In Simple Terms
Bayer says sales of its prescription medicines are growing strongly, led by two treatments for cancer, kidney disease, and heart problems. That has prompted the company to raise some of its financial forecasts for 2026. But the gains are uneven: legal costs are still draining cash, while parts of its farming and consumer health businesses face tough markets.
A Stronger Engine in Prescription Drugs
Prescription medicines were Bayer’s clearest source of progress in the third quarter. The division brought in 4.680 billion euros, up 8.0% in reported terms and 6.4% after adjusting for currency movements and changes in the business portfolio. Nubeqa, a cancer treatment, and Kerendia, used to treat chronic kidney disease and heart failure, led the growth.
Sales of Nubeqa rose 58.3% on an adjusted basis, reaching nearly 1 billion euros in the quarter alone. Kerendia sales climbed 64.9%, bringing the drug to the annual sales level commonly associated with blockbuster status: revenue topped 1 billion euros in the 12 months ended September 30, 2026. Those results matter to Bayer because they suggest the division’s expansion is not riding on a single product. More than one treatment is gaining commercial momentum.
Medical imaging also delivered a positive development. Sales of Beyonttra, which was successfully launched in Europe as a treatment for cardiomyopathy, increased fivefold as sales volumes rose sharply. At the same time, the loss of patent protection continued to weigh on some older products. Sales of Xarelto, an oral anticoagulant, fell 30.7%, while Eylea sales declined 23.5%, although Bayer expects that decline to slow gradually.
Within the Eylea portfolio, the 8 mg version—which allows for longer intervals between treatments—accounted for about 60% of the drug’s revenue. That share shows how changing the way an existing medicine is used can help counter sales lost to competition after patent protection ends, even if it is not enough to stop the product’s overall decline.
Stronger Operating Profit, but Pressures Remain
The prescription drugs division’s operating profit before special items increased 23.6% to 1.292 billion euros. The improvement came mainly from higher sales, particularly of Nubeqa and Kerendia. Spending on marketing and sales also increased as Bayer continued investing in the growth of its business. Currency movements provided a further boost of 30 million euros. As a result, the division’s margin before special items rose by 3.5 percentage points to 27.6%.
Following that performance, Bayer raised its 2026 forecast for the division’s adjusted operating margin to a range of 25% to 27%, up from the previous forecast of 23% to 25%. The move suggests management sees the momentum behind newer products as more than a one-quarter surge. Future results will still depend on whether those medicines can keep growing, how much it costs to support them, and how Bayer makes up for declining sales of products that have lost patent protection.
At the Group Level: Higher Sales, but a Net Loss
Bayer reported third-quarter revenue of 10.053 billion euros. That was a 4.1% increase in reported terms, but growth was only 1.9% after adjusting for currency movements and changes in the business portfolio. Currency effects added 246 million euros. EBITDA before special items rose 6.9% to 1.615 billion euros, including a positive currency impact of 36 million euros.
Despite the improvement in adjusted operating measures, the group recorded an operating loss of 110 million euros, compared with a loss of 543 million euros in the same period a year earlier. One source of pressure was a 307 million euro impairment of the Xofigo brand in the pharmaceuticals division. Operating results also included net special charges of 407 million euros, down from 1.064 billion euros a year earlier. These included a 215 million euro write-down of the Claritin brand in consumer health, as well as expenses related to litigation.
The group ended the period with a net loss of 672 million euros, smaller than the 963 million euro loss recorded a year earlier. Adjusted earnings per share, however, fell to 0.31 euros from 0.49 euros. Bayer said stronger operating performance was not enough to offset non-cash effects arising from changes in interest rates. Sales and adjusted profit alone therefore do not tell the whole story: accounting valuations, financing costs, and special items continue to shape the final results.
Cash and Debt Still Feel the Impact of Settlements
Free cash flow was negative, at 293 million euros, compared with a positive 596 million euros in the same period a year earlier. Bayer attributed the reversal, among other factors, to higher expected payments to settle legal cases. This helps explain the gap between stronger adjusted operating profit and the company’s ability to turn that performance into cash it can actually use. Legal obligations can drain liquidity even when the underlying business improves.
In contrast, net financial debt fell to 31.083 billion euros on September 30, 2026. That was 2.564 billion euros lower than on June 30 and 1.625 billion euros below the level a year earlier. The biggest factor was Bayer’s receipt of 3.0 billion euros from Apollo Global Management in exchange for the previously announced sale of a minority stake in a newly established entity. It is important to distinguish the lower debt balance from the quarter’s operating cash flow: the deal payment helped the balance sheet, while free cash flow remained negative.
