Summary 1. The Company 1.1. Industry Areas 1.2. Market Share and Importance 1.3. History 2. Products and Projects 2.1. Bayer Healthcare 2.2. Bayer CropScience 2.3. Bayer Chemicals 2.4. Bayer Polymers 3. Who, where, how much? 3.1. Structure 3.1.1. Bayer AG / The Bayer group 3.1.2. Reorganisation Process: Bayer's Corporate Shake Up 3.1.3. Embattled Drug Unit 3.1.4. NYSE 3.2. Locations 3.3. Management 3.3.1. Members of the Board of Management of Bayer AG 3.3.2. Supervisory Board 3.4. Ownership 3.5. Bayer Plc in the UK 3.5.1. Offices 3.5.2. Management 3.6. Bayer AG: Subsidiaries & Alliances 3.6.1. Subsidiaries 3.6.2. Alliances 4. Influence / Lobbying 4.1. Lobby Groups 4.1.1. Bayer's lobby activities on the global level 4.1.2. Bayer's lobby activities in the United States 4.1.3. Bayer's lobby activities in Europe 4.2. Influencing Research and Education 4.3. Bayer and Public Relations (PR) Companies 4.3.1 PR Companies used by Bayer 4.3.2. PR stories involving Bayer 5. Corporate Crimes 5.1. Bayer and War Crimes 5.2. Scams, Blags and Corporate Bullying 5.3. Pharmaceutical Phailings 5.4. Pesticides and Poisons 5.5. Abusing Workers 6. Further Links, Contacts and Resources references

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Bayer AG
A Corporate Profile

By Corporate Watch UK
Completed March 2002

3. Who, where, how much?

Bayer AG: Structure (1), Locations (2), Management (3), Ownership (4)

3.1. Structure

3.1.1. Bayer AG / The Bayer group
Bayer AG is a health care and chemicals group represented by 350 companies on all continents employing 117,300 people.

The activities of the Bayer Group are divided into four business segments - Health Care, Agriculture, Polymers and Chemicals - which comprise 15 business groups worldwide.[49]

For an overview of the activities of the individual business groups and their key products, visit:

http://www.bayer.com/en/unternehmen/arbeitsgebiete/index.html

In addition, Bayer cooperates with various companies through strategic alliances, license agreements and scientific operations (see section on 'Alliances').

3.1.2. Reorganisation Process: Bayer's Corporate Shake Up
Bayer plans to transform its current organisational structure into a management holding company with independent operating subsidiaries in order to achieve greater flexibility for necessary strategic partnerships. The holding company's management board is to determine overall strategy, decide on the portfolio, control resource allocation and nominate subsidiary companies' managers. The four business divisions (Health Care, Agriculture, Chemicals and Polymers) will be transferred into legally independent corporate units within the Bayer Group.

Subject to stockholders' approval, the new structure is to be operational effective January 1, 2003. The company's Supervisory Board at its meeting on December 6, 2001 approved plans to this effect. CEO Schneider is optimistic about the future of the new business units and said: "We are convinced that all the new companies will prosper and establish themselves as leaders in their respective markets. The Bayer name and trademark will continue to be of great benefit. We believe the strong cohesion provided by a holding company serves to increase the value of the entire Group."[50]

3.1.3. Embattled Drug Unit
Many analysts expected that Bayer would divest its Health Care Division after various major setbacks had hit Bayer's pharmaceutical segment (e.g. the Baycol and Kogenate crises). However, the company said it 'had no intention of giving up control of its drug unit'.[51] The already embattled drug unit has recently faced yet another setback, as Bayer's global head of pharmaceuticals David Ebsworth decided to quit unexpectedly. The company gave no explanation for the sudden departure of Ebsworth who is known to have hinted that he was dissatisfied with Bayer's efforts to revamp its structure and recover from the aforementioned serious pharmaceutical setbacks. He has said that he could find no opportunities that appealed within the new Bayer structure.[52]

Bayer is likely to form a pharmaceutical alliance in next couple of months (BBC News, 8 January 2002).

