On April 27, 2017 Kyowa Hakko Kirin Co., Ltd., an R&D-based life sciences company with special strengths in biotechnology, reported financial results for the first quarter ended March 31, 2017.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Net worldwide sales for the first quarter of 2017 were 90.9 billions of yen in comparison to that of 88.4 billions of yen for the first quarter of 2016. Regional Sales for the first quarter of 2017 were as follows: Japan 60.1 bn yen, Americas 7.5 bn yen, Europe 15.8 bn yen, Asia, 7.1 bn yen and other regions amounted to 0.2 bn yen.

For Kyowa Hakko Kirin Co., Ltd’s detailed sales figures, visit: View Source

On April 27, 2017 Celgene Corporation (NASDAQ:CELG) reported net product sales of $2,950 million for the first quarter of 2017, an 18 percent increase from the same period in 2016 (Press release, Celgene, APR 27, 2017, View Source [SID1234518705]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Net product sales growth includes a 0.6 percent negative impact from currency exchange effects. Celgene reported first quarter of 2017 total revenue of $2,960 million, an 18 percent increase compared to $2,512 million in the first quarter of 2016.

Based on U.S. GAAP (Generally Accepted Accounting Principles), Celgene reported net income of $941 million and diluted earnings per share (EPS) of $1.16 for the first quarter of 2017. For the first quarter of 2016, GAAP net income was $801 million and diluted EPS was $0.99.

Adjusted net income for the first quarter of 2017 increased 28 percent to $1,364 million compared to $1,064 million in the first quarter of 2016. For the same period, adjusted diluted EPS increased 27 percent to $1.68 from $1.32.

"Our significant first quarter operational, financial and strategic progress strengthen our confidence and outlook for 2017," said Mark J. Alles, Celgene’s Chief Executive Officer. "Our business momentum is increasing as we continue to generate meaningful catalysts and long-term value drivers."

First Quarter 2017 Financial Highlights

Unless otherwise stated, all comparisons are for the first quarter of 2017 compared to the first quarter of 2016. The adjusted operating expense categories presented below exclude share-based employee compensation expense, collaboration-related upfront expense and research and development asset acquisition expense. Please see the attached Use of Non-GAAP Financial Measures and Reconciliation of GAAP to Adjusted Net Income for further information relevant to the interpretation of adjusted financial measures and reconciliations of these adjusted financial measures to the most comparable GAAP measures, respectively.

Net Product Sales Performance

REVLIMID sales for the first quarter increased 20 percent to $1,884 million. Sales growth was driven primarily by increased volume as a result of increases in duration and market share. U.S. sales of $1,234 million and international sales of $650 million increased 24 percent and 13 percent year-over-year, respectively.
POMALYST/IMNOVID sales for the first quarter were $364 million, an increase of 33 percent year-over-year. U.S. sales were $216 million and international sales were $148 million, an increase of 26 percent and 44 percent year-over-year, respectively. POMALYST/IMNOVID sales grew due to increased volume driven by duration gains.
OTEZLA sales for the first quarter were $242 million, a 24 percent increase year-over-year. First quarter U.S. sales of $199 million and international sales of $43 million increased 14 percent and 105 percent, respectively, and were driven by market share gains in the U.S. and continued international launches.

Despite a contraction in the overall market volume of prescriptions filled, OTEZLA share in psoriasis grew versus last quarter. In addition, net sales were impacted by increasing gross-to-net adjustments related to contracts implemented in January with several large payers that significantly broadened access for up to 100 million covered lives.
ABRAXANE sales for the first quarter were $236 million, a 5 percent increase year-over-year. U.S. sales were $142 million and international sales were $94 million, a decrease of 1 percent and an increase of 16 percent, respectively. ABRAXANE market shares in pancreatic cancer, first-line advanced non-squamous lung cancer and metastatic breast cancer in the U.S. are stable. Growth in Europe was driven by market share gains for ABRAXANE in pancreatic cancer.
In the first quarter, all other product sales, which include THALOMID, ISTODAX, VIDAZA and an authorized generic version of VIDAZA drug product in the U.S., were $224 million compared to $226 million in the first quarter of 2016.
Research and Development (R&D)

On a GAAP basis, R&D expenses were $995 million for the first quarter of 2017 versus $733 million for the same period in 2016. The first quarter increase was due to R&D asset acquisition expenses primarily related to the acquisition of Delinia, Inc., that was partially offset by a decrease in collaboration-related upfront expense.

