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Bayer shares plunged to their lowest level in more than a decade after the group abandoned a key late-stage trial of a blood-thinning drug that was seen as a prospective blockbuster, saying it did not work as hoped.
The German company on Monday said its Oceanic trial studying asundexian as a treatment for atrial fibrillation had shown “inferior efficacy” compared with standard treatment.
Over the weekend, Bayer also lost a key case in the US related to the weed killer Roundup, which it acquired when it bought Monsanto in 2016. Shares fell as much as 20 per cent in morning trading on Monday, their biggest-ever drop, reaching lows not seen since 2008. More than €7.5bn in market value was wiped off the company within hours.
The abandoned asundexian trial “is a major setback for Bayer”, said Markus Manns, a portfolio manager and healthcare expert at Union Investment, Germany’s third-largest asset manager. Manns said asundexian was the most promising drug in Bayer’s pharma pipeline. “Without it, the pharma unit is left without sustainable growth.”
Bayer’s pharma unit is facing the expiry of patents on some of its best-selling drugs, including its anti-clotting medication Xarelto, and had high hopes for asundexian. The company previously estimated that the new drug could generate up to €5bn in sales a year — a quarter of the group’s entire 2022 pharma revenue.
Bayer said it had decided to end the trial on the recommendation of an independent committee monitoring the study. It said it would “further analyse the data to understand the outcome” and publish it. The company said it would continue to study the drug in a separate trial for stroke patients.
Analysts at Barclays said they saw the failure as “a total surprise” and downgraded the stock.
Shares in Bayer have underperformed since the group’s €63bn takeover of US agrochemical giant Monsanto, which saddled the company with debt and exposed it to costly and drawn-out litigation over allegations that Roundup causes cancer, which Bayer denies.
Bayer has already paid more than $10bn to settle claims related to the best-selling weedkiller and has earmarked another $6.4bn for future legal costs. After winning nine consecutive court cases over the past years, it has suffered a string of defeats in US courts since the summer.
Bayer said it would appeal against the verdicts and accused plaintiffs of having misrepresented “worldwide regulatory and scientific support for our products” in court, adding that it had “strong arguments to get the recent unfounded verdicts overturned”.
Bayer replaced its chief executive earlier this year, hiring former Roche executive Bill Anderson, who has promised to explore “all options” for the struggling group, including splitting the pharma unit from the crop sciences business. He has also promised to make the business less bureaucratic and more efficient.
The abandoned trial and the court loss compound the challenges facing Anderson, who recently said the conglomerate’s performance was “not acceptable” as it struggled to revive its fortunes after the Monsanto deal.