3.1.4. NYSE
Bayer have recently completed their highly symbolic listing of its shares Wall Street on January 24 2002. By floating on the New York Stock Exchange (NYSE) Bayer hoped to raise new capital in order to, among other things, finance its reorganisation plans. The company was forced to postpone the listing last year after its best-selling drug, the cholesterol-treatment Baycol, was linked to more than 50 deaths worldwide.[53]

3.2. Locations

The cornerstones of its business activities are in Europe, North America and the Far East. You can find links to all locations at:http://www.bayer.com/en/unternehmen/standorte/index.html

The headquarters of the Bayer Group is in Leverkusen, Germany. From Leverkusen, Bayer administers and coordinates its activities throughout the world. To find out how to get to Bayer Leverkusen, visit: http://www.bayer.com/de/standorte/wege_zu_bayer/wege_leverkusen/wege_leverkusen_en.html

3.3. Management

Board of Management & Supervisory Board
The Board of Management, the company's highest-ranking group of individuals leads Bayer AG. The 20-person Supervisory Board oversees the Board of Management. Employees from inside and outside the company, as well as representatives from subsidiaries, industry organisations, banks, unions and research organisations make up the Supervisory Board. Each member has one vote.[54]

3.3.1. Members of the Board of Management of Bayer AG[55]:

Manfred Schneider
Chairman of the Board of Management
Dr. Manfred Schneider has been Chairman of the Board of Management of Bayer AG since April 29, 1992.
He chairs the Board Committee for Corporate Coordination and is a member of the Board Committee for Finance. Manfred Schneider was born on December 21, 1938 in Bremerhaven. He studied business management at the universities of Freiburg, Hamburg and Cologne. He joined Bayer AG in 1966. Schneider joined the Board of Management on January 1, 1987, and from then until his appointment as Chairman he served various high-ranking positions within the company.
In addition to his activities on the Board, Dr. Schneider has various functions outside the company. He is, for example, President of the German Chemical Industry Association (VCI), Vice President of the Confederation of German Industry (BDI) and a member of the Supervisory Boards of Allianz AG, Munich; DaimlerChrysler AG, Stuttgart; Metro AG, Cologne; and RWE Aktiengesellschaft, Essen.[56]
Schneider is also a member of the following industrial lobby groups: European Roundtable of Industrialists (ERT), EuropaBio, UNICE and AmCham (see Influence section).

Dr. Udo Oels
Dr. Udo Oels has been a member of the Board of Management of Bayer AG since February 1, 1996.[60]

Werner Spinner
Werner Spinner was appointed to the Board of Management of Bayer AG effective February 1, 1998.[61]

Werner Wenning
Werner Wenning was appointed to the Board of Management of Bayer AG effective February 1, 1997.[62] At the end of the Annual Stockholders' Meeting on April 26, 2002, Wenning will succeed Dr. Manfred Schneider as Bayer's CEO.[63]

Dr. Gottfried Zaby
Dr. Gottfried Zaby was appointed to the Board of Management of Bayer AG on May 1, 2000. Dr. Zaby is Chairman of the Executive Committee of the German Association of Plastics Manufacturers.[64] He is also one of the Directors of UK-based Bayer PLC.

Dr. Attila Molnar
Dr. Attila Molnar was appointed to the Board of Management effective April 1, 1999. He is a member of the Executive Committee of the German Chemical Industry Employers' Association (BAVC), Wiesbaden, and a member of the Board of the European Chemical Industry Council (CEFIC).[65]

Dr. Frank Morich
Dr. Frank Morich was appointed to the Board of Management of Bayer AG on May 1, 2000. Dr. Morich is a member of the Board of the EFPIA (European Federation of Pharmaceutical Industries and Associations).[66]

For the profiles of the Members of the Board of Management, visit: http://www.bayer.com/en/unternehmen/fuehrungsmannschaft/index.html

3.3.2. Supervisory Board
The 20-person Supervisory Board oversees the Board of Management. Employees from inside and outside the company, as well as representatives from subsidiaries ('More than half of Bayer's supervisory board is made up of worker representatives'[67]), industry organisations, banks, unions and research organisations make up the Supervisory Board. Each member has one vote.

Members include:

Hermann J. Strenger
Chairman of the Supervisory Board

Petra Kronen
Dr. Eugen Velker

Siegfried Wendlandt
Mr. Wendlandt is North Rhine District Secretary of the German Mine, Chemical and Power Workers' Union. [68]

L.C. van Wachem
L.C. van Wachem is also Chairman of Philips Supervisory Board; former chairman of the Committee of Managing Directors of the Royal Dutch/Shell Group; currently chairman of the Supervisory Board of Royal Dutch Petroleum Company; a member of the supervisory boards of Akzo Nobel, and BMW; and a member of the board of directors of IBM, Atco and Zürich Financial Services.[69]

Hilmar Kopper
Kopper sat for many decades in numerous control committees. Still today Kopper pulls the strings in two of the most important control committees of the German economy: He is chief custodian of both the Deutsche Bank AG and DaimlerChrysler.[70] In addition, Kopper sits on the Supervisory Boards of Akzo Nobel, Unilever and Xerox Corp.[71] In the past, Kopper sat on the boards of Lufthansa AG, Solvay SA and RWE AG. He has frequently been labelled as 'one of Germany's most influential men'.

