Kogenate Since the 1970s, Bayer has marketed formulations of coagulation Factor VIII for the treatment of hemophilia. The earliest versions were derived from human blood. The most recent is a recombinant product, produced through bioprocessing. Kogenate was Bayer HealthCare's second-best-selling product in 2005, with sales of 663 million euros [about $795 million]. (In first place was the Ascensia diabetes care product line, with sales of 701 million euros.) The company continues to develop Kogenate. It currently markets a version that comes packaged with a needle-free injection system. And the next generations of Kogenate are already in the works. Bayer has identified five new protein variants that might be part of the new formulation. And it has signed an agreement with Dutch-based Zilip-Pharma to license the company's pegylated liposome technology to develop a new longer-acting formulation of Kogenate.

Trasylol (aprotinin), first approved in 1993, is a broad-spectrum proteinase inhibitor used to control the systematic inflammatory response (SIR) associated with cardiopulmonary bypass surgery. Its sales hit 178 million euros in 2005—up 34 percent from the preceding year, and it contributed to Bayer's push to be seen as a force in cardiology/hematology. But in September, controversy over the drug arose when it was revealed that safety data were withheld from FDA. On the plus side, FDA continued to recommend the drug for some subgroups of patients. Bayer has announced an investigation into why the data were withheld. At this point, Trasylol's future has to be seen as uncertain.

"If you take a Kogenate, a Trasylol, and then a Factor X, and maybe some other things that we're pretty optimistic we can achieve, we're starting to build a pretty nice cardiovascular risk business," says Higgins. "I see them as being the kind of exciting assets that send a clear signal to the market that these people can be innovative, that they have real value-transforming assets. From a specialty perspective, we will continue to look at partnering when it comes to the primary care elements of those assets. The economics are such that I believe that's still a more profitable model than trying to do it yourself. You can get as much profitability through your partner without the risk."

Bayer HealthCare is not just a pharmaceutical company. It also has units devoted to animal health, diabetes care, and OTC and biological products. And Higgins' fast-paced transformation has touched all of them as well. OTC, of course, is being transformed by the Roche acquisition. But smaller, yet still decisive, developments are taking place in the other units as well.

Diabetes The diabetes unit was formerly part of a unified diabetes and diagnostics division. That may have made sense years ago, before the advent of simple patient-oriented blood testing devices and the transformation of diabetes care into something resembling a consumer products business. In the 21st century, it left both businesses struggling to find where the resources should be directed. Bayer split the division into its component parts, and in June it announced its intention to sell the diagnostic unit to Siemens.

Animal Health "In that marketplace, it's important to stay in both farm animal products and companion animal products," says Higgins. "The real growth driver is companion animals, particularly in the US. We see that as a very attractive business. We already have an animal health business with above-industry-average profitability. And this year we've seen close to double-digit growth in our companion animal business in the US."

Biological Products "I see that business as an artificial distinction," says Higgins. "To me, the only thing that distinguishes pharma from biotech is that pharma makes money and biotech loses money. Once they become profitable, biotech companies are basically pharma companies. We're going to bring our biological business back into pharma, so it'll actually disappear in the sense of reporting it separately. Because I think the biotech/pharma distinction is wrong. It's wrong because the business drivers are the same. It's also wrong because when we're looking at a therapeutic problem, we shouldn't again be saying this is a problem we solve with a small molecule or a large molecule."