Research, Development, Innovation

Bayer Group expenses for research and development rose by 9.4% (Fx adj.) to €1,122 million in the second quarter of 2016, with the Life Science businesses accounting for €1,060 million of this figure (Fx adj. plus 10.5%).

Research and Development Expenses

 

 

R&D expenses

 

R&D expenses before special items

 

 

Q2 2015

Q2 2016

 

Change

 

H1 2015

H1 2016

 

Change

 

Q2 2015

Q2 2016

 

Change

 

H1 2015

H1 2016

 

Change

 

 

€ million

€ million

 

Fx adj. %

 

€ million

€ million

 

Fx adj. %

 

€ million

€ million

 

Fx adj. %

 

€ million

€ million

 

Fx adj. %

2015 figures restated

1

Including reconciliation

Pharmaceuticals

 

581

679

 

+17.0

 

1,114

1,379

 

+23.6

 

578

679

 

+17.6

 

1,111

1,346

 

+21.0

Consumer Health

 

65

71

 

+10.8

 

117

129

 

+11.1

 

60

60

 

+3.3

 

110

116

 

+7.3

Crop Science

 

268

272

 

+3.7

 

506

533

 

+6.9

 

268

265

 

+1.1

 

506

526

 

+5.5

Animal Health

 

32

34

 

+9.4

 

65

64

 

.

 

32

34

 

+9.4

 

65

64

 

.

Total Life Sciences1

 

967

1,060

 

+10.5

 

1,852

2,105

 

+14.1

 

959

1,042

 

+9.6

 

1,842

2,052

 

+11.9

Covestro

 

68

62

 

–5.9

 

127

126

 

+0.8

 

67

62

 

–4.5

 

126

126

 

+1.6

Total Group

 

1,035

1,122

 

+9.4

 

1,979

2,231

 

+13.3

 

1,026

1,104

 

+8.6

 

1,968

2,178

 

+11.2

Capital expenditures for property, plant and equipment and intangible assets amounted to €589 million (Q2 2015: €601 million), including €509 million (Q2 2015: €466 million) in the Life Science businesses.

In addition to the partnership concluded at the end of 2015 with CRISPR Therapeutics AG, Switzerland, Bayer and ERS Genomics, Ireland, signed an agreement in May 2016 that will grant Bayer access to the CRISPR-Cas9 genome editing patents of ERS. The agreement grants Bayer rights for defined research applications of this technology in selected core strategic areas.

Pharmaceuticals

We are conducting clinical trials with several drug candidates from our research and development pipeline.

The following table shows our most important drug candidates currently in Phase II of clinical testing:

Research and Development Projects (Phase II)1

Indication

Cancer

Serious eye diseases2

Heart failure

Prevention of thrombosis3

Recurrent / resistant non-Hodgkin lymphoma (NHL)

Renal anemia

Heart failure

Wet age-related macular degeneration2

Breast cancer with bone metastases

Cancer, various studies

Cancer

Diffuse systemic sclerosis

Cystic fibrosis

Secondary prevention of acute coronary syndrome (ACS)4

Chronic heart failure

Symptomatic uterine fibroids

Endometriosis

1 As of July 18, 2016
2 Sponsored by Regeneron Pharmaceuticals, Inc.
3 Sponsored by Ionis Pharmaceuticals, Inc.
4 Sponsored by Janssen Research & Development, LLC
The nature of drug discovery and development is such that not all compounds can be expected to meet the predefined project goals. It is possible that any or all of the projects listed above may have to be discontinued due to scientific and / or commercial reasons and will not result in commercialized products. It is also possible that the requisite Food and Drug Administration (FDA), European Medicines Agency (EMA) or other regulatory approvals will not be granted for these compounds. Moreover, we regularly review our research and development pipeline so that we can give priority to advancing the most promising pharmaceuticals projects.

Following the recommendation of an independent data monitoring committee (DMC), we terminated our Phase II study investigating riociguat (tradename: Adempas™) in patients with pulmonary hypertension associated with idiopathic interstitial pneumonia (PH-IIP) in May 2016.

We also will not further pursue the development of BAY 98-7196 + anastrozole (intravaginal ring) for the indication endometriosis.

