Investor Handout Q2 I 2010

Transcription

1 Investor Handout Q2 I

2 Science For A Better Life 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. Disclaimer

3 Bayer Key Characteristics A leader in its markets Business portfolio aligned to growth markets Track-record of performance and target attainment Promising innovation pipeline Clear dividend policy Outlook projects further growth and higher earnings through 2012 Bayer Investor Presentation Q Page 1 Bayer A Leader in Its Markets 25% 16.0bn HealthCare Pharmaceuticals 10.5bn Leading positions in key categories Consumer Health 5.5bn OTC pharmaceuticals, blood glucose meters and veterinary medicines, global #2-4 53% 22% 6.5bn CropScience Agrochemicals and seeds & traits, global #2 in agrochemicals 7.5bn MaterialScience Polyurethanes and polycarbonates, global #1 Sales 2009: 31.2bn Break-down excluding reconciliation Bayer Investor Presentation Q Page 2 1

4 Fiscal 2009: Successful in a Difficult Environment Underlying EBIT in million 2009 Highlights Underlying EBITDA-margin in % Group sales of 31.2bn (-5.3%) 4,287 4, ,772 EBITDA before special items of 6.5bn (-6.6%); 3rd highest ever 3, , Net income of 1.4bn (-20.9%) Net cash flow significantly improved to 5.4bn (+49.0%) 2,244 Net financial debt reduced by 4.5bn to 9.7bn 1, Unchanged DPS of Group targets largely achieved * % vs As reported in respective year 2002 as reported in as reported in excluding H.C. Starck and Wolff Walsrode margin in 2002 as reported Bayer Investor Presentation Q Page 3 Second Quarter 2010 Further Growth of Sales and Earnings Sales portfolio & currency adj. in million EBITDA pre-special items in million Core EPS in Net Cash Flow in million 9,179 8,009 1,765 1,917 1,399 1, Q2 09 Q2 10 Q2 09 Q2 10 Q2 09 Q2 10 Q2 09 Q % +9% +10% +10% Bayer Investor Presentation Q Page 4 2

5 2nd Quarter 2010 Sales by Segment Sales in million, % yoy, Fx and portfolio adjusted Pharma 2,748 +1% Sales ex-us up almost 6%. US sales (-21%) impacted by generic Yaz, Betaseron and Mirena. Consumer Health 1,557 +4% Driven by OTC pharmaceuticals (+6%) and Animal Health (+10%). Crop Protection 1,476 1,520-9% Unfavorable market and weather conditions resulted in poor demand and intensive competition. ES / BS* % Increasing sales of products for professional users. BioScience +13% Fx-adj. MaterialScience Bayer Investor Presentation Q Page 5 2, % Expansion driven by increased demand across the portfolio and in all geographies. Volumes of main products again above pre-crisis levels. *Environmental Science / BioScience 2010 Financial Outlook Raised on Improving Outlook for MaterialScience And Fx Sales Fx and portfolio adjusted Previous 2010E Updated* 2010E 2012E Sales >5% unchanged ~5% p.a. uebitda increase towards 7bn > 7bn ~8bn Core EPS ~10% >15% average ~10% p.a. to ~ 5 *with Q and confirmed with Q Bayer Investor Presentation Q Page 6 Outlook depends on planning assumptions as detailed in the 2009 annual report 3

6 New Growth Opportunities Pharma Pipeline Ag BioScience Innovative Materials Emerging Economies On the verge of a new business transforming product cycle Sales expected to triple over the next 10 years Supplementing portfolio with new applications research Capturing significant growth Bayer Investor Presentation Q Page R&D And CapEx Budgets HealthCare 2.1bn thereof Pharma 1.7bn 7% MaterialScience 0.2bn CropScience 0.8bn HealthCare 0.5bn 32% MaterialScience 35% 0.5bn 25% 67% 1% 11% 23% Reconciliation 0.04bn Reconciliation 0.2bn CropScience 0.3bn R&D 2010E: ~ 3.1bn CapEx (PPE) 2010E: ~ 1.4bn Bayer Investor Presentation Q Page 8 4

