Earnings call transcript: Bayer's Q3 2025 performance shows steady growth

Bayer AG's third-quarter earnings call for 2025 highlighted a period of steady growth and strategic advancements. The company reported a 1% increase in net sales, adjusted for currency and portfolio changes. Core earnings per share (EPS) rose to €0.57, reflecting a positive trend compared to the previous quarter. However, the market reaction was muted, with the stock price experiencing a modest increase of 0.36% following the announcement.

Key Takeaways

• Bayer's Q3 net sales increased by 1%, with EBITDA before special items rising 21% year-over-year.
• Pharmaceutical products Nubeqa and Kerendia saw significant sales growth of 60% and 80%, respectively.
• The company is undergoing a major organizational redesign, eliminating 13,500 jobs to enhance efficiency.
• Bayer confirmed its full-year 2025 outlook despite challenges in the consumer health and agricultural sectors.
• Litigation provisions remain a significant focus, with efforts to manage risks by 2026.

Company Performance

Bayer reported a 1% increase in net sales for Q3 2025, demonstrating resilience amid challenging market conditions. The company's focus on pharmaceuticals and crop science has bolstered its performance, with notable growth in key products. Despite currency headwinds and geopolitical uncertainties affecting the agricultural sector, Bayer maintained its competitive position through strategic initiatives and portfolio optimization.

Financial Highlights

• Revenue: Increased by 1% in currency and portfolio-adjusted terms.
• Core EPS: €0.57, up from the previous quarter.
• EBITDA before special items: €1.5 billion, a 21% increase from the prior year.
• Net financial debt: Reduced by €600 million to €32.7 billion.
• Free cash flow: Approximately €0.6 billion for Q3.

Outlook & Guidance

Bayer reaffirmed its full-year 2025 outlook, anticipating continued growth in pharmaceuticals, particularly with Nubeqa and Kerendia. The company plans to launch Linkwit in the U.S. and monitor agricultural market dynamics. However, potential declines in Xarelto sales and ongoing geopolitical uncertainties pose challenges. Bayer's focus on innovation and efficiency is expected to drive future growth.

Executive Commentary

• Wolfgang Nickl, CFO, emphasized the company's adaptability: "We are fully focused on effectively managing what we control, adjusting to new realities around us quickly, and advancing in our transformation."
• CEO Bill Anderson highlighted the company's commitment to accessibility: "Our goal is to make sure that all the patients who can benefit from any of our products have access."
• Anderson also noted the strategic organizational changes: "We never had a specific job reduction target... our approach is to design the whole organization around customers, around products, around the science."

Risks and Challenges

• Currency fluctuations continue to pose a significant risk, impacting financial performance.
• Geopolitical tensions could affect agricultural market stability and sales.
• Litigation provisions remain a substantial concern, with efforts to mitigate risks ongoing.
• The consumer health market faces challenges, particularly in the U.S. and China.
• Managing the transition during organizational redesign and job cuts presents operational risks.

Bayer's Q3 2025 earnings call underscored the company's strategic focus on pharmaceuticals and crop science, while navigating complex market dynamics and organizational changes.

Full transcript - Bayer AG (BAYN) Q3 2025:

Michael, Moderator, Bayer: Good morning and welcome to our media update for the third quarter. Many thanks for joining us today. Bill Anderson will kick us off with the year-to-date business performance and an update on strategic priorities. Wolfgang Nickl will then provide more details on the financials and outlook. After that, we will have time for your questions. Before starting, I would like to briefly draw your attention to the cautionary language included in our safe harbor statement. With that, over to you, Bill.