The following table shows our most important drug candidates currently in Phase III of clinical testing:

Research and Development Projects (Phase III)1

Indication

Pulmonary infection

Nonmetastatic castration-resistant prostate cancer

Metastatic hormone-sensitive prostate cancer

Hemophilia A

Pulmonary infection

Various forms of non-Hodgkin lymphoma (NHL)

Diabetic kidney disease

Combination treatment of castration-resistant prostate cancer

Refractory liver cancer

Colon cancer, adjuvant therapy

Pulmonary arterial hypertension (PAH) in patients who do not sufficiently respond to PDE-5i / ERA

Prevention of major adverse cardiac events (MACE)

Anticoagulation in patients with chronic heart failure2

Long-term prevention of venous thromboembolism

Prevention of venous thromboembolism in high-risk patients after discharge from hospital2

Embolic stroke of undetermined source (ESUS)

Peripheral artery disease (PAD)

Pulmonary infection

1 As of July 18, 2016
2 Sponsored by Janssen Research & Development, LLC
The nature of drug discovery and development is such that not all compounds can be expected to meet the predefined project goals. It is possible that any or all of the projects listed above may have to be discontinued due to scientific and / or commercial reasons and will not result in commercialized products. It is also possible that the requisite Food and Drug Administration (FDA), European Medicines Agency (EMA) or other regulatory approvals will not be granted for these compounds. Moreover, we regularly review our research and development pipeline so that we can give priority to advancing the most promising pharmaceuticals projects.

In May 2016, a clinical Phase III study investigating regorafenib (tradename: Stivarga™) in unresectable liver cancer reached its primary endpoint, a statistically significant improvement of overall survival. The study investigated regorafenib in patients with hepatocellular carcinoma that had further progressed during prior treatment with sorafenib (tradename: Nexavar™). Based on these data, we plan to file for marketing authorization for regorafenib in the treatment of unresectable liver cancer before the end of 2016.

In June 2016, we agreed with Orion Corporation, Espoo, Finland, to expand the global clinical development program for the novel androgen receptor (AR) antagonist BAY-1841788 (ODM-201). A new clinical Phase III study will evaluate BAY-1841788 in men with newly diagnosed metastatic hormone-sensitive prostate cancer (mHSPC) who are starting first line hormone therapy.

Also in June 2016, we formed a new research partnership with the U.S. National Surgical Adjuvant Breast and Bowel Project (NSABP), a leading clinical trials cooperative group. A clinical Phase III study will investigate regorafenib as a single agent for adjuvant treatment following completion of standard adjuvant chemotherapy in patients with advanced but not yet metastatic colon cancer.

The most important drug candidates in the approval process are:

Products Submitted for Approval1

Indication

E.U., U.S.A.; contraception

U.S.A.; secondary prophylaxis of acute coronary syndrome (ACS)

1 As of July 18, 2016

2 Submitted by Janssen Research & Development, LLC

In May 2016, the U.S. Food and Drug Administration (FDA) approved Gadavist™ / Gadovist™ (active ingredient: gadobutrol) as the first contrast agent for use with magnetic resonance angiography (MRA) to evaluate known or suspected supra-aortic or renal artery disease in patients of all ages.

Consumer Health

In April 2016, we expanded our Claritin™ portfolio in the United States to include ClariSpray™, a 24-hour nasal spray to treat allergy symptoms.

In June 2016, we began marketing Aleve™ Direct Therapy in the United States to expand our range of analgesic products. This product is a medical device for transcutaneous electrical nerve stimulation to help relieve lower back pain and tension.

Crop Science

In April 2016, Crop Science announced a five-year research partnership with the Institute of Geography and the Department of Informatics of the University of Hamburg that is aimed at jointly developing new digital solutions for agriculture based on geoinformatics methods and models. The project will leverage relevant geobasic data such as soil, climate, land relief and usage parameters for IT-based visualization of the consequences of agricultural processes.

In May 2016, Crop Science and Planetary Resources, based in Redmond, Washington, United States, signed a memorandum of understanding about the development of applications and products based on satellite images.

Animal Health

In May 2016, we entered into an agreement with BioNTech AG, Germany, to develop novel mRNA vaccines and therapeutics specifically for veterinary medicine applications.

Also in May 2016, we signed a global license agreement with TransferTech Sherbrooke, Quebec, Canada, to advance a novel vaccine candidate developed at Université de Sherbrooke. The new vaccine is intended to help protect dairy cattle from mastitis caused by the bacterium Staphylococcus aureus.

Covestro

In June 2016, Covestro inaugurated a production facility at the Dormagen site that will manufacture a novel foam component with 20% CO2 content, enabling input of the traditional oil-based raw material to be reduced by an equal amount. The new plant with an annual capacity of 5,000 tons will allow the company to manufacture plastics using carbon dioxide for the first time on an industrial scale.