Page 2 Meet Management in Tokyo November Bayer HealthCare. Jörg Reinhardt CEO of Bayer HealthCare AG

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1 Meet Management in Tokyo Bayer HealthCare Jörg Reinhardt CEO of Bayer HealthCare AG November 21, 2012 Disclaimer This presentation may contain forward-looking statements based on current assumptions and forecasts made by Bayer Group or subgroup management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in Bayer s public reports which are available on the Bayer website at The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments. Page 2 Meet Management in Tokyo November 2012

2 Leading Positions in Key Healthcare Markets Sales Split by Segment 2011 Pharma 9,949m Leading positions in key therapeutic categories 25% 58% 7% 20% 14% Consumer Care 3,534m Global #2 in OTC-pharmaceuticals Medical Care 2,500m #1 in fluid injection systems, #1 in contrast media, #4 in blood glucose meters HealthCare 17,169m Animal Health 1,186m Global #5 Page 3 Meet Management in Tokyo November 2012 Top Pharma Products in Important Therapeutic Categories Primary Care Xarelto Adalat Aspirin Cardio Glucobay Avelox Once-daily oral anticoagulant Hypertension treatment Prevention of myocardial infarction Oral antidiabetic Antiinfective Women s Healthcare Oncology Multiple Sclerosis Hematology YAZ-family Mirena Nexavar Betaferon/ Betaseron Kogenate Oral contraception Intrauterine device for contraception Kidney cancer Liver cancer Treatment of multiple sclerosis Recombinant clotting factor VIII for the treatment of hemophilia A Page 4 Meet Management in Tokyo November 2012

3 Consumer Health is an Attractive Part of our Portfolio Consumer Care Aspirin Aleve Bepanthen Canesten One A Day Analgesic, MI prevention Analgesic Dermatological Antifungal Multivitamin Medical Care Contour Contrast Agents Catheters Blood glucose meters Diagnostic imaging (X-ray, MRI) Endovascular devices Animal Health Advantage Baytril Drontal Parasiticide Antiinfective Parasiticide Page 5 Meet Management in Tokyo November 2012 MI: Myocardial infarction 9M 2012: Growth in all Segments Page 6 Meet Management in Tokyo November 2012

4 Growth in All Segments In million, % yoy, () = Fx & portf. adjusted 9M 2012 Sales Earnings Consumer Health +8% (+4%) 36% Pharma +9% (+4%) Adjusted EBITDA* Adjusted EBIT* 5,753 7,936 3,522 3,726 +6% 2,214 2,376 +7% 2,552 2,735 +7% 1,544 1, % Price +1% HealthCare 13,689m; +9% (+4%) Volume +3% Fx +5% Portfolio 0% 1,308 1,350 +3% 1,008 1,031 2% 9M 11 9M 12 9M 11 9M 12 Page 7 Meet Management in Tokyo November 2012 *before special items Top 10 Pharma Product Performance in 9M M 2012 sales in million ( % yoy Fx-adj.) Betaseron Multiple Sclerosis % Kogenate Hemophila A % YAZ-Family Contraception 775-4% Nexavar Cancer % Mirena Contraception % Adalat Hypertension 501-2% Avelox Antiinfective 363-3% Aspirin C. MI prevention % Glucobay Diabetes % Levitra Erectile Dysfunction % Page 8 Meet Management in Tokyo November 2012 MI: Myocardial infarction

5 Clear Priorities for Our Established Pharma Product Portfolio Primary Care Expand business in emerging markets Women s Healthcare Extend leadership beyond oral contraception Oncology Build a multi-asset franchise Multiple Sclerosis Maximize value of Betaferon / Betaseron Hematology Drive Kogenate and expand through R&D Page 9 Meet Management in Tokyo November 2012 Strong Pipeline Page 10 Meet Management in Tokyo November 2012

