Bayer's Pivotal Pivot: Can New Therapies Offset Xarelto's Decline?

Bayer, the pharmaceutical giant best known for its blood thinner Xarelto, is facing a critical crossroads. The drug’s U.S. patent expires in May 2025, a milestone that could strip the company of nearly $600 million annually in Medicare revenue alone. Generics are expected to capture 80% of the market within two years, and Xarelto’s global sales are projected to drop by €1–1.5 billion by 2025. Yet, Bayer is not waiting passively. The company has positioned a portfolio of new therapies—Nubeqa, Kerendia, and the experimental asundexian—to counteract the impending loss. The question is: Can these drugs turn the tide?

The Xarelto Crisis and Its Ripple Effects
Xarelto’s decline is not just about lost revenue. The drug’s patent expiry in the U.S. and Europe (where exclusivity for higher-dose formulations ends in January 2026) coincides with the U.S. Inflation Reduction Act (IRA), which could slash Xarelto’s Medicare prices by 62% starting in 2026. These dual pressures have already begun to bite: Xarelto’s ex-U.S. sales fell 13% to €3.48 billion in 2023, with further annual declines of 15% forecast for 2024. By 2025, Bayer’s pharmaceutical division expects Xarelto’s EBITDA contribution to drop from €4.7 billion in 2023 to €3.5 billion—a staggering 25% erosion.

The New Guard: Nubeqa, Kerendia, and the Race Against Time
Bayer’s hope hinges on three pillars:
1. Nubeqa (darolutamide): A prostate cancer treatment that has surged to €1.08 billion in sales in Q3 2024, up 83% year-over-year. Analysts predict €1.3 billion in 2024 sales, with peak projections exceeding €3 billion. Nubeqa’s momentum is fueled by its safety profile and expanding indications, including use in earlier-stage cancers.
2. Kerendia (finerenone): A chronic kidney disease drug with Q3 2024 sales of €126 million, up 96% year-over-year. Bayer is seeking to broaden its label into heart failure, a market that could add €1–2 billion in annual sales by 2030.
3. Asundexian: A novel anticoagulant targeting atrial fibrillation, currently in Phase III trials. If approved, it could displace Xarelto and rivals like Eliquis by addressing safety concerns tied to older blood thinners. Analysts estimate asundexian could generate €5 billion annually by 2030—a lifeline for Bayer’s cardiovascular franchise.

The Numbers Game: Can Growth Outpace Declines?
The math is stark. To offset Xarelto’s €1.5 billion loss by 2025, Bayer’s new drugs must collectively grow by over €2 billion in the same period. Nubeqa and Kerendia are on track, but asundexian’s success is binary. A failed trial in late 2025—a risk given the drug’s unproven mechanism—could leave a void.

Geography also plays a role. Bayer is delaying generic competition in Asia-Pacific and Japan, where Xarelto’s sales grew 8% in Q4 2024. Meanwhile, North America’s sales plummeted 19% in the same quarter due to the IRA’s price caps. This regional split underscores the challenge of balancing growth and margin protection.

The Long Game: 2025–2026 as a Make-or-Break Period
Bayer’s pharmaceutical division forecasts flat growth through 2026, with hopes of stabilization by 2027. The company is investing €2.3 billion annually in R&D—targeting cell/gene therapies and chemoproteomics—to build a diversified pipeline. Yet, this spending could squeeze margins in the near term.

Analysts remain split. Bulls point to Nubeqa’s oncology dominance and Kerendia’s renal potential, while bears warn that Bayer’s reliance on a handful of drugs mirrors past vulnerabilities. The stock, trading at a 12-month forward P/E of 13.5, reflects this uncertainty.

Conclusion: A Narrow Path to Stability
Bayer’s future hinges on executing two critical plays: accelerating Nubeqa and Kerendia’s adoption and securing asundexian’s approval. The stakes are enormous: Xarelto’s decline is a multi-billion-dollar hole, and the window to fill it is narrowing.

The numbers tell the story. If asundexian succeeds and Nubeqa hits its peak sales target, Bayer could stabilize its pharmaceutical division by 2027. But failure on either front risks years of stagnation. Investors should watch closely for Phase III data on asundexian (due late 2025) and Nubeqa’s penetration in earlier-stage prostate cancer markets.

In the end, Bayer’s pivot is not just about replacing Xarelto—it’s about proving that the company can thrive without its once-indispensable blockbuster. The next 18 months will decide whether this transition becomes a masterclass in resilience or a cautionary tale of overreach.