Animal Health

Pharmaceuticals

Consumer Care

Medical Care

Bayer HealthCare: The Power of Diversity

Names Figures Facts 2011

Conten t s
Names Figures Facts 2011

Foreword The Bayer HealthCare management team Facts and figures 2010 Active worldwide

3 4 5 8

Animal Health Consumer Care Medical Care Pharmaceuticals

10 12 14 16

Research and development Product Supply Business development Social commitment Research milestones BHC in dialogue

20 24 26 28 30 31

COVER: Bayer researcher Dr. Johannes-Peter Stasch (left) and Professor Hossein Ardeschir Ghofrani from Giessen University Hospital (Germany) work with a model of a lung.

Foreword
Innovation that reaches its target
Dear Readers, The global healthcare market is undergoing a transformation. While cost aspects are increasingly becoming the main priority in many state healthcare systems, in emerging markets such as China or Brazil there is a new, growing demand for healthcare products and services. Given these changes, innovation is and will remain a crucial success factor. For Bayer HealthCare, innovation means offering products that improve peoples lives. Excellence in research and development is essential for this. Furthermore, we must also understand peoples needs because innovation is only innovation if our customers view it as such and it provides them with true added value. Customer orientation in all phases of product development from research to marketing is a key success factor in this regard. In each of our four divisions Animal Health, Consumer Care, Medical Care and Pharmaceuticals we constantly work to offer our customers real innovations: Animal Health is our specialist for veterinary medicine for companion animals and livestock. Among our product innovations is Profender Dog, the first allwormer for dogs, which provides control of adult and all larval stages of the most relevant worm species in dogs. Our Consumer Care Division is a world leader in the over-the-counter or non-prescription drugs market. Through our Intendis business, we also place emphasis on new areas such as aesthetic dermatology, where we are working together with a partner to develop an injection to remove fat deposits under the chin. The Medical Care portfolio comprises blood glucose meters for people with diabetes and devices for diagnostic imaging and medical therapy. Cotavance, a drug-coated balloon catheter for the treatment of peripheral arterial disease, is one of the most important development projects in this division.

Dr. Jrg Reinhardt

At Pharmaceuticals, we research and develop new therapies primarily in areas where there is a high level of medical need, such as cancer therapy, cardiovascular and hematological disorders, gynecological therapy and new molecular imaging processes. Among the promising candidates in our pipeline are the anticoagulant Xarelto and VEGF Trap-Eye for the treatment of wet age-related macular degeneration. Bayer HealthCare is thus prepared to create value through innovation in the future as well. This brochure provides insight into the diversity and strength of our company, and I hope that this edition of Names Figures Facts will spur your fascination for Bayer HealthCare and its innovative power. Dr. Jrg Reinhardt Chairman of the Bayer HealthCare Executive Committee

Baye r Healt hCare

The management team
Bayer HealthCare is managed by its Executive Committee. This body is composed of the four divisional heads, the heads of Research and Development as well as the heads of the cross-divisional platform functions Central Administration & Organization, Communications, Human Resources, Law and Patents and Product Supply. The Executive Committee sets the course for the companys future. Its task is to make strategic decisions that lead to a sustained increase in the companys value.
Dr. Jrg Reinhardt Chairman of the Bayer HealthCare Executive Committee

Dr. Alexander Bey Head of Law and Patents and Compliance Officer

Prof. Dr. Andreas Busch Head of Pharmaceuticals and Animal Health Research

Andreas Fibig Head of the Pharmaceuticals Division

Andreas Gnther Head of Human Resources

Dr. Hartmut Klusik Head of Product Supply

Dr. Jean-Luc Lowinski Head of the Animal Health Division

Alan Main Head of the Medical Care Division

Dr. Kemal Malik Head of Development and Chief Medical Officer of the Pharmaceuticals Division

Erica L. Mann Head of the Consumer Care Division

Dr. Markus Pickel Head of Corporate Communications

Manfred Vehreschild Head of Central Administration and Organization

Status: April 2011

Facts and figures 2010

Headquarters: Employees: Sales: 5 55,700

16,913 million Monheim (Animal Health) Berlin (Pharmaceuticals) Leverkusen (Bayer HealthCare)

Tarrytown (Medical Care) Morristown (Consumer Care)

Headquarter sites of Bayer HealthCare and the divisions

The BHC headquarters are located at Bayer's Leverkusen site.

Bayer HealthCare million Sales EBITDA EBIT Special items Gross cash flow Net cash flow

2009

2010

Change %

15,988 4,148 2,640 (372) 3,153 3,431

16,913 4,116 1,861 (1,169) 2,948 3,320

5.8 -0.8 -29.5

- 6.5 -3.2

Fact s and f igures

Facts and figures 2010
Best-Selling Pharmaceutical Products million Betaferon/Betaseron (Specialty Medicine) YAZ/Yasmin/Yasminelle (General Medicine) Kogenate (Specialty Medicine) Nexavar (Specialty Medicine) Adalat (General Medicine) Mirena (General Medicine) Avalox/Avelox (General Medicine) Levitra (General Medicine) Aspirin Cardio (General Medicine) Glucobay (General Medicine) Ultravist (Specialty Medicine) Cipro/Ciprobay (General Medicine) Magnevist (Specialty Medicine) Iopamiron (Specialty Medicine) Kinzal / Pritor (General Medicine) Total Proportion of Pharmaceuticals sales
Products are ranked by full year 2010 sales.

