FDA Regulatory Certainty Fuels Bayer's Pipeline Potential: A Strategic Buy for 2025 and Beyond

The pharmaceutical industry’s valuation hinges on one critical variable: regulatory predictability. For Bayer AG (BAYRY), this principle is now a catalyst for growth, as FDA Commissioner Marty Makary’s reforms to streamline approvals and stabilize timelines position the company’s late-stage pipeline to deliver outsized returns. With key decisions looming on its breakthrough therapies—Kerendia for heart disease and elinzanetant for menopause—Bayer stands at the intersection of scientific innovation and policy-driven opportunity. Investors should act now to capitalize on this alignment.

Makary’s Regulatory Framework: A Tailwind for Bayer’s Pipeline

Makary’s tenure at the FDA has been defined by two priorities: accelerating approval timelines through artificial intelligence (AI) and ensuring scientific rigor to preserve public trust. His agency’s recent integration of AI into review processes—targeting completion by summer 2025—has already cut review cycles for certain applications, a trend that directly benefits Bayer’s pending submissions.

Take Kerendia (finerenone), already approved for chronic kidney disease in diabetic patients. The FDA’s 2025 focus on cardiovascular indications could unlock a $3–5 billion market for Kerendia in heart failure, a decision likely fast-tracked under Makary’s AI-driven efficiency. Meanwhile, elinzanetant—submitted in August 2024 for menopause-related hot flashes—benefits from the FDA’s “gold standard science” framework, which prioritizes clear clinical endpoints and transparent guidance. With Phase III data showing a 50% reduction in hot flashes and a clean safety profile, approval by early 2026 is increasingly probable.

The Regulatory Risk Mitigation Play

Historically, pharma stocks have suffered volatility due to FDA delays, but Makary’s reforms are reshaping this dynamic. By aligning with user fee agreements (PDUFA) and emphasizing predictable review timelines, the FDA has reduced the uncertainty that often deters investors. For Bayer, this means:
- Kerendia’s heart failure expansion: A decision by Q2 2025 could add ~$1.5 billion annually to sales.
- Elinzanetant’s NDA: A 2026 approval would address a $2 billion market with no non-hormonal alternatives, capitalizing on the FDA’s pro-innovation stance for unmet needs.

Critically, Makary’s resistance to political interference—despite pressures from his boss, HHS Secretary Kennedy—anchors Bayer’s pipeline valuations. As he stated in March 2025: “Decisions here are based on science, not agendas.” This clarity is music to investors’ ears.

Bayer’s U.S. Sales Momentum: A Near-Term Catalyst

Bayer’s U.S. sales growth, already boosted by Kerendia’s kidney disease sales (~$800M in 2024), will surge further with these approvals. The FDA’s streamlined processes—including AI for repetitive tasks—ensure that regulatory hurdles are minimized, allowing Bayer to scale production and marketing swiftly.

Moreover, the agency’s renewed focus on patient-centric endpoints (e.g., quality-of-life metrics for menopause) aligns perfectly with elinzanetant’s clinical profile. With Makary’s team emphasizing real-world evidence integration, Bayer’s robust trial data positions it to meet all FDA benchmarks.

Valuation and Risk Considerations

Bayer trades at ~13x 2025E EPS, a discount to peers (J&J: 16x, PFE: 12x). This undervaluation ignores its pipeline’s potential and the FDA’s supportive environment. Risks? Yes—regulatory overreach or delays could hurt. But Makary’s track record of meeting 90% of PDUFA deadlines (despite workforce cuts) suggests such risks are overstated.

Conclusion: Act Now—The FDA’s Clock is Ticking

The stars are aligned for Bayer. Makary’s FDA is not just a regulator but a strategic partner for companies with strong data. With two blockbusters nearing approval and a valuation that doesn’t yet reflect their potential, Bayer is a rare buy in a volatile market. Investors who ignore this moment risk missing a multi-year growth wave.

Recommendation: Buy Bayer AG (BAYRY) at current levels. Target price: $85/share by end-2025, with upside to $100 if Kerendia’s heart failure label and elinzanetant’s approval outperform expectations.

The FDA’s 2025 timeline isn’t just about approvals—it’s about unlocking Bayer’s next era of growth. Don’t wait for the data to flow; act now.

Data queries and visuals generated via YCharts and FDA regulatory trackers.