Bayer Targets Health-Care Sales of More Than $27 Billion

Bayer AG intends to increase health-care sales by an average of about 6 percent a year through 2017 to more than 25 billion euros ($27 billion) as the company focuses on life sciences and exits the plastics industry.

The unit also is targeting an operating margin before special items of 29 percent to 31 percent, compared with 27.5 percent last year, the Leverkusen, Germany-based company said in a statement today.

“The outlook for our health-care business is particularly positive thanks to the five pharmaceutical products we recently launched,” Chief Executive Officer Marijn Dekkers said in the statement. The products include anticoagulant Xarelto, eye medicine Eylea and two cancer drugs.

Bayer is focusing its drug development on heart disease, hematology, cancer and gynecology, and will benefit from its purchase of Merck & Co.’s over-the-counter medicines business for $14.2 billion last year. The company is planning to dispose of its plastics unit, and will decide between an initial public offering and a spinoff of shares to investors in the second half of the year.

At the mid-range of Bayer’s forecasts, the company’s targets “accommodate expectations,” analysts at Citigroup including Peter Verdult said in a note.

Bayer shares rose as much as 1.1 percent and were up 1 percent at 137.55 euros at 9:24 a.m. in Frankfurt. That extended the gain this year to almost 22 percent.

“A stronger outlook for CropScience, as well as a stronger margin outlook for Consumer to reflect the Merck OTC acquisition, offsets a tempered margin outlook for Pharma,” the Citigroup analysts said. Bayer faces pressure in several pharmaceutical areas, including haemophilia and women’s health, according to the note.

“We are focusing on the health of humans, animals and plants,” Dekkers said on a conference call after the forecast was released.

The drugmaker is also in the process of examining its diabetes unit, which is a major cash-flow generator, the CEO has said. Bayer is working with Credit Suisse Group AG on a potential sale of the division, people with knowledge of the matter have said.

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