rattled company. 

Investors are parsing Mr Anderson’s every word for signs of whether he will support Bayer’s conglomerate structure — which combines crop science, pharma and consumer health divisions under one roof — or if he might decide to break up the company. It employs 100,000 people around the world.

Bayer previously expected sales to climb 3% at the crops division. However, prices have stayed stubbornly low for glyphosate-based products, including the controversial weedkiller Roundup. 

That has battered the herbicides business, especially in North and Latin America. The bright spot for that division was Bayer’s seed business, where sales rose by 11% in the second quarter. That performance helped offset weak demand for soybean, cotton and vegetable seeds.

Bayer’s pharma unit is struggling to compensate for falling sales of Xarelto, its blockbuster blood-thinner that is encountering generic competition. Higher demand for new cancer drug Nubeqa and new kidney medicine Kerendia helped soften that blow in the second quarter. 

Consumer health, Bayer’s smallest division, remains its fastest grower for now. That unit is seeing especially high demand for its Bepanthen skin creams and its allergy and cold products, allowing Bayer to confirm its target for the division’s revenue to grow 5% this year. 

• Bloomberg