Bayer AG, the renowned pharmaceutical and chemical corporation, recently disclosed its financial performance for the first quarter of 2024. During a media briefing, CEO Bill Anderson revealed a strategic decision to cut approximately 1500 positions from the company’s workforce, predominantly in management roles across pharmaceuticals, crop science, and consumer health divisions. This move underscores Bayer’s commitment to achieving sustainable cost savings of €500 million ($540 million) by 2024 and €2 billion ($2.16 billion) by 2026.
Bayer’s financial results for Q1 2024 indicate a modest decline in sales by 4.3% compared to the corresponding period last year, amounting to over $14.86 billion. However, when adjusted for currency and portfolio changes, the year-over-year sales reduction was a mere 0.6%. Notably, the pharmaceutical division emerged as the only segment to experience sales growth during the quarter.
Bayer’s pharmaceutical sector witnessed an impressive 4% increase in sales, surpassing $4 billion on an adjusted basis. This growth is primarily attributed to the remarkable performance of newer products such as Nubeqa (darolutamide) for prostate cancer and Kerendia (finerenone) for chronic kidney disease in type 2 diabetes patients. Nubeqa sales surged by an impressive 59%, reaching close to $306 million, while Kerendia experienced a significant 63.5% increase, amassing $56 million in the first quarter.
Despite a slight dip in revenue, Bayer’s leading products, the anticoagulant Xarelto (rivaroxaban) and the eye medication Eylea (aflibercept), continue to be the top earners, generating approximately $1 billion and $844 million, respectively.
Looking ahead, Bayer has revised its earnings-per-share (EPS) projection for 2024 to a range of $5.19 to $5.62, adjusted from the previously forecasted $5.35 to $5.78. This revision is primarily driven by anticipated currency effects, the company noted.
Since taking over the leadership at Bayer in June 2023, CEO Anderson has been diligently steering the company away from the fallout of its $66 billion Monsanto acquisition in 2016. In January 2024, Anderson unveiled a new operational model designed to increase efficiency and reduce bureaucratic hurdles within Bayer. This comprehensive restructuring plan, known as Dynamic Shared Ownership, encompasses the workforce reduction that will be implemented over the next ten years, starting in 2025.
Since March 2024, Bayer has notably downsized its executive team from 14 to just eight members. The pharmaceutical industry, as a whole, is grappling with similar challenges. A recent example is Bristol Myers Squibb’s announcement to cut $1 billion in costs by 2025, leading to the elimination of approximately 2,200 positions.
Bayer’s strategic workforce reduction and operational streamlining efforts are indicative of the company’s commitment to long-term growth and profitability. By focusing on core competencies and optimizing operations, Bayer aims to navigate the dynamic healthcare landscape and emerge as a leader in the pharmaceutical and chemical industries.
