Time for sharp competitive intelligence

Shares in Bayer slumped as much as 5.6 percent on Tuesday after a U.S. court voided the patent on its Yasmin oral contraceptive drug, prompting the German group to tweak its healthcare margin goal.

Bayer shares were down 4.3 percent at 48.02 euros at 0920 GMT, compared with a 0.5 percent rise in the pan-European DJ Stoxx drug index.
“This negative news flow will weigh on the share price. We intend to cut our EPS estimates by 3 percent and to revise our margin assumptions slightly,” Cheuvreux analyst Martin Roediger told clients in a research note.
The U.S. court ruling capped years of legal wrangling and paved the way for Barr Pharmaceuticals Inc to sell a generic version in the U.S. market.
Bayer has said it disagreed with the court’s decision and will consider its legal options.
Bayer now aims for its Bayer HealthCare unit to improve its core earnings (EBITDA) margin before special items “toward” 27 percent in 2008 from 25.6 percent in 2007. Its 2009 margin target of around 28 percent remained in place, it added.
It had previously targeted a 2008 healthcare margin of about 27 percent.
Sales of Yasmin in the United States, the world’s largest healthcare market, were 321 million euros ($487 million) last year.

Bayer also said it was evaluating the impact of the court’s decision on another product of the company’s line of oral contraceptives, YAZ. It said it retained marketing exclusivity for YAZ in the United States until March 16, 2009.

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