7 Key Pharma Pipeline Assets Potentially Transformational What it does Status Cardiology Xarelto Riociguat Inhibits blood clot formation Lowers blood pressure in the lung 1st indication launched/ filed; Phase III Phase III Oncology Regorafenib Alpharadin Inhibits enzymes important for tumor growth Inhibits enzymes important for tumor growth Targeted treatment of bone metastases in prostate cancer Launched, additional indications in phase II/III Phase III Phase III Eye Diseases VEGF Trap-Eye Inhibits formation of new blood vessels Phase III Bayer Investor Presentation Q Page 9 We Expect Significant Newsflow From Our Pharma Pipeline in 2010 selection Xarelto VEGF-Trap-Eye Visanne Potential newsflow from products in registration Further data from EINSTEIN program in DVT treatment Completion of ROCKET AF trial in stroke prevention in A fib patients Completion of MAGELLAN trial in VTE prevention in medically ill patients First filings in DVT treatment and in stroke prevention Phase III initiation in breast cancer Completion of NExUS lung cancer trial First data from phase III program in wet-amd (VIEW program) Launch for treatment of endometriosis (EU) Xarelto (VTE prevention after hip/knee replacement surgery) (US) Qlaira (OC and treatment of heavy/prolonged menstrual bleeding) (US) Levitra orodispersible tablet (US, EU) YAZ plus (US) Bayer Investor Presentation Q Page 10 5

8 Key Results of the EINSTEIN-DVT Study In patients who had objectively confirmed DVT without symptomatic PE oral rivaroxaban was studied vs. standard therapy* and showed: Non-inferiority for efficacy; primary efficacy outcome: symptomatic recurrent VTE (composite of recurrent DVT, non-fatal PE or fatal PE) Similar findings for the principal safety outcome (composite of major bleeding and clinically relevant non-major bleeding) with numerically lower major bleeds Significant improvement for secondary outcome net clinical benefit: primary efficacy outcome + major bleeding A confirmed positive benefit-risk profile No signal for impaired liver safety No increase in major adverse cardiovascular events Once approved, oral rivaroxaban (15 mg twice-daily for 3 weeks followed by 20 mg once-daily) could provide clinicians and patients with a simple, single drug approach for the acute and continued treatment of DVT Bayer Investor Presentation Q Page 11 *Standard therapy: Low-molecular weight heparin (LMWH) followed by vitamin K antagonist (VKA) DVT: Deep vein thrombosis PE: Pulmonary embolism In All Reported Phase III Studies Xarelto Demonstrated an Excellent Clinical Profile Indication Study Comparator Status Clinical Trial Results # VTE prevention after orthopedic surgery 12,729 patients Enoxaparin launched in >70 countries filed in US Superior efficacy: 52% relative risk reduction* Rates of major bleeding low. No statistically significant difference in both groups. No signal for liver toxicity or cardiovascular rebound Extended secondary prevention of VTE 1,197 patients Placebo Completed Superior efficacy: 82% reduction of recurrent VTE Low incidence in major bleeding no statistically significant difference No signal for liver toxicity no increase in major adverse CV events DVT Treatment 3,449 patients Enoxaparin followed by VKA Completed Non-inferior efficacy Composite of major and clinically relevant non major bleeding similar Numerically lower major bleedings observed for rivaroxaban Significantly improved net clinical benefit ** No signal for impaired liver safety No increase in major adverse CV events DVT: Deep vein thrombosis PE: Pulmonary embolism VTE: Venous thromboembolism VKA: Vitamin K antagonist CV: Cardiovascular # ) Selection, for full data see publications: RECORD data published in NEJM and Lancet, EINSTEIN-Ext. presented at ASH 2009, EINSTEIN-DVT presented at ESC 2010 *) Symptomatic VTE + all-cause mortality in pooled analysis of RECORD 1-4 **) Secondary outcome defined as composite of primary efficacy endpoint plus major bleeding Bayer Investor Presentation Q Page 12 6