3.4. Ownership
Bayer AG is a publicly owned company and has nearly 500,000 shareholders, all having a small interest in the corporation. As a consequence, individually they exert very little influence.

In June 2001, Bayer reported that non-German investors held 39% of its capital stock. The UK and US hold the largest proportion of non-German owned stock; together investors in these countries account for 46% of the non-German stock ownership.[72]

Stock ownership by categories of shareholders:
55% Banks and Insurance Companies (including both Allianz AG, the only stockholder with a holding of more than 5% of the capital stock, and Deutsche Bank)
24% Individuals (about 12% of the individual stockholders are Bayer employees, who between them own 2.1 percent of the stock)
12% Investment funds
6% Others
3% Trade and Industry [73]

The Critical Bayer Shareholders (a project group of the Coalition Against BAYER-Dangers) are equipped with the voting rights of smaller shareholders. They have confronted company management, banks and large shareholders with the information on the real consequences of Bayer's profits since 1982. The Critical Bayer Shareholders sometimes pass shareholder entry permits on to other public interest groups in order to give them a chance to stress their concerns at Bayer shareholder meetings.

At the Bayer shareholder meeting in Cologne (27 April 2001) Dr. Korinna Horta of US-based Environmental Defense was able to enter the meeting hall and register as a speaker thanks to an entry permit passed by Coalition Against BAYER-Dangers. Dr. Korinna Horta reports that it was clear that much of what went on was staged. "Many of the "shareholders" did nothing but praise the heroic deeds of management." She explains how the "critical shareholders" got the worst slots to speak, basically only at the end of the day.[74]

Bayer Shares Data:
http://www.nyse.bayer.com/en/bstock/bstockdata.php?id=03010200000000000000

Current Price and Market Data:
http://www.nyse.bayer.com/en/bstock/curdata.php?id=03010300000000000000

Basic Data Capital Stock
The capital stock of Bayer AG, amounting to Euro 1,869,675,315.20, is divided into 730,341,920 bearer shares. Since July 1, 1998, the stock has been traded as no-par stock, which means the individual shares no longer have a nominal value. The current value of one share - the share price - is determined by the company's total value on the stock market (market capitalisation) and the number of shares in circulation.

Bayer shares have lost a third of their value since the Baycol story broke at 8 August 2001.[75] Bayer withdrew key anti-cholesterol drug Baycol on August 8 because of potentially fatal side effects, sending its stock down and raising questions about Bayer's future in drugs.[76] In addition, investors downgraded Bayer after the Aventis CropScience deal was announced because of the company's increased debt burden. Analysts said the increase in Bayer's debt, which will reach about 14bn Euros, would also restrict Bayer's ability to make acquisitions to bolster its troubled pharmaceuticals division.[77]

However, Bayer's stock rose slightly in response to the so-called anthrax crisis following the terrorist attacks of the 11th of September. Bayer holds the US patent on Cipro, an anthrax treatment drug.[78] (see Corporate Crimes section)

Bayer's 24th January 2002 listing its on the New York Stock Exchange (NYSE) was done in order to raise new capital and boost its creditworthiness. In preparation for raising funds in the capital markets, Bayer has already expanded its existing financing operations.[79]

Changing Shareholder Climate in Germany
Foreign Shareholders gain greater ControlBayer's Annual Shareholder Meeting illustrates this trend

Deutsche Bank
Deutsche Bank is Germany's largest commercial bank.
For further details: www.deutsche-bank.com

Deutsche Bank is currently in the process of laying-off 7% (7,100 people by 2003) of its workforce. Even so, yet more could be on the way: German press reports say that total lay-offs at the bank could top 10,000.[80] Deutsche Bank announced 2,600 job losses in January 2001, on the same day it reported a doubling of net profits for 2000.[81]

Deutsche Bank is alleged to be involved in the shady business of gold price manipulation, labelled by Der Spiegel (7 January 2001) as 'one of the biggest scandals in economic history'. US Federal Reserve Bank Chairman Alan Greenspan and JP Morgan were also involved.[82]