Adjusted R&D expenses were $595 million for the first quarter of 2017 compared to $591 million for the first quarter of 2016.

Selling, General, and Administrative (SG&A)

On a GAAP basis, SG&A expenses were $620 million for the first quarter of 2017 compared to $543 million for the same period in 2016. Adjusted SG&A expenses were $539 million for the first quarter of 2017 compared to $468 million for the first quarter of 2016.

Cash, Cash Equivalents, and Marketable Securities

Operating cash flow was $853 million in the first quarter of 2017, compared to $1.0 billion1 for the first quarter of 2016. In the first quarter, Celgene purchased approximately 2.6 million of its shares at a total cost of approximately $304 million. As of March 31, 2017, the Company had approximately $4.4 billion remaining under the stock repurchase program. Celgene ended the quarter with approximately $8.9 billion in cash, cash equivalents and marketable securities.

1 Adjusted as a result of the adoption of ASU 2016-09, "Compensation-Stock Compensation."


2017 Guidance Updated
Previous 2017 Guidance Updated 2017 Guidance
Net Product Sales
REVLIMID() $8.0B to $8.3B Unchanged
POMALYST()/IMNOVID() Approximately $1.6B Unchanged
OTEZLA( )
$1.5B to $1.7B
Unchanged
ABRAXANE() Approximately $1.0B Unchanged
Total Revenue $13.0B to $13.4B Unchanged
GAAP operating margin Approximately 45.5% Approximately 46.0%
GAAP diluted EPS $5.85 to $6.21 $5.95 to $6.29
Adjusted operating margin Approximately 56.5%
Approximately 57.0%
Adjusted diluted EPS $7.10 to $7.25 $7.15 to $7.30
Weighted average diluted shares Approximately 815M Unchanged

Product and Pipeline Updates

Hematology/Oncology

In February, the U.S. Food and Drug Administration (FDA) and the European Commission (EC) approved the use of REVLIMID as a single agent for maintenance therapy in adult patients with newly diagnosed multiple myeloma (NDMM) following autologous stem-cell transplantation (ASCT). Celgene is actively involved in launch activities for this indication in the U.S. and reimbursement discussions across Europe.
A New Drug Application (NDA) was filed with the FDA for IDHIFA (enasidenib) in relapsed and/or refractory acute myeloid leukemia (AML) with isocitrate dehydrogenase 2 (IDH2) mutation. The NDA was granted Priority Review and has been given a Prescription Drug User Fee Act (PDUFA) action date of August 30, 2017. IDHIFA is part of Celgene’s global strategic collaboration with Agios Pharmaceuticals focused on cancer metabolism.
The phase III OPTIMISMM trial evaluating POMALYST/IMNOVID in combination with bortezomib and low-dose dexamethasone versus bortezomib and low-dose dexamethasone in patients with second-line relapsed and/or refractory multiple myeloma (RRMM) completed enrollment. Data from the OPTIMISMM trial are expected in 2018.
In April, Celgene’s partner OncoMed Pharmaceuticals, Inc. provided top-line data from the phase II YOSEMITE trial evaluating demcizumab in combination with ABRAXANE and gemcitabine in patients with first-line metastatic pancreatic cancer. The trial did not meet its primary and secondary endpoints of progression-free survival and overall survival, respectively. Celgene retains an opt-in right on demcizumab.
At the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting in April, data presentations from several collaboration partners highlighted the scientific advancement of Celgene’s broad innovation strategy in immuno-oncology:
Jounce Therapeutics presented preclinical data supporting the ongoing phase I/II ICONIC trial evaluating JTX-2011, an agonist monoclonal antibody targeting Inducible T cell CO-Stimulator (ICOS), as a single agent and in combination with nivolumab in patients with advanced solid tumors. The ICONIC trial is currently enrolling with preliminary efficacy data expected in the second half of 2017.
OncoMed Pharmaceuticals presented the first public data of its anti-T cell immunoglobulin and ITIM domain protein (TIGIT) antibody, OMP-313M32. The preclinical data demonstrated immune activation and anti-tumor activity of OMP-313M32 alone and in combination with checkpoint inhibitors. OncoMed Pharmaceuticals plans to initiate a phase I trial in the second quarter of 2017.
At the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting in June, data presentations are expected to include:
Updated data from the phase III MAGNIFY trial with REVLIMID in combination with rituximab (R2) in patients with relapsed and/or refractory indolent non-Hodgkin lymphoma (NHL). The data analysis will focus on patients with double-refractory or early relapsed follicular lymphoma (FL).
Updated data from the phase I/II trial evaluating IDHIFA in patients with relapsed and/or refractory AML with an IDH2 mutation. Data from this trial supports the NDA currently under review by the FDA.
Celgene’s collaboration partner bluebird bio is expected to present updated data from the phase I trial evaluating bb2121, a B-cell maturation antigen (BCMA) chimeric antigen receptor (CAR)-T cell therapy, in patients with RRMM. Celgene and bluebird bio plan to initiate a pivotal trial with bb2121 in RRMM by year-end.
Celgene’s collaboration partner Juno Therapeutics is expected to present updated data from the phase I TRANSCEND trial evaluating investigational CAR-T cell product candidate, JCAR017, in patients with relapsed or refractory aggressive NHL. Celgene and Juno Therapeutics plan to initiate a pivotal trial with JCAR017 in NHL by year-end.
At the 14th International Symposium on Myelodysplastic Syndromes (MDS) in May, Celgene’s collaboration partner Acceleron Pharma, Inc., is expected to present data from the phase II trial evaluating luspatercept in first-line, lower-risk MDS patients. Celgene plans to initiate a phase III trial with luspatercept in first-line, lower-risk MDS in early 2018.
Inflammation & Immunology