9 Attractive AgChem Pipeline With Increased Combined Peak Sales Potential of 1.25bn Peak sales potential Peak gross margin > 150 m > 100 m Spirotetramat Penflufen Thiencarbazonemethyl Isotianil Fluopyram Bixafen Bacillus firmus* Indaziflam > 50 m < 50 m Bayer Investor Presentation Q Page 13 Pyrasulfotole Cyprosulfamide (Safener) Herbicides Fungicides Insecticides Seed Treatment 2010 * Biological control agent; ** Subject to regulatory approval Expected initial launch** 2012 Peak sales potential raised in view of outstanding properties of active ingredients Grow BioScience Sales to 1.4bn by 2018 Planned sales development in million CAGR 12% >1,000 ~1,400 Key growth drivers Fast growing established business in cotton, canola, rice and vegetables Introduction of new varieties Regional expansion CAGR 11% >500 Exploit traits potential through licensing agreements Extension of our crop-portfolio Significant R&D investment (~ 130m in 2009; 200+m in 2012E) 2002* E 2015 E 2018 E *2002 sales pro-forma Bayer + Aventis CropScience R&D capacities strengthened through acquisition of Athenix Bayer Investor Presentation Q Page 14 7

10 Multiple Applications of Advanced Resins Lead Future Growth of Polycarbonates Auto & Transport IT & Communications Electro, Electronics & Appliances Consumer Products Advanced Resins (70% of sales) Above average growth Medical Sheets Average PCS franchise Optical Data Storage (ODS) Extrusion businesses Water bottles +6% p.a. Long-term volume growth Performance Resins (30% of sales) Below average growth Bayer Investor Presentation Q Page 15 Functional Films Innovative Surface Technology for Multiple Applications Properties Ability to conduct electricity, store energy, influence haptics and to contract or expand Conductive, semi-conductive or non-conductive materials can be printed one on top of each other in wafer-thin layers Cost-effective alternative for electronic components comprised of a large number of individual elements Applications Information technology, electrical engineering, automotive industry Example: Makrofol ID Protexxion embeds tiny randomly distributed metal platelets in films, card surfaces become unique as fingerprints Bayer know-how allows cost-effective production of Makrofol ID Protexxion and other security measures, e.g. three-dimensional colored holograms Bayer Investor Presentation Q Page 16 8

11 Bayer is Well Positioned And Captures Significant Growth in Emerging Economies In million, % yoy Fx adjusted Group sales by region Emerging Economies USA -2% 21% Emerging Economies¹ +18% +33% 1,340 36% +12% % 33% 10% % 440 Western Europe +8% Other Territories² +6% Group 9,179m; +9% Emerging Asia³ Latin America Eastern Europe Africa & Middle East Bayer Investor Presentation Q Page 17 ¹ Emerging economies include: Latin America, Asia w/o Japan, Australia, New Zealand, Africa and Middle East incl. Turkey, Eastern Europe ² Other Territories = Japan, Australia, New Zealand, Canada ³ Emerging Asia = Asia minus Japan, Australia, New Zealand Second Quarter 2010 Additional information Bayer Investor Presentation Q Page 18 9

12 HealthCare 2nd Quarter 2010 In million, % y-o-y 812 Consumer Health +10% (+4%) 1,557 ( ) Currency & portfolio adjusted 2,748 Pharma +4% (+1%) HealthCare 4,305m; +6% (+2%) Underlying EBITDA 1,112 1,102-1% 753-7% Underlying EBIT % 482-8% Highlights (currency & portfolio adjusted) Pharma sales ex-us up almost 6% US pharma sales (-21%) impacted by generic Yaz, Betaseron and Mirena Consumer driven by OTC pharma (+6%), Animal Health (+10%). Medical down (-4%) on weak US diabetes market EBITDA reflects business dynamics, 180m higher R&D and selling expenses, negative portfolio effect ( 20m) and positive Fx effect ( 80m) Outlook 2010 (updated following unexpected generic Yaz) Pharma sales level with previous year Consumer Health above market growth HealthCare: Slight increase in sales and uebitda expected to reach at least prior year level % % Q2 09 Q2 10 Q2 09 Q2 10 Bayer Investor Presentation Q Page 19 Pharma Top 10 Products Q2 10 sales in million (yoy changes Fx-adj.) ROW U.S. Betaseron 187 (-10%) 115 (-14%) 302 (-11%) YAZ-Family 209 (+6%) 80 (-44%) 289 (-15%) Kogenate Adalat Mirena Avelox Levitra 170 (+26%) 68 (+23%) 238 (+25%) 139 (+23%) 47 (+11%) 186 (+20%) 176 (+1%) 1 (-9%) 177 (+1%) 65 (+10%) 58 (-34%) 123 (-16%) 95 (+20%) 23 (+24%) 118 (+21%) 51 (-1%) 45 (+3%) 96 (+1%) Aspirin C. 92 (+11%) 92 (+11%) Glucobay 90 (0%) 90 (0%) Bayer Investor Presentation Q Page 20 10