Bill Anderson, CEO/Management Board Member, Bayer: Thanks, Michael. Thanks to all of you for joining today's call. We posted our results for the third quarter earlier today. As you saw, sales are slightly up in currency and portfolio-adjusted terms, both in the quarter and year-to-date. You'll note that we refer to currency and portfolio-adjusted sales growth figures throughout today's presentation. Core EPS is at EUR 4.29, up 7% from last year. Free cash flow is at negative EUR 800 million, which is in line with our projections and the seasonality of our business. Here's what the picture looks like in our divisions. First, crop science. Q3 is always a smaller quarter for our agriculture business, but crop science continued to show resilience. Sales are slightly down nine months into the year, with the significant regulatory effects that we're absorbing.

Corn is up 9% this year, with solid Q3 growth coming from increased acreage in the U.S. and a strong start to the Latin America season. Our core crop protection business was down 2% in Q3 on the expiration of Movento's Europe license. Glyphosate, which we steer separately, posted slight Q3 growth on account of pricing. On the bottom line, we're realizing efficiency gains from our operating model and profitability measures. While Q3 had some favorable phasing, we're very well positioned to deliver our commitments for the full year. Moving on to pharmaceuticals, we remain encouraged by the resilience of our top line. Both Nubeqa and Kerendia continued their impressive momentum, with Nubeqa up 60% year-over-year and Kerendia up nearly 80% in the same time frame, thanks in particular to strong growth in the U.S. and China. Eylea declined in Q3.

We saw significant pricing pressure in both Japan and Canada, as well as some one-time effects. We remain confident in our ambition to keep 2025 Eylea sales stable relative to 2024. Our year-to-date EBITDA margin is at 26.1%. This is down slightly from last year due to pricing pressure, currency effects, and investments into our launches, but we're on track to land within the guidance we upgraded in summer. In Consumer Health, we see an increasingly challenging market environment, particularly in the U.S. and China. In that context, our year-to-date growth is currently behind our full-year projection due to the soft market environment. We expect those dynamics will put further pressure on our top-line growth in Q4, so we're lowering our 2025 sales growth expectation for Consumer Health.

Regardless of how the market develops, we're committed to delivering an EBITDA margin in line with our guidance of 23%-24% and continued strong cash contributions. Overall, in a pivotal year, we're in a strong position to deliver the 2025 group guidance that we upgraded last quarter. There's more to do this year and beyond. Looking at 2026, we look forward to continued growth from Nubeqa, from Kerendia, and the first meaningful sales from Biantra and Linkwit, which we just received FDA approval for. We remain confident that our dynamic shared ownership system will deliver continued efficiency gains in line with our commitments. We're aware that we have challenges to navigate, including declines in Xarelto sales, currency headwinds, and some trade uncertainty. However, overall, we're confident in our improvement plan and the trajectory of our business.

We're finalizing our assumptions, and we're going to provide more transparency on 2026 in our call on 2025 full-year results in February. Now, let's take a look at our strategic agenda. I'll mention a few of the highlights captured on this slide. On our pharma pipeline, we announced FDA approval of Linkwit just two and a half weeks ago, and we expect it to reach the U.S. market this month. Further, we're making good progress with our cell and gene therapy assets against Parkinson's, which are now in phase three and phase two, respectively. In addition, we just announced study data for Kerendia in patients with chronic kidney disease associated with type 1 diabetes, making it the first medicine in over 30 years to demonstrate positive results in addressing the high risk of kidney disease progression and cardiovascular events in this patient population.

In litigation, as each prong of our strategy advances, we have a clearer view of the paths to significant containment. I say paths, plural, because there is not just one way to get there, and no one way alone will be enough. We are making significant progress, and we are confident in our objective to significantly contain litigation risk by the end of 2026. Here is where we stand. I will start with PCBs. We recently received an adverse verdict on the PCB Erickson case by the Supreme Court in the state of Washington. This verdict confirms that our earlier decision to reach settlements on the remaining Sky Valley cases was the right one. Nonetheless, we disagree with that decision, and we concur with the dissenting justices who found the court's opinion judicially inconsistent on the statute of repose issue. We are considering further legal options for that specific case.