In July 12 1999 Deutsche bank issued a report ('Ag Biotech: Thanks, But No Thanks?') which reviewed the financial performance of life science companies investing in GMOs. The report has stimulated much discussion and considerable media coverage.[83] Deutsche Bank also issued other reports in 1999 (e.g. 'GMOs Are Dead' in May 1999) advising its institutional investors, including government pension funds, that "growing negative sentiment" was creating problems for the biotech companies.[84] Although the Deutsche Bank analysts advised investors that GMOs were a poor investment because of consumer resistance, they still believe in the long-term benefits of GMOs.[85]

Allianz AG
Allianz AG owns 5.7 percent of Bayer stock. Allianz remains the biggest single stockholder and the only one holding more than 5 percent of the capital stock.[86]
Allianz AG is one of the world's leading insurance groups. Allianz AG took over Dresdner Bank in April 2001 and became the Allianz Group. Allianz Group rank among the world's top financial giants. Bernt Fahrholz, Dresdner Bank's chairman, said the Allianz deal was a major step towards consolidation of the German financial sector, unravelling a complex web of cross shareholdings (see also box above).[87]

Tweedy Browne A New York-based investment management firm.
Tweedy Browne holds less than 1% of Bayer.
Thomas Shrager, a partner at Tweedy Browne has lobbied Bayer's management for months to free its undervalued pharmaceutical business from the rest of the conglomerate. We now know Schrager's proposal did not materialise.[88]

3.5. Bayer Plc in the UK

3.5.1. Offices in the UK
See: http://www.bayer.co.uk/about/locations.html

For information on Bayer in the UK, you can contact:

Other Bayer sites are located at:

Web links to these subsidiaries will provide you with the site-specific contact details.[89]

3.5.2. Management

Directors of Bayer PLC (information from Companies House Current
Appointments Report for BAYER PUBLIC LIMITED COMPANY 14/12/2001)

Company Secretary: Martin David Newson
Director: Lennart Thorsten Aberg (Managing Director of Bayer plc)
Director: Dr Franz-Joseph Berners
Director: Dr Gottfried Zaby

3.6. Bayer AG: Subsidiaries (1) & Alliances (2)

3.6.1. Subsidiaries
Most of Bayer's subsidiaries carry the Bayer name. Bayer subsidiaries not carrying the Bayer name include:

Haarmann & Reimer
Flavours & fragrances for processing industries wholly owned by Bayer. Bayer will divest Haarmann & Reimer as part of their reorganisation process (see above).
Haarmann & Reimer has recently been fined by the European Commission for participating in a price-fixing and market-sharing cartel in citric acid. Citric acid is one of the most widely used additives in the food and beverage industry both as an acidulent and preservative. Hoffmann-La Roche AG, Archer Daniels Midland Co (ADM), Jungbunzlauer AG, and Cerestar Bioproducts BV were the other corporations fined.[90]
Further information: http://www.haarmann-reimer.com/en/index.php

Rhein Chemie Rheinau GmbH (RC)
The company is a specialist in additives for the rubber, lubricants and plastics industries as well as in polyurethane chemistry. Rhein Chemie Rheinau will be divested as part of the reorganisation process (see above). The company is an expanding international chemicals company with production sites in the major industrial regions of the world. Rhein Chemie has 13 production sites and sales divisions, and more than 70 agencies, mainly operated by Bayer. Further information: http://www.rheinchemie.com/public/rccms.nsf/homepagesEN/$First

PolymerLatex
Polymer company, a joint subsidiary of Bayer AG and Degussa AG. Bayer has planned to sell its 50% interests in PolymerLatex as part of the reorganisation process. Since Degussa, the other joint venture partner, also wishes to sell its interest, the sale will be effected jointly by Bayer and Degussa.[91] Further information: http://www.polymerlatex.com/

H.C. Starck
Metal & ceramic powders.

H.C. Starck supplies Bayer with tantalum (= a metal) powder, an essential input for the production of Bayer's capacitors that go into cellular telephones, personal computers and CD players. Bayer claims its close co-operation with its subsidiary H.C. Starck made the company Europe's premier supplier of tantalum capacitors. The booming mobile phone market boosted profits derived from tantalum. Nearly all mobile phones contain one of Bayer's capacitors (Bayer Annual Report 2000).[92]