In February, Celgene disclosed positive top-line results from the phase III SUNBEAM trial evaluating ozanimod in patients with relapsing multiple sclerosis (RMS). The trial met its primary endpoint in reducing annualized relapse rate (ARR), compared to weekly interferon (IFN) β-1a (Avonex). Data from the confirmatory phase III RADIANCE trial are expected in the second quarter. Celgene anticipates filing ozanimod for regulatory approval by year-end based on these data.
The phase II STEPSTONE trial evaluating ozanimod in patients with moderate-to-severe Crohn’s disease is complete. The data will be presented at a medical congress in the second half of 2017. Based on these positive data, Celgene plans to initiate a phase III trial with ozanimod in Crohn’s disease by year-end.
On March 1, 2017, OTEZLA was launched in Japan following full marketing authorization by Japan’s Ministry of Health, Labor and Welfare (MHLW) for the treatment of patients with plaque psoriasis with an inadequate response to topical therapies, as well as psoriatic arthritis.
At the American Academy of Dermatology (AAD) annual meeting, data were presented from the phase IV UNVEIL trial evaluating OTEZLA in patients with moderate plaque psoriasis with a body surface area (BSA) of 5 to 10 percent who were naïve to systemic and biologic therapy. At week 16, OTEZLA demonstrated significant improvements versus placebo for the primary endpoint defined by the mean percentage change from baseline in the product of Physician’s Global Assessment and Body Surface Area (PGA×BSA). The safety profile for OTEZLA in the UNVEIL trial was consistent with that of previous trials. Celgene is executing on a strategy to maximize the value of OTEZLA across additional patient segments in psoriasis to include initiating a phase III trial in scalp psoriasis in the second quarter of 2017.
Data from the ongoing phase IIa trial evaluating CC-220 in patients with systemic lupus erythematosus (SLE) are expected to be presented at the European League Against Rheumatism (EULAR) Annual Congress in June. Celgene plans to initiate a phase IIb trial with CC-220 in the second half of 2017.

On April 27, 2017 The Bayer Group reported that it has gotten off to a very successful start to 2017 and generated strong sales and earnings growth in the first quarter (Press release, Bayer, APR 27, 2017, View Source [SID1234518739]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

“At Pharmaceuticals, we once again benefited from the very good performance of our key growth products,” CEO Werner Baumann said when he presented the interim report for the first quarter on Thursday. Consumer Health, Crop Science and Animal Health also registered increases in sales and EBITDA before special items. Covestro posted substantial growth in sales and earnings. Driven by Covestro’s performance, Bayer has raised its Group outlook for 2017.

