“I had a freak fall, and I broke my right femur in four places,” Bayer chief Bill Anderson said of the injuries he sustained from a hobby he’s been doing for 40 years.

“I was face down in the street, no friends or family with me, and my leg was bent almost 90 degrees, and I was on the edge of unconsciousness from the pain,” Anderson added, before concluding that he was still able to keep working while being affected in every other part of his life. 

The point of this over-the-top war story? Anderson sees similarities between his injured body and the current state of the $25 billion German company. 

Anderson, who took charge of Bayer in June last year, was using the metaphor of his broken leg to ask investors for patience as he shelved plans to split the group into three separate parts for up to three years.

“We are a high-impact, mission-driven life science company with three strong businesses, but we’re badly broken in four places,” he said.

Broken Bayer

Bayer, the group that patented aspirin, has had several issues come to a head at once after suffering from years of decline. The company is worth a quarter of its $122 billion peak from nine years ago, while shares in Bayer dropped by more than half in the last year.

Sales declined by 7% last year to €47.6 billion ($51.7 billion), according to the group’s latest annual financial report. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell to €10.6 billion ($11.5 billion), and is expected to fall again in 2024

The pharma group has been hammered by a wave of litigation since buying Monsanto, the parent company behind the controversial weedkiller Roundup, for $63 billion in 2018 in what is now seen by some analysts as one of the worst acquisitions in history. 

Bayer has already been ordered to pay out billions of dollars in damages to former customers who claimed years of using the weedkiller had contributed to them developing cancer, and has thousands more cases to defend in the pipeline.

The group has enjoyed some victories in this space more recently, however. Last week, a California judge slashed a $332 million fine by 90%, while Bayer had another lawsuit against it dismissed this week, Bloomberg reported.

Bayer is also contending with the looming expiry on the exclusivity of some of its most important drugs, expirations that are expected to place a significant strain on revenues.

Blood-clot medication Xarelto, Bayer’s best-selling drug, is set to see its exclusivity expire in 2026, which chief financial officer Wolfgang Nickl projects will cause a double-digit decline in sales of the drug.

These issues have contributed to a debt pileup of €34.5 billion ($37.5 billion), not much less than the company’s annual sales. 

Ratings agency Fitch downgraded Bayer’s outlook to “negative” in August amid the group’s mounting challenges. 

Bayer has pledged to bring down debt in the coming years through profitability in its core businesses while cutting its dividend to the legal minimum over the next three years, equivalent to a 95% reduction.

Anderson resists split

Amid this sea of obstacles, investors have been urging Bayer to split the company into three distinct groups—based on its pharmaceutical, consumer health, and crop science divisions—to inspire a turnaround in fortunes.

Unlike his now-healed femur, though, Anderson is resisting calls from investors to break up the pharma group into separate entities, indicating it will take up to three years of steadying the ship before that can happen.

“In short, on the question of structure, our answer is not now. And this shouldn’t be misunderstood as never,” Anderson said.