Overall, we'll continue to consider all options to limit the company's risk exposure. In the glyphosate litigation, we're expecting a recommendation from the U.S. Solicitor General as to whether or not the U.S. Supreme Court should hear our case. We remain optimistic that this recommendation will occur in time for the current session, which ends in June of 2026. This is an important decision, and we have plans in place for all outcomes. In the legislative realm, we continue to believe that U.S. farmers need certainty. That's particularly true in times of challenging farm economics. At the federal level, both the Appropriations Bill and the Farm Bill are important pieces of legislation that reinforce clarity on how essential crop protection tools are regulated in American agriculture. The government shutdown has delayed congressional activity, and it's essential that progress is made, and we're making that case.

At the state level, another round of legislative sessions will soon kick off, beginning in January. We think it's very important to defend the work of American farmers, and we will advocate for the innovation and regulation that they need. Overall, we know that we have a crucial and highly dynamic phase ahead of us. You see this dynamic reflected in our provision, which moved over the past quarter due to a range of factors. For example, after Q2, we announced some confidential settlements, which were followed by a moderate increase in glyphosate case filings. It's natural that the prospect of settlements would prompt an increase in the case count, and we expect that to continue as our containment efforts mature. The case count leads to additional provisions, as do the costs of litigation.

At the same time, we've reached settlements on some verdicts at both the appeals and post-trial motion phases because settling them was advantageous in limiting the company's exposure. Finally, the recent PCB Erickson verdict led to an upward adjustment of our provision. I share that background because it's emblematic of what we expect in the coming phase: consequential decisions, some in our control and others not, with important bearings on our path forward and the future of glyphosate in American agriculture. We're convinced our multi-pronged strategy is the right one. As we continue to advance it, we'll continuously adjust our approaches to resolution, evaluating them for their future optionality, finality, cost, and risk. On cash and deleveraging, we saw a further reduction in net financial debt in Q3, and we confirm our full-year free cash flow outlook, including litigation-related payouts.

Our crop science organization is aggressively focused on execution of our five-year plan. We're actively streamlining our portfolio and operations by outsourcing 12 active ingredients and discontinuing 150 products. This strategic focus enables us to concentrate on innovative crop solutions. A prime example is our recent launch of Plinexis. It's a cutting-edge insecticide which hit the Latin American market last week. Finally, on our operating model, we see benefits on the top and bottom line. Our organization continues to get leaner and more efficient, and we're seeing benefits in terms of speed and focus. I'll close with an example from our pharmaceuticals division. Twenty months ago, we announced a deal to in-license Biantra in Europe. Prior to that, this medicine wasn't on the radar for many people in the company.

By April of this year, we had launched it in Germany, and the first European patients were able to receive Biantra. Today, the medicine is off to a strong start, already exceeding our ambitions for 2025. Only months into the launch, we've reached around 50% market share in new-to-brand prescriptions in Germany, one of the fastest uptakes of a cardiovascular treatment we've seen. The teams are now focused on making Biantra the new standard of care in its treatment setting. They attribute their speed and success in part to their ability to cut out inefficient handovers, flexible resource allocation across markets, and a keen focus on most important work. With that, I'll hand it over to Wolfgang. Before doing so, you've seen we announced Wolfgang's successor last week.

Judith Hartman will be joining Bayer in March of next year, and she'll take over as CFO on June 1. Judith brings with her a wealth of finance and leadership experience across industries and countries, and we look forward to welcoming her. It's far too early to say goodbye to Wolfgang, who'll be retiring in June of next year, as we've previously communicated. We've got a crucial period ahead for the company, and he's going to be dialed in on delivering 2025, planning 2026, and continuing our efforts to significantly contain litigation. Wolfgang, I look forward to continuing to work with you over these next months. Thank you so much, Bill. Appreciate it. Hello, and also welcome from my side. Let's go right into it and look at the group picture for Q3 first. Net sales grew by 1% versus the prior year quarter in currency and portfolio-adjusted terms.