Against that backdrop, Bayer improved its full-year free cash flow forecast by 1 billion euros, to a range of negative 1.5 billion euros to negative 0.5 billion euros. Its year-end net debt forecast also fell to 28.0–29.0 billion euros, from 29.0–30.0 billion euros. These revisions point to a better outlook, but they do not mean Bayer expects positive free cash flow in 2026: the entire forecast range remains below zero.
Agriculture and Consumer Health Lag Behind
Crop Science recorded sales of 3.884 billion euros, a slight reported increase of 0.7%. After adjusting for currency and portfolio changes, however, sales declined 2.4%. The division faced particular pressure from unfavorable regulatory effects and poor weather in Europe, the Middle East and Africa, as well as in Asia and the Pacific. Latin America provided a bright spot, with strong growth driven by greater demand for corn and soybean seeds for the summer season.
Sales of corn seeds and related plant traits were close to the year-earlier level, with an adjusted decline of 0.1%. Sales of soybean seeds and traits rose 4.5%. By contrast, fungicides and non-glyphosate herbicides each fell 8.6%. The agricultural division’s adjusted operating profit dropped 41.3% to 101 million euros in the quarter, which is seasonally less important for this business. The fall was mainly due to higher manufacturing and distribution costs, though Bayer noted that the comparison was also affected by favorable factors in the previous period. Currency effects added 9 million euros, but the adjusted margin contracted by 1.9 percentage points to 2.6%.
Over-the-counter consumer health products generated revenue of 1.445 billion euros, up 2.1% in reported terms but only 0.1% on an adjusted basis. Digestive health products rose 4.5%, helped by a large increase in MiraLAX sales in the United States. Dermatology products gained 3.0%, particularly on the strength of Bepanthen. In contrast, nutritional supplements fell 3.4%, while allergy and cold products declined 2.9%. Business grew in Asia and the Pacific and in Latin America, but fell in Europe, the Middle East and Africa after a strong previous quarter. The US market remained weak.
Adjusted operating profit in consumer health fell 4.4% to 347 million euros, while the margin declined by 1.7 percentage points to 24.0%. Cost controls and pricing were not enough to offset increased investment in marketing new products. Revenue from the sale of a small, non-core brand helped, as did a positive currency effect of 7 million euros. The results underline that the improvement in pharmaceuticals has not automatically spread to Bayer’s other businesses.
Drug Innovation and Legal Developments in the Background
Alongside its commercial results, Bayer announced that China had approved Asundexian the previous week for the secondary prevention of stroke, under the brand name Sunharbo. The company said it is the first Factor XIa inhibitor to receive approval anywhere in the world. Management said its next priority is to pursue additional approvals. Bayer credited the accelerated development to its scientific teams in Wuppertal, who had worked on the treatment for more than a decade, as well as to regulatory changes and the use of artificial intelligence tools. The company said these factors helped bring the medicine to patients one year ahead of schedule.
The first glyphosate verdict since the US Supreme Court ruled in Bayer’s favor by a 7-to-2 majority was issued the previous week. Management described the decision by all 12 jurors to side with Bayer in the new case as a sign that could affect the calculations of potential plaintiffs. It said, however, that it would handle future cases according to what it considers to be in the company’s best interests. Bayer is also awaiting an important decision on a class-action settlement. These developments do not remove the legal costs already being incurred, but they help explain why settlements and court payments remain central to its cash outlook.
Higher Forecasts, with Caution Still Warranted
Bayer raised its group-level forecast for EBITDA before special items to 9.8–10.3 billion euros, calculated using constant exchange rates, from the previous range of 9.6–10.1 billion euros. The revision came alongside improved estimates for free cash flow and net debt. The company left its forecasts for the other full-year measures unchanged from its half-year financial report. The revised outlook therefore rests substantially on the performance of the pharmaceuticals division, rather than on an even recovery across all of Bayer’s businesses.
The finance leadership says its priorities include strengthening the balance sheet, increasing productivity, improving cash generation, and building financial flexibility to invest in future growth. Getting there will require continued growth from Nubeqa, Kerendia, and other products; control of marketing and manufacturing costs; a response to patent expirations; and continued management of legal obligations. The forecast for negative free cash flow, even though it has improved, is a reminder that rebuilding financial flexibility is still a work in progress.
The Bottom Line
Bayer’s third-quarter 2026 results present a mixed picture, but one that is moving in a more positive direction. Prescription drugs delivered strong growth, prompting the company to raise its forecasts for the division’s margin and group earnings, lower its net debt estimate, and improve its free cash flow outlook. But Bayer still posted a net loss and negative free cash flow, while agriculture and consumer health faced uneven pressure and legal expenses continued to consume cash. The company’s prospects for the year depend on newer medicines continuing to grow—and on that growth gradually translating into stronger cash generation and a more flexible balance sheet.