Sales of the Bayer Group increased by 11.7 percent to EUR 13,244 million (Q1 2016: EUR 11,854 million) in the first quarter. Adjusted for currency and portfolio effects (Fx & portfolio adj.), sales advanced by 9.4 percent. Sales of the Life Science businesses amounted to EUR 9,680 million, up by 4.9 percent (Fx & portfolio adj.) year on year. Group EBITDA before special items improved by 14.9 percent to EUR 3,893 million (Q1 2016: EUR 3,387 million). EBIT climbed by a substantial 34.3 percent to EUR 3,116 million (Q1 2016: EUR 2,320 million) after special charges of EUR 85 million (Q1 2016: EUR 272 million). These mainly resulted from expenses related to efficiency improvement programs, impairment losses on intangible assets, and costs in connection with the agreed acquisition of Monsanto. EBIT before special items moved ahead by 23.5 percent to EUR 3,201 million (Q1 2016: EUR 2,592 million). Net income climbed by 37.9 percent to EUR 2,083 million (Q1 2016: EUR 1,511 million), and core earnings per share from continuing operations by 11.5 percent to EUR 2.62 (Q1 2016: EUR 2.35).

Cash flow provided by operating activities from continuing operations climbed by a substantial 49.6 percent to EUR 826 million (Q1 2016: 552 million) due to the improvement in EBITDA. Net financial debt of the Bayer Group declined by EUR 1.4 billion to EUR 10.4 billion between December 31, 2016, and March 31, 2017, due mainly to cash inflows from the sale of Covestro shares.

Strong gains at Pharmaceuticals

Sales of prescription medicines (Pharmaceuticals) rose in the first quarter by an encouraging 7.4 percent (Fx & portfolio adj.) to EUR 4,263 million (Q1 2016: EUR 3,889 million). “Our key growth products were once again especially successful, registering combined growth of 20 percent on a currency-adjusted basis,” Baumann said. The oral anticoagulant Xarelto, the eye medicine Eylea, the cancer drugs Xofigo and Stivarga, and the pulmonary hypertension treatment Adempas posted total combined sales of EUR 1,445 million (Q1 2016: EUR 1,187 million). Sales of Xarelto climbed by 19.6 percent on a currency-adjusted basis (Fx adj.), due primarily to higher volumes in Europe and Japan. In addition, Bayer once again significantly expanded its business with the eye medicine Eylea (Fx adj.: plus 19.3 percent), with performance driven by higher sales volumes in Europe. Encouraging sales were also achieved in Canada and Japan.

Sales of the hormone-releasing intrauterine devices of the Mirena product family increased by a substantial 22.7 percent (Fx adj.), primarily due to the performance of the U.S. business, which also benefited from the successful market launch of the new Kyleena intrauterine device. Bayer also recorded substantial sales increases for its diabetes treatment Glucobay (Fx adj.: plus 14.6 percent), its Aspirin Cardio product for the secondary prevention of heart attacks (Fx adj.: plus 13.8 percent) and its X-ray contrast agent Ultravist (Fx adj.: plus 18.0 percent), primarily as a result of the positive development of business in China. On the other hand, business with the Kogenate/ Kovaltry blood-clotting medicines was down overall (Fx adj.: minus 8.5 percent), largely due to fluctuations in the order volumes placed by Bayer’s distribution partner for these products. As expected, sales of the multiple sclerosis product Betaferon/Betaseron were also lower than in the prior-year quarter due to reduced demand in Europe and the United States (Fx adj.: minus 12.1 percent). Overall, the Pharmaceuticals business grew in all regions on a currency-adjusted basis.

EBITDA before special items of Pharmaceuticals increased by a substantial 19.1 percent to EUR 1,502 million (Q1 2016: EUR 1,261 million). While sales rose, selling expenses and research and development expenditures were at around the same level as the prior-year quarter.