As reported, we saw a decline of 3%, with continued foreign exchange headwinds affecting our top line with about EUR 450 million. In a seasonally low quarter, EBITDA before special items of EUR 1.5 billion came in 21% above the prior year. The increase was largely driven by better crop science and reconciliation results, offsetting slight decline in pharma. Let me pause right here and give you some more background on the reconciliation line. It includes a rather predictable element for our enabling function costs that cannot be clearly allocated to the divisions. In addition, there are other elements, mainly around incentive provisions, side businesses such as our soccer club, and balance sheet-related hyperinflation effects that are more unpredictable. These factors can vary significantly from quarter to quarter and versus the prior year periods.

For Q3, the main drivers versus last year were lower expenses for personnel-related adjustments and lower hyperinflation effects, while additions to long-term incentive provisions were comparable to the prior year. For the full year, we anticipate favorability-enabling function costs on top of positive one-offs in our side businesses. While some elements can still move, we now expect around EUR 400 million for 2025 and an improvement of about EUR 100 million versus our previous guidance. Core earnings per share for Q3 came in at EUR 0.57, and they were above the prior year quarter, and that delta was EUR 0.33. It was largely due to the higher EBITDA as well as better core financial result. The core financial result improved by about EUR 56 million year-on-year, largely driven by lower interest expenses due to lower debt. Earnings per share came in at minus EUR 0.98 for the quarter.

Main driver for the delta from core to reported earnings per share, next to the regular amortization of intangibles, are additional litigation-related provisions classified as special items in the total amount of EUR 934 million. These include amounts for the glyphosate litigation reflecting an increased case count, other litigation costs, and the settlement of some cases, which were strategically advantageous to resolve, as Bill mentioned just a minute ago. We have also adjusted the provision for the impacts from the recently received PCB Erickson ruling in the Washington Supreme Court. Our free cash flow came in about EUR 0.6 billion for Q3. The delta versus the prior year is mainly driven by higher settlement payouts. Compared to the end of Q2, net financial debt decreased by about EUR 600 million to EUR 32.7 billion, mainly due to the operational cash inflow. Year-on-year, net financial debt was down by about EUR 2.3 billion.

Based on the year-to-date performance, we feel confident in the full-year outlook for Crop Science and Pharmaceuticals, both in terms of top and bottom line. For the fourth quarter, we expect to see the following developments. For Crop Science, growth in the fourth quarter is driven by glyphosate, which is now anticipated at the upper end of our full-year sales guidance range and will have a dilutive impact to margin in Q4. In addition, growth is anticipated for Latin America, recovering from a weak prior year period. For our Pharma business, we anticipate increased price pressures for Eylea in conjunction with the entry of 2-milligram biosimilars in Q4. In addition, we expect continuous generalization of Xarelto, as well as volume-based pricing-related impacts on our business in China. The continued growth of our launch assets is expected to compensate for these headwinds.

On our margin, we expect to see accelerated launch investments in Q4, for example, linked to our liquid launch activities. For consumer health, we have already pointed to the lower end of our sales growth guidance range for the full year at our Q2 call in August. Given our significant exposure to markets with challenging dynamics like the U.S. and China, we now expect full-year sales growth for consumer health in the range of -1% to 1%. This does not impact the group outlook. In close partnership with retailers, we will carefully manage the balance of sell-in and sell-out to ensure sustainable growth going forward. In terms of profitability, we are committed to achieve the expected EBITDA before special items margin range of 23%-24% for the full year.

Based on months' end September rates, we see similar foreign exchange effects for all three divisions compared to prior guidance. Let me conclude with the group outlook for 2025 and early insights into the business drivers for 2026. Overall, for the group, we confirm our full-year 2025 outlook at constant currencies and the latest currency estimate, which did not change materially from months' end June to months' end September rates. At the same time, we update our modeling assumptions for special items for the additional litigation-related provisions we booked this quarter. We now expect special items in the range of -EUR 3.5 billion to -EUR 4 billion for the full year. We also adjusted the recon modeling assumption, as I mentioned earlier in my remarks. Let's now look at 2026. For pharma, we will continue to ramp Nubeqa and Kerendia, scale Biantra, and launch Linkwit.