13 CropScience 2nd Quarter 2010 In million, % y-o-y Environmental Science +16% (+9%) BioScience +18% (+11%) 165 Crop Protection 199-1% (-9%) 1,520 CropScience 1,884m; +2% (-5.5%) Underlying EBITDA % % ( ) Currency & portfolio adjusted Underlying EBIT % % Highlights (currency & portfolio adjusted) Unfavorable market and weather conditions resulted in poor demand and intensive competition Expected strong catch-up sales did not materialize Price -3%, Volumes -3%, Fx +7% BioScience with continued good growth and profit momentum Earnings impacted by lower prices and volumes, idle costs ( 50m) as well as higher investments in BioScience. Positive Fx effect ( 60m) Outlook 2010 (updated) Updated outlook reflects unfavorable market conditions in 1H 2010 Provided normal market conditions in 2H 2010, we expect slightly lower FY sales and a significant decline in uebitda % % Q2 09 Q2 10 Q2 09 Q2 10 Bayer Investor Presentation Q Page 21 MaterialScience 2nd Quarter 2010 In million, % y-o-y ( ) Currency & portfolio adjusted * Coatings, Adhesives and Specialties Industrial Operations +7% (+6%) CAS* +43% (+37%) Polycarbonates +67% (+59%) Polyurethanes +44% (+37%) MaterialScience 2,689m; +47% (+40.5%) Underlying EBITDA % Underlying EBIT Highlights Price +8%, Volumes +33%, Fx +6% Volumes of main products again above pre-crises levels Business expansion driven by increasing demand across the portfolio and in all geographies Underlying EBITDA tripled mainly on higher volumes. Selling price increase offset impact from higher raw material / energy prices ( 150m) Outlook 2010 (updated) Previous target of sales increase by ~20%, and more than doubling of uebitda now looks conservative Believe to exceed these targets and anticipate Q sales and uebitda in line with Q Q2 09 Q2 10 Q2 09 Q2 10 Bayer Investor Presentation Q Page 22 11

14 BRIC-MST: Market leading positions in fast growing markets almost19% of 2009 group sales generated in BRIC-MST Bayer Investor Presentation Q Page 23 Emerging Markets (BRIC-MST) Account for Almost 19% of Group Sales 2009 sales by market Emerging markets are expected to drive healthcare market growth 42% 18% 25% BRIC-MST 5,708m Other territories 5% 14% Brazil Russia India China Mexico South Korea Turkey IMS predicts 14-17% CAGR (through 2014) in pharmerging markets In 2009 Brazil was the world s 2nd largest market for crop protection China is the world s largest polycarbonates market By 2015 China is expected to be the world s largest polyurethanes market Bayer Investor Presentation Q Page 24 12

15 BRIC Countries Bayer is Well Positioned and Capturing Significant Growth Sales by market; % yoy Fx adj. RUSSIA 2008: 0.5bn +41% 2009: 0.5bn +8% BRAZIL 2008: 1.4bn +22% 2009: 1.3bn -4% INDIA 2008: 0.4bn +22% 2009: 0.4bn +1% CHINA* 2008: 1.9bn +6% 2009: 2.1bn +4% *includes PR China, Hongkong, Macau and Taiwan Bayer Investor Presentation Q Page 25 China Has Become Our 3rd Largest Market Within Only a Couple of Years In billion, Δ% Fx.-adj. y-o-y +23% % % CAGR +30% % % 2.1 All growth rates are Fx-adj. Greater China includes PR China, Hongkong, Macau and Taiwan Bayer Investor Presentation Q Page

