Bayer Dodges US Antitrust Suit but Pharma Headwinds Mount in China
25.05.2026 - 09:01:51 | boerse-global.de
Bayer enters a new quarter having sidestepped a formal US Department of Justice lawsuit while simultaneously wrestling with deteriorating profitability in its pharmaceuticals division. The disparate signals from the group’s two largest units — agribusiness and healthcare — leave investors puzzling over which trend will dominate the second half of 2026.
The DOJ investigation centered on the “Premier Performance Program” run by Bayer CropScience, a rebate scheme that required independent seed distributors to meet combined sales targets for corn and soybean seeds in order to qualify for discounts. The US authorities argued the practice unfairly locked out alternative suppliers. Bayer halted the contested bundling for the 2025 planting season and has now formally agreed not to reintroduce such clauses for the next seven years. The settlement eliminates the risk of a federal lawsuit and any associated financial penalties.
Operationally, the first quarter offered a mixed picture. Group revenue climbed to a solid €13.4 billion, with adjusted operating earnings advancing 9% on the back of a strong start in the agriculture segment. Net income improved to €2.76 billion. Yet free cash flow swung sharply negative to minus €2.3 billion, weighed down by hefty payments for legal settlements — a stark reminder of the cash drain still facing the company.
Should investors sell immediately? Or is it worth buying Bayer?
Across in pharma, the headwinds are clearly building. The division recorded a currency- and portfolio-adjusted revenue decline of 0.5% to roughly €4.2 billion. Earnings before interest, tax, depreciation and amortisation before special items slumped 7.5% to €1.242 billion, driven by higher distribution costs, rising R&D spending and the ongoing patent cliff for Xarelto. Chinese procurement policy has also taken a toll: Aspirin Cardio and Stivarga both saw sales fall in the country during the quarter.
Bayer’s response in China is to double down. At the China Innovation Day in Berlin, board member Stefan Oelrich described the country as the company’s second-largest market and underlined plans to expand early-stage drug development there, partnering with universities and biotech start-ups. While no specific investment figure was disclosed, China’s five-year plan prioritises biopharma innovation and targets an average life expectancy of 80 years by 2030, underpinning long-term demand. The catch remains price pressure from Beijing’s volume-based procurement system — a fact already evidenced in the first-quarter numbers.
The stock closed Friday at €38.39, down nearly 2% on the day and roughly 1.3% below its 50-day moving average of €38.91. For the year to date, shares have still climbed about 58%, though they remain nearly 22% below the 52-week high of €49.17. Oelrich’s weekend interview means investors will only be able to price in the China comments from Monday onward.
Adding another layer of change, Judith Hartman officially takes over as chief financial officer on June 1, succeeding Wolfgang Nickl. She already joined the board in March and will now be tasked with navigating the debt-reduction programme. Her first public appearance comes this Wednesday at the Deutsche Bank European Champions Conference in Frankfurt, where management is expected to provide granular updates on the efficiency plan. The next hard data test for the pharma turnaround is the half-year report due August 4.
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