Tantalum is also vital to the manufacture of advanced jet engines, air bags, night vision goggles, fiber optics and computer chips. Col-tan (short for columbite-tantalite, an ore rich in the element tantalum) is an important factor in the Congo war. Minerals have funded the two wars that have ravaged Congo for four of the last five years. Congo's eastern section is home to some of the richest col-tan ore deposits in the world. Roughly half of the tantalum that originates from Congo ends up being turned to powder by H.C. Starck (see also Corporate Crimes section internal link).[93] Further information: http://www.hcstarck.com/index.cfm?PAGE_ID=5

Wolff Walsrode
Chemical company. Wolff Walsrode's core competency lies in cellulose derivatives for use in a wide variety of building materials as well as in emulsion paints, printing inks, coatings, pharmaceutical products and cosmetics.[94] Further information: http://www.wolffwalsrode.de/index.htm

Epurex
Technical film applications. The company's global activities also include its sister company Deerfield Urethane, USA. Further information: http://www.epurex.com/index.cfm?SEITEN_ID=1118

Polyurethanes Business Group (PU)
PU is a supplier of polyurethane raw materials and systems and wholly owned by Bayer AG. PU has regional centers as well as R&D and technical service centers forming a network of locations in different parts of the world. Further information: www.pu.bayer.com/4228_e.htm

iSL Chemie
A subsidiary of Rhein Chemie Rheinau GmbH in Mannheim. iSL-Chemie manufactures colour pastes for plastics and coatings. Following the company's acquisition at the end of 1997 and its integration into the Bayer Group, colour systems for thermosetting plastics - especially polyurethanes - were concentrated in iSL-Chemie.[95] Further information: http://www.press.bayer.com/News/news.nsf/ID/NT000056E6

Hennecke
PUR-recycling technologies and processing of environmentally friendly blowing agents. Further information: http://www.hennecke.com/

Agfa-Gevaert Group
Bayer AG owns 30% of the Afga-Gevaert Group shares, Gevaert NV owns 25% and 45% floats free. Afga is well known for its photographic films, but manufactures all kinds of high-end 'imaging' solutions; hardware, software and digital imaging products. Further information: www.agfa.com

W. Hawley & Son Ltd are a wholly owned subsidiary of Bayer. Today the company stands as one of the market leaders in the manufacture of quality specialist powder and liquid pigments, and is now the largest blender and processor of these products in the United Kingdom.[96] Further information: www.hawley.co.uk

DyStar
DyStar supplies dyestuffs to the textile industry. DyStar Textilfarben GmbH is a joint venture between Bayer and Hoechst, who merged their dyestuffs operations in 1995. Its main product areas are reactive dyestuffs for cotton and viscose dyeing; disperse dyestuffs for the polyester fibres market; and speciality dyestuffs, mainly for the dyeing of polyamide, polyacrylic and cotton.[97] Further information: http://www.dystar.com

pbi Home & Garden Limited
pbi Home & Garden Limited is a multi-million pound garden products business, part of Bayer plc since 1999. Based in Enfield, Middlesex, the company's famous products include Baby Bio plant food and the Bio product range for the home garden market, available through all major UK garden centres and DIY outlets.[98] The company claims that research suggests 'there's hardly a household in Britain that doesn't own a pbi Home & Garden product.'[99]Further information: http://www.pbi.co.uk/

Bayer CropScience (internal link)
Bayer bought Aventis CropScience (ACS) in October 2001. Current owners of AventisCropScience are Aventis (76 percent) and Schering (24 percent).

The combined Bayer CropScience [the company to be set up to combine the activities of Bayer's Crop Protection Business Group with those of Aventis CropScience] will have a share of more than 30% of the global insecticides market and will become number 2 in the global agrochemical market, behind Syngenta. Aventis, formed from a merger of Hoechst and Rhone-Poulenc in 1999, and Bayer said they expected the deal to close in the first quarter of 2002.[100]

However, anti-trust authorities might demand disinvestment. The European Commission, the US Federal Trade Commission and the Canadian Competition Bureau have started investigations into Bayer's proposal to purchase ACS.[101]

Deutsche Bank, JP Morgan and Bank of America Securities are to provide a 6bn euros ($5.3bn) bridging loan to finance Bayer's planned acquisition of Aventis CropScience, according to BBC News (12 December 2001).[103]

Aventis CropScience web site:
http://www.cropscience.aventis.com

Aventis accused of violating UN Global Compact rules:
http://www.corpwatch.org/news/PND.jsp?articleid=72
(Source: CorpWatch USA)

Aventis accused of participating in global vitamin cartel:
http://www.smh.com.au/news/0111/23/world/world13.html
(Source: The Sidney Morning Herald, 23 November 2001)

