To Partner, or Not to Partner, that is Not the Question. Gregor Fachinger, BAYER.
1. Gregor Fachinger Ph.D.; Bayer Lifescience Center; Upgraded Life Festival Helsinki, May 31, 2016
Bayer´s Strategy to Access External Innovation
To Partner, or Not to Partner, that is Not the Question
2. Forward-Looking Statements:
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
forward-looking statements or to conform them to future events or developments.
Legal Notice:
The product names designated with ™ are brands of the Bayer Group or our
distribution partners and are registered trademarks in many countries.
Disclaimer
Partnering at Bayer • G. Fachinger • Upgraded Life Festival • May 31, 2016Page 2
3. The steadily growing and aging
global population has a need for new and better
medicines and for an adequate supply of safe food.
Our innovations offer answers to these challenges. We invent
new molecules which can positively influence the biochemical
processes in living organisms with the goal of improving
the quality of life. That is what our mission
“Bayer: Science For A Better Life”
stands for.
Our Mission
Bayer: Science For A Better Life
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4. Pharmaceuticals Consumer Health Crop Science
• Prescription drugs • Over-the-counter medicines,
dietary supplements,
dermatology products,
foot care and sunscreen
• Innovative crop protection
and seeds
What do we do?
Bayer Business Areas Focus on Human Health,
Animal Health and Plant Health
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5. Pharmaceuticals Division
One of the leading innovative companies in the healthcare
industry
* pro forma by new segments
** as of December 31, 2015 by new segments in full-time equivalents
• Largest division of Bayer in terms of sales
• One of the fastest growing pharma companies
worldwide
• Sales of 13.7 billion Euro
• Pro forma sales of 15.3 billion Euro in 2015 *
• Global headquarter in Berlin, Germany
• 40,500 employees worldwide in 2015 **
• Largest German pharma company
• Focus on prescription products, especially for
cardiology, oncology, hematology, women’s healthcare,
and ophthalmology
• Also markets contrast-enhanced diagnostic imaging
equipment together with contrast agents
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6. 2015
Pharmaceuticals Division
Innovative and established prescription products
Xarelto™ 1,679
Eylea™ 759
Kogenate™ 1,109
Mirena™ product family 819
Nexavar™ 773
Betaferon™/Betaseron™ 823
YAZ™/Yasmin™/Yasminelle™ 768
Adalat™ 588
Aspirin™ Cardio 486
Glucobay™ 443
Ultravist™ 302
Gadovist™ / Gadavist™ 233
Product [ sales in € million ]
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2,252
1,228
1,155
968
892
824
706
633
524
523
318
290
2014
7. Pharmaceuticals Division
Pipeline by Indication
Cancer / Pasotuxizumab (PSMA BiTE Antibody)
Cancer / Pan-FGFR Inhibitor
Cancer / FGFR2-ADC
Cancer / Allost. AKT1/2 Inhibitor
Cancer / PTEFb Inhibitor 1
Cancer / PTEFb Inhibitor 2
Cancer / MPS1 Inhibitor 1
Cancer / MPS1 Inhibitor 2
Cancer / C4.4a-ADC
Cancer / MKNK1 Inhibitor
Cancer / mIDH1-Inhibitor
Cancer / anti-CD22-Thorium Conjugate
Heart Failure / Vasopressin-Rec Ant
Thrombosis / FXIa Inhibitor
Thrombosis / FXIa Antibody
Hypertension / sGC Stimulator
Diabet. Foot Ulcers / ARα 2c Rec Ant
Hemophilia / anti-TFPI Antibody
Endometriosis / AKR1C3 Inhibitor
Endometriosis / PRLR Antagonist
Selection of major Pharma pipeline projects in clinical
Phase I to III (Status April 2016)
Prostate Cancer / ODM-201
HCC 2nd Line / Regorafenib*
Comb. Study CRPC / Radium-223 Dichloride
NHL / Copanlisib (PI3K Inhibitor)
ESUS / Rivaroxaban
PAD / Rivaroxaban
Major Adv. Card. Events Prevent. / Rivaroxaban
CHF and CAD / Rivaroxaban
Long-term VTE Prevention / Rivaroxaban
Medically Ill / Rivaroxaban
Insufficient PDE5 Inhibitor Response / Riociguat
Diabetic Kidney Disease / Finerenone
Hemophilia / Damoctocog alfa pegol
Non-CF Bronchiectasis / Cipro DPI
Lung Infections / Tedizolid
Gram-neg. Pneumonia / Amikacin inhale
Phase III (16)Phase I (20)
*Regorafenib is a Bayer compound developed solely by Bayer. In 2011, Bayer entered into an agreement with Onyx Pharmaceuticals, Inc. under which Onyx will receive royalty on future global net sales of regorafenib in oncology
Oncology
Cardiovascular
Diseases
Gynecology
Hematology
Others
Phase II (18)
Cancer / Regorafenib*
Bone Mets Breast Cancer / Radium-223 Dichloride
Cancer, various studies / Radium-223 Dichloride
Cancer / Anetumab Ravtansine (Mesoth.-ADC)
NHL / DLBCL / Copanlisib (PI3K Inhibitor)
ACS sec Prevention / Rivaroxaban
Thrombosis / FXI ASO (Antisense-Oligonuc.)
