1899 acetylsalicylic acid, better known as Aspirin, was registered at the imperial patent office in Berlin. The first-ever synthetic drug went on to become one of the world’s most successful medicines. On Aspirin’s 125th birthday its maker, Bayer, is in no mood for schnapps.
Bayer certainly needs more than a painkiller. Last year it made a net loss of almost €3bn . Sales fell by 6%. It has torched 70% in shareholder value since June 2018, when it completed the acquisition of Monsanto, an American agrochemical giant . If the company is to recover, Mr Anderson must first and foremost undo that deal’s toxic legacy.The $63bn Bayer splurged on Monsanto turned out to be just a downpayment.
All this may have made it harder to replenish its dwindling drug pipeline. The patents for two bestsellers, Eylea, an eye drug, and Xarelto, a blood-thinner, expire in 2025 and 2026 respectively. In November Bayer stopped testing an anti-clotting drug it had hoped could generate more than €5bn in annual sales, after trials showed disappointing efficacy. Another bet, Elinzanetant, a menopause medicine in late-stage testing, looks more promising.
To start the healing process, Mr Anderson has trimmed dividends by 95% and announced large job cuts. He wants to do away with chunks of a 1,326-page book of internal rules for managers and halve the number of management layers from 12 to six. “We hire brilliant people. They don’t need baby-sitters,” he says. The organisational changes may cut annual costs by €2bn, or nearly as much as Bayer spends on administrative expenses, by 2026.