Read about Bayer's market position in the crop protection sector after acquiring ACS: http://www.news.bayer.com/News/news.nsf/ID/NT0000E0AE
(Source: Bayer press release, 2 October 2001, "Bayer CropScience will make us the market leader")

3.6.2. Alliances
Bayer cooperates with various independent companies through strategic alliances, license agreements and scientific operations. A few examples:

Pharmaceuticals:
In spite of the various setbacks in Bayer's pharmaceutical division (see above) the Bayer management still expresses uncompromising confidence in the division's success and profitability. They want to give the health care division more autonomy within the new organisational structure (see above). Also, many in the industry expect Bayer to form a pharmaceutical alliance in next couple of months (BBC News, 8 January 2002).

Bayer has just started talks with Aventis, the Franco-German life sciences company, to set up a joint venture in blood products, BBC News reports (8 January 2002). A joint venture would bring together two of the largest players in the $5.8bn global market for plasma and recombinant blood products. A complete merger could face anti-trust problems. However, the companies are understood not to be talking about combining the entire operation.[104]

Bayer has signed a co-marketing deal in the US with GlaxoSmithKline for its new erectile dysfunction drug, which is seen as crucial to the German group's future. Bayer is hoping that the new treatment, Vardenafil, will fill part of the gap left by the August withdrawal of its anti-cholesterol drug Baycol. The deal with GSK will give Bayer a powerful US marketing partner to sell the drug against competition from better-known rivals such as Viagra, produced by drug giant Pfizer (Financial Times, 15 November 2001).[105]

In 2000, Bayer Corp. signed a collaborative agreement with PPL Therapeutics. PPL Therapeutics is one of the world's leading companies in the application of transgenic technology to the production of human proteins for therapeutic and nutraceutical use. PPL is also at the forefront of nuclear transfer (cloning) and gene targeting, and is known the world over for its creation of Dolly the Sheep.[106]

PPL Structure: PPL has a strong intellectual property portfolio and a multinational commercial base with facilities in three continents. PPL employs a workforce of approximately 200. Its corporate headquarters are in Scotland.[107]

PLL Therapeutics History: PPL began operations in 1987 in order to commercialise the production of proteins using transgenic technology which had been developed at the Animal Breeding Research Organisation, now the Roslin Institute, in Scotland. By 1991, with the birth of its first transgenic sheep, Tracy, producing human protein at approximately 40g/l in her milk, PPL was established as a leader in the transgenic production of human proteins.

Having established its corporate headquarters in Scotland, UK, in 1993 PPL extended its facilities through a strategic merger with TransPharm Inc, USA, to create the first multinational corporation producing recombinant proteins using transgenic technology. This event has provided the company with significant facilities within the USA to serve the increasing requirements of the North American markets.

PPL's transgenic bovine programs were established at this facility and its xenotransplantation and cell therapy programmes are currently being developed at its US facility. In 1994 the company was granted a US patent for its transgenic technology. This patent covers the use of the ovine ß-lactoglobulin gene promoter for the production of any protein in the milk of all species of transgenic livestock and the subsequent recovery of the protein from the milk.

PPL achieved significant progress in 1996. In June it became a public company listed on the London Stock Exchange. In the same year the company completed its unique £7.2 million (US$11 million) pilot production facility specifically built to collect and purify recombinant pharmaceuticals from the milk of transgenic animals. Its facilities and geographical base was further extended with the opening of a second transgenic sheep facility in New Zealand. At the end of 1996, the company began human clinical trials of its lead product, Alpha-1-Antitrypsin (AAT), a potential new treatment for patients with hereditary emphysema (AAT deficiency) and cystic fibrosis.[108]

PPL-Bayer Partnership: In 2000, PPL and Bayer Corporation signed a collaborative agreement to develop and commercialise an aerosol formulation of PPL's transgenic AAT product. AAT (alpha-1-antitrypsin, a human blood protein) is the company's lead product which will begin Phase III clinical trials in 2001 for the treatment of hereditary emphysema. The product is also being developed for the treatment of cystic fibrosis.

PPL and Bayer will collaborate initially to conduct a Phase III efficacy study for AAT deficiency and ultimately to manufacture and commercialise an aerosol formulation of transgenically produced rAAT world wide. PPL and Bayer will also collaborate on development of aerosol rAAT in a second clinical indication, cystic fibrosis. Under the agreement, Bayer will be responsible for and bear the costs of clinical development and marketing. Bayer made an upfront investment in PPL of US$15m and PPL will receive a number of milestone payments totalling US$25m, as progress is made in gaining marketing approvals. PPL will be responsible for exclusive product manufacturing and will receive a significant percentage of Bayer's revenues from sales of rAAT.

