Bayer Expands China Innovation Focus, Aims for 30% Pharma Margin

April 3 — The pharmaceutical division of the company is aiming for a 30% operating margin by 2030 and plans to return to moderate revenue growth starting in 2027. This move aims to shift focus away from older, patent-expired products and to strengthen China’s role within its global innovation strategy.

The company outlined these targets at its recent Pharma Media Day, where Stefan Oelrich, head of the division based in Leverkusen, noted that the business is entering a new phase following a record year for pipeline advancements.

This initiative is crucial as the company seeks to compensate for declines in key legacy medicines while boosting growth through newer assets. The division’s EBITDA margin before special items was 25.4% in 2025, leaving roughly five percentage points to reach the 2030 goal.

According to the report, sales of the blood thinner Xarelto dropped 33% in 2025 to approximately EUR2.3 billion (USD2.7 billion) and are expected to decrease an additional 35-40% in 2026. Meanwhile, the treatment for retinal disease Eylea is projected to decrease by 20-25% over the same period.

Oelrich emphasized that pipeline execution will be key to the company’s recovery. The company achieved five regulatory approvals and six positive Phase III results in 2025—an unprecedented milestone for a firm of its size. He added that 2025 marked the end of a “resilience phase,” setting the stage for growth starting in 2027. Five key growth drivers include darolutamide (prostate cancer), finerenone (heart failure and chronic kidney disease), acoramidis (transthyretin-mediated amyloid cardiomyopathy), elinzanetant (menopause-related vasomotor symptoms), and asundexian (recurrent stroke).

China plays a central role in this strategy. “China is now the second-largest biopharmaceutical market globally and has become an important source of pharmaceutical innovation, which is quite different from the past,” Oelrich stated.

China: From Market to Innovation Hub

The company’s recent initiatives in China, including the expansion of its incubator and innovation centers, reflect a broader shift from viewing China primarily as a commercial market to positioning it as a hub of scientific research, partnerships, and globally relevant development work.

In the past year, the 8 mg formulation of aflibercept, sold as Eylea HD, was approved for a form of eye disease called neovascular age-related macular degeneration, with accelerated commercialization through early engagement during Beijing tendering processes. Darolutamide, marketed as Nubeqa, has secured three approved indications in China since 2021.

Regarding patient access, Oelrich highlighted the goal of “not just rapid approval but swift access to patients.” Finerenone, sold as Kerendia, was included in China’s national reimbursement list just six months after receiving domestic approval—an unusually quick reimbursement cycle. An application for its use in treating heart failure is also in progress. Additionally, applications for finerenone in heart failure treatment in other markets, including China, are under review.

The company’s research and development center in China completed the first global patient enrollment for a broad-spectrum study of larotrectinib, sold as Vitrakvi, demonstrating China’s capacity to conduct large-scale, complex multinational trials.

Regarding competition, Oelrich said, “It’s not just local competitors; many are partners,” citing collaborations with local biotech firms and universities such as Tsinghua University and Peking University. The company has cultivated long-term relationships with these institutions and supported over 100 joint research projects in China.

The company emphasizes open innovation within China, moving away from an over-reliance on out-licensing deals. Its two main innovation hubs—Bayer Co.Lab China and the Bayer E-Town Open Innovation Center—form a “dual innovation engine.” One focuses on early-stage discovery and entrepreneurship, while the other handles integration and translation across the biopharmaceutical pipeline.

In March, the company welcomed Abalone Bio, increasing its portfolio of startups at Bayer Co.Lab China to 12 within just over a year. This highlights the hub’s vibrancy as a global biotech innovation center, connecting Chinese biotech companies with the company’s global expertise and investor networks. The Beijing-based Bayer E-Town Open Innovation Center, launched last November, aims to connect local innovations with global development pathways early in the process.

Artificial intelligence is also a key pillar of the company’s strategy. It is integrating AI throughout its R&D efforts, aiming for a 40% boost in productivity by 2030. “We are investing heavily in early-stage science and breakthrough technologies, including digital health and AI-enhanced drug discovery, especially given China’s strong capabilities in these areas,” Oelrich said.

However, the industry sees uneven financial benefits from AI-driven efficiencies, with some uncertainty about how quickly these gains will translate into tangible returns.

Pipeline: Key Assets for China and Globally

The company’s near-term growth prospects rest on five core assets: darolutamide, finerenone, acoramidis, elinzanetant, and asundexian. Among these, asundexian is considered a particularly promising late-stage candidate. It recently completed a Phase III trial focused on secondary stroke prevention, demonstrating a reduction in recurrent ischemic stroke, and has received fast-track designation from the US Food and Drug Administration.

This profile might be especially relevant in China, where stroke rates remain high, as it could help shift current standards of care by preventing recurrent strokes while minimizing bleeding risks when used with antiplatelet therapy. “This trade-off has been a challenge for physicians for decades,” Oelrich explained.

Both darolutamide and finerenone continue to support the company’s existing market position in China, where they are either established or expanding. Other assets are at various stages of development and market penetration, reflecting a strategic shift toward a diversified product portfolio rather than solely volume-driven growth.