Investor Handout Innovations at Pharma June 2016

This presentation may contain forward-looking statements based on current assumptions and forecasts made by Bayer 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 www.bayer.com. The company assumes no liability whatsoever to update these forwardlooking statements or to conform them to future events or developments. Figures for 2012 have been restated due to changes in accounting policies relating to the accounting standards IAS 19R (“Employee Benefits”) and IFRS 11 (“Joint Arrangements”). In addition, Bayer changed accounting for the stock-based compensation program.

Disclaimer

Fast-Growing Global Pharma Business Sales

Successful launch of 5 products

€ billion; ∆% yoy Fx & portfolio adj.

Leading novel oral anti-coagulant

+10%

10.0

+9%

+4%

+1%

9.9

+11%

11.2

10.8

13.7

12.1

Success in treatment of retinal diseases First-in-class હ-pharmaceutical First marketed sGC modulating agent

2010

Page 1

2011

2012

2013

2014

Multi-kinase inhibitor for cancer treatment

2015

• Bayer Investor Handout May 2016

Q1 2016 – Launch Products Continued to Drive Performance at Pharma Sales

Launch Products

EBITDA

in € million; ∆% yoy, Fx & portfolio adj.

Q1‘16 sales, ∆% yoy, Fx adj.

before special items, in € million; ∆% yoy

€617m 3,562

Q1‘15

Page 2

3,889 +12%

Q1‘16

• Bayer Investor Handout May 2016

1,261 +16%

+31% 1,085

Sum

€372m

+49%

€67m

-5%

€75m

+37%

€56m

+48%

€1,187m

+35%

Q1‘15

Q1‘16

Full Year 2016 Pharma Outlook Projects Further Growth in Sales and Earnings Sales ∆% Fx and portfolio adjusted

2015

2016

€13.7bn

Mid- single-digit % increase to ~ €16bn

New Product Sales

€4.2bn

> €5bn

EBITDA

€4.2bn

Mid- to high-single-digit % increase (aim for margin improvement)

Sales

before special items

Page 3

Assuming end Q1 2016 Fx rates (USD 1.14) Outlook depends on specific planning assumptions as detailed in the Annual Report

• Bayer Investor Handout May 2016

Xarelto – Leading Novel Anticoagulant Sales € million; ∆% Fx adj.

• Continued dynamic growth: gaining

+ 34%

~2%-age points market share since

2,252

December 2014 1,679

• ~18 million patients treated to date + 31%

949

617 322

2012

Page 4

• Comprehensive life-cycle management program underway*

 Peak sales potential of 2013

2014

2015

• Bayer Investor Handout May 2016

Q1'16

~€3.5bn reiterated

* in collaboration with J&J

Investigating New Indications for Xarelto Major phase III studies*

# of patients diagnosed**

Indication

Primary *** completion

Chronic heart failure and significant coronary artery disease

~4 million2

May 2018e

Major cardiovascular events in coronary or peripheral artery disease

~13 million1

Feb 2018e

Embolic stroke of undetermined source

~7 million2

Jan 2018e

Peripheral artery disease

~5 million2

Jan 2019e

*examples; ** internal estimates on number of diagnosed patients Page 5

• Bayer Investor Handout May 2016

(1: global; 2: EU major 5 countries +Japan + US) based on multiple published references; ***as published at clinicaltrials.gov status April. 2016

FXla Inhibition - Exploring a Novel Approach For Anti-thrombotic Therapy

FXIa

FXIa inhibition blocks thrombosis, but not hemostasis

Amplification Vessel wall injury

Tissue Factor

Factor Xa

Thrombin

Risk for vessel occlusion = Thrombosis Vessel injury coverage = Hemostasis

• FXI inhibition may have potential for antithrombotic therapy without increased bleeding risk • FXI inhibition may offer an additional pathway for treating patients for whom there are currently no suitable therapeutic options available Page 6

• Bayer Investor Handout May 2016

Investigating New Approaches in Anticoagulation via FXI Inhibition IONIS-FXIRX Antisense Drug Candidate