2009 1,214 1,278 888 604 633 490 460 360 315 315 262 331 219 199 164 7,732 74 %

2010 1,206 1,111 1,004 705 664 539 497 429 358 347 313 262 215 185 178 8,013 73 %

Change % -0.7 -13.1 13.1 16.7 4.9 10.0 8.0 19.2 13.7 10.2 19.5 -20.8 -1.8 -7.0 8.5 3.6

Best-Selling Consumer Health Products million Contour (Medical Care) Aspirin* (Consumer Care) Advantage product line (Animal Health) Aleve/naproxen (Consumer Care) Bepanthen/Bepanthol (Consumer Care) Canesten (Consumer Care) One A Day (Consumer Care) Baytril (Animal Health) Supradyn (Consumer Care) Breeze (Medical Care) Total Proportion of Consumer Health sales

2009 601 400 336 217 186 188 153 149 136 138 2,504 45 %

2010 602 418 408 273 212 210 178 166 138 125 2,730 45 %

Change % 0.2 4.5 21.4 25.8 14.0 11.7 16.3 11.4 1.5 -9.4 9.0

* Total Aspirin sales = 776 million (2010: 715 million), including Aspirin Cardio, which is reflected in sales of the Pharmaceuticals segment.

14,000

2,000

3,000

8,000

1,000

Employees
Germany 12,976 8,618 5,012 2,455 2,361 1,587 1,560 1,461 1,121 1,085 910 691 683 672 669 641 616 601 592 583 563 505 Columbia 479 United Arab Emirates 432 Poland 432 Pakistan 356 Australia 325 Morocco 290 Philippines 289 Guatemala 279 Republic of South Africa
USA

200

400

600

800

Status: December 31, 2010

Consumer Health*

17,700
China Japan Mexico Brazil Italy France Spain Turkey Russian Federation Republic of Korea India Argentina Indonesia Canada Finland United Kingdom El Salvador Switzerland Venezuela

38,000 Sales
Consumer Care 3,371 million Medical Care 1,514 million

Headcount according to country

*The Consumer Health segment comprises Bayer HealthCare's Animal Health, Consumer Care and Medical Care Divisions.

Pharmaceuticals

Pharmaceuticals 10,908 million

Animal Health 1,120 million

Status: December 31, 2010

Acti ve worldwide

Bayer HealthCare and its divisions are represented in nearly all markets of the world.

Active worldwide
The aim of Bayer HealthCare is to research, develop, manufacture and market innovative products that will improve the health of people and animals all over the world. The products are used for the diagnosis, prevention and treatment of diseases and help to enhance quality of life. Bayer HealthCare is a globally operating company with sites on all five continents. Approximately 55,700 people work for the Bayer subgroup in more than 100 countries at all stages of the value-added chain. The company has its headquarters in Germany (Leverkusen). Two divisions (Consumer Care and Medical Care) are based in the United States (Morristown and Tarrytown). The headquarters of the Animal Health and Pharmaceuticals Divisions are also located in Germany (Monheim and Berlin, respectively). Local companies handle product distribution and are in close contact with the customer and with the authorities in the various countries. As a global company with four divisions, sites all over the world and a differentiated portfolio, Bayer HealthCare is reliant on a diversely composed workforce. After all, one of the cornerstones of Bayer HealthCares success is the innovative strength of its employees. This is why Bayer HealthCare is keen to attract the most promising talent from all over the world to the company. Overall, diversity pays off. In addition to a better understanding of customer requirements, an enhanced image and greater appeal as an employer, diversity as a business case is also gaining importance in day-to-day business: the more diverse the workforce, the greater the creative potential released through cooperation. Working together, men and women, different age groups and nationalities, and people with different ways of thinking can have a more well-rounded approach to challenges and may find solutions which would not have even occurred to a group with a more homogeneous composition. Only in this way can the diverse knowledge, experience and values of employees be put to profitable use to produce innovative customer solutions and meet global challenges.

Ani mal Healt h

When pets become ill, they can also impair the health of humans - for example by spreading disease pathogens.