The signing of the marketing agreement with Bayer fulfilled a precondition for the funding package for the £42m large scale production facility for AAT, the completion of which is due in 2004.

Go to News [http://www.ppl-therapeutics.com/Welcome/News/news.cfm] for the latest company releases, including further AAT information.[109]

Bayer press release on their partnership with PPL:
http://www.bayerbiologicals.com/html/global_utilities/newscenter/press_release1.html
(Source: Bayer, date viewed: 19.01.02)

Dolly the Sheep:
The first mammal cloned from an adult cell. Born 5th July 1996 in Scotland. Produced through nuclear transfer (cloning) from a differentiated adult cell. At the end of 1997 Dolly was mated with a Welsh Mountain ram and produced a female lamb, Bonnie, on 13th April 1998.[110]

The scientists who created Dolly the Sheep have recently revealed that Dolly has developed arthritis at the relatively young age of five and a half. "The fact that Dolly has arthritis at this comparatively young age suggests there may be problems," Ian Wilmut of the Roslin Institute in Scotland told the BBC. But, he added: "We cannot ever know whether this is the result of cloning or just an unhappy coincidence."

'PPL Therapeutics lost 15 per cent of its share value following the news of Dolly's arthritis.
But the shares had surged 40 per cent the day before after a press release announced the birth of genetically modified pig clones (see below).

In November 2001, US cloning company Advanced Cell Technology (ACT) said detailed investigations of 24 surviving calf clones revealed all were normal. But overall, Wilmut pointed out at the time, 73 per cent of pregnancies ended in abortion and 20 per cent of the cloned calves died soon after birth. Evidence of severe pregnancy complications and defects caused by cloning have been widely reported by cattle cloners. There have been instances of dramatically oversized calves, enlarged tongues, intestinal blockages, immune deficiencies and diabetes.'[111]
Visit NewScientist.com for related up-to-date stories on cloning: http://www.newscientist.com/hottopics/cloning/

PPL cloned 'Knock-out' pigs:
PPL Therapeutics announced (2 January 2002) it has produced 'knock-out' piglets which were born as a result of using nuclear transfer (cloning) and PPL's patented gene targeting technology. The five healthy births took place on Christmas Day, 25 December 2001. The company declares it has always been the objective of PPL's xenotransplantation programme to produce ' knock-out' pigs. In future, this step should enable organs and/or cells from such animals to be transplanted into humans and not be rejected by the human recipient. A 'knock-out' pig has the specific gene that leads to the human immune system rejecting pig organs inactivated.
Further details at: http://www.biotechanalytics.com/News/p/ppl.htm (Source: BioTech Analytics, date viewed: 19.01.02).

Mapping of the human genome is a high priority for Bayer. To meet this challenge, Bayer entered into various partnerships. In 1998 Bayer entered into the world's largest genome research alliance with the US company Millennium Pharmaceuticals. Since then 300 Millennium experts have been working exclusively for Bayer.

Millennium is a leading drug discovery and development company. The company focuses on three disease targets -- cancer, metabolic diseases, and inflammation -- but revenue is primarily from R&D alliances with such companies as Bayer (27%; it owns about 10% of the firm), Monsanto (22%), and American Home Products. Abbott Labs and Millennium are developing a metabolism-boosting obesity drug candidate that targets a gene that may prompt the body to store fat.[112]

To process the genetic data Bayer needs powerful computers. In other words, work in the laboratories is supplemented by bioinformatics. Bayer's partner in this field is LION Bioscience AG, based in Heidelberg, Germany (Bayer Annual Report, 2000).[113]

LION bioscience AG is a developer of enterprise-wide R&D data analysis and information management systems and solutions for the life sciences and healthcare industry, enabling the use of IT for drug discovery.[114] Deals with Bayer represent 60% of the firm's revenues. With the life sciences division of IBM, it is developing faster, more powerful drug discovery tools.[115]

A licensing agreement with biotechnology company MorphoSys AG in Munich has given Bayer access to a library containing more than one billion different human antibodies (Bayer press release, 31 January 2000). In January 2000, Bayer gained access to a database of more than 480 patented human genes for research purposes through an agreement with the US company Incyte Pharmaceuticals.