•

Antisense oligonucleotide1 that specifically reduces the biosynthesis of clotting factor XI Positive Phase II data2

•

Fully human IgG Anti-FXIa Antibody

•

IONIS FXI 200 mg

IONIS FXI 300 mg

Preclinical studies showed

• •

•

Enoxaparin 40 mg

Strong antithrombotic effect in standard animal models of venous & arterial thrombosis No bleeding in sensitive animal models despite high dosing & combination with antiplatelet therapy

Phase I initiated

Oral small molecule FXIa Inhibitor • Preclinical profile confirms anti-coagulation potential with low bleeding risk • Phase I initiated 1) In-licensed from IONIS-Pharmaceuticals Page 7

2) Prevention of thrombosis in patients undergoing total knee arthroplasty Büller et al., NEJM (2015) 372; 232

• Bayer Investor Handout May 2016

Eylea – Gaining Share in Key Markets Sales € million; ∆% Fx adj.

• Significant label expansion achieved.

+ 57 % 1,228

New indications approved: DME, mCNV and RVO

759

• Life-cycle management including + 49 % 372

333

combination therapy with either PDGFR-β antibody* or Ang2antibody*

14 2012

2013

2014

2015

Q1'16

 Peak sales potential of ≥ €1.5bn DME: Diabetic macula edema mCNV: myopic Choroidal neovascularization RVO retinal vein occlusion

Page 8

• Bayer Investor Handout May 2016

Marketed by Bayer ex-US only *in collaboration with Regeneron

Eylea and PDGFR-ß-Ab or Ang2-Ab Combination Therapy •

Eylea and a PDGFR-ß antibody co-formulation in wet AMD

• Program currently in phase II 1 • PDGF may induce maturation of pathological neovascularization through pericyte stimulation; showed experimentally to recruit profibrotic cells in the eye and may therefore have a role in retinal scarring secondary to wet AMD2

• PDGF inhibition can potentially augment efficacy of VEGF inhibition in wet AMD3

• Eylea and a Ang2 antibody co-formulation in wet AMD and DME • 2 ongoing phase II programs1 evaluating the combination of coformulated Eylea with the Ang2 antibody nesvacumab

• Ang2 together with VEGF have the potential to influence pathological development of new blood vessels and the permeability of blood vessels in certain eye diseases 1 In

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• Bayer Investor Handout May 2016

collaboration with Regeneron

3 Diago et al. Mayo Clin. Proc. 2008; 83, 231-234; 2 Kudelka et al. Exp Rev Ophthalmol. 2013; 8(5):475-484; Ab antibody; PDGF(R): Platelet-derived growth factor (receptor) ; Ang2: Angiopoietin 2

Xofigo 1st in Class Alpha-Pharmaceutical Sales € million; ∆% yoy Fx adj.

+ 43%



Roll-out on track • Approved in 49 countries* • Launched in 36 countries*



Globally, ~18,600 patients have received Xofigo treatment*



Life-cycle management program targeting label expansions in CRPC and additional cancer indications underway

257

157 + 37%

75 41

2012

Page 10

2013

2014

• Bayer Investor Handout May 2016

2015 Q1'16

CRPC: Castration resistant prostate cancer * As of April. 2016

Addressing Multiple Life-cycle Opportunities for Radium-223 Dichloride (Xofigo) Life-cycle Opportunities

Addressed Through

Repeat dosing in CRPC

Phase II trial assessing the short and long-term safety of re-treatment

Higher dose in CRPC

Phase II trial with dose higher than the approved 50 kBq/kg

Earlier disease stages of CRPC

Phase III combination trial with abiraterone

Combination studies in CRPC

Phase II trial in combination with abiraterone or enzalutamide Phase I and/or II studies in breast cancer, osteosarcoma and potentially in additional cancer types

Expansion into additional cancer types

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• Bayer Investor Handout May 2016

Expanding CRPC Treatment to Nonmetastatic Disease Hormone-sensitive Prostate Cancer (PC)

nmPC

Castration-resistant Prostate Cancer (CRPC)

nmPC potentially ODM-201

mPC asymptomatic

mPC symptomatic

e.g. Xofigo1

Therapies available? 