10

OUR AREAS OF FOCUS THE FOUR DIVISIONS

Net sales 2010: 1.1 billion Global ranking: 4 Headquarters: Monheim, Germany

The Animal Health Division

The goals of the Animal Health Division are to maintain the health of animals and cure veterinary diseases, with the focus primarily on treating infectious diseases and repelling parasites. In livestock animals that play a role in food production the safety of drug and care products is paramount for food safety. Companion animals receive special attention in clinical practice: in view of the emotional ties that people have to them but also their close relationship to the family, it is vital that they receive dependable, easy-to-use and safe medication in order to safeguard both their well-being and that of their owners. With more than 100 different animal health and care products worldwide for livestock and companion animals, the division is one of the most successful suppliers in the field of veterinary medicine. Animal Health is well positioned in the steadily growing market for antiparasitic products for companion animals. The Advantage family of flea control products for dogs and cats was again one of Bayer HealthCares best-selling consumer health products in 2010, generating annual sales of roughly 408 million. Baycox for the treatment of coccidiosis, a parasitic infectious disease in livestock, enjoyed double-digit sales growth relative to the previous year. The Baytril antibiotic for the treatment of serious infectious diseases in livestock and companion animals has been setting standards for many years. Animal Health strengthened its business with acquisitions in 2010. The acquisition of the New Zealand-based Bomac Group added products for the treatment of mastitis and for parasite control in sheep to the farm animals product portfolio. Animal Health also acquired a technology from the U.S. company Piedmont Pharmaceuticals: a novel chewable tablet formulation that makes it possible to administer active ingredients to dogs and cats easily and reliably. With sales of 1.1 billion in 2010, the Animal Health Division contributed 6.6 percent to Bayer HealthCares total sales. The main part of the divisions sales came from the Region North America with 36.9 percent, followed by the Region Europe/Japan/MERA (Middle East, Eastern Europe, Russia and Africa) with 33.3 percent and the Region International (Asia Pacific, Latin America, South Africa) with 29.8 percent. Animal Health is active in more than 120 countries. Its animal health and care products are produced mainly in Germany and the United States, as well as at additional regional production sites.

11

Cons umer Care

neues F

More and more people are taking responsibility for their own health. For this reason, self-medication is becoming increasingly important.

12

OUR AREAS OF FOCUS THE FOUR DIVISIONS

Foto

Net sales 2010: 3.4 billion Global ranking: 2 Headquarters: Morristown, NJ, USA

The Consumer Care Division

A growing number of individuals worldwide select medicines themselves for the prevention or treatment of common ailments, as well as nutritional supplements to support a healthy diet. Many of them place their trust in tried-and-true nonprescription or over-the-counter (OTC) products from Bayer HealthCare's Consumer Care Division. One example is Aspirin, a more than 110-year-old brand that enjoys an unsurpassed level of global familiarity. Consumer Care currently ranks among the top consumer healthcare companies in the world. The division operates in more than 140 countries and maintains 14 manufacturing sites and two product research and development centers. With more than 170 brands around the world and eight global brands generating annual sales of more than 100 million each, Consumer Care is well positioned to take advantage of the sustained growth forecast for the OTC market. The division holds a balanced portfolio of strong brands in all major OTC categories, including analgesics, cardiovascular risk prevention, cough and cold, dermatology, gastrointestinals and nutritionals. In fact, some of the worlds best-known and most trusted over-the-counter medications and nutritional supplements including Aspirin, Aleve, Alka Seltzer, Bepanthen/Bepanthol, Berocca, Canesten, Elevit, Redoxon, Rennie, Supradyn, Talcid and One A Day are part of the Consumer Care portfolio. The division has a strong track record of growth in emerging markets and continues to invest in fast-growing regions around the world to increase its global footprint and advance its international portfolio of products. Recent investments including the acquisitions of Topsun Science & Technology in China and Sagmel Inc. in Eastern and Central Europe are excellent examples of this. In 2009, Consumer Care also executed on its Rx-to-OTC switch strategy with the launch of the OTC proton pump inhibitor (PPI) omeprazole under the brand names Antra and Losec through an exclusive licensing agreement with Astra-Zeneca. Consumer Care generated sales of 3.4 billion or 19.9 percent of Bayer HealthCares total sales in 2010.

13

Medi cal Care

Regular blood glucose monitoring helps people with diabetes to keep their blood sugar levels normal. This in turn can considerably reduce the risk of complications.

14

OUR AREAS OF FOCUS THE FOUR DIVISIONS

Net sales 2010: Medical Care 1.5 billion Global ranking: Blood glucose monitoring systems: 3 Fluid injection systems and thrombectomy devices: 1 Headquarters: Tarrytown, NY, USA

The Medical Care Division

Bayer HealthCares Medical Care Division is one of the leading providers of blood glucose monitoring systems and medical devices. Its portfolio includes blood glucose monitoring systems, monitors to test glycated hemoglobin (HbA1c), Viterion TeleHealth and other patient education and lifestyle support services. The division also markets devices for diagnostic imaging and medical therapy. The portfolio of blood glucose meters includes Contour, Contour TS, Contour Link, Contour USB, Didget and Breeze2. In 2010, the division continued the global rollout of the Contour USB meter which connects directly to a computer, providing users with easy access to information and trends about their blood sugar levels. Monitors for measurement of glycated hemoglobin include the A1CNOW+ monitor for healthcare providers, and A1CNOW SELFCHECK for home use. Glycated hemoglobin is an indicator of long-term blood sugar control. Viterion TeleHealth provides remote patient monitoring technology to help manage chronic conditions such as diabetes and congestive heart failure. Morever, Medical Care develops, markets and services medical devices that enable or enhance therapeutic medical procedures in computed tomography, magnetic resonance imaging, molecular imaging and cardiovascular applications. Its products include fluid injection systems for radiology and cardiology, vascular intervention systems for treating constricted or blocked blood vessels, magnetic-resonance-compatible accessories and equipment services. Fluid delivery systems are used to enhance computed tomography (CT), positron emission tomography (PET), magnetic resonance imaging (MRI) and angiography/ cardiovascular imaging procedures. In 2010, the divisions medical devices business was recognized for the second time with the Malcolm Baldrige National Quality Award, the highest honor a U.S. company can receive for quality and business excellence.