PH IIP / Riociguat (sGC Stimulator)
Chronic HF / Vericiguat (sGC Stimulator)
Renal Anemia / Molidustat
Heart Failure / Neladenoson Bialanate (p.Ad-A1 Ag)
Heart Failure / Chymase Inhibitor
Sympt. Uterine Fibroids / Vilaprisan (S-PR M)
Endometriosis / Vilaprisan (S-PR M)
Wet AMD / PDGFR Antibody + Aflibercept
Wet AMD / DME / Ang-2 Antibody + Aflibercept
Cystic Fibrosis / Riociguat (sGC Stimulator)
Diff. syst. Sclerosis / Riociguat (sGC Stimulator)
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8. Partnering at Bayer • G. Fachinger • Upgraded Life Festival • May 31, 2016
Collaboration with Orion Pharma on ODM-201
A highly innovative Androgen Receptor Inhibitor
added to Bayer´s Prostate Cancer Pipeline
From: Ganesh V et al., Cancer Forum Prostate Cancer,
November 2015 Vol 39
Collaboration Agreement with Orion on ODM-201
ODM-201 is an investigational novel oral Androgen
Receptor (AR) inhibitor in clinical development
ODM-201 may provide a potential new treatment for
patients with high risk non-metastatic castration-resistant
prostate cancer
Excellent fit to Bayer´s portfolio in Prostate Ca, which
includes Xofigo for the treatment of patients with
symptomatic bone metastases
Partners to jointly develop ODM-201 with Bayer
obtaining global commercial rights; Orion has option to
co-promote in Europe
Orion will be responsible for manufacturing
Upfront €50M, milestones, double-digit royalties
Dr. Joerg Moeller, Member of the Bayer Pharmaceuticals Executive Committee and Head of Global
Development: “From a clinical perspective, ODM-201 has the potential to complement Bayer´s portfolio in
Prostate Cancer and enables us to deliver new treatment options for patients who desperately need them”
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9. Pharmaceuticals Division
From Molecules To Medicine:
The long process of drug development
Source: based on PhRMA Profile Pharmaceutical Industry 2010
More than 1 billion Euro
Drug research Vorklinik
Data review
by regulatory
authorities
(up to 2 years)
(more than
2 years)
Lab and animal
experiments
Preclinical Clinical trials
Evaluation/
Approval
Phase IV
studies
10,000
Test compounds
<250
Test compounds
<5 Test compounds
1 Drug
Approved
By Health
Authorities
Years
0 2 4 6 8 10 12
Phase I: 20-100 healthy volunteers
tolerability, pharmaco-
kinetics / pharmacodynamics
Phase II: 100-500 patients
safety, efficacy (dose finding)
Phase III: 1,000-10,000 patients
efficacy, safety
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10. Pharmaceuticals Division
Our research activities focus on diseases with a high
medical need
• Thrombosis / Heart Failure /
Acute Coronary Syndrome
• Kidney Diseases
• Lung Diseases
Cardiovascular Diseases
Oncology
• Cell Cycle / Survival Signaling
• Tumor Metabolism / Chromatin
Biology
• Immunotherapies / Antibody-
Drug Conjugates / Thorium
Conjugates
• Hemophilia
• Rare Bleeding Disorders
• Hemoglobinopathies
• Hematopoiesis
Hematology
Gynecological Therapies
• Endometriosis
• Uterine Fibroids
• Macular degeneration
• Other Exudative / Non-
Exudative Eye Diseases
Ophthalmology
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11. OsloBerlin
Pharmaceuticals Division
Research centers around the globe
Wuppertal /
Cologne
Berkeley /
San Francisco
Turku
Employees in R&D 2015: 7,741
Investment in R&D 2015: € 2.3 billion
Investment in R&D of 2015 total net sales: 16.6%
• Oncology
• Gynecological
Therapies
• Cross-
Indication
Platform
