EU HEALTHCARE: Bayer (BAYNGR: Baa2 neg/BBB/BBB): Crop Science Competition

Bayer may be facing more competition from Corteva

• Corteva - a DowDuPont AgChem spin-off - is a significant competitor for Bayer
• JPM note recently that US farmers are switching from 100% Dicamba corn seeds (Bayer) to 75% Pioneer (Corteva). In soybeans, Corteva's Enlist product seems favoured over that from Bayer.
• Q3 saw a poor showing from Bayer's Crop Science due to low acreage in LatAm
• Typically Q1 sees 35% of Agri sales. Corn acreage is up in the US but will only help Bayer if they can capitalise on the increase.
• 2025 is hoped to see a turn-around for Bayer's fortunes. The company (and also S&P) are expecting to see a 0.5x fall in leverage. Bayer is targeting a return to Single A eventually.
• Bayer Perps currently trade with a Sub_Sen spread around 195-210 which would fall to 150a if they can stabilise.
• Positive catalysts would be product launches for Acoramidis and Elinzanetant in Pharma (both in 2025). Combined with continued growth in Nubeqa & Kerendia. A phase III trial for Bemdaneprocel (Parkinson's) will also be watched.