15

Pharmaceuticals

More and more doctors and patients rely on innovative drugs from Bayer HealthCare's Pharmaceuticals Division.

16

Our areas Of fOCus THe fOur DivisiONs

Net sales 2010: 10.9 billion Global ranking: Leading positions in key therapeutic categories Headquarters: Berlin, Germany

The Pharmaceuticals Division

Bayer HealthCares success story in the pharmaceuticals business goes back more than 120 years. The first product marketed by the Pharmaceutical Department of Bayer was the antipyretic Phenacetin in 1888. Schering AG, the company acquired by Bayer in 2006, had already entered hormone research by the 1920s, offering the first medicine to treat menopause symptoms in 1928. For its part, Bayer quickly developed a reputation especially in the treatment of infectious diseases. Bayer researcher Gerhard Domagk, who discovered the antibacterial effect of sulfonamides, was awarded the Nobel Prize in Medicine in 1939. Bayer HealthCare Pharmaceuticals is today the highest-selling pharmaceuticals company in Germany and holds a worldwide leading position in its main therapeutic areas. The focus on specialty pharmaceuticals and the opportunities for growth in the field of general medicine offer an outstanding basis for prospering in the increasingly competitive pharmaceuticals market. The division combines its strengths in two business units: General Medicine and Specialty Medicine. The General Medicine Business Unit develops and markets products that are prescribed by both general practitioners and medical specialists. The extensive range of products in this segment for the control of high blood pressure, prevention of myocardial infarction and stroke, and for diabetes management offer doctors and patients options in both the treatment and prevention of acute disease conditions. The company also markets effective products to treat bacterial infections, such as respiratory tract and urinary tract infections. In the field of Mens Health, the division offers a wide range of therapeutic options, including treatments for erectile dysfunction and testosterone deficiency. The latest product to be researched and developed is a drug to prevent and treat life-threatening blood clots. In clinical trials in patients undergoing elective hip or knee replacement surgery, the new active ingredient rivaroxaban, a direct, oral Factor Xa inhibitor, demonstrated increased efficacy compared to the current standard treatment, with a similar safety profile. The product has since been registered and launched in this indication in numerous countries worldwide. A

17

Pharmaceuticals

Dr. Peter Kolkhof checks a slide before examining it under the microscope in one of the laboratories of Bayer HealthCare's Pharmaceuticals Division in Wuppertal (Germany).

large-scale clinical development program is investigating the suitability of the drug product in the prevention and treatment of various types of acute and chronic blood coagulation disorders. The Womens Healthcare segment of the General Medicine Business Unit is a pioneer in its field, concentrating on three areas: contraception, menopause management and gynecological therapies. Bayer is the world leader in the field of female hormonal contraception, in particular in the area of oral contraception. The pill has been enabling women to engage in conscious family planning for 50 years. Womens Healthcare offers a wide range of different contraceptives to meet individual needs, including lowdosage contraceptives with additional indications. One product that was first launched in the European Union in 2009 is the first product from a new class of oral contraceptives whose estrogen component is based on estradiol,

the same estrogen that is produced by the female body. In addition, Womens Healthcare develops products to relieve the symptoms associated with menopause. In the gynecological therapy segment, Bayer HealthCare is working to develop new therapeutic options for conditions with a high level of unmet medical need such as uterine fibroids (myomas) and endometriosis, a condition in which endometrial cells grow outside of the uterus. Indeed, a drug for the treatment of endometriosis was launched in Europe in the second quarter of 2010. The Specialty Medicine Business Unit offers innovative therapeutic options to markedly improve the quality of life for people suffering from severe, chronic and life-threatening diseases. Thanks to the contrast agents from Diagnostic Imaging, precise and early diagnosis can play a crucial role in the selection of optimal treatment and therefore has a positive effect on the therapeutic course.

18

Our areas Of fOCus THe fOur DivisiONs

shaping pharmaceutical products requires special skills.

Oemur Capar conducts a visual inspection of Nexavar tablets at Bayer HealthCare's Leverkusen site.

