German pharmaceutical giant Bayer (ETR: BAYN) is facing investor and analyst scrutiny following its issuance of USD 5.75 billion in bonds shortly before disclosing a significant setback in its late-stage pipeline. The company issued the 3 to 30-year maturity bonds on November 16, and then announced the early termination of a Phase III trial for the potential blockbuster anticoagulant asundexian on November 19, citing lack of efficacy. This sequence of events has raised concerns that Bayer may have had prior knowledge of the trial results, which the company denies.
Bayer asserts that the findings from the independent data monitoring committee (IDMC) were not available at the time of the bond issuance, and that the bond prospectus contained information about the company’s risks. Despite this, investors are alarmed as the bonds have seen a value drop of USD 0.016 and their spread over US treasuries has widened by 0.25%. Moreover, Bayer’s stock price plummeted as much as 19% in the wake of the asundexian failure, exacerbated by a legal setback over its glyphosate-based herbicide Roundup in the US.- Flcube.com