Most PC patients eventually build up resistance to anti-androgen treatments



CRPC: more aggressive tumor progression and poor prognosis



Target population ODM-201: non-metastatic CRPC patients, where no therapy is approved • •

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Addresses a large prevalent population Long treatment duration (>2 years)

• Bayer Investor Handout May 2016

AR: Antigen Receptor; m: metastatic; nm: non-metastatic 1 indicated for treatment of symptomatic bone metastasis in CRPC

ODM-201 – Targeting the Primary Tumor of CRPC An AR antagonist in development in non-metastatic CRPC* • M0 prostate cancer market has no approved therapies • Unique profile including

armaceuticals

•

Promising phase II results

•

No CYP inhibition or induction expected with therapeutic doses; hence low potential for drug-drug interaction

•

Low penetration into the brain1 vs enzalutamide2, and ARN 5092 in preclinical studies, which may decrease brain-associated sideeffects

• Primary completion phase III 2018e 1. Rat autoradiography (QWBA confirms brain/plasma ratio of 14C-ODM-201 related radioactivity was 0.04-0.06) indicating negligible penetration to the brain Page 13

2. Refs. Clegg et al, Cancer Research 2012; Forster at al, Prostate 2011 *in-licensed from Orion Ph

• Bayer Investor Handout May 2016

Copanlisib – Clinical Program in NHL Progressing ● PI3K inhibitor targeting non-solid tumors with broad clinical development program with a differentiated profile:  Inhibits both PI3K-α and –δ isoforms  Once weekly dosing  i.v. dosing

● Phase II in iNHL ongoing - preliminary results* encouraging:  Significant activity shown  Complete responses observed in several forms of NHL**

● Phase III programs on-going:  ≥ 3rd line iNHL  ≥ 2nd line iNHL

● Clinical program also addresses aggressive NHL (DLBCL)  phase II initiated

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• Bayer Investor Handout May 2016

iNHL: indolent Non-Hodgkin’s lymphoma; DLBCL: diffuse large B cell lymphoma; *Dreyling et al. ASH 2013; **in FL, mantle cell lymphoma, peripheral T-cell lymphoma and DLBCL

Anetumab Ravtansine – A Novel Antibody-Drug-Conjugate Therapy for Cancer Mesothelin is overexpressed by a number of solid tumors, including

 mesotheliomas (100%)  pancreatic cancer (~80-100%) and  ovarian adenocarcinomas (~80%)

Anetumab ravtansine

• Anetumab selectively binds to mesothelin-expressing cancer cells • Ravtansine - zytotoxic payload targeting tubulin function Confirmed Partial Response

•

Phase I, single-agent, dose-escalation study* with promising results

• Phase II initiated

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• Bayer Investor Handout May 2016

*Bendell et al; AACR, Washington, April 6-10, 2013

Soluble Guanylate Cyclase Stimulation: Pioneering Novel Therapeutic Options A novel mode of action… • •

•

An entirely new drug class backed by >20 years of research at Bayer

Anti-fibrosis

soluble Guanylate Cyclase (sGC) is the only known nitric oxide (NO) receptor in the human body

Vasodilation

sGC signaling is a key element of systemic arterial hypertension mediated via cGMP activation

•

Proof-of-concept demonstrated (Adempas marketed since 2013)

•

Joint development and commercialization with Merck & Co.

