Focus on Innovation

Pharmaceuticals

Pharmaceuticals focuses on indications with high medical need in the areas of cardiovascular disease, oncology, gynecology, ophthalmology and hematology. We conduct research and development activities at several locations, mainly in Germany, the United States, Japan, China, Finland and Norway.

In line with our targets for 2016 we transferred 12 new molecular entities from our research pipeline into preclinical development in the reporting year. We define a new molecular entity (NME) as a new chemical or biological substance that has not been in development to date. In preclinical trials these substances are examined further in various models with respect to their suitability for clinical trials and linked “first-in-man” studies. In 2016, we conducted clinical trials with several drug candidates from our research and development pipeline. We strengthened products that were already on the market through life cycle management activities to further improve their application and/or expand their spectrum of indications.

Group target 2016:

transition of 10 new molecular entities (NMEs) into development

Progress in clinical Phase II projects

The following table shows our most important drug candidates currently in Phase II of clinical testing:

Research and Development Projects (Phase II)1

Indication

Cancer

Serious eye diseases2

Heart failure

Prevention of thrombosis3

Recurrent / resistant non-Hodgkin lymphoma (NHL)

Renal anemia

Chronic heart failure

Wet age-related macular degeneration2

Breast cancer with bone metastases

Cancer, various studies

Cancer

Diffuse systemic sclerosis

Cystic fibrosis

Secondary prevention of acute coronary syndrome (ACS)4

Symptomatic uterine fibroids5

Endometriosis

1 As of January 31, 2017
2 Sponsored by Regeneron Pharmaceuticals, Inc.
3 Sponsored by Ionis Pharmaceuticals, Inc.
4 Sponsored by Janssen Research & Development, LLC
5 Based on positive Phase II study data, the decision was taken to initiate Phase III studies.

The nature of drug discovery and development is such that not all compounds can be expected to meet the predefined project goals. It is possible that any or all of the projects listed above may have to be discontinued due to scientific and / or commercial reasons and will not result in commercialized products. It is also possible that the requisite U.S. Food and Drug Administration (FDA), European Medicines Agency (EMA) or other regulatory approvals will not be granted for these compounds. Moreover, we regularly review our research and development pipeline so that we can give priority to advancing the most promising pharmaceuticals projects.

Below are the most significant changes that occurred in 2016 compared with the previous year:

In March 2016, we expanded our existing cooperation with Regeneron Pharmaceuticals, Inc., United States, to jointly develop a combination therapy of the angiopoietin2 (Ang2) antibody nesvacumab and aflibercept for the treatment of serious eye diseases. Two ongoing Phase II clinical studies are evaluating the combination therapy as a single intravitreal injection in patients with wet age-related macular degeneration or diabetic macular edema.

Also in March 2016, the study involving BAY 1007626, or progestin IUS (contraception), was discontinued. Clinical development of roniciclib (cancer) was discontinued. Bayer does not intend to pursue the development of refametinib (cancer) and the project will be returned to Ardea BioSciences, Inc., United States.

In May 2016, we terminated our Phase II study investigating riociguat (tradename: Adempas™) in patients with pulmonary hypertension associated with idiopathic interstitial pneumonia (PH-IIP) following the recommendation of an independent data monitoring committee (DMC).

We also will not further pursue the development of BAY 98‑7196 + anastrozole (intravaginal ring) for the indication endometriosis.

In September 2016, our partner Regeneron Pharmaceuticals, Inc., United States, published the first data from a clinical Phase II study investigating the treatment of wet age-related macular degeneration with rinucumab, a PDGFR-β antibody, in combination with aflibercept (tradename: Eylea™). Although the study failed to meet its primary endpoint, a statistically significant improvement in visual acuity after 12 weeks, Regeneron will, however, continue the study as planned. Further data will be analyzed after 28 weeks and following the conclusion of the trial (after 52 weeks). Bayer will then examine the available data and decide on the next steps.

Progress in clinical Phase III projects

The following table shows our most important drug candidates currently in Phase III of clinical testing:

Research and Development Projects (Phase III)1

Indication

Pulmonary infection

Nonmetastatic castration-resistant prostate cancer

Metastatic hormone-sensitive prostate cancer

Non-cystic fibrosis bronchiectasis

Various forms of non-Hodgkin lymphoma (NHL)

Hemophilia A

Diabetic kidney disease

Combination treatment of castration-resistant prostate cancer

Colon cancer, adjuvant therapy

Prevention of major adverse cardiac events (MACE)

Anticoagulation in patients with chronic heart failure2

Long-term prevention of venous thromboembolism

Prevention of venous thromboembolism in high-risk patients after discharge from hospital2

Embolic stroke of undetermined source (ESUS)

Peripheral artery disease (PAD)

Pulmonary infection

Chronic heart failure3

1 As of January 31, 2017
2 Sponsored by Janssen Research & Development, LLC
3 Sponsored by Merck & Co., Inc., United States

The nature of drug discovery and development is such that not all compounds can be expected to meet the predefined project goals. It is possible that any or all of the projects listed above may have to be discontinued due to scientific and / or commercial reasons and will not result in commercialized products. It is also possible that the requisite U.S. Food and Drug Administration (FDA), European Medicines Agency (EMA) or other regulatory approvals will not be granted for these compounds. Moreover, we regularly review our research and development pipeline so that we can give priority to advancing the most promising pharmaceuticals projects.