For Xarelto, we expect declines in a similar % range as this year. For Eylea, we will gain further insights into the evolving market dynamics with an aspiration to drive volume growth of the 8-milligram dosage. For crop science, the ag market outlook is quite dynamic. We are monitoring acreage development, particularly in the context of geopolitical uncertainty. In corn, we plan to drive growth based on our portfolio refresh and build on continued technology adoption. For soy and cotton, we count on the registration for Dicamba for the next season. Overall, we remain intensely focused and on track to deliver our five-year framework. For consumer health, while we experience some challenges in key markets this year, we see the general market growth trends intact. We will keep investing in our brands to address consumer needs and drive consumption through household penetration.

On geopolitics, we have gained some more clarity on EU-U.S. pharma tariffs. In recent weeks, individual companies have announced truck pricing deals, but some questions, particularly around sectoral pharma tariffs or potentially policy shifts in other countries, remain open. At the same time, our cross-functional teams showcased the strengths in managing the situation and limiting potential impact for this year. Looking ahead, we continue to carefully monitor the developments and will include the most likely scenario in our planning for next year. We are also following the U.S.-China trade relations closely. As we are innovating for the benefit of our patients, farmers, and consumers in all markets, both the U.S. and China remain mission-critical for us. On foreign currencies, this is a major swing factor for our business. As already pointed out previously, we expect significant currency headwinds to continue in 2026.

In conclusion, we are fully focused on effectively managing what we control, adjusting to new realities around us quickly, and advancing in our transformation. We're currently completing the picture for 2026 and will communicate specific guidance with our full-year 2025 results end of February. With that, over to you, Michael, to facilitate the Q&A, please. Thank you very much, Wolfgang and Bill. Let's now start with the Q&A session. Here's what you need to do to ask a question. Please make sure that Zoom is the only active chat program open on your computer and make sure that your microphone is activated in Zoom. If that is the case, you can use the raise hand function and we will register your interest. When it's your turn, I will call your name. A pop-up window will then open on your screen.

When you see this pop-up window, please unmute yourself and ask a question. Your camera will remain off during this time. Much for this. Let's now get started and let's see. We have a first question coming from Antje Höning, Rheinische Post, followed then by Aisha Sharma from Endpoint News. First question goes to Antje Höning from Rheinische Post. Antje, over to you. Hello, good morning. You say that ESO pays off. Can you tell me how many jobs has Bayer cut in this context and how many in Germany? When will the reorganization and the job cuts be completed? Thank you. Yeah, thanks, Antje. So far, we've eliminated about 13,500 jobs worldwide. I don't have a specific Germany number, but I would say that the cuts have been roughly proportional so far, and about 20% of our employees are based in Germany.

Let's see, when will it be over? We never had a specific job reduction target. We've always said our approach is to design the whole organization around customers, around products, around the science, and take out all the jobs that are sort of gatekeepers and basically the jobs that unintentionally serve to slow down innovation and make us slower to respond to our customers' needs. We're going to continue doing that as long as it takes to become the fastest, most innovative life science company in the world. I would anticipate that the most significant reductions have already happened and that going forward, there will be less than we've seen in the past. Thank you. Next question comes from Aisha Sharma from Endpoint News. Afterwards, we have Jonas Jansen from Frankfurter Allgemeine Zeitung. Next question goes to Aisha. Over to you.