16 Bayer is One of The Leading International HealthCare Companies in China Top products* Glucobay Adalat Avelox Aspirin Cardio Ultravist 5% 10% 15% 20% Growth yoy in % Fx adj. *PR of China HealthCare m +26% y-o-y (Fx-adj.) 25% 30% 35% 70% Impressive growth Driven by both Pharma (+23%) and Consumer Health (+35%) Pharma portfolio includes innovative products like, Scilin Insulin (launch 2010E) and Xarelto Significant investment commitment Approx. 4,500 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) Bayer Investor Presentation Q Page 27 Strong MaterialScience Foothold in China Generates Growth Opportunities MaterialScience 1.2bn -5% y-o-y (Fx-adj.) Leading the recovery >25% of 2009 global sales in AsiaPacific (21% in 2007) 16% of 2009 sales in China (12% in 2007) China sales in 1H 10 again 67% (Fx-adj.) above previous year Major investment China already is the world s largest PCS market China is set to become the world s largest PUR market by 2015 Aerial view on Caojing site Bayer Investor Presentation Q Page bn investment program in integrated polymer site in Caojing, China Significant cost advantages through lower conversion costs and energy consumption Direct customer access through local PUR System Houses and PCS compounding facilities Sales refer to BMS only. China includes PR China, Hong Kong, Macau and Taiwan. 14

17 CropScience in Brazil Strong Growth in One of the World s Largest Agchem Markets In million (Fx adj.) Brazil is the 2nd largest market for CropScience CropScience sales CAGR +20% (+20%) Bayer is one of the leading suppliers and growing strongly (20% CAGR between 2006 and 2009) Risk management systems in place to limit the potential impact of reduced credit availability Barter business expanded Bayer Investor Presentation Q Page 29 Pharma Pipeline Key Development Projects Bayer Investor Presentation Q Page 30 15

18 Our R&D Pipeline Provides a Balanced Mix of NME and LCM Opportunities Phase I (12) Phase II (17) Phase III (21) Colorectal Cancer Acute Heart Failure Breast Cancer Medical ill NSCLC L19-TNFalpha Cinaciguat (sgc Activator) Xarelto Cancer DME Ovarian or Peritoneal Cancer SPAF Thyroid Cancer CA9-ADC VEGF Trap-Eye Xarelto Cancer PH-COPD CRC VTE Treatment Multiple Sclerosis PI3K Inhibitor Riociguat (sgc Stimulator) Xarelto Alemtuzumab Cancer PH-ILD Additional Indications ACS Bone Met. Prev. Breast Cancer MEK-Inhibitor Riociguat (sgc Stimulator) Xarelto Bonefos Cancer PH-LHD Lung Infection wet AMD OC CDK-Inhibitor Riociguat (sgc Stimulator) Cipro inhale VEGF Trap-Eye YAZ Flex Foll. Lymphoma Lung / Ovar / Prostate OC CRVO Menopausal Management Autologous Vaccine Sagopilone (ZK-EPO) E2+DRSP VEGF Trap-Eye Angeliq low-low Hemophilia Cancer Gram-negative Pneumonia PAH Contraception Rec. Factor VII Regorafenib Amikacin inhale Riociguat (sgc Stimulator) LCS (ULD LNG) Anemia Brain Mets, Lung Cancer CTEPH Contraception HIF-PH L19-SIP Riociguat (sgc Stimulator) FC Patch Low DIC: Short-acting Thrombosis Bone Mets Breast Cancer CRC MRI LCM Inhibitor Alpharadin Regorafenib Gadovist CHF Atopic Dermatitis Bone Mets HRPC VV Atrophy / FSD MR Antagonist SEGRA Alpharadin Vaginorm Diagnostic Imaging Alzheimer PET Imaging PET-Tracer Florbetaben Sympt. Uterine Fibroids S-PRAnt New molecular entities (NME) Bayer Investor Presentation Q Page 31 Status as of July 2010 Life cycle management (LCM) Xarelto Target Indications With High Unmet Medical Need Thromboembolism is the single largest cause of morbidity and mortality in the Western world In the US, VTE affects almost 1 million people each year and is responsible for more deaths each year than breast cancer, HIV disease, and motor vehicle crashes combined VTE is the third most common cardiovascular disease in the Western world, and contributes to around 10% of hospital deaths Almost all of the hospital deaths resulting from pulmonary embolism are preventable Bayer Investor Presentation Q Page 32 16