Growth in sales and earnings at Consumer Health

Adjusted for currency and portfolio effects, sales of self-care products advanced by 2.6 percent to EUR 1,601 million (Q1 2016: EUR 1,520 million) in the first quarter. “We achieved double-digit percentage sales gains for several products at Consumer Health as well,” Baumann noted. The division registered encouraging growth in Europe/Middle East/Africa and in Asia/Pacific. Sales in North America were level year on year on a currency-adjusted basis, while business declined substantially in Latin America.

The sunscreen product Coppertone delivered positive performance (Fx adj.: plus 21.3 percent), primarily in the United States and China where Bayer built inventories in the distribution channel ahead of the summer season. Encouraging sales gains were also recorded for Canesten skin and intimate health products (Fx adj.: plus 11.5 percent), in part due to the expansion of the product portfolio last year. Sales of the Alka-Seltzer family of products to treat gastric complaints and cold symptoms advanced significantly (Fx adj.: plus 19.6 percent), especially in the United States due to a strong cold season and as a result of a product line extension. The One A Day vitamin product achieved double-digit growth (Fx adj.: plus 19.1 percent), as did the Elevit prenatal vitamin (Fx adj.: plus 13.4 percent). By contrast, sales of Dr. Scholl’s foot care products declined substantially (Fx adj.: minus 33.6 percent), primarily due to the reduction of inventories in distribution channels ahead of a change in product lines and a weak market environment in the United States. Business with the antihistamine Claritin was down slightly (Fx adj.: minus 2.4 percent), mainly because of a slow start to the allergy season in the United States. Gains in Europe and China only partially offset this effect.

EBITDA before special items of Consumer Health advanced by 2.3 percent to EUR 392 million (Q1 2016: EUR 383 million). This increase resulted from the positive development of sales as well as from one-time gains of around EUR 20 million, primarily from the sale of brands. A higher cost of goods sold, in part due to write-downs on inventories, had an opposing effect.

Crop Science: business expanded in North America

Sales of the agriculture business increased by 3.2 percent (Fx & portfolio adj.) to EUR 3,120 million (Q1 2016: EUR 2,936 million). “Crop Science benefited primarily from encouraging performance in North America,” Baumann said. Sales in that region grew by 8.9 percent (Fx adj.). Business development was also positive in Europe/Middle East/ Africa (Fx adj.: plus 2.0 percent) and in Asia/Pacific (Fx adj.: plus 2.9 percent), while sales in Latin America declined by 9.8 percent (Fx adj.).

Sales at Seeds (which also includes the traits business) rose by 8.0 percent (Fx and portfolio adj.). At Crop Protection, gains were primarily recorded at SeedGrowth (seed treatment products) and Herbicides, which posted increases of 7.1 percent and 5.3 percent (both Fx and portfolio adj.), respectively. Business at Insecticides expanded by 3.9 percent (Fx and portfolio adj.), while sales at Fungicides were 6.2 percent lower (Fx and portfolio adj.) than in the prior-year quarter. Sales growth of 20.5 percent (Fx and portfolio adj.) at Environmental Science was based on the delivery of products to the company that acquired the consumer business in October 2016.

EBITDA before special items of Crop Science increased by 2.4 percent to EUR 1,115 million (Q1 2016: EUR 1,089 million). Positive earnings effects resulted primarily from higher volumes. These stood against an increase in the cost of goods sold and in research and development expenses.

Substantial earnings growth at Animal Health

Sales of the Animal Health business rose by 2.9 percent (Fx and portfolio adj.) to EUR 440 million (Q1 2016: EUR 408 million). The development of business in the Asia/Pacific region in particular was encouraging. Business in North America benefited from the sales generated by the Cydectin product portfolio that Bayer acquired from Boehringer Ingelheim Vetmedica, Inc. in the United States. Bayer once again significantly expanded business with its Seresto flea and tick collar (Fx adj.: plus 38.2 percent), primarily as the result of higher volumes in the United States and Europe. By contrast, sales of the Advantage family of flea, tick and worm control products were considerably lower than in the prior-year quarter (Fx adj.: minus 10.0 percent), partly due to intensified competitive pressure and shifts in demand patterns. EBITDA before special items increased by 10.7 percent to EUR 135 million (Q1 2016: EUR 122 million). Positive earnings contributions resulted from both price increases as well as the Cydectin business that Bayer acquired. These stood against an increase in selling expenses and research and development expenditures.