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… mediating multiple physiological effects

• Bayer Investor Handout May 2016

Antiproliferation Antiinflammation sGC: Soluble guanylate cyclase cGMP: Cyclic guanosine monophosphate

Adempas First Marketed sGC Modulating Agent Sales € million

56 49

51

44 38



Approved in PAH and CTEPH



>7,200 patients treated to date1



Life-cycle management underway

31 26

Q3 ‘14

Q4 ‘14 Q1 ‘15 Q2 ‘15

Q3 ‘15 Q4 ‘15



Systemic sclerosis (SSc)



Cystic fibrosis



PH associated with idiopathic interstitial pneumonias (PH-IIP)



Positive phase IIa data in PH-ILD



Phase IIb program ongoing for SSc and PH-IIP – data 2017e*

Q1 ‘16 1) as of end of April 2016; *) as of April ’16, PH: Pulmonary hypertension PAH:

Page 17

Pulmonary arterial hypertension; CTEPH: Chronic thromboembolic pulmonary hypertension PH-ILD: pulmonary hypertension interstitial lung disease

• Bayer Investor Handout May 2016

Unmet Medical Need – Chronic Heart Failure Unmet Need

Despite existing therapies and evolving treatment landscape, morbidity and mortality of heart failure remain high Clinical Burden1

• 26 million people with HF worldwide • 6.5 million in Europe • 600, 000 new cases per year • 5.8 million in US • 500,000 new cases per year • 1 in 5 adults over 40 years of age will develop heart failure in their lifetime

Economic / Societal Burden



25 bn $ in annual health care costs in 2010 (US)



Average cost of HF-related hospitalization ranges from ~4,000 EUR to >20,000 EUR2

• 1 in 5 patients will die within 1 year of diagnosis

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• Bayer Investor Handout May 2016

1 ref: http://www.medicographia.com/2012/02/the-heart-failure-epidemic; CHF: chronic heart failure HFpEF: HF with preserved EF; 2: Bayer estimates

Vericiguat – Targeting Treatment of Heart Failure Direct increase of cGMP level through sGC stimulation as new MoA 

cGMP is a critical regulator of cardiac and vascular function



In heart failure, cGMP deficiency due to insufficient sGC stimulation may contribute to progressive myocardial injury and dysfunction



New mode of action aims at restoration of deficient sGC-derived cGMP



Holds promise to improve cardiac performance



Potential reduction in morbidity and mortality on top of standard of care in heart failure



Preparations to enter phase III in HFrEF1 underway

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sGC, Soluble guanylate cyclase; cGMP: Cyclic guanosine monophosphate; MoA: Mode of Action; 1 with the partner, Merck & Co., Inc.

• Bayer Investor Handout May 2016

Vericiguat Dose Dependently Reduced NTproBNP in Heart Failure Patients 

SOCRATES Phase IIb trial in patients with HFrEF (N = 456)1



Prim. endpoint (pooled analysis) not met



10 mg dose demonstrated greater reductions in log-transformed NT-proBNP than placebo at 12 weeks



Patients randomized to 10 mg dose daily achieved:

-0 .1 -0 .2 -0 .3

P= 0.15



Greater improvement in left ventricular ejection fraction



Numerically fewer cardiovascular deaths or HF hospitalizations

-0 .5

-0 .4

P < 0.05

-0 .6

C h a n g e in lo g -tra n s fo rm e d N T -p ro B N P

0 .0

Change in log-transformed NT-proBNP

Placebo Placebo

1.25mgmg 2.5 2.5mg to 5mg to 10mg 1.25 mg 2.5 2.5 to 2.52.5 to 5 mg 10 mg

P < 0.02

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• Bayer Investor Handout May 2016

Pooled Pooled



Adverse events were not increased in the highest target dose arm of Vericiguat compared to placebo

HF: Heart failure; HFr(p)EF: Heart failure with reduced (preserved) ejection fraction; 1) Gheorghiade, M. et al. JAMA (2015), doi: 10.1001/jama 2015.15734

Unmet Medical Need – Diabetic Kidney Disease (DKD) Unmet Need

• Limited efficacy of SoC (ACEI/ARB) in DKD • No approved MRAs in kidney disease Clinical Burden

Economic / Societal Burden

• ~29 million people with diabetes in the US (9.3% of the population)



Annual treatment cost per patient range from ~2,000 EUR2 in earlier disease stages to ~ >75,0002 EUR at dialysis