• Cardiovascular
Diseases
• Ophthalmology
• Biologics
Research &
Development
• Cross-Indication
Platform
• Hematology
• Biologics
Research &
Development
• Chemical and
Pharmaceutical
Development:
Polymer-based
Drug Delivery
Systems
• Oncology:
Thorium
Conjugates
Platform
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12. Pharmaceuticals Division
Research partnerships are coordinated at our international
Science and Innovation Centers
* Facility of collaboration partner
Beijing
• DD Innovation Center China
• * Bayer Tsinghua Center for
Innovative Drug Discovery
• * Bayer / Peking University
Center of Translational
Research for Drug Discovery
Osaka
• Open Innovation Center
Japan
Singapore
• Science Hub Singapore
Region
• Integrated Translational
Oncology Network
San Francisco
• Science Hub US
• CoLaborator
Boston
• East Coast Innovation Center
Berlin
• CoLaborator
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13. Increasing challenges in the Healthcare Market
Need for Partnerships
Increasing Value
Requirements
Aging
Population
From “Emerging Markets”
to “Growth Markets”
Patients /
Consumers
gain more
Influence
Highly
efficient
healthcare
industry
Rising costs
and pressure
on healthcare
industry
manufacturers
These challenges cannot be addressed by the major
pharmaceutical companies alone: partnerships are a key component
Need to come up with
„breakthrough“ innovation
Understand needs and specifics
of diseases prevalent in emerging
markets
Find options to “de-risk” research
and increase flexibility
Improve molecular understanding
of disease mechanisms, better
models, patient stratification
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14. Pharma / Biotech Companies
Arm‘s length
Close
interaction
on individual
or multiple
projects
Co-location
Academic Institutions
Joint labs
License and research
agreements
Consortia
Asset acquisition /
divestment
Contract research
Grants
Accelerator
Incubator CoLaborator
German
Cancer Research
Center (DKFZ)
Amgen, Compugen,
OncoMed, Broad
Institute, Lead Discovery
Center, Innovative
Medicines Initiative,
Inception 4,
Syndax,
Grants4-Initiativen
From traditional licensing
agreements or strategic
research alliances to
public-private
partnerships or open
innovation models –
Bayer welcomes many
different forms of
cooperation along the
value chain.
There's No 'One Size Fits All'!
A Portfolio of Collaboration Models is Employed
to Address Different Partnering Needs and Interests
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15. Strategic Alliances
Long-term-oriented, risk-sharing agreements, complementary expertise
and joint collaboration goals to develop new therapy options
Significant contributions from both partners in terms of content, resources
and financials
There's No 'One Size Fits All'!
Strategic Alliances Enable Work on Highly Complex
and Innovative Project Portfolios
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Examples
German Cancer Research Center (DKFZ): Cancer therapy
OncoMed: Cancer stem cell therapeutics
Evotec: Innovative endometriosis therapeutics
Tsinghua University: Bayer-Tsinghua Joint Research
Center for Innovative Drug Discovery (multiple drug
discovery projects)
16. PROGNOSTIC
Treat or don’t
treat?
PHARMACO-
DYNAMIC
Which dose?
PREDICTIVE
Which drug?
BIOMARKERS
Precision Medicine
Biomarker concepts in Pharma Drug Development
adapted from Sawyers, Nature 2008
Clinical use of BM requires scientific evidence and an assay.