Covestro records substantial expansion in volumes and prices

Sales of Covestro advanced by 23.6 percent (Fx & portfolio adj.) in the first quarter compared with the prior-year period, to EUR 3,564 million (Q1 2016: EUR 2,850 million). Selling prices were much higher overall, especially at Polyurethanes, while volumes increased substantially in all business units. EBITDA before special items improved by 66.5 percent to EUR 839 million (Q1 2016: EUR 504 million). Substantially higher selling prices more than offset the effect of a slight increase in raw material prices. In addition, higher volumes had a positive effect on earnings.

Group outlook for 2017 raised

For 2017, Covestro is now budgeting a substantial sales increase (previously: increase) and a significant improvement in EBITDA after adjustment for special items (previously: on or above the prior-year level).

This development leads to the following changes for the Bayer Group. Sales are now expected to increase to around EUR 51 billion (previously: more than EUR 49 billion). This now corresponds to a mid- to high-single-digit (previously: low- to mid-single-digit) percentage increase on a currency- and portfolio-adjusted basis. EBITDA before special items is now expected to improve by a low-teens percentage (previously: mid-single-digit percentage). Bayer now aims to grow core earnings per share from continuing operations by a mid- to high-single-digit percentage (previously: mid-single-digit percentage). Bayer’s interest in Covestro amounts to only 53 percent as of March 2017 (previously: 64 percent for the full year). Excluding capital and portfolio measures, net financial debt is targeted to be around EUR 8 billion at the end of 2017 (previously: around EUR 10 billion).

Taking into account the potential opportunities and risks, at this point in time Bayer is not adjusting the forecasts issued for its Life Science businesses in February 2017 and refers to its Annual Report 2016 for further information. This forecast is based on the exchange rates as of March 31, 2017. There were no significant changes in this regard compared with December 31, 2016.

On April 27, 2017 The Bayer Group reported that it has gotten off to a very successful start to 2017 and generated strong sales and earnings growth in the first quarter (Press release, Bayer, APR 27, 2017, View Source [SID1234518739]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"At Pharmaceuticals, we once again benefited from the very good performance of our key growth products," CEO Werner Baumann said when he presented the interim report for the first quarter on Thursday. Consumer Health, Crop Science and Animal Health also registered increases in sales and EBITDA before special items. Covestro posted substantial growth in sales and earnings. Driven by Covestro’s performance, Bayer has raised its Group outlook for 2017.

Sales of the Bayer Group increased by 11.7 percent to EUR 13,244 million (Q1 2016: EUR 11,854 million) in the first quarter. Adjusted for currency and portfolio effects (Fx & portfolio adj.), sales advanced by 9.4 percent. Sales of the Life Science businesses amounted to EUR 9,680 million, up by 4.9 percent (Fx & portfolio adj.) year on year. Group EBITDA before special items improved by 14.9 percent to EUR 3,893 million (Q1 2016: EUR 3,387 million). EBIT climbed by a substantial 34.3 percent to EUR 3,116 million (Q1 2016: EUR 2,320 million) after special charges of EUR 85 million (Q1 2016: EUR 272 million). These mainly resulted from expenses related to efficiency improvement programs, impairment losses on intangible assets, and costs in connection with the agreed acquisition of Monsanto. EBIT before special items moved ahead by 23.5 percent to EUR 3,201 million (Q1 2016: EUR 2,592 million). Net income climbed by 37.9 percent to EUR 2,083 million (Q1 2016: EUR 1,511 million), and core earnings per share from continuing operations by 11.5 percent to EUR 2.62 (Q1 2016: EUR 2.35).

Cash flow provided by operating activities from continuing operations climbed by a substantial 49.6 percent to EUR 826 million (Q1 2016: 552 million) due to the improvement in EBITDA. Net financial debt of the Bayer Group declined by EUR 1.4 billion to EUR 10.4 billion between December 31, 2016, and March 31, 2017, due mainly to cash inflows from the sale of Covestro shares.