19 Xarelto and the Market for Anticoagulants Estimated treatment days in 2007* (in millions) 30 VTE prevention after orthopedic surgery Launched / filed (US) 120 VTE treatment PH III 340 Primary prevention (excl. orthopedic surgery) PH III in VTE prevention in medically ill patients 440 Stroke prevention in Atrial Fibrillation PH III Secondary prevention Acute Coronary Syndrome (ACS) PH III 1,300 Xarelto: Target Indications Bayer Investor Presentation Q Page 33 *Sources: PADDS, IMS Midas, BAYER estimates Decision resources Rivaroxaban Status of Clinical Development Market Study Facts Phase II Phase III Filing Acute Indications >12,500 patients vs. standard therapy (enoxaparin) VTE prevention after orthopedic surgery launched in > 70 countries; filed in US ~8,000 patients vs. standard therapy (enoxaparin) VTE prevention in medically ill patients 2011e Chronic Indications ~8,700 patients vs. standard therapy (enoxaparin & warfarin) VTE treatment and secondary prevention 2010e ~14,000 patients noninferiority vs. standard therapy (warfarin) Stroke prevention in atrial fibrillation 2010e ~ 14,600 patients in addition to standard therapy Secondary prevention ACS 2011/ 2012e Bayer Investor Presentation Q Page 34 17

20 Stroke Prevention in AF ROCKET-AF 1 is a major outcome study to compare the efficacy and safety of oral rivaroxaban once daily with warfarin for the prevention of stroke and non-central nervous system systemic embolism in patients with non-valvular atrial fibrillation Treatment period months Non-valvular atrial fibrillation, history of stroke, TIA or embolism; or at least 2 of the following: Heart failure Hypertension Age>75 years Diabetes mellitus Randomization Stratum 1 N =14,266 patients R Day 1 Rivaroxaban 20 mg once daily + warfarin placebo Rivaroxaban 15 mg once daily (CrCL ml/min at entry) + warfarin placebo Warfarin target INR 2.5 (INR range 2-3) + rivaroxaban-placebo End of treatment Follow-up Day 30 after last dose The main objective of the study is to evaluate if rivaroxaban is at least as effective as dose-adjusted warfarin for the prevention of thromboembolic events A) Primary efficacy endpoint: composite of stroke and non-cns systemic embolism B) Primary safety endpoint: composite of major and clinically relevant non-major bleeding 1 ROCKET AF= Rivaroxaban once daily oral direct Factor Xa inhibition compared with a vitamin K antagonism for the prevention of stroke and embolism trial in atrial fibrillation CrCL: Creatinine clearance INR: International normalised ratio TIA: Transient ischaemic attack Bayer Investor Presentation Q Page 35 VEGF Trap-Eye Phase III Program in Wet AMD VIEW-1 (US) and -2 (ex-us), ~1,200 patients each are fully enrolled 4 arms in both trials Fixed dosing for 52 weeks followed by PRN dosing for 44 weeks Potential for less frequent dosing with similar gain in vision compared to standard of care is assessed in VIEW VEGF-Trap-Eye 0.5mg q4 weeks 2.0mg q4 weeks 2.0 mg q8 weeks (after 3 monthly doses) Lucentis (ranibizumab) 0.5mg q4 weeks Background wet AMD: Wet AMD due to abnormal blood vessel growth in the eye; accounts for approx. 90% of AMD-related blindness Leading cause of acquired blindness in the elderly Approx. 1.5 million patients annually in the US Initial data from the VIEW program are expected Q Bayer Investor Presentation Q Page 36 18