6 At the Beginning of a Business Transforming New Product Cycle at Pharma Combined Peak Sales Potential > 5.5bn Xarelto Stivarga (Regorafenib) Eylea (VEGF Trap-Eye) Alpharadin Riociguat Radium-223 Dichloride E 2013E 2014E First launches in first / main indication* Page 11 Meet Management in Tokyo November 2012 * Subject to approval as expected Xarelto Effective Anticoagulation For More Patients 1) 1 Clinical Breadth of indications: met or exceeded primary efficacy endpoint in 11/11 phase III studies Phase III trial initiated for the secondary prevention of myocardial infarction and death in patients with coronary or peripheral artery disease 2) Regulatory Filed in: PE treatment and prevention of recurrent DVT and PE in Europe (positive CHMP recommendation); secondary prevention of ACS in Europe and U.S. 3) Marketing VTE prevention following total knee/hip replacement surgery Stroke prevention in patients with atrial fibrillation (SPAF) DVT treatment and prevention of recurrent DVT and PE Treatment of PE and prevention of recurrent PE and DVT Peak sales potential > 2bn Euro Page 12 Meet Management in Tokyo November 2012 SPAF: prevention of stroke and systemic embolism in patients with non-valvular atrial fibrillation, DVT: deep vein thrombosis, VTE: venous thromboembolism, PE: pulmonary embolism, ACS: acute coronary syndrome

7 Xarelto Expect to Exceed 2012 Sales Target of m Status as of November 2012 Outstanding launch performance; most successful launch ever in the German cardiovascular market; market share 1 ~22% vs. dabigatran ~10% U.S. 4 : steady uptake with consistent positive indicators in cardiology Japan: launch activities on track; market share still low UK: reimbursed for SPAF, DVT treatment and VTE prevention 2 ; market share ~3%, growth in SPAF Brazil: strong uptake, ~24% market share 1 ; ~29% of patients are switchers from warfarin Canada: obtained reimbursement 3 ; market share 1 ~8% Roll-out for SPAF in France and Spain since September 2012 Page 13 Meet Management in Tokyo November : retail anticoagulants; ex manufacturer prices; 2: after hip or knee replacement surgery ;3: SPAF after VKA failure; 4: marketed by J&J Eylea (VEGF Trap-Eye) - A New Treatment Option For Various Retinal Diseases Wet age-related macular degeneration (wet AMD) The leading cause of acquired blindness in the elderly Approx. 1.2 million patients in the U.S. Diabetic macular edema (DME) The most prevalent cause of vision loss in patients with diabetes Approx. 370,000 patients with clinically significant DME in the U.S., with 95,000 new cases / year Central retinal vein occlusion (CRVO) May lead to vision loss and other serious complications 100,000 people in the U.S. and > 66,000 people in EU5 Myopic choroidal neovascularization (myopic CNV) A common cause of blindness in Japan Prevalence in Japan is estimated to be approx. 200,000 Page 14 Meet Management in Tokyo November 2012

8 Eylea (VEGF Trap-Eye) Regulatory and Clinical Progress Achieved Wet age-related macular degeneration (wet AMD) Expect first launches in wet AMD in Australia, Germany, Japan and UK end Launch team in place, staffing in various countries ongoing Co-promotion agreement with Santen, a leading ophthalmic pharmaceutical company in Japan established Regeneron reported encouraging uptake in the first year after launch in the U.S. 2 Positive phase III data in CRVO - filing targeted H in Europe Late-stage clinical program underway DME: VISTA-DME North American trial and VIVID-DME EU/Japan trial fully enrolled mcnv: Asian phase III trial ongoing wet AMD: SIGHT phase III trial in China ongoing Peak sales potential 1bn Euro Page 15 Meet Management in Tokyo November 2012 CRVO: central retinal vein occlusion, mcnv: Myopic choroidal neovascularization; DME: Diabetic macular edema; 1:subject to regulatory approval 2 :Marketed by Regeneron; Regeneron has exclusive rights in the U.S. Stivarga (Regorafenib) Three Dimensional Mode of Action Inhibition of proliferation of certain tumor cells Inhibition of tumor microenvironment signals Inhibition of neoangiogenesis Regorafenib is an oral tumor deactivation agent that potently blocks multiple protein kinases, including kinases involved in: Tumor angiogenesis (VEGFR1, -2, -3, TIE2) Oncogenesis (KIT, RET, RAF-1, BRAF, BRAFV600E) Tumor microenvironment (PDGFR, FGFR) Page 16 Meet Management in Tokyo November 2012 VEGFR: vascular endothelial growth factor receptor; TIE2: tyrosine kinase with immunoglobulin-like and EGF-like domains ; PDGFR: platelet derived growth factor receptor; FGFR: fibroblast growth factor receptor;