Good morning and thank you for taking my questions. Just two from me. Firstly, with regards to deals on most favored nation pricing, I know that companies like AstraZeneca have announced deals with the Trump administration, saying that they could cut the price of some drugs by up to 80%. I was just wondering where Bayer is in terms of its talks and is it considering the same sort of range of price cuts? Secondly, just on your menopause drug that was recently approved in the U.S., I was wondering what makes you confident that that's going to have a strong commercial launch just because other drugs like Astellas Veozah have had a bit of a difficult start, lower than expected commercial demand, and some issues with the reimbursement. What makes you confident that this will be different? Thank you. Yeah, thanks, Aisha.

Yeah, first regarding MFN and deals, yeah, we've been monitoring the situation very closely. We have a very strong presence in the U.S. We already have very substantial discounts on most of our portfolio. Yeah, we don't have anything new to discuss on that right now, but we think we offer a very strong value for American consumers and patients, and we intend to continue that. We stay very close on that topic. Regarding Linkwit, yeah, we're really pleased with the strong label we received. This is a really good molecule. It has sort of two mechanisms of action, which we think may be a differentiator. It works on hot flashes, but also reduces nighttime awakenings, which is a significant issue for women in menopause.

Yeah, we have decades of work in women's health, and we will bring that expertise and that knowledge of the field to our efforts to make sure that women have that option. Yeah, we look forward to a strong launch and further updates for you in the future. Okay, next question comes from Jonas Jansen, Frankfurter Allgemeine Zeitung. Afterwards, we have Kevin Grogan from Scrip. Jonas, you're next in line. Over to you. Good morning and thank you for the chance to ask a question. Regarding the provisions for the litigation complex, it's now again another roughly $1 billion.

Do you think that this will be enough looking to the future, or do you sometimes think you needed to do a bigger number again to not every other quarter say, yeah, we need to put a little more money to that to have this feeling that this still never ends? Thank you. Yeah, Jonas, good morning. Very good question. When it comes to the provision, we are bound by the accounting rules like any other company is. You have two conditions. Amount needs to be predictable, and it needs to be probable. You need to be able to put a number to it, and it needs to be more likely than not. As we advance in resolving the litigation by the end of next year or substantially containing it, more pieces of the puzzle, so to speak, become clear.

You have seen that after Q2, we've put a substantial provision associated with settlements in both glyphosate and also in PCBs on the balance sheet. We've done the same thing last quarter, where we added just over EUR 900 million to the provision because we made progress again on glyphosate. You have seen that we had to provide for new cases, but that we also did some strategic settlements last year. It is hard to predict what's going to follow. It comes together with resolving the overall complex. As Bill said earlier, we're making substantial progress there on all four prongs of our strategy. Stay tuned. We will report more on that as we go. Thank you for the clarification. Understand now. You're welcome, Jonas. Okay, if you do want to ask a question, use the raise hand function. The next one is Kevin Grogan from Scrip.

Kevin, over to you. Good morning, everybody. I hope everything's marvelous. A quick question first on Biantra. Obviously, it's got off to a very good start. It's very impressive. And you're very enthused, obviously, Bill, about the way that your teams have managed the launch. Does that experience tempt you to go shopping again for some sort of late-stage asset, given that your team has shown that they know how to do a good launch? Would you be interested in licensing it? Something else. There's quite a few interesting late-stage assets around. A quick one also on Kerendia. Again, given the very strong sales growth and the recent positive data in kidney and so on, could you give me an idea of what you think peak sales will be, given that you've made a forecast before, but it's going maybe better than expected? Thank you.

Yeah, thanks, Kevin. Also, thanks for the extra energy contribution. It seems like you've had your coffee this morning, and I'd like to get some of whatever you got. Yeah, Biantra, as I said, we're very pleased with the launch. You asked whether we're sort of shopping again. I would say we're always on the lookout for good value across every stage of the pipeline. Now, as you probably know, good value is a lot harder to come by in the late stage. In fact, I would say, yeah, probably 75%-80% of late-stage deals end up being negative NPV deals for the acquirers. I've been in the industry almost 30 years, and actually, I do not like doing negative NPV deals. For that reason, we have very high hurdles.

