Leverkusen (dpa) – A weak business with seeds and pesticides has brought the pharmaceutical and agrochemical company Bayer a loss of one billion dollars.
Also due to depreciation in the agricultural division, the bottom line was a group loss of around € 2.7 billion in the third quarter, as announced by the Dax group.
A year ago, Bayer had still reached a surplus of one billion euros. The group’s sales, including the other areas of pharmaceuticals and non-prescription drugs, fell in the summer quarter by 13.5 percent to 8.5 billion euros.
The poor development was also due to the corona pandemic: Since corn and soy prices are in the basement, farmers buy fewer agricultural products from Bayer.
The negative effects of the exchange rate also worsened the figures. Furthermore, high-value adjustments had to be made because the agrochemicals division is performing poorly and the outlook remains bleak. Part of the “Crop Science” division is the American rival Monsanto, which was bought in 2016 and mainly produces seeds, and the controversial pesticide Roundup with the active ingredient glyphosate.
The herbicide caused a lot of trouble for Leverkusen. Many American citizens have filed lawsuits against Bayer because of the risk of cancer, but Bayer believes that glyphosate is safe when used correctly. In the summer, the company concluded a deal that cost around 10 billion euros. According to CEO Werner Baumann, Bayer has settled with the plaintiffs in 88,500 cases.
One side of the deal, which is hugely important to the group, is still open: a US court has challenged a regulation that future lawsuits are also included in the deal. Bayer and the plaintiff are now working on how they can formulate this part in court. According to Baumann, the group wants to present a corresponding agreement to the competent court in the coming weeks. The CEO was confident that this time the judge would agree with the wording.
In hindsight, was the Monsanto purchase a mistake? Faced with this question, Baumann was defiant and emphasized that he had “a lot of confidence” for the agrochemical business in the long term: “We have always been, nothing has changed in that and nothing has changed due to the current crisis.”
In addition to headwinds in the agricultural sector, the corona pandemic is also causing problems for Bayer in the pharmaceutical business. Doctors sometimes postpone treatments that are not urgently needed, and that corrodes sales with Eylea, an eye drug that is actually in high demand. Here, revenue even fell slightly in the third quarter. In China, the national drug purchase program has made its mark. As a result, prices for the diabetes drug Glucobay and the antibiotic Avalox dropped significantly. The most important drug in the group, the anticoagulant Xarelto, achieved a significant increase in sales.
The over-the-counter drug business continued to recover. Although sales fell slightly, this was only due to negative exchange rate effects. Operating income, excluding special effects, grew significantly thanks to cost reduction.