Beasley, Allen, Crow, Methvin, Portis & Miles, P.C.

An article in this week’s Business Week reveals a dualistic Bayer. On one hand, the pharmaceutical giant is “flush with success,” with projected sales just shy of $50 billion and increased dividends for shareholders. On the other hand, Bayer has been racked by a sequence of bad luck that threatens to sully its future fiscal health and innovation. What are the elements at work behind this dichotomy?

Trasylol, Bayer’s injectable aprotinin for heart patients, is largely responsible for the gloom that many analysts forecast for Bayer. Approved by the FDA in 1993 for use in controlling blood loss during heart bypass surgery, Trasylol was administered to nearly 5 million patients around the world. However, two extensive studies published last week in the New England Journal of Medicine revealed the risk of death to be dangerously high in patients who had received Trasylol injections. The drug was found to double the risk of liver damage, kidney failure, cardiac arrest, and heart failure. Moreover, it quadrupled the risk of stroke.

Bayer agreed to suspend marketing of Trasylol in November of last year following preliminary results of a Canadian test that indicated the drug’s link to increased risk of death. The FDA is reviewing the test results, but it’s likely that Trasylol is soon to be a thing of the past.

Trasylol controversies are just one of Bayer’s problems right now. Its performance in other markets evokes the image of an Olympic athlete jumping hurdles with a broken leg. A trial for one of Bayer’s next-best things, a drug called Nexavar, revealed that it was ineffective in the treatment of lung cancer. Also pharmaceutical companies Novartis and Novo Nordisk took Bayer to court over the hemophilia drug Kogenate, claiming that the drug infringes on their patents. Kogenate represents well over $1 billion in annual sales for Bayer.

All of these setbacks, it should be noted, are contained within the drug arm of Bayer – a large and diversified company on the brink of celebrating its 150th birthday. In addition to prescription pharmaceuticals, Bayer’s conglomerate includes over-the-counter health care, chemical research and development, and crop protection. The old giant may seem a little too unfocused and clunky to truly compete in the pharmaceutical arena, but its diverse ventures help to safeguard it from the risky and unsteady world of big pharma.

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