Some 2.5 million people worldwide suffer from multiple sclerosis (MS), a chronic inflammatory disease of the central nervous system usually occurring in episodes. Bayer HealthCare was one of the first companies to offer a causal treatment for this autoimmune disease that reduces the frequency of attacks and in this way can slow progression of the disease considerably. Hemophilia A is a rare genetic blood coagulation disorder that can be effectively treated with blood coagulation Factor VIII. The Pharmaceuticals Division is one of the worlds most important manufacturers of drug products to treat this hereditary disease. Crucial improvements have been achieved in selective cancer treatments therapies that inhibit cell division and simultaneously disrupt the blood supply to the tumor. A state-of-the-art oral drug product containing the active ingredient sorafenib has been granted regulatory approval

for the treatment of renal cell carcinoma and hepatocellular carcinoma in many countries and is now undergoing studies to investigate its suitability for a large number of other forms of cancer such as breast cancer, colorectal cancer and lung cancer. Today, medicine relies not only on conventional X-rays but also employs various diagnostic methods such as computed tomography (CT), magnetic resonance imaging (MRI) and ultrasound. Diagnostic Imaging is one of the worlds leading providers of X-ray and MRI contrast agents for in vivo diagnostics. These products are used to make tissues and organs visible in their natural position inside the body. Work is also focused on the development of markers (tracers) for positron emission tomography (PET). The PET tracer florbetaben in Bayer's pipeline makes it possible to recognize beta Amyloid, one of the pathological hallmarks of Alzheimer's disease, with high accuracy very early on and while the patient is still alive.

19

research and development

fanny Knoth, stefan stargard and Dr. antje stratmann examine cell cultures under microscopes to investigate the efficacy of a substance.

20

research and development at Bayer HealthCare

Bayer HealthCare spends more on research and development (R&D) than any other Bayer subgroup: in 2010, 2,066 million of the Bayer Groups total research and development (R&D) spending went to Bayer HealthCare, corresponding to 67.7 percent of the groups entire research expenditure. Pharmaceutical drug discovery research at Bayer Health Care Pharmaceuticals is concentrated on four areas: Cardiology & Hematology, Oncology, Diagnostic Imaging and Womens Healthcare. It includes identifying and optimizing low-molecular-weight substances and developing new biologics. Bayer HealthCare's Pharmaceuticals Division researches and develops innovative active ingredients for the treatment of diseases where there is a high level of medical need. It also further develops products that have already been granted regulatory approval. One example of an innovative active ingredient is the anticoagulant rivaroxaban (trade name: Xarelto), which has already been granted regulatory approval for the prevention of thrombosis after elective knee or hip replacement surgery, is marketed in 75 countries and is currently undergoing development in other indications. This thrombosis medication can be taken as a tablet once daily and is therefore a real innovation. One of the many other innovative substances in the pipeline is riociguat, an active ingredient for the treatment of pulmonary hypertension which would be the first drug from a new class of vasodilatative substances. Another focus of Bayers Cardiology research is heart failure. Despite major advances in the fight against cancer, the medical need for therapies which prolong survival and improve quality of life is still great. Our development pipeline in Oncology comprises various antibodies and low-molecular-weight substances. In addition to the active ingredient sorafenib (trade name: Nexavar), these include regorafenib, a development substance with a profile for inhibiting various enzymes stimulating tumor growth and angiogenesis, and Alpharadin, a novel alpha-pharmaceutical agent currently under investigation, for example in a Phase III study for prostate cancer. VEGF Trap-Eye could make an important contribution in the treatment of serious eye diseases. This active ingredient has demonstrated very promising results in two Phase III clinical studies in the treatment of wet, age-related macular degeneration and, as the next step, is seeking regulatory approval in Europe. The research activities in the field of Diagnostic Imaging are focused on the development of substances (known as tracers) for molecular imaging, and for use in positron emission tomography (PET), which

21

research and develo pment development

Dr. Klemens Krieger and sabrina schwartzkopff from the research department of the animal Health Division apply droplets of Advocate to a cat.

BHC's scientists' profound knowledge of human and veterinary medicine, accompanied by their expertise in inter-disciplinary technologies, forms the basis for innovative products.

could support earlier and more precise diagnosis of cancer or dementia in the future. Bayer HealthCare's Pharmaceuticals Division is also carrying out research and development in the field of womens healthcare, to offer a wide spectrum of contraceptive options. This ranges from the clinical testing of a contraceptive patch through to oral contraceptives which are intended for authorization in additional indications besides contraception. A new class of oral contraceptives with an estrogen component based on estradiol the estrogen which is also produced naturally by the female body was granted regulatory approval in the EU in 2009. Gynecological therapies are another R&D focus of Womens Healthcare. The company launched Visanne, a new treatment option for endometriosis, in Europe in the second quarter of 2010. Endometriosis is a chronic gynecological disease in which endometrial-like tissue appears and flourishes in areas outside the uterine cavity, which leads to chronic inflammatory reactions. The Medical Care Division conducts proprietary R&D into next-generation advances in diabetes monitoring, radiology and interventional cardiology, improving the current portfolio of marketed products as well as entering into strategic alliances with other companies to share technology and expertise. The current R&D focus in the field of blood glucose monitoring includes ease-ofuse, meter accuracy, and e-health initiatives to simplify