Diabetes prevalence rising globally

• Diabetes causes 44% of new cases of kidney failure

• CV mortality dominates CKD with 45% of deaths1

SoC: Standard of Care; ACEI: Angiotensin-converting enzyme (ACE) inhibitors; ARB: Angiotensin receptor blocker; CKD: chronic kidney disease; CV: cardiovascular Page 21

• Bayer Investor Handout May 2016

1: United States Renal Data System 2012; 2: Bayer estimates

Rationale for Developing Finerenone in Diabetic Kidney Disease Finerenone

Diabetic Kidney Disease

●

Finerenone is a novel nonsteroidal MRA with a differentiated profile

●

~29 million people with diabetes in the US (9.3% of the population)

●

Steroidal MR antagonists are not approved for kidney diseases

●

Diabetes causes 44% of new cases of kidney failure

●

> 35% of people > 20 years of age develop (DKD)

●

Cardiovascular (CV) mortality dominates CKD with 45% of deaths1

●

A Finerenone phase IIb (ARTSDN) study in Diabetic Nephropathy was successfully completed

 Significant need for innovative therapies  Phase III program in DKD progressing Page 22

• Bayer Investor Handout May 2016

MRA: MR antagonist ; HF: heart failure; CKD: chronic kidney disease; CV: cardiovascular UACR: urine albumine-creatinine ratio; AEs: adverse events: SAE: severe AEs; 1: United States Renal Data System 2012

Finerenone – Phase III Program 2 Event-Driven Outcome Trials Diabetic Kidney Disease FIGARO-DKD ● Type II Diabetes and CKD ● DKD with high risk of developing CV events ● Primary cardiovascular endpoint

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• Bayer Investor Handout May 2016

FIDELIO-DKD ● Type II Diabetes and CKD ● DKD with high risk of progression of CKD and developing CV events ● Primary renal endpoint

CKD: chronic kidney disease; DKD diabetic kidney disease CV: cardiovascular;

Finerenone – Phase III FIGARO-DKD and FIDELIO-DKD Trial - Design

FIGARO-DKD ● FInerenone in reducinG cArdiovascular moRtality and mOrbidity in DKD ● N~6,400 ● Primary EP: composite of CV death or non-fatal CV events

FIDELIO-DKD ● FInerenone in reducing kiDnEy faiLure and dIsease prOgression in DKD ● 4,800 ● Primary EP: composite of kidney failure, decrease of eGFR≥40% from baseline or renal death

Page 24

• Bayer Investor Handout May 2016

OD: once a day; DKD: diabetic kidney disease; eGFR estimated glomerular filtration rate; EP: endpoint

Modulating Hemostatic Balance in Hemophilia Anticoagulant Factors

Procoagulant Factors

Bleeding

Clotting

In hemophilia and other bleeding disorders, clotting can be enhanced by •

Increase in procoagulant factors, e.g. factor VIII supplementation

•

Decrease in anticoagulant factors, e.g. inhibition of TFPI (Tissue Factor Pathway Inhibitor)

Page 25

• Bayer Investor Handout May 2016

TFPI-Inhibition as a Potential Novel Treatment Principle for Hemophilia A/B Role of TFPI* in Coagulation

anti-TFPI Facts  Can reversibly inhibit various clotting

factors leading to bleeding  Inhibition of TFPI potentially offers

novel treatment option for Hemophilia A/B patients with or without inhibitors  Hemophilia patients depend on extrinsic

pathway for clotting. anti-TFPI Ab inhibits TFPI - thereby restoring impaired hemostasis

 BAY1093884 is a fully human

monoclonal antibody  Phase I initiated

Page 26

• Bayer Investor Handout May 2016

*TFPI: Tissue factor pathway inhibitor

Robust Innovation Pipeline in Hemophilia and Bleeding Disorders Preclinical

Phase I

Phase II

Phase III

Filed

Marketed

Kogenate Kovaltry (First launches in Q1 2016) Bay 94-9027 Damoctocog Alfa Pegol (long acting FVIII)