Partnering at Bayer • G. Fachinger • Upgraded Life Festival • May 31, 2016
• Can add to a clear
diagnosis
• Need for human samples
• Not necessarily involved
with a novel therapeutic
• Need for animal
samples, non/res-
ponsive models
• Need for human
samples
• Potential as CDx
for patient selection
• Need for animal
samples, response
to drug
• Need for human
samples
• Valuable for inter-
nal decision mak-
ing in early trials
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17. In 2008, Bayer Pharma AG established
the internal Research Biobank.
Its mission is…
…to provide Bayer Pharma scientists
with speedy and compliant access
to clinical specimens of standard of
care patients
outside clinical trials
in particular for biomarker research
Partnering at Bayer • G. Fachinger • Upgraded Life Festival • May 31, 2016
Biomarker Collaborations
Bayer´s Research Biobank Concept
Bayer Scientists
Sample processing
Sample analytics
Joint interpretation
& publication
Academic MDs
Specimen generation
Clinical data
Joint interpretation
& publication
CROs
Sample Procurement
Clinical data
Sample processing
& analytics
Patients:
Hope for new
treatments
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18. In 2015 Bayer entered into a
collaboration with Turku University
Hospital
covering all indications
legal environment
highly annotated samples
recontact for trial?
Data measured will be reported to
Auria
Biobanks in Finland
Key part of Bayer Biobanking Strategy: Auria
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19. Partnering at Bayer • G. Fachinger • Upgraded Life Festival • May 31, 2016
Biobanks in Finland
Key part of Bayer Biobanking Strategy: FIMM/FHRB
FHRB: Finnish national Biobank project for hematological disorders:
bone marrow and blood samples
skin biopsies
clinical information
Bayer-FIMM/FHRB collaboration:
screen AML samples ex vivo
against >200 compounds
NGS analytics
Samples analyzed for
Preclinical drug research
Biomarker discovery
Drug repurposing
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20. Examples:
Grants4Targets™ (www.grants4targets.bayer.com)
Grants for developing target proposals, low effort
application, IP rights remain with applicant
Promising targets might be pursued via collaboration
agreements
Initiated 2009, 1300+ applications world-wide, 175+
grants were awarded
Bayer´s “Grants4…” initiatives
Crowd Sourcing Utilizes the Expertise of a Larger
Scientific Community
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Grants4Indications™ (www.grants4indications.bayer.com)
Grants to support non-clinical or clinical research projects
to evaluate a Bayer compound in a new indication
Terms and conditions will be defined in a separate
contract
21. PartnerYourAntibodies™(www.partneryourantibodies.bayer.com)
Easy-to-use web platform to promote the
exploration of antibodies as potential drugs
A joint antibody exploration project might be
negotiated for interesting assets, involving
substantial financial support from Bayer
Bayer´s “Grants4…” initiatives
Crowd Sourcing Utilizes the Expertise of a Larger
Scientific Community
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Grants4Apps™ (www.grants4apps.bayer.com)
Submission platform for innovative healthcare
projects instead of classical assets
Examples include apps, services, wearables,
devices or processes contributing to improved
health outcomes
Selected projects will gain financial support from
Bayer
22. Key Partnering Principles
Strategic Fit
Complementary capabilities, common strategic goals
Relationship and Culture
Focus on personal relationship, trust and respect, cultural differences
Operational Management
Well-defined processes and objectives, clear IP and publication
agreements
Learning Capabilities
Openness to learn from each other
Value of Communication
Open communication, active conflict resolution
Enthusiasm and Commitment
Commitment to overcome issues, share credit
[Wissenschaftsmanagement 2010, 34-41.]
It's All About the Execution!
Alliances are Managed According to Key Partnering
Principles, and this is Regularly Checked
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23. • generate added
value for all
involved parties
• complementary
expertise
It's All About the Execution!
Our partners value collaborations on eye-level with close
interaction and exchange of expertise
¹ Insights based on a survey conducted with 52 partners from Biotech (23), CROs (3), and Academia (26) in May/June 2012.