21 VEGF Trap-Eye: Clinical Program Expanded to Central Retinal Vein Occlusion Central retinal vein occlusion (CRVO) Over 100,000 people in the United States and > 66,000 people in key European countries are estimated to suffer from CRVO CRVO is caused by obstruction of the central retinal vein that leads to a back up of blood and fluid in the retina. This causes retinal injury and potential loss of vision. Release of VEGF contributes to increased vascular permeability in the eye and inappropriate new vessel growth Phase III program in CRVO Two identical studies (COPERNICUS, GALILEO; n=330) 2 arms: 2mg VEGF Trap-Eye vs. sham control injection Primary endpoint: Visual acuity change vs. baseline after 6 months of treatment Data from the CRVO program expected 1H 2011 Bayer Investor Presentation Q Page 37 VEGF Trap-Eye: Encouraging Data from Phase II Study in Diabetic Macular Edema (DME) Phase II trial (DA VINCI) comparing VEGF Trap-Eye vs. laser treatment (n=219) Met primary endpoint (sign. improvement in best corrected visual acuity from baseline to week 24) VEGF Trap-Eye was generally well tolerated Most common ocular adverse events were typical of those associated with intravitreal injections Patients continue to be treated for another 24 weeks Discussion about next steps ongoing Mean improvement in visual acuity at week 24 (in letters) +2.5 Laser Treatment +8.5 to VEGF Trap-Eye (4 dosing groups) P<0.01 for each VEGF Trap-Eye group vs. laser Initial 1 year data from the DA VINCI program expected later in 2010 Bayer Investor Presentation Q Page 38 19

22 Riociguat An Emerging Treatment for Pulmonary Hypertension Pulmonary hypertension (PH) encompasses multiple disease subtypes. Currently treatments are only indicated for pulmonary arterial hypertension (PAH). No. of patients estimated 120,000 Pulmonary arterial hypertension (PAH) Approved products >60,000 Chronic Thromboembolic PH 1,200,000 PH owing to lung disease 460,000 PH owing to left heart disease Riociguat Others Bayer Investor Presentation Q Page 39 Riociguat: The New Mechanism of Action Oral stimulator of soluble guanylate cyclase (sgc) Acts independently of nitric oxide (NO) Enhances the sensitivity of sgc to low levels of bioavailable NO Increased cgmp levels lead to vasodilatation Maintains the crucial balance between oxygen supply and blood flow, avoiding a drop of oxygen in the blood Reduction of pulmonary vascular resistance and alleviation of disease symptoms Riociguat NO sgc* Constricted Pressure Flow rate cgmp Relaxed Pressure Flow rate * native (intact) Bayer Investor Presentation Q Page 40 20

23 Riociguat: Clinical Program Addresses Unmet Medical Need Study Facts Phase I Phase II Phase III Filing PATENT-1 / -2 ~ 460 patients (treatment-naïve or pretreated) vs.placebo (PATENT-1); Efficacy study and long-term extension Pulmonary Arterial Hypertension 2011e CHEST-1 / -2 ~ 270 patients vs.placebo (CHEST-1); Efficacy study and long-term extension Chronic Thromboembolic Hypertension 2011e NCT (PH owing to ILD) ~ 20 patients (PH with interstitial lung disease - ILD) proof-of-concept; efficacy and dosefinding PH owing to ILD NCT (PH owing to COPD) ~ 20 patients (PH with chronic obstructive pulmonary disease - COPD) Single-dose hemodynamic study PH owing to COPD NCT (LEPHT) NCT NCT (DILATE) (PH owing to LHD) 3 studies, 2 study single-dose (25 and 48 patients); 1 study multiple dose (180 patients) PH owing to LHD Bayer Investor Presentation Q Page 41 ILD: Interstitial lung disease; COPD: Chronic obstructive pulmonary disease LHD: Left heart disease Riociguat Demonstrated Clinically Meaningful Improvement in Pulmonary Hypertension Mean improvement over baseline after 12 weeks of treatment (in meters) 6-minute walking distance test (p<0.001) PAH patients Baseline values: PAH: 317 m; CTEPH: 383 m (p<0.001) CTEPH patients PAH: Pulmonary arterial hypertension CTEPH: Chronic thromboembolic pulmonary hypertension Open-label, uncontrolled phase II study involving 75 PAH and CTEPH patients Exercise capacity significantly improved + 23% in PAH-patients + 17% in CETPH-patients Improvement on hemodynamic parameters, i.e. pulmonary arterial pressure, pulmonary vascular resistance Riociguat was well tolerated and had a favorable safety profile Phase III program in PAH and in CTEPH underway Bayer Investor Presentation Q Page 42 21