Strong gains at Pharmaceuticals

Sales of prescription medicines (Pharmaceuticals) rose in the first quarter by an encouraging 7.4 percent (Fx & portfolio adj.) to EUR 4,263 million (Q1 2016: EUR 3,889 million). "Our key growth products were once again especially successful, registering combined growth of 20 percent on a currency-adjusted basis," Baumann said. The oral anticoagulant Xarelto, the eye medicine Eylea, the cancer drugs Xofigo and Stivarga, and the pulmonary hypertension treatment Adempas posted total combined sales of EUR 1,445 million (Q1 2016: EUR 1,187 million). Sales of Xarelto climbed by 19.6 percent on a currency-adjusted basis (Fx adj.), due primarily to higher volumes in Europe and Japan. In addition, Bayer once again significantly expanded its business with the eye medicine Eylea (Fx adj.: plus 19.3 percent), with performance driven by higher sales volumes in Europe. Encouraging sales were also achieved in Canada and Japan.

Sales of the hormone-releasing intrauterine devices of the Mirena product family increased by a substantial 22.7 percent (Fx adj.), primarily due to the performance of the U.S. business, which also benefited from the successful market launch of the new Kyleena intrauterine device. Bayer also recorded substantial sales increases for its diabetes treatment Glucobay (Fx adj.: plus 14.6 percent), its Aspirin Cardio product for the secondary prevention of heart attacks (Fx adj.: plus 13.8 percent) and its X-ray contrast agent Ultravist (Fx adj.: plus 18.0 percent), primarily as a result of the positive development of business in China. On the other hand, business with the Kogenate/ Kovaltry blood-clotting medicines was down overall (Fx adj.: minus 8.5 percent), largely due to fluctuations in the order volumes placed by Bayer’s distribution partner for these products. As expected, sales of the multiple sclerosis product Betaferon/Betaseron were also lower than in the prior-year quarter due to reduced demand in Europe and the United States (Fx adj.: minus 12.1 percent). Overall, the Pharmaceuticals business grew in all regions on a currency-adjusted basis.

EBITDA before special items of Pharmaceuticals increased by a substantial 19.1 percent to EUR 1,502 million (Q1 2016: EUR 1,261 million). While sales rose, selling expenses and research and development expenditures were at around the same level as the prior-year quarter.

Growth in sales and earnings at Consumer Health

Adjusted for currency and portfolio effects, sales of self-care products advanced by 2.6 percent to EUR 1,601 million (Q1 2016: EUR 1,520 million) in the first quarter. "We achieved double-digit percentage sales gains for several products at Consumer Health as well," Baumann noted. The division registered encouraging growth in Europe/Middle East/Africa and in Asia/Pacific. Sales in North America were level year on year on a currency-adjusted basis, while business declined substantially in Latin America.

The sunscreen product Coppertone delivered positive performance (Fx adj.: plus 21.3 percent), primarily in the United States and China where Bayer built inventories in the distribution channel ahead of the summer season. Encouraging sales gains were also recorded for Canesten skin and intimate health products (Fx adj.: plus 11.5 percent), in part due to the expansion of the product portfolio last year. Sales of the Alka-Seltzer family of products to treat gastric complaints and cold symptoms advanced significantly (Fx adj.: plus 19.6 percent), especially in the United States due to a strong cold season and as a result of a product line extension. The One A Day vitamin product achieved double-digit growth (Fx adj.: plus 19.1 percent), as did the Elevit prenatal vitamin (Fx adj.: plus 13.4 percent). By contrast, sales of Dr. Scholl’s foot care products declined substantially (Fx adj.: minus 33.6 percent), primarily due to the reduction of inventories in distribution channels ahead of a change in product lines and a weak market environment in the United States. Business with the antihistamine Claritin was down slightly (Fx adj.: minus 2.4 percent), mainly because of a slow start to the allergy season in the United States. Gains in Europe and China only partially offset this effect.

EBITDA before special items of Consumer Health advanced by 2.3 percent to EUR 392 million (Q1 2016: EUR 383 million). This increase resulted from the positive development of sales as well as from one-time gains of around EUR 20 million, primarily from the sale of brands. A higher cost of goods sold, in part due to write-downs on inventories, had an opposing effect.

