Bayer: Stumbling Giant from the DAX

Last Updated: 27. November 2023By

Last week it was a surprise to me for the second time that a DAX value had to accept double-digit losses in a day. I had already provided you with an overview of the price crash at Bayer, but today I will go into more detail about the background and what is currently going on at Bayer in detail.

Study for hope bringer ended prematurely So Bayer had to reveal that they had to end the study of the anticoagulant „Asundexian“ prematurely, meaning that phase 3 of the medication had to be ended prematurely due to poor effectiveness.

„Asundexian“ was to be used in patients with atrial fibrillation and stroke risk and this medication was the great hope for Bayer and was already to be ready for the market and usable from 2026.

Great disappointment after previous announcements If you go back a bit in the past, the Bayer Group had always pointed to the importance of the preparation, especially with regard to an expected turnover of 5 billion euros – annually! That would then indeed be more than the pharma giant had earned with any other medication so far.

Understandably, investors and analysts were deeply disappointed and now the fantasy for sustainable growth without the expected blockbuster is obviously missing.

Expiring patents ahead Furthermore, there is the penalty that the patents on the former cash registers, the anticoagulant „Xarelto“ and also the eye medicine „Eyla“, will expire in the middle of the decade and thus generic medicines will find their place here.

It would therefore have been even more important for Bayer to successfully complete „Asundexian“ and bring it to the market, because otherwise the pharma business of Bayer has little to offer in the future and only with „Aspirin“ alone, the company will not be able to generate growth fantasy.

New lawsuits: Glyphosate scandal takes no end Finally, there are always setbacks in the USA with regard to damage claims regarding the herbicide glyphosate.

Recently, the Leverkusen were obliged by a court in the US state of Missouri to pay a compensation claim amounting to 1.5 billion dollars to three victims who attribute their cancer to glyphosate.

In retrospect, Bayer had taken over the glyphosate manufacturer Monsanto for 63 billion dollars in 2018 and has been bombarded with claims for compensation ever since.

At the core, there are supposed to be around 160,000 victims, of which 113,000 proceedings are said to have been completed. Bayer alone has made provisions of 16 billion dollars for these proceedings.

In summary, the reaction of shareholders and analysts is quite understandable, to part with the share after so many „bad news“ and the little good prospects.

If the share was still at 62 euros in February of this year, it closed at 32.69 euros last Friday.

Positive impulses are needed – dividend remains attractive It is questionable how it will continue at the pharma and chemical giant now, because investors need a good „story“ from time to time to believe in and invest in a company. But that seems to have been lost at Bayer at least for the time being.

The share remains something for very speculative investors. The dividend is still a valuable asset in the company and for the remaining shareholders – possibly also for you. So Bayer paid a dividend of 2.40 euros per share in the 2022 financial year. At a price of 32.69 euros on 24.11.2023, the current dividend yield is 7.23%.

That is at least a consolation and otherwise, when you look at the price, you need a lot of aspirin and patience!