Bayer (BAYRY) Focuses on Acquisitions, Competition a Concern
We issued an updated research report on Bayer AG BAYRY on Sep 17, 2018.
Bayer has made several acquisitions and inked a number of deals to boost its portfolio, in the past few quarters.
The company completed the acquisition of the U.S. seed giant, Monsanto on Jun 7, 2018, for $63 billion, including debt. With the acquisition, Bayer now has the strongest portfolio of seed and crop protection products for a wide range of crops and indications, the best research and development platform and the leading digital farming business.
Shares of Bayer have decreased 31.5% year to date against the industry’s growth of 6.2%.
The company also received a few approvals in the past few months which should boost the top-line. In August 2018, the FDA approved Jivi (BAY94-9027) for the routine prophylactic treatment of hemophilia A in previously-treated adults and adolescents aged 12 years or older, in the United States. The FDA also approved Jivi for on-demand treatment and perioperative management of bleeding in the same population. Jivi is a long acting PEGylated recombinant human Factor VIII (rFVIII) replacement therapy.
In May 2018, Bayer announced that Eylea (aflibercept solution for injection into the eye) has been approved by the Chinese regulatory authorities for the treatment of visual impairment due to neovascular (wet) age-related macular degeneration (wAMD). This is the second indication for Eylea approved in China, following its decision (Feb 2018) to approve the drug for the treatment of visual impairment due to diabetic macular edema (DME).
Further, in August 2018, Bayer announced that the European Commission (EC) approved a new treatment approach for Eylea to help clinicians combine proactive treatment with early extension of the injection interval for patients with neovascular age-related macular degeneration (nAMD). The new regimen allows clinicians already in the first year of treatment to extend patients’ individual injection intervals based on visual and/or anatomic outcomes.
In the same month, the EC approved a regimen of Xarelto (rivaroxaban) 2.5 mg twice daily plus acetylsalicylic acid (ASA) 75-100 mg once daily for the prevention of atherothrombotic events in adult patients with coronary artery disease (CAD) or symptomatic peripheral artery disease (PAD) at high risk for ischemic events. Bayer has a robust pipeline ranging from phase I to phase III development. The company plans to launch at least 20 products by the end of 2023 and it is on track for the same.
However, Bayer is facing generic threats/competition for many of its products including the Yaz franchise (oral contraceptives). The genericization of key drugs would negatively impact revenues. Bayer’s dependence on its pharmaceutical segment for growth remains a concern.
Zacks Rank & Stocks to Consider
Bayer is currently a Zacks Rank #3 (Hold) stock.
Some better-ranked stocks in the same space are Roche Holding AG RHHBY, Bristol-Myers Squibb Company BMY and Eli Lilly and Company LLY .While Roche and Bristol-Myers carry a Zacks Rank #1 (Strong Buy), Lilly carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Roche’s earnings per share estimates have increased from $2.10 to $2.24 for 2018 and from $2.15 to $2.28 for 2019 over the past 60 days. The stock has rallied 15.6% in the past three months.
Bristol-Myers’ earnings per share estimates have increased from $3.42 to $3.62 for 2018 and from $3.65 to $3.83 for 2019 over the past 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters with an average beat of 6.39%. The stock has rallied 14.2% in the past three months.
Lilly’s earnings per share estimates have increased from $5.16 to $5.47 for 2018 and from $5.56 to $5.73 for 2019 over the past 60 days. The company delivered a positive earnings surprise in all of the trailing four quarters with an average beat of 10.15%. The stock has rallied 21.7% in the past three months.
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Bayer Aktiengesellschaft (BAYRY): Free Stock Analysis Report
Roche Holding AG (RHHBY): Free Stock Analysis Report
Eli Lilly and Company (LLY): Free Stock Analysis Report
Bristol-Myers Squibb Company (BMY): Free Stock Analysis Report
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