Below are the most significant changes that occurred in 2016 compared with the previous year:

In the first quarter of 2016, we decided to focus our development activities for finerenone on the indication of diabetic kidney disease. A study in the indication of chronic heart failure will therefore not be carried out.

In May 2016, a clinical Phase III study investigating regorafenib (tradename: Stivarga™) in unresectable liver cancer reached its primary endpoint, a statistically significant improvement of overall survival. The study investigated regorafenib in patients with hepatocellular carcinoma whose disease had further progressed during prior treatment with sorafenib (tradename: Nexavar™). Based on these data, we submitted regorafenib for marketing authorization for the treatment of unresectable liver cancer in Europe, Japan and the United States in the third quarter of 2016.

In June 2016, we agreed with Orion Corporation, Espoo, Finland, to expand the global clinical development program for the novel androgen receptor (AR) antagonist BAY-1841788 (ODM-201).

A new clinical Phase III study is evaluating BAY-1841788 in men with newly diagnosed metastatic hormone-sensitive prostate cancer (mHSPC) who are starting first-line hormone therapy.

In June 2016, we formed a new research partnership with the U.S. National Surgical Adjuvant Breast and Bowel Project (NSABP), a leading clinical trials cooperative group. A clinical Phase III study will investigate regorafenib as a single agent for adjuvant treatment following completion of standard adjuvant chemotherapy in patients with advanced but not yet metastatic colon cancer.

In September 2016, a new clinical Phase III trial was initiated to evaluate vericiguat, a soluble guanylate cyclase (sGC) stimulator, in patients suffering from chronic heart failure with reduced ejection fraction. The development and commercialization of vericiguat are part of the worldwide strategic collaboration between Bayer and Merck & Co., Inc., United States (through a subsidiary), in the field of sGC modulation.

In February 2017, the Phase III COMPASS study with Bayer’s rivaroxaban in patients with coronary or peripheral artery disease showed overwhelming efficacy and met its primary endpoint early.

Clinical trials are an essential tool for determining the efficacy and safety/tolerability of new developmental products before they can be used to diagnose or treat diseases. The benefits and risks of new medicinal products must always be scientifically proven and well documented. All clinical trials at Bayer satisfy strict international guidelines and quality standards, as well as the respective applicable national laws and standards.

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Transparency through publication of clinical trials

Bayer publishes information about clinical trials in line with the respective applicable national laws and according to the principles of the European (EFPIA) and U.S. (PhRMA) pharmaceutical associations, these principles being defined in a joint position paper.

Pharmaceuticals publishes information on its own clinical trials both in the publicly accessible register www.ClinicalTrials.gov and in its own “Trial Finder” database. In the case of approved products, summarized results of Phase II, III and IV clinical trials are accessible online through the “Trial Finder.” Upon request, scientists can receive access to anonymized data at the patient level via the portal www.clinicalstudydatarequest.com.

Further information on our globally uniform standards, the monitoring of studies and the role of the ethics committees can be found on the here.

Filings and approvals

We regularly evaluate our research and development pipeline in order to prioritize the most promising pharmaceutical projects. Following the completion of the required studies with a number of these drug candidates, we submitted applications to one or more regulatory agencies for approvals or approval expansions. The most important drug candidates in the approval process are:

Main Products Submitted for Approval1

Indication

Europe, Japan, U.S.A.: second-line treatment for unresectable liver cancer

U.S.A.; secondary prophylaxis of acute coronary syndrome (ACS)

1 As of January 31, 2017

2 Submitted by Janssen Research & Development, LLC

In February 2016, Bayer received approval from the European Commission for Kovaltry™ (Bay 81‑89-73) for the treatment of hemophilia A in patients of all age groups. Kovaltry™ is an unmodified recombinant factor VIII product that in clinical trials has demonstrated efficacy and tolerability as an on-demand therapy and for prophylactic use two or three times per week by hemophilia A patients. In March 2016, Kovaltry™ was approved by the U.S. Food and Drug Administration (FDA) and the Japanese Ministry of Health, Labour and Welfare (MHLW).

In March 2016, the Japanese MHLW granted marketing authorization for Xofigo™ (radium‑223 dichloride) for the treatment of adult patients with castration-resistant prostate cancer and bone metastases.

In May 2016, the U.S. Food and Drug Administration (FDA) approved Gadavist™ / Gadovist™ (active ingredient: gadobutrol) as the first contrast agent for use with magnetic resonance angiography (MRA) to evaluate known or suspected supra-aortic or renal artery disease in patients of all ages.

