Bayer AG Confirms Strategy Chief Werner Baumann as New CEO
Published: Feb 24, 2016
February 24, 2016
By Alex Keown, BioSpace.com Breaking News Staff
LEVERKUSEN, Germany -- Werner Baumann, Bayer AG ’s head of strategy, will succeed the role of succeed Marijn Dekkers and assume the role of chief executive officer on May 1, Bayer announced this morning.
Baumann was widely considered to be the CEO-designate to replace Dekkers, who has served as CEO since 2010, as the company competes its transition into a full service life science business with a growing oncology pipeline following the divestment of its plastics business. Baumann will take over a Bayer that was recently transformed into three separate life sciences divisions focusing on life sciences—Pharmaceuticals, Consumer Health and Crop Science. Under the newly approved restructuring, starting on Jan. 1, 2016, the three divisions will become an integrated organization under the Bayer brand.
“With its clear focus on the Life Science businesses and its new organizational structure, Bayer is in a position of strength. The course for successful future development has already been set at all levels. Also with a successor from within the company there will be no need for a familiarization period,” Dekkers said in a statement.
Dekkers’ contract will end April 30 following the company shareholders meeting, Bayer said. His tenure with the company will come to an end several months before it was expected. Originally it was thought Dekkers would remain at the helm of Bayer through the end of 2016.
In addition to serving as chief executive, Baumann, who has served at Bayer since 1988, will continue to oversee strategy and portfolio management. That retention of responsibility move means Bayer will eliminate one position on its executive team, the company said.
After the company made its announcement of Dekkers earlier-than-expected retirement and Baumann’s appointment, Bayer’s stock was down slightly this morning, trading at $95.05 per share. Since November when Bayer was trading at $126.85 per share, the stock has seen a steady decline.
Baumann was instrumental in Bayer AG’s acquisition of Scherring in 2006. If he is named as the company’s next leader, industry analysts have predicted he will guide the company through an acquisition of some life sciences company to strengthen its position in crop and animal sciences, Reuters said.
Following the transformation into a life sciences business, Bayer announced it will strengthen its oncology pipeline in order to carve out a bigger share of the $100 billion global market for such treatments. The Germany-based company is looking to launch five oncology treatments within the next few years. In its developmental pipeline Bayer has multiple products, including treatments that marry radiation and biologics. Currently Bayer has 17 oncology therapies in development, including ODM-201 which will be used to treat prostate cancer and copanlisib for the treatment of indolent non-Hodgkin’s lymphoma. Additionally, Bayer has Xofigo for the treatment of patients with castration-resistant prostate cancer, symptomatic bone metastases and no known visceral metastatic disease. Bayer acquired Xofigo in 2014 when it purchased Norway-based Algeta ASA for $2.9 billion. That acquisition also brought the experimental radiation technology called thorium-227 under Bayer’s umbrella. One way Bayer is advancing its pipeline is to look at combination therapies of immune treatments and radiation. The company expects that to be possible through thorium-227. Bayer believes thorium-227 will make it possible for radiation therapy to be linked with a monoclonal antibody that will help stimulate the body’s own immune system to respond to therapy.
To develop its oncology pipeline, Bayer is planning on ramping up its investments into research and development. Last year the company spent $2 billion on R&D. In contrast, Roche spent $8.5 billion on drug R&D. Additionally, Bayer is working with other companies to develop therapies, including Israel-based Compugen Ltd. The two companies are collaborating on antibody-based cancer therapeutics against two novel Compugen-discovered immune checkpoint regulators, CGEN-15001T and CGEN-15022.
Increased oncology R&D will place Bayer in competition with numerous pharmaceutical companies pursuing treatments for a wide variety of cancers and drugs that are establishing themselves as blockbuster treatments, such as Merck ’s Keytruda, which has shown to be effective in treating patients with three types of cancer, melanoma, lung cancer and mesothelioma.