9 Stivarga (Regorafenib) Shows Potential in Different Forms of Cancer Positive phase III data 29% improvement in overall survival vs. placebo in metastatic colorectal cancer (mcrc) (CORRECT trial) 73% reduction in the risk of progression or death vs. placebo in metastatic gastrointestinal cancer (mgist) (GRID trial) Launched for mcrc in the U.S., filed in EU & Japan (priority review) Filed for mgist in the U.S. (priority review), filing in Europe H1 2013e Additional clinical studies under initiation Liver cancer (2 nd line) Colorectal cancer (adjuvant therapy after resection of liver metastases) Peak sales potential 1bn Euro Page 17 Meet Management in Tokyo November 2012 Treatments for CRPC Patients with Bone Metastases Needed ~900,000 men diagnosed and ~260,000 died from prostate cancer p. a. worldwide 1 CRPC is a form of advanced prostate cancer in which the tumor grows despite castrate levels of testosterone Up to 90% of CRPC patients have radiological evidence of bone metastases Bone metastases are the main cause of disability and death in patients with CRPC No survival benefit from current bone-targeted agents Bone metastasis occurs in almost all prostate cancer patients during the natural course of their disease and typically targets the lumbar spine, vertebrae and pelvis 2 Page 18 Meet Management in Tokyo November World Health Organization. GLOBOCAN Bubendorf L, et al. Hum Pathol. 2000;31(5): CRPC: castration-resistant prostate cancer

10 Alpharadin Addressing Significant Unmet Need for Treating Cancer Bone Metastases Alpha-pharmaceutical (Radium-223 Dichloride, delivering highly energetic, short ranging radiation) in-licensed from Algeta Radium as natural bone seeker targeting bone metastases ALSYMPCA (phase III) trial in symptomatic castration-resistant prostate cancer (CRPC) patients with bone metastases stopped early Alpharadin demonstrated 44% improvement in overall survival vs. placebo Significant delay to skeletal-related events demonstrated in ALSYMPCA First submissions for treating bone metastases in patients with CRPC before the end of 2012 Broader clinical development program in preparation Peak sales potential 1bn Euro Page 19 Meet Management in Tokyo November 2012 Pulmonary Hypertension A Severe, Progressive and Life-threatening Disorder Pulmonary hypertension (PH) encompasses multiple disease subtypes but approved treatments are only indicated for pulmonary arterial hypertension (PAH) ~ 700,000 patients diagnosed 1 with diseases related to / including PH, of which ~ 300,000 patients are potentially eligible for PH treatment No. of patients diagnosed 1 : ~30,000 PAH Approved products ~20,000 ~410,000 2 CTEPH PH owing to lung disease ~240,000 PH-LVD Page 20 Meet Management in Tokyo November 2012 CTEPH: Chronic thromboembolic pulmonary hypertension; LVD: Left ventricular disease 1 Diagnoses estimated in 2009 in US, EU5, J 2 Of which ~ <20% could be treated for PH

