(Jan 14): Bayer AG plans to push pause on some of its pharmaceutical dealmaking, focusing instead on reducing the high debt load the company still faces after its US$63 billion (RM283.56 billion) acquisition of Monsanto.

The company won’t seek pharma and biotech deals toward the top end of a target range of €1 billion (RM4.61 billion) to €5 billion, head of pharmaceuticals Stefan Oelrich said in an interview on Monday (Jan 13) on the sidelines of the JPMorgan Healthcare Conference in San Francisco. That marks a reversal of comments he made at the same meeting a year ago. Bayer now has built the drug pipeline it needs to grow in the next five to seven years, he said.

“Acquisitions are probably taking a little bit of a backseat right now in the next two years or so as we try to improve our debt situation,” Oelrich said. “We continue to make deals, but maybe less focused on buying entire companies.”

The ailing German drugs-to-herbicides conglomerate is facing one of its toughest stretches in decades after the Monsanto deal brought down an avalanche of litigation over the weedkiller Roundup. Low prices for the weedkiller are also hurting sales.

Bayer shares rose as much as 2% in early Frankfurt trading. The stock has lost more than 40% in the past 12 months, falling to a two-decade low in November after the company said earnings would probably drop this year. To win back investor confidence, Chief Executive Officer Bill Anderson has rolled out across-the-board cost-cutting measures and a new operating model aimed at boosting productivity.

Bayer’s total debt is about €38 billion.

The pharma unit is a bright spot, Oelrich argued. Though it’s facing its own set of challenges — including loss of exclusivity for its top-selling drug, the blood thinner Xarelto — he said strong demand for new prostate cancer and kidney medicines will help offset the lost sales.

The company is also pushing forward quickly with an experimental cell therapy for Parkinson’s disease, saying on Monday it plans to move the potential drug directly into a late-stage trial. The study will probably take about three years, Oelrich said.

While the next two years will be challenging, the pharma business will likely return to growth in 2027 once the company has absorbed Xarelto’s loss of exclusivity, Oelrich has said previously.

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