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SAP cuts forecast – Bayer with a new takeover

When it presented the figures for the third quarter, the Walldorf-based software company lowered its forecast for this year and announced that it would postpone its medium-term goals. Bayer, on the other hand, wants to strengthen its position in the cell and gene therapy business and undertakes another billion-dollar takeover in the United States.

First things first about SAP and Bayer:

  • According to SAP at the turning point
  • Bayer is looking for a successor to expiring blockbuster drugs

With the publication of the latest quarterly figures, SAP has warned its shareholders and stated that operating profit could “stagnate or be slightly lower” than previously assumed in the next two years. Specifically, SAP is now expecting a currency-adjusted operating profit of between 8.1 and 8 for 2020 .5 billion euros, compared to 8.2 billion euros in the previous year, up to 8.7 billion euros had previously been promised.

In terms of sales, the Walldorf-based company is assuming 27.2 to 27.8 billion euros instead of the previously forecast 27.8 to 28.5 billion. In 2019 as a whole, it was 27.6 billion euros. Due to the corona pollution, the medium-term targets set for 2023 will also be postponed by one to two years.

In the third quarter of 2020, currency-adjusted sales remained stable at EUR 6.54 billion. Operating profit rose by 4 percent after adjusting for currency effects to just under EUR 2.1 billion. The bottom line is an increase in profits of 31 percent to 1.65 billion euros. This was primarily due to a valuation effect at the subsidiary Sapphire Ventures, which invests mainly money in start-ups.

The company is at “a turning point” due to the reaction of its customers to the corona pandemic, said CEO Christian Klein according to the press release. It is now a matter of aligning SAP more towards the cloud and making corresponding investments. CFO Luka Mucic said: ” Our accelerated move to the cloud will ensure we continue on our path as a cloud growth company while remaining focused on cost savings. ”

Products on SAP

The German agricultural and pharmaceutical company Bayer wants to expand its position in the gene therapy business and has therefore announced that it will be joining the US biotech company Asklepios BioPharmaceutical (AskBio). With the billion dollar deal, Bayer is also taking another step to strengthen its pharmaceutical pipeline. This is necessary because the patents of his blockbuster hits – the anticoagulant Xarelto and the eye remedy Eylea – expire in the middle of the decade. Then there is a risk of considerable sales losses due to competing products.

Bayer will initially pay two billion dollars for AskBio, which was founded in 2001 and specializes in gene therapies based on adeno-associated viruses. In addition, additional success-based milestone payments of up to two billion dollars have been agreed. “This acquisition will significantly advance the development of our cell and gene therapy business,” said Bayer CEO Werner Baumann.

AskBio has therapies for the metabolic disease Pompe disease, Parkinson’s disease and heart failure in early clinical development. “With the acquisition, our still young cell and gene therapy business is making a big leap,” said Bayer Pharmaceuticals Director Stefan Oelrich. He sees AskBio as a complement to the stem cell specialist BlueRock Therapeutics, which was acquired in 2019. It focuses on neurological and cardiological diseases, among other things.

Products on Bayer

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Source: HSBC

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