Crop Science: business expanded in North America

Sales of the agriculture business increased by 3.2 percent (Fx & portfolio adj.) to EUR 3,120 million (Q1 2016: EUR 2,936 million). "Crop Science benefited primarily from encouraging performance in North America," Baumann said. Sales in that region grew by 8.9 percent (Fx adj.). Business development was also positive in Europe/Middle East/ Africa (Fx adj.: plus 2.0 percent) and in Asia/Pacific (Fx adj.: plus 2.9 percent), while sales in Latin America declined by 9.8 percent (Fx adj.).

Sales at Seeds (which also includes the traits business) rose by 8.0 percent (Fx and portfolio adj.). At Crop Protection, gains were primarily recorded at SeedGrowth (seed treatment products) and Herbicides, which posted increases of 7.1 percent and 5.3 percent (both Fx and portfolio adj.), respectively. Business at Insecticides expanded by 3.9 percent (Fx and portfolio adj.), while sales at Fungicides were 6.2 percent lower (Fx and portfolio adj.) than in the prior-year quarter. Sales growth of 20.5 percent (Fx and portfolio adj.) at Environmental Science was based on the delivery of products to the company that acquired the consumer business in October 2016.

EBITDA before special items of Crop Science increased by 2.4 percent to EUR 1,115 million (Q1 2016: EUR 1,089 million). Positive earnings effects resulted primarily from higher volumes. These stood against an increase in the cost of goods sold and in research and development expenses.

Substantial earnings growth at Animal Health

Sales of the Animal Health business rose by 2.9 percent (Fx and portfolio adj.) to EUR 440 million (Q1 2016: EUR 408 million). The development of business in the Asia/Pacific region in particular was encouraging. Business in North America benefited from the sales generated by the Cydectin product portfolio that Bayer acquired from Boehringer Ingelheim Vetmedica, Inc. in the United States. Bayer once again significantly expanded business with its Seresto flea and tick collar (Fx adj.: plus 38.2 percent), primarily as the result of higher volumes in the United States and Europe. By contrast, sales of the Advantage family of flea, tick and worm control products were considerably lower than in the prior-year quarter (Fx adj.: minus 10.0 percent), partly due to intensified competitive pressure and shifts in demand patterns. EBITDA before special items increased by 10.7 percent to EUR 135 million (Q1 2016: EUR 122 million). Positive earnings contributions resulted from both price increases as well as the Cydectin business that Bayer acquired. These stood against an increase in selling expenses and research and development expenditures.

Covestro records substantial expansion in volumes and prices

Sales of Covestro advanced by 23.6 percent (Fx & portfolio adj.) in the first quarter compared with the prior-year period, to EUR 3,564 million (Q1 2016: EUR 2,850 million). Selling prices were much higher overall, especially at Polyurethanes, while volumes increased substantially in all business units. EBITDA before special items improved by 66.5 percent to EUR 839 million (Q1 2016: EUR 504 million). Substantially higher selling prices more than offset the effect of a slight increase in raw material prices. In addition, higher volumes had a positive effect on earnings.

Group outlook for 2017 raised

For 2017, Covestro is now budgeting a substantial sales increase (previously: increase) and a significant improvement in EBITDA after adjustment for special items (previously: on or above the prior-year level).

This development leads to the following changes for the Bayer Group. Sales are now expected to increase to around EUR 51 billion (previously: more than EUR 49 billion). This now corresponds to a mid- to high-single-digit (previously: low- to mid-single-digit) percentage increase on a currency- and portfolio-adjusted basis. EBITDA before special items is now expected to improve by a low-teens percentage (previously: mid-single-digit percentage). Bayer now aims to grow core earnings per share from continuing operations by a mid- to high-single-digit percentage (previously: mid-single-digit percentage). Bayer’s interest in Covestro amounts to only 53 percent as of March 2017 (previously: 64 percent for the full year). Excluding capital and portfolio measures, net financial debt is targeted to be around EUR 8 billion at the end of 2017 (previously: around EUR 10 billion).

Taking into account the potential opportunities and risks, at this point in time Bayer is not adjusting the forecasts issued for its Life Science businesses in February 2017 and refers to its Annual Report 2016 for further information. This forecast is based on the exchange rates as of March 31, 2017. There were no significant changes in this regard compared with December 31, 2016.