What was valued and is
important to our partners
Partners seek for
• Collaborations on eye-level
with close interaction, exchange
of expertise and mutual benefit
• Clear strategy and long-term
perspective
Feedback from our partners:
• Bayer has high scientific
expertise and good partnership
management
Impact on organizing the
partnership
Partner
• Excellent collaboration partners
• Sharing of knowledge
Bayer
• Excellent internal Drug
Discovery expertise
• Long-term, reliable partnership
• Good partner interaction
“High level of mutual trust which
allows for in-depth sharing of
knowledge.”¹
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24. Strategic Partnering complements internal
excellence as a key to success for
addressing the current and future
healthcare challenges
There is no 'one size fits all' model,
for each goal and partner the optimal
partnering model has to be selected
Professional alliance- and project
management is an important contributor
to successful partnering
Consider Bayer as your partner of choice!
Strategic Partnering and Open Innovation for Life Sciences
Collaboration is a key element in Bayer´s Innovation Strategy
Partnering at Bayer • G. Fachinger • Upgraded Life Festival • May 31, 2016Page 24
26. Our products help improving people’s quality of life
Pharmaceuticals Division
• Therapies with significant clinical benefit in liver cancer, colorectal
cancer, prostate cancer, and gastrointestinal tumors
• Products to prevent and treat venous and arterial thromboembolism
• Helping people with cardiovascular risk management
• Treatment for different forms of pulmonary hypertension
• Treatment for Hemophilia A patients
• A therapy for five of the leading causes of vision loss in the working
age and elderly population
• A broad Women’s Healthcare franchise including contraceptives,
menopause management, and gynecological therapies
• Anti-bacterial treatments to manage respiratory, urinary and surgical
infections
• Well established therapy for Multiple Sclerosis
• Contrast media for computed tomography (CT) and magnetic
resonance imaging (MRI)
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27. Strong and consistent performance in 2015
Pharmaceuticals Division
2015
* Pharmaceuticals sales 2015 excluding sales from radiology business
[ in € million ]
Sales*
EBITDA
Special items
EBITDA before special items
EBITDA margin before special items
EBIT
Special items
EBIT before special items
Gross cash flow
Net cash flow
13,745
3,987
-208
4,195
30,5%
2,807
-254
3,061
2,737
2,863
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28. Example
The Bayer-DKFZ Strategic Alliance Comprises
Collaboration Along the Entire Oncology R&D Process
The German Cancer Research Center (DKFZ) is one of the largest bio-
medical oncology research centers in Europe (3000+ employees)
First agreement signed in 2009, extended in 2014; Joint lab at the
National Center for Tumor Diseases (NCT) established in 2013
Risk and reward sharing approach with joint financing and joint project
selection (currently 30+ projects)
Ideal partnership due to high strategic fit and complementary expertise
BenchBedside
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29. Example
The Bayer-Evotec Strategic Alliance Enables
a New Approach to Endometriosis Research
Endometriosis research is currently facing a transition
from hormonal to non-hormonal approaches
This required the identification of new targets and the
development of novel, complex animal models
Contribution of complementary know-how (pain vs. endometriosis)
Five-year, multi-target, risk- and reward-sharing alliance started 2012
Alliance built a balanced project portfolio in a short timeframe, currently
10+ projects, 3 preclinical development candidates so far
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30. Pharmaceuticals Division
Our open innovation initiatives complement our
innovation strategy
Bayer allocates grants for the exploration of attractive, novel drug targets and
biomarkers.
Bayer offers financial support to assess and to promote the exploration of small-
molecule leads.
Bayer funds projects for novel software, hardware or technologies contributing to
improve health outcomes or pharmaceutical processes. In addition, the
“Grants4Apps Accelerator” in Berlin supports 5 digital health startups each year.
Bayer offers financial support to evaluate antibodies or derivates and to promote
its exploration for a potential new drug development.
Bayer offers attractive laboratory and office spaces for young life-sciences
companies at its premises in Berlin and San Francisco.
Bayer promotes the exploration of new indications and offers grants and further
financial support for promising proposals.
Grants4Targets
Grants4Leads
Grants4Apps
Grants4Indications
CoLaborator
PartnerYourAntibodies
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