I think Biantra is a good example of being careful and diligent and getting a good value. I recently asked for information on Nubeqa, the original Nubeqa deal. We had a $50 million upfront on that, and that was a phase three ready deal. It was a product that I think people were underestimating, and we saw something in it. Nubeqa is well on its way to being a mega blockbuster. We are going to do more of those kinds of deals, but they do not come along every day. We are going to be very choosy because I do not want to join the ranks of many other pharmaceutical companies that are in the, they have the winner's dilemma where they won the prize, but they lose on the economics. Kerendia, you said it. I mean, we are continuing to be very pleased by the data that is coming in.

As you know, we got the heart failure indication this year, and we're beginning to promote that now around the world. That's really fueling the sales increase. We just got this data on people with type 1 diabetes and kidney disease and, again, seeing a really excellent result. Yeah, we look forward to many more happy patients with Kerendia, but we don't give peak sales. Yeah, our goal is to make sure that all the patients in the world who can benefit from Kerendia get it. Thank you. Okay, we have Anette Becker from Börsen Zeitung next, and then followed by Sonja Wind from Bloomberg. Anette, first, over to you. Yes, good morning. I hope you can hear me. Yep. Okay. I would like to come back to the provisions, especially for PCB cases. Can you tell us the PCB cases provision?

You increased the provisions. Can you give us a number? How big is your provisions now in the balance sheet? Because in the Q3 report, you mentioned that it's EUR 7.2 billion or EUR 7.3 billion for the Glyphosate cases. Can you give us a comparable number for the PCB cases? Regarding the negative verdict, can we think that you now try to settle the pending cases that are not in the prior several months included? Yeah, I think, Anette, I got your question. Thanks for that. Total provision on the balance sheet is about EUR 7.8 billion. We disclose that just under EUR 7 billion is for Glyphosate. Since we do not have any other big cases that require provisions, you can kind of conclude what the PCB portion is. Again, there, the same thing applies that you provision when you can estimate something and when it is more likely than not.

Until the summer, you have seen that we provisioned only for defense costs for PCB. Now, as the complex resolves itself, you see these provisions coming into the balance sheet. I think we have already said, and Bill referred to it. We were disappointed with the Supreme Court of Washington's verdict, and in particular, as it relates to the statute of repose. We have seen that we put provisions for that case on the balance sheet. We also provisioned for some cross rates on that. We will see what happens with the cases, the verdicts that are still open. Eventually, those have to be resolved as well. I can tell you also this: we are quite pleased with the fact that we could settle everything that was related to other cases on file and cases that have not gone and got a court date yet.

We're pretty pleased that we got that done beforehand and got also a resolution on some case orders by the court that increased the hurdle on what you have to do in providing evidence upfront. I think we are in reasonable control on the Sky Valley complex. Okay, the next questions come from Sonja Wind from Bloomberg. Sonja, over to you. Hello, can you hear me? Yes, we can hear you. Okay, thank you for taking my question. I have a follow-up question on the MFN question with drug prices. Bill, you mentioned that you already have sizable discounts. Are you referring to the PPM discounts, or are there discounts that you now implemented as a response to Trump's strategy? Would you consider coming up with your own direct-to-patient platform, or would you rather consider the Trump RX platform?

Then my second question is on the crop science business. You noted that prices for Glyphosate increased in North America, but you pointed out that in the fourth quarter, it will be margin dilutive. Could you explain a bit the dynamics that are going on with the prices for Glyphosate? Yeah, thanks, Sonja. Welcome to the world of Bayer. Yeah, on MFN and some of the questions you had about discounts, we have a wide range of discounts across our portfolio. Some of those are with PBMs or direct with insurance companies. Others are to healthcare providers. Still others with, obviously, Medicaid discounts are very important. Our goal is to make sure that all the patients who can benefit from any of our products have access. We will pursue whatever means we need to to make sure that's the case.