24 Building a Player in Oncology Capture Future Growth Advancing as a franchise-building opportunity Several phase III studies ongoing in liver, lung, thyroid and kidney cancer Start phase III in breast cancer planned 2H 2010 >200 actively recruiting trials ongoing Building an oncology portfolio: Advancing early oncology pipeline (phase III initiation regorafenib) In-licensed pipeline projects (Alpharadin, Nycomed preclinical oncology program, MEK-inhibitor, BiTE antibody, targets) Divested non-core products (Campath, Fludara, Leukine) Fueled preclinical pipeline as a basis for future growth Bayer Investor Presentation Q Page 43 : A Franchise Building Opportunity Sales in million +28%* 604 Approved for kidney cancer (RCC) and for liver cancer (HCC) - only approved drug with overall survival benefit in HCC Peak sales potential in RCC and HCC combined ~EUR 750 million Comprehensive development program underway Phase III in lung cancer (NSCLC) ROW U.S. Phase III thyroid cancer Phase III breast cancer to be initiated in 2H 2010 *Fx adjusted Bayer Investor Presentation Q Page 44 22

25 Oncology Pipeline at a Glance Autol. Vac. Foll. Lymphoma Autol. Vac.: Autologous vaccine CA9-ADC: Carboanhydrase 9 antibody drug conjugate CDK-I: Cyclin dependent kinase inhibitor CRC: Colorectal cancer HCC: Hepatocellular carcinoma HRPC: Hormone-refractory prostate cancer CDK-I Cancer NSCLC: PI3K-I: MEK-I: Non-small cell lung cancer Phospharidylinositol-3 kinase inhibitor Inhibitor of MEK protein kinase 1: Start phase III planned in : Study in 3rd/4th line L19-TNFα CRC Alpharadin Bone mets in breast cancer Thyroid cancer Regorafenib CRC CA9-ADC Cancer L19-SIP Brain mets, lung cancer HCC (combination) NSCLC 2 PI3K-I Cancer Various cancer types Regorafenib Cancer HCC (adjuvant) Kidney cancer (adjuvant) Kidney cancer MEK-I Cancer Sagopilone Lung / ovar / prostate cancer 1 Breast cancer Bonefos Bone mets in breast cancer Alpharadin Bone mets in HRPC HCC Phase I Phase II Phase III Submitted Launched Bayer Investor Presentation Q Page 45 Alpharadin- A Late-Stage Oncology Pipeline-Project Beyond Alpharadin Alpha-pharmaceutical (based on 223Radium delivering highly energetic, short ranging radiation) Radium as natural bone seeker targeting bone metastases Phase III in symptomatic hormone-refractory prostate cancer ongoing (ALSYMPCA) data expected 2H 2012 Phase II findings in prostate cancer: >40% overall survival improvement (p=0.017) Pain control enhanced quality of life Significant PSA reduction Excellent safety profile Phase II in bone metastases in breast cancer initiated Potential in additional cancer types to be evaluated In-licensed from Algeta Bayer Investor Presentation Q Page 46 23

26 Regorafenib - A Late-Stage Oncology Pipeline-Project Beyond Regorafenib Regorafenib is an orally active multikinase inhibitor Distinct profile targeting angiogenic, stromal, and oncogenic receptor tyrosine kinases-potential for differentiation vs. other VEGF-R inhibitors Phase II, open-label study in kidney cancer with regorafenib (160 mg) administered once daily on a three weeks on/one week off schedule (n=49) 31% partial response (RECIST) 50% stable disease rate Phase I dose-finding study in patients with CRC (n=38) 74% disease control rate in evaluable patients Several Phase II studies ongoing (including GIST, HCC) Phase III development program in 3rd/4th line CRC initiated Bayer Investor Presentation Q Page 47 CRC: colorectal cancer Investor Relations Contacts Dr. Alexander Rosar Head of Investor Relations Phone: alexander.rosar@bayer-ag.de Dr. Jürgen Beunink Phone: juergen.beunink@bayer-ag.de Peter Dahlhoff Phone: peter.dahlhoff@bayer-ag.de Judith Nestmann Phone: judith.nestmann@bayer-ag.de Dr. Olaf Weber Phone: olaf.weber@bayer-ag.de Bayer Investor Presentation Q Page 48 24