11 Riociguat Demonstrated Efficacy in PAH and CTEPH Riociguat is on oral stimulator of sgc, acting independently of nitric oxide, in development for different forms of pulmonary hypertension (PH) Phase III trials in two forms of pulmonary hypertension, PAH & CTEPH, reported at CHEST in October 2012 Both trials met the primary efficacy endpoint (6MWDT) PATENT-1: +36m from baseline after 12 weeks compared with placebo (p<0.0001) in patients with PAH CHEST-1: +46m from baseline after 16 weeks compared with placebo (p<0.0001) in patients with CTEPH Significant improvement observed in relevant secondary endpoints Filing in PAH and CTEPH targeted for H Peak sales potential > 500m Euro Update on further development program of Riociguat in 1H 2013 Page 21 Meet Management in Tokyo November MWDT: 6 Minutes walking distance test, CTEPH: Chronic thromboembolic pulmonary hypertension, PAH: Pulmonary arterial hypertension, sgc Soluble guanylate cyclase Exploiting the OTC Opportunity Page 22 Meet Management in Tokyo November 2012

12 Consumer Care: Aspire to Become #1 in Over-The-Counter Business Fully maximize the potential of leading brands Build a winning future portfolio Improve position in emerging markets Capture advantages of our multidivisional setup Invest in innovation Open for bolton acquisitions and licensing Establish functional excellence in commercial organization Leverage opportunities for all divisions across Bayer HealthCare platforms Page 23 Meet Management in Tokyo November 2012 Major Brands Have Further Penetration Opportunities Regional sales distribution Bepanthen Aleve ~75% US ~ 80% Europe Alka-Seltzer ~90% Americas Page 24 Meet Management in Tokyo November 2012

13 Expanding in Emerging Markets Page 25 Meet Management in Tokyo November M Strong Business Momentum in Emerging Markets Continued Sales in million; % y-o-y Fx adjusted 9M 2012 HealthCare Sales Emerging Economies USA +6% 25% 24% 33% Emerging Economies¹ +9% +12% +9% ~1,600 ~1,500 +8% +2% Western Europe -2% 29% 14% Others² 0% ~800 ~700 HealthCare 13,689m Emerging Asia³ Latin America Eastern Europe Africa & Middle East ¹ Emerging economies include: Latin America, Asia w/o Japan, Australia, New Zealand, Africa and Middle East incl. Turkey, Eastern Europe ² Others = Japan, Australia, New Zealand, Canada ³ Emerging Asia = Asia without Japan, Australia, New Zealand Page 26 Meet Management in Tokyo November 2012

14 Bayer is One of The Leading International HealthCare Companies in China Sales in million; % y-o-y Fx adjusted Top products growth in 9M 2012 Aspirin Adalat Nexavar Avelox Glucobay Avelox HealthCare 9M 2012 ~ 1bn +24% y-o-y (Fx-adj.) +36% +24% +24% +24% +14% Driven by Pharmaceuticals (+26% Fx-adj) ~1,000 sales representatives added in 2011 Approx. 6,900 employees 100m over 5 years to set-up a global R&D center in China Beijing manufacturing site expansion (~ 45m through 2015) Partnership with Tsinghua University (joint drug discovery, student support) Page 27 Meet Management in Tokyo November 2012 Positive Outlook Page 28 Meet Management in Tokyo November 2012

15 2014 Targets Project Accelerated Growth HealthCare sales of ~ 20bn Pharma sales of ~ 11.5bn High-single to low-double-digit % EM growth Consumer Health sales of ~ 8.5bn HealthCare margin* of 28% Pharma margin* of >30% Consumer Health margin* of ~25% Page 29 Meet Management in Tokyo November 2012 *EBITDA before special items to sales in % Building Growth Momentum Leading positions in key therapeutic areas Established product portfolio provides strong business base Accelerated future growth driven by: Strong late-stage pipeline combined peak sales potential > 5.5bn Over-the-counter business further potential for expansion Emerging markets continued business momentum 2014 targets project accelerated business expansion and higher margins Page 30 Meet Management in Tokyo November 2012