Yeah, we'll certainly consider all the platforms that we can use, including new ones that are emerging. Let's see, Wolfgang, you want to talk about the margin? Yeah, I can help on Glyphosate. What we said, Sonja, is in crop science, we have seen in the Glyphosate portion, the reference pricing a little bit above the 15-year median, which was driven by the U.S. There, it was driven by specific tariffs that the U.S. imposed on China on this product. What you should also know is that the Glyphosate business in our crop science business is very dilutive. We always talked about 200 basis points or so. Therefore, if the growth in Q4 is driven by Glyphosate, then it will be dilutive to the overall margin that quarter as well.

It's a quarterly effect from a higher mix of Glyphosate relative to the rest of the products. Right, thank you very much. Actually, I don't see anyone right now raise the hand. Maybe I'll just wait for a few seconds and see what happens. That's okay. We can also have a kind of a shorter and crisper session today. Actually, Jonas, I think you have a follow-up question. Jonas, over to you. Yes, thank you very much. Speaking about Glyphosate and the margin effects, you reported that the non-Glyphosate products are now selling more. What's your expectation in the next few months also regarding alternatives to Glyphosate? How is the situation at the moment with the products from China and also maybe with regards to what's happening in Germany?

Because you had big problems there and closing one plant because of the pricing effects and the whole chemical industry in Germany suffering, as you, of course, know. Yeah, Jonas, thanks. That's a kind of multi-part question. I would just say, yeah, the intense price competition on the high volume, especially older and off-patent active ingredients, continues to intensify. That's why we've basically made a strategic shift. We're going to go out of a number of those products because there's just simply no profit in the world. It would appear that a lot of those products are being sold below cost. That's obviously not a business you want to be in. On the other hand, our newer products and some of our advanced formulations are doing very well.

For example, we just launched last week, first time in the world, and this is in Latin America, a new insecticide called Plinexis. Just to give you a sense of why that's a new dynamic, not only is this product effective against a number of insects that older products, the insects, have become immune to, not only that, but it's a very potent and very safe product. The dosage for insect control is 6 grams per hectare. Many older products, it's sort of like a kilogram or more per hectare. Now we're talking about 6 grams. That's important not only because of the effect and the fact that it has lower residues and all that, but it's also important because then production costs are less significant.

The situation in Germany continues to be very difficult for the entire industry that is either dependent on raw materials or significant energy. We think products like this are sort of the answer for the future, both for the customer but also for companies like Bayer. Okay, we have a very last follow-up question from Kevin Grogan from Scrip. Kevin, over to you. Hi, Morgan. Just a quick one about Eylea. Obviously, the decrease in sales was probably bigger than expected, really. Obviously, there was a boost with a one-off payment in the U.K. You are saying you are confident that Eylea's sales can be roughly in line with last year's. Where is that confidence coming from? Yeah, thanks, Kevin. Eylea, we are seeing two things happening. One is that the uptake is very strong of the new high dose, the 8-milligram dose.

Patients and doctors really prefer the long dosing intervals and really that ability to maintain efficacy with fewer doses. That is a big deal, obviously, in a treatment area where you have to give injections into the eye. We are seeing good uptake there. We are now starting to launch the RVO indication for the high dose. Also, we have a prefilled syringe for high dose. We are seeing good adoption of the high dose. That is our reason for confidence. The challenge that we see is that the launches of the 2 mg dose of biosimilars is actually having a bigger effect, not so much on our volume, but on our pricing. That is why the results were a little softer than we were expecting.

We believe that the combination of new indications, prefilled syringe, and then just the general preference for the less frequent dosing means we'll have a strong run with Eylea for years to come. Thanks very much. All right, thank you very much, Bill. Thanks, Wolfgang. Thank you very much for your questions and also for your interest. This concludes our call for today. We all wish you a very good day. Thank you very much.

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