In September 2016, the U.S. Food and Drug Administration (FDA) approved our new low-dose levonorgestrel-releasing intrauterine system with the brand name Kyleena™. The new system releases the lowest daily hormone dose in an intrauterine system for up to five years of effective protection against pregnancy. It uses the smallest T-shaped body available today for implantation in the uterus for the purpose of contraception with active ingredient-releasing systems. In October 2016, furthermore, we successfully completed the corresponding decentralized registration procedure for the European Union. On this basis, it is expected that the health authorities of the E.U. member states will grant national marketing authorizations in the coming months.

In November 2016, an expansion of indications was filed for Stivarga™ (active ingredient: regorafenib) in the United States, Japan and Europe. The filings pertain to the second-line treatment of patients with unresectable hepatocellular carcinoma. Stivarga™, an oral multikinase inhibitor, is already approved under this brand name in numerous countries for the treatment of metastatic colorectal cancer and unresectable or metastatic gastrointestinal stromal tumors. The U.S. Food and Drug Administration (FDA) granted priority review status to regorafenib in the registration process for the expansion of indications (supplemental New Drug Application, sNDA). The Japanese Ministry of Health, Labour and Welfare (MHLW) granted priority review status for the registration filing in January 2017.

Cooperations

We augment our own research capacities through collaborations and strategic alliances with external industrial and academic research partners. In this way we gain access to complementary technologies and external innovation potential. The following table shows examples of the main collaborations:

Main Cooperations in 2016

Cooperation objective

Strategic partnership in the field of genome and drug research in cardiology aimed at using findings from human genetics to develop new cardiovascular therapies and in the field of oncology to identify and develop active ingredients that target tumor-specific gene alterations

Strategic partnership for the development of new therapeutic options in oncology, especially in immunotherapy

Collaboration to identify development candidates for the treatment of endometriosis and kidney diseases

Cooperation in the field of antibody-drug conjugates (ADCs) for novel tumor therapies

Development of Xarelto™ (rivaroxaban)

Development and marketing collaboration in the field of soluble guanylate cyclase (sGC) modulation

Development of antibody-drug conjugates using MorphoSys’s HuCAL technology

Development of ODM-201 for the treatment of patients with prostate cancer

Development of Eylea™ (aflibercept) to treat various eye diseases

Development of a combination therapy of rinucumab, a PDGFR-beta (beta-type platelet derived growth factor receptor) antibody, and aflibercept for the treatment of wet age-related macular degeneration

Development of a combination therapy of the angiopoietin2 (Ang2) antibody nesvacumab and aflibercept for the treatment of serious eye diseases

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Other Cooperations in 2016

Cooperation objective

Access to antibody library with in-licensing of antibodies

Collaboration for the research and development of new immunotherapy approaches in oncology

Development of a novel gene therapy for hemophilia A

Research into new approaches for the treatment of various eye diseases

Development of an antisense molecule for the prevention of thrombosis

Development of diagnostic tests in personalized oncology treatment

Research into lung vascular disease, especially pulmonary hypertension

Codevelopment of tedizolid to treat various infections

Codevelopment of a targeted antibiotic inhalation therapy for lung infections (amikacin inhale)

Development of a targeted antibiotic inhalation therapy for lung infections (ciprofloxacin DPI)

Discovery and development of novel anticancer stem cell therapeutics

Codevelopment of Nexavar™ (sorafenib) for various types of cancer

Research cooperation and establishment of a research center for joint projects

Access to technologies for antibody-drug conjugates (ADCs) for novel tumor therapies

Research cooperation and establishment of a research center for joint projects

Strategic research alliance for the development of novel gynecological therapies

Development of diagnostic tests in personalized oncology treatment

Research and development of innovative drug products to treat serious back-of-the-eye diseases

Science and cooperation centers

In addition to these cooperations, we operate our own science and innovation centers. We coordinate primarily our research partnerships in Asia through our innovation centers in Beijing, China; Singapore; and Osaka, Japan. In Berlin, Germany, and San Francisco, California, United States, we operate the CoLaborator™, an incubator model for young Life Sciences This term describes Bayer’s activities in health care and agriculture and comprises the Bayer Group excluding its legally independent subsidiary Covestro. It refers to the businesses of the Pharmaceuticals, Consumer Health and Crop Science divisions and the Animal Health business unit. companies. The objective of the global CoLaborator™ concept is to offer these companies suitable laboratory and office infrastructure in the direct vicinity of Bayer’s own research facilities and the opportunity to exchange experiences with Bayer experts.

In the area of crowdsourcing, we established another global initiative named Grants4Indications™ in February 2016. This program promotes the exploration of new therapeutic indications for Bayer’s active ingredients. We are also continuing the Grants4Apps™, Grants4Targets™ and PartnerYourAntibodies™ programs. In 2016, we launched the AACR-Bayer Innovation and Discovery Grants together with the American Association for Cancer Research (AACR). The objective is to develop new treatment options for cancers with high medical need. In addition, the East Coast Innovation Center was established in 2016 in Cambridge/Boston, Massachusetts, United States.

In the area of venture capital, we are active with the “High-Tech Gründerfonds” and Versant Ventures.