FVIII supplementation

Anti-TFPI Antibody

Gene Therapy

Page 27

• Bayer Investor Handout May 2016

Novel MoA

TFPI: Tissue factor pathway inhibitor MoA: Mode of action

Damoctocog Alfa Pegol (BAY 94-9027) Reduction of Infusion Frequency in Prophylaxis  Site-specific PEGylated B-domain-deleted recombinant factor VIII - Filing planned for mid 2017  Attachment of PEG extends half-life without reducing FVIII activity

Phase III results

 No inhibitors against FVIII developed during treatment period, hypersensitivity reaction in two patients within the first 2 weeks of treatment

Page 28

• Bayer Investor Handout May 2016

*Median ABR for the 32 (74%) completers was 0.96 ABR: Annualized bleeding rate

Leading in Women´s Healthcare YAZ-family Oral contraception

Long-acting contraception

Gynecological therapies

Page 29

Beyaz, Safyral, Natazia, Qlaira

Mirena-family, the leading long-acting reversible contraception devices

Visanne, a new option for treatment of endometriosis

• Bayer Investor Handout May 2016

Uterine Fibroids - The Most Common Benign Tumors in Women of Reproductive Age ●

5-10% of fertile women suffer from symptoms (peak in late reproductive years)

●

Common symptoms: heavy menstrual bleeding, pelvic pain and reproductive dysfunction

●

Benign, progesterone and estrogen tumors of the myometrium

●

Current therapies include surgical procedures, ulipristal (sPRM) or shortterm use of GnRH analogs

Page 30

• Bayer Investor Handout May 2016

sPRM- selective progesterone receptor modulator GnRH - gonadotropin-releasing hormone

Vilaprisan – Developed For Treatment of Uterine Fibroids Targeting best in class drug for treatment of uterine fibroids: Novel oral, highly potent and selective progesterone receptor modulator



Exhibits marked efficacy in an innovative humanized fibroid disease model1





Phase IIa data (N=67) showed proof of concept including: •

Reduction of bleeding

•

Reversal of amenorrhea after treatment cessation

•

No prohibitive safety findings

Arm 1 (n=300): Dose finding study (placebo controlled) Arm 2 (n=138): Vilaprisan vs. ulipristal vs. placebo First phase IIb data H1 2016e; topline data suggest a very competitive profile

1

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• Bayer Investor Handout May 2016

Wagenfeld et al. Hum Reprod. 2013 Aug;28(8):2253-64

Summary 

Fast growing global pharma business



Growth mainly driven by launch products Xarelto, Eylea, Stivarga, Xofigo, Adempas



Combined peak sales potential of  €7.5 billion for launch products



Promising pipeline opportunities from life-cycle management and progressing mid-stage projects



Focus Finerenone phase III on DKD



Plan to enter phase III in chronic heart failure (HFrEF) with Vericiguat



Positive top-line data for Vilaprisan in first phase II for treatment of uterine fibroids

Page 32

• Bayer Investor Handout May 2016

HFrEF: Heart failure with reduced (ejection fraction;

Date

Event

Publication

Wednesday, July 27, 2016

Investor Conference Call

Q2 2016 Interim Report

Wednesday, October 26, 2016

Investor Conference Call

Q3 2016 Interim Report

Wednesday, February 22, 2017

Investor Conference Call

2016 Annual Report

Thursday, April 27, 2017

Investor Conference Call

Q1 2017 Interim Report

Friday, April 28, 2017

Annual Stockholders’ Meeting

Reporting Events

Dr. Alexander Rosar Head of Investor Relations Phone: +49-214-30-81013 E-mail: [email protected]

Dr. Jürgen Beunink Phone: +49-214-30-65742 E-mail: [email protected]

Judith Nestmann Phone: +49-214-30-66836 E-mail: [email protected]

Peter Dahlhoff Phone: +49-214-30-33022 E-mail: [email protected]

Constance Spitzer Phone: +49-214-30-33021 E-mail: [email protected]

Prof. Dr. Olaf Weber Phone: +49-214-30-33567 E-mail: [email protected]

Contacts