data capture and analysis. In the field of medical devices, the division is focused on developing alternative fluid delivery mechanisms, vascular intervention systems for treating constricted or blocked blood vessels (such as Cotavance, a drug-coated balloon catheter), customer workflow efficiencies and patient-specific contrast administration, as well as molecular imaging and healthcare informatics. The acquisition of the Bomac Group with its headquarters in Auckland, New Zealand, has strengthened the Animal Health Divisions research activities in the livestock sector. Auckland will join Monheim (Germany) and Shawnee (Kansas, USA) as a new, regional development center. The growing demand for animal protein necessitates innovative solutions for food-producing animals. Another important research area is the treatment of age-related diseases in companion animals. Further efforts are devoted to developing new formulations and user-friendly applications for established active ingredients. The Consumer Care Division is concentrating its research and development activities on developing existing brands through expanded indications and optimized delivery forms. In addition, Consumer Care actively seeks opportunities to switch prescription pharmaceuticals that could be marketed as over-the-counter products.

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Development of a pharmaceutical product: The long road

Research

Preclinical

Clinical studies

Application submitted

Approved

Phase I
up to substances

Phase II
substances
Testing in a small number of patients

Phase III
substances
Testing generally in several thousand patients

10,000

substances
Efficacy and safety tests, animal testing with the final 10 to 20 substances

250

substances
Tolerability testing in healthy human subjects

4.7

3.3

1.5

substances
Documentation examined by regulatory authorities

1.2

substance

Only one substance receives marketing authorization: On average, the development of a pharmaceutical product to market maturity takes about 10 to 12 years and costs roughly half a billion euros. Generally only one out of every 5,000 to 10,000 examined substances ultimately receives marketing authorization.

In vitro efficacy tests

10

12 years

Research and Development Projects (Phase III)* alemtuzumab Alpharadin aTX-101 fC Patch low florbetaben Gadovist LCs (uLD LNG contraceptive system) Nexavar Nexavar Nexavar regorafenib (DasT inhibitor) regorafenib (DasT inhibitor) riociguat (sGC stimulator) riociguat (sGC stimulator) Xarelto Xarelto Xarelto Vaginorm veGf Trap-eye veGf Trap-eye veGf Trap-eye
* as of February 15, 2011 PAH = pulmonary arterial hypertension; CTEPH = chronic thromboembolic pulmonary hypertension The nature of drug discovery and development is such that not all coumpounds can be expected to meet the pre-defined project goals. It is possible that any or all of the projects listed above may have to be discontinued due to scientific and/or commercial reasons and will not result in commercialized products. It is also possible that the requisite FDA, European Medicines Agency (EMA) or other regulatory approvals will not be granted for these compounds.

Multiple sclerosis Treatment of bone metastases in hormone-refractory prostate cancer Reduction of submental fat Contraception PET imaging in diagnosis of Alzheimers disease Magnetic resonance imaging Contraception Breast cancer Thyroid cancer Non-small-cell lung cancer Treatment of metastatic or inoperable gastrointestinal stromal tumors Colon cancer Pulmonary hypertension (CTEPH) Pulmonary hypertension (PAH) Prevention of venous thromboembolism in medically ill, immobilized patients Treatment and secondary prevention of venous thromboembolism Secondary prevention of acute coronary syndrome / myocardial infarction Vulvovaginal atrophy and female sexual dysfunction (FSD) Wet age-related macular degeneration Abnormal retinal angiogenesis following pathological myopia Central retinal vein occlusion

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Prod uct supply

Product supply employee Christian Otulak fills active pharmaceutical ingredients in the supply Center in Bergkamen (Germany).

24

everything centrally steered: from sourcing to the finished product

Bayer HealthCare manufactures products at almost 60 sites around the world. The active ingredients for prescription medicines are manufactured primarily at the sites in Wuppertal and Bergkamen (Germany) and Berkeley and Emeryville (United States). They are processed and packaged as finished pharmaceuticals in plants around the world using sophisticated technology. A broad spectrum of different pharmaceutical presentations is covered: solid formulations such as tablets, sugar-coated tablets and powders, semi-solid ointments and creams, and liquid drug products for application, for example, as injections or infusions. Hormonal contraceptives are produced as sugar-coated tablets but also, for example, as intrauterine systems. These processing and packaging activities are based in Berlin, Leverkusen and Weimar (Germany), Garbagnate (Italy), Turku (Finland), So Paulo (Brazil), Beijing (China), as well as various other sites in Europe, Asia and Latin America. Kogenate, the drug product for the treatment of hemophilia, is manufactured in Berkeley (United States) using a biotechnology process, while Betaferon for the treatment of multiple sclerosis is produced in Emeryville (United States). Bayer HealthCare produces its over-the-counter medicines at Bitterfeld-Wolfen and Grenzach-Wyhlen (Germany), Gaillard (France), Cimanggis (Indonesia) and Myerstown (United States), as well as at locations in Latin America and Asia. The globally marketed animal health products are mainly manufactured at the sites in Kiel (Germany) and Shawnee (United States). In addition to drug products for humans and animals, medical devices for diagnosis and therapy are produced in the United States. Bayer HealthCare supplies a total of more than 20,000 articles. The reason for this large number is the different presentation of individual products and their packaging for example, different formulations, dosage, pack sizes and language versions. Bayer HealthCare Product Supply steers the subgroups entire supply chain, from raw material sourcing through manufacturing to distribution, utilizing a global production network consisting of its own sites and those of contract manufacturers. In this way the company aims for continuous improvement of costs, flexibility and delivery reliability, maintaining high standards of quality, safety and environmental protection on a global basis. The manufacture of pharmaceuticals is subject to extraordinarily stringent quality requirements. These standards are known collectively as Good Manufacturing Practice (GMP). Compliance with these requirements is regularly inspected by internal experts, regulatory authorities and external auditors.

