Bayer plans to continue Phase III development of stroke drug repinotan despite terminating research on other stroke candidates.

Bayer anticipates launching repinotan for the treatment of acute ischemic stroke in 2003.

Bayer is cutting research on additional stroke candidates as part of an R&D refocusing effort. The company also will not pursue further research in the areas of osteoporosis and fibrosis of the liver, but will continue to develop the candidates it has already discovered, which are in preclinical development.

The company also plans to continue developing its two Phase I stroke candidates, BAY 38-7271, a cannabinoid receptor agonist, and BAY 44-2041, an adenosine reuptake inhibitor.

Bayer said it is refocusing its R&D to concentrate on 13 therapeutic areas: bacteriology, virology, coronary heart disease, atherosclerosis, hematology, neurodegenerative diseases, pain, asthma, chronic obstructive pulmonary disorder, diabetes, obesity, cancer and urology.

HIV, Alzheimer's, Parkinson's and urological diseases will be new therapeutic research areas for Bayer, the company said. Bayer expects to announce its first development candidate for HIV in two years.

Bayer emphasized R&D capability as a characteristic it would require in a potential merger partner.

"Our planning does not include any major transaction such as has been the subject of great speculation in connection with Bayer in the past," Bayer Management Board Finance Committee Chair Werner Wenning told analysts during a conference call Nov. 17.

However, "we remain open to the idea of strengthening our agrochemical and pharmaceuticals business through acquisition and/or merger with other companies," Wenning continued.

"We expect any potential partner to have a proven track record of R&D productivity."

Wenning said the company would look for a potential merger partner with a strong U.S. market focus.

"In regional terms, we are looking above all to the U.S., the fastest growing pharmaceutical market in the world," Wenning said.

"With pharmaceuticals accounting for around 40% of Bayer sales in the U.S., we are not doing badly for a European company. However, we would certainly welcome additional exposure in the U.S. in pharmaceuticals and crop protection."

Bayer has "the following criteria for a major life-science transaction," Wenning said: "management control, innovative potential and U.S. exposure."

"If we succeed in concluding such a transaction," Wenning said, "we would demerge the new company from the existing Bayer structure - for example, in the case of pharmaceuticals - and manage it as a separate entity."

"Restructuring in this way would be relatively quick and easy," Wenning said, "because...we already manage our businesses as if they were separate companies."

Maintaining management control would be essential to Bayer before moving forward with any merger, Wenning said.

"Experience has shown quite simply that 50/50 joint ventures are difficult to manage with the result that often [you] do not meet the goals set and are unable to fully realize their value creation potential," Wenning maintained. "In short, we aim to retain management control in our core businesses."

Bayer plans to focus increasingly on healthcare and agriculture, Wenning said. "We are planning for the life sciences to become [the] main focus of our activities in the medium term, in other words within the next four to five years."

"We expect the most powerful growth drivers to be in healthcare and we hope to raise that segment's share of sales to about 40%, which obviously means that the percentage contribution of the industrial business, polymers and chemicals, will decline," he said.

"We will achieve this shift in our portfolio by maintaining our existing strategy of selective life."

Bayer Will Continue To Develop Repinotan Despite Cutting Stroke Research

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