German drugs giant Bayer posted third-quarter profits below analysts' expectations but a source said the company was about to shore up its drugs business with an imminent marketing deal with GlaxoSmithKline.
An industry source said Germany's largest drugs group could sign a co-marketing deal with GSK for its new anti-impotence drug vardenafil in the US in the coming days. Company officials declined to comment.
Glaxo, which has a powerful sales force and is keen to fill a gap in its pipeline by licensing in late-stage products, has long been seen by analysts as a frontrunner to partner the new Bayer drug. The two companies have already worked together in marketing the ill-fated cholesterol-lowering drug Baycol/Lipobay, which Bayer was forced to withdraw on safety grounds in August.
Bayer, which aims to start selling vardenafil in the second half of next year, will be challenging Pfizer's Viagra and another new drug from Eli Lilly and Co. Several big pharmaceutical companies had been interested in partnering vardenafil, which, like Lilly's Cialis, acts faster and with fewer side effects than Viagra.
Bayer said in a statement today that third-quarter operating profit on continuing operations before exceptionals dropped 90.7% to 66 million euros. Sales from continuing operations fell 5.9% to 6.868 billion euros. But it pledged the global economic slowdown would not stop it from making an operating profit in the fourth quarter.
Bayer's healthcare division, which contains its pharmaceuticals unit, saw third-quarter operating profit before exceptionals plummet to 24 million euros from 334 million.
All the big German chemicals companies, including Bayer's arch-rival BASF, have warned on profits this year as demand has fallen across industry sectors from cars to electronics.