25

Busi n es s develop ment

Global partnerships enable Bayer HealthCare to secure access to innovative research technologies, systematically expand its product portfolio and strengthen its regional market presence.

26

Good on their own, better together

Bayer HealthCare is an innovation- and growth-oriented enterprise. Thats why its divisions invest not only in their own research and development activities and in continuous life-cycle management, but also in external collaborations. The company is thus constantly on the search worldwide for opportunities to cooperate with external partners be it in order to secure access to innovative research approaches and technologies, to systematically expand its product portfolio or to strengthen its regional market presence. Partnerships can enrich all phases of the value-added chain: whether it is research and development collaborations, licensing agreements, co-marketing agreements or regional alliances the philosophy is that collaborations must always pay off for both partners. The innovative anticancer drug Nexavar, for example, is the result of a development agreement with Onyx Pharmaceuticals, Inc., USA. Bayer HealthCares co-development and co-promotion agreement with Johnson&Johnson subsidiary Ortho-McNeil for the anticoagulant Xarelto ensures optimum development of the substance rivaroxaban. In addition to the Phase III trial in the indication agerelated macular degeneration for the VEGF Trap-Eye development project being conducted jointly with Regeneron Pharmaceuticals, Inc., another Phase III trial has since started in Asia for patients suffering from revascularization of the choroid area as a result of pathological myopia, which can lead to visual impairment. Bayer HealthCare is currently collaborating in a Phase III trial with Algeta ASA to develop the cancer drug Alpharadin, a novel radiopharmaceutical active ingredient that releases alpha radiation. New approaches to block cancer stem cells are also being pursued in collaboration with OncoMed Pharmaceuticals. Strategic alliances with international innovation partners from academia are an essential element of our R&D strategy. In 2009, Bayer HealthCare and the Tsinghua University in Beijing, China established a joint research center for the discovery and development of innovative therapeutic approaches. Bayer HealthCare and the German Cancer Research Center are cooperating in the field of tumor diagnostics and therapy in the context of a strategic research alliance aimed at enabling more rapid exploitation of research findings for the development of new cancer drugs and improved evaluation of innovative therapeutic approaches to tumor diseases. In the veterinary field, the Animal Health Division continued its strong focus on identifying New Chemical Entities that will be the building blocks for future products, while also adding important new commercial agreements in the Asia-Pacific region to further support its customers in important emerging markets with even better services and additional product solutions.

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soc i al commitment

Dr. Luis alberto Benios, a doctor in the san Marcos de sierra hospital in Honduras, explains how to take Lampit tablets to Yadira and her mother Catalina Nuez. Yadira suffers from Chagas disease.

Bayer HealthCare's Pharmaceuticals Division has many years of experience and great expertise in the field of family planning. The company is dedicated to ensuring that people in developing countries in particular can engage in conscious family planning free of charge or at reasonable prices.

Bayer HealthCare is engaged in social projects around the world, many of which are devoted to improving the supply of health care in developing countries.

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Global initiatives for better healthcare

Bayer HealthCare is committed to the principles of sustainable development and accepts a level of responsibility in society that goes well beyond the companys own borders. At the center of all our employees actions are human and animal health and environmental protection. Our Guidelines for responsible care in environmental protection and safety ensure that all of our products for humans and animals are well tolerated and can be safely disposed of and decomposed after use. The sustainability program also makes concrete contributions to the United Nations Millennium Development Goals. Self-determined family planning: as the market leader in hormonal contraception, Bayer HealthCare's Pharmaceuticals Division has supported family planning around the world, in particular for people with low incomes, for 50 years. Firstly, the company is working together with partners to improve knowledge of sexuality, health and contraception in developing countries. Secondly, it provides hormonal contraceptives free of charge or at reduced prices in cooperative projects, empowering women to decide for themselves about their family planning. The war on neglected diseases: more than 3.3 billion people are affected by so-called neglected diseases. In cooperation with the World Health Organization (WHO), Bayer HealthCare provides medicines free of charge to treat African sleeping sickness and Chagas disease in Latin America. In addition, with the Bayer Fights Chagas project Bayer HealthCare is taking a new approach that combines corporate social responsibility and talent management. For the first time, up-and-coming managerial employees and volunteers are being brought together to develop a sustainable concept to combat Chagas disease in Argentina. Bayer HealthCare is also working together with the Global Alliance for TB Drug Development on a new treatment for tuberculosis that will shorten the duration of therapy. Should the studies prove successful, the new treatment will be made available at reduced prices, particularly in developing countries. Training and education: Medical Care is one of three corporate sponsors of the India Diabetes Educator Project/Project Hope which provides training to healthcare workers throughout India. Another of Medical Cares projects is a partnership with the Juvenile Diabetes Research Foundation (JDRF), including a collaboration with popstar Nick Jonas. Furthermore, the company has long been actively involved in social projects and offers its employees numerous opportunities to voluntarily contribute to such projects at its corporate sites.

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Histo r y
research milestones
1888 Phenacetin 1890 Piperazin 1899 Aspirin
More than 100 years ago, Aspirin was already known beyond the borders of Germany as an effective pain reliever.

Bayer enters the pharmaceuticals business with this antipyretic medicine Anti-aging product and later gout medicine Pain reliever containing the active ingredient acetylsalicylic acid Medicine to treat African sleeping sickness The first hormonal drug to treat menopause symptoms The first injectable renal contrast agent for X-ray images Chemotherapeutic drug to treat bacterial infections Globally successful malaria drug First European hormonal contraceptive First portable blood glucose meter Drug to treat coronary heart disease Antibiotic to treat bacterial infections Contrast agent for magnetic resonance imaging Medicine to treat severe infectious diseases in livestock and companion animals New therapy principle for diabetics Drug for the specific treatment of chronic lymphocytic leukemia (CLL) Blood glucose meter

1994 Aspirin Protect/ Cardio 1996 Advantage 1997 Mirena 1999 Avalox/ Avelox 2000 Yasmin 2003 Levitra 2003 Advantix

For prevention of a second myocardial infarction or stroke Long-acting flea control product for dogs and cats Novel hormonal intrauterine contraceptive system Respiratory tract antibiotic

1923 Germanin 1928 Progynon 1930 Uroselectan 1935 Prontosil 1950 Resochin 1961 Anovlar 1969 Ames Reflectance Meter 1975 Adalat 1987 Ciprobay 1987 Magnevist 1987 Baytril 1990 Glucobay 1991 Fludara

The first oral contraceptive based on the novel gestagen drospirenone Erectile dysfunction medicine Flea, tick and mosquito control product for dogs

2004 Animal health product to combat Advocate/ internal and external parasites Advantage Multi in dogs and cats 2005 Nexavar Marketing authorization granted for treatment of advanced kidney cancer

in 1961, Anovlar became the first hormonal contraceptive on the market in europe.

2005 Deworming agent for cats Profender Cat 2007 Nexavar 2008 Xarelto 2008 Qlaira 2008 Renalzin 2008 Intego 2009 Contour USB 2009 Baycox Sheep Marketing authorization granted for treatment of liver cancer Prevention of venous thrombosis after elective knee or hip replacement surgery First oral contraceptive based on estradiol, the same estrogen as is produced by the female body Dietary supplement to support kidney function in cats with chronic kidney failure First automated PET (positron emission tomography) infusion system in the U.S. First blood glucose meter with integrated software Drug to control coccidiosis, a parasitic infectious disease, in lambs

The winners of the German innovation Prize: Bayer researchers Dr. elisabeth Perzborn (left), Dr. frank Misselwitz (2nd right) and Dr. Dagmar Kubitza (right) with the then German federal President Horst Khler.

1992 Glucometer Elite 1993 Kogenate 1993 Betaferon/ Betaseron

The first recombinant Bayer drug product to treat hemophilia The first multiple sclerosis drug to be registered in the United States

2009 Deworming agent for dogs Profender Dog

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BHC i n dialogue
Contacts:

BaYer HeaLTHCare Dr. Markus Pickel markus.pickel@bayer.com aNiMaL HeaLTH DivisiON Astrid Khler astrid.koehler@bayer.com PHarMaCeuTiCaLs DivisiON Oliver Renner oliver.renner@bayer.com CONsuMer Care DivisiON Tricia McKernan tricia.mckernan@bayer.com

MeDiCaL Care DivisiON Meredith Fischer meredith.fischer@bayer.com CONsuMer HeaLTH eurOPe Helmut Schfers helmut.schaefers@bayer.com

A comprehensive overview of Bayer HealthCare is available on the Internet at www.bayerhealthcare.com

imp ri nt
Published by: Bayer HealthCare AG Communications Dr. Markus Pickel 51368 Leverkusen Germany English version: Language Service, Currenta GmbH & Co. OHG, Germany Edited by: Christina Sehnert christina.sehnert@bayer.com Brbel Doormann baerbel.doormann@bayer.com
fOrWarD-LOOKiNG sTaTeMeNTs This brochure may contain forward-looking statements based on current assumptions and forecasts made by Bayer Group or subgroup management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in Bayers public reports which are available on the Bayer website at www.bayer.com. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments. Product names are mostly registered trademarks. All trademarks are printed in italics.

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