MorphoSys is a biotechnology enterprise, which develops and uses technologies for the discovery of new medicaments and illness-relevant goal molecules. The company has dozens of license and co-operation agreements with other pharmaceutical and biotechnological enterprises, such as Millennium Pharmaceuticals and CPG AG. MorphoSys has patented HuCAL, the Human Combinatorial Antibody Library. HuCAL's combination of features such as fully human composition of antibodies, high-throughput optimisation and big quantity production make it an ideal source of research and therapeutic antibodies.[116]

Incyte Pharmaceuticals Inc. is a leading provider of an integrated platform of genomic technologies designed to aid in the understanding of the molecular basis of disease. Collaborations: Abbott, ARIAD, BASF, Bayer, Bristol-Myers Squibb, Eli Lilly, Genetech, Hoechst, Hoffmann La-Roche, Johnson & Johnson, Monsanto, Novartis, Novo Nordisk, Organon, Pfizer, Pharmacia & Upjohn, Rhone Poulenc, Schering AG, SmithKline Beecham, Zeneca.[117]

In March 2000, Bayer signed a research and licensing agreement with the UK company Oxford GlycoScience (OGS) in the field of proteomics technology, the comprehensive study of proteins. OGS is a spinoff of Oxford University. The collaboration is initially for two years.[118]

Bayer has signed an agreement with US biotechnology company Avigen Inc., granting Bayer worldwide marketing and distribution rights for Coagulin-B, a gene therapy treatment for hemophillia B.[119]

Avigen is engaged in the development of gene therapy products for the treatment of inherited and acquired diseases.[120]

Agriculture:
In agrochemicals as in healthcare, Bayer claims to be assembling a cutting-edge research platform. Biotechnology plays a key role on that stage. An important aspect of Bayer's crop protection research strategy is collaboration with entrepreneurial companies. Bayer has formed alliances with Paradigm Genetics in herbicides, LION Bioscience in fungicides and with Genoptera, the joint venture between Exelixis and Bayer AG's crop protection business group.[121]

Paradigm Genetics determines the functions of specific genes (mainly for agricultural purposes). Paradigm's revenue sources include an agreement with Bayer to develop herbicides, a partnership with Monsanto focused on crop protection and nutrition, and a grant from the US Department of Energy. It is buying Celera's AgGen unit to expand its operations.[122]

Genoptera was formed in January 2000 to discover new insecticides and nematicides. The joint venture is a continuation and expansion of a 1998 venture between Bayer and Exelixis. In addition to the $80 million in committed research funding over the course of the eight-year venture, Exelixis receives performance-based milestone and royalty payments from Bayer. Bayer has the exclusive right to commercialise insecticides based on technology developed by Genoptera.[123] Exelixis (Greek for "evolution") gathers and compares genetic data from fruit flies, roundworms, and other organisms to speed the development of drugs, insecticides, and animal health products. Exelixis bought Genomica to expand its drug discovery operations. Exelixis' partners include Pharmacia (about 40% of revenues) and Bristol-Myers Squibb.[124]

Chemicals:
Bayer has planned to create a joint venture with Japanese companies Honshu and Mitsui. Honshu Chemical Industry will build a production facility for specialty bisphenols in Bitterfeld-Wolfen immediately adjacent to the site of Bayer Bitterfeld GmbH. These raw materials are used at Bayer for the production of highly heat-resistant Apec polycarbonate. The facility will have an annual capacity of some 5,000 tons and will cost some EUR 38 million to build. It is scheduled to go on stream at the end of 2003 and will create about 35 new jobs (Bayer press release 13 December 2001).[125]

Industrial Park Walsrode (see section on chemicals) is currently home to Bayer's units and subsidiaries in the chemical and plastics processing industry. The aim is to attract more companies to the site. For further information see:
http://www.industriepark-walsrode.de/index.cfm?PAGE_ID=1254

Bayer's Chemical Parks
Bayer sites in Brunsbuttel, Dormagen, Leverkusen and Uerdingen have evolved as chemical parks. These sites offer a total of more than 643 acres of land for use by other companies, combined with infrastructure and a network for all kinds of chemicals.[126] Particular opportunities exist for partners from the chemical and pharmaceutical industries, as well as for service companies to those industries and manufacturers which use chemical products as their raw materials. Such companies have the option of constructing their own plants or leasing facilities at the Chemical Parks, utilising the existing infrastructure and services.[127]

Polymers:
Ground was broken on Wednesday, October 17, 2001, for the construction of a polymer production facility for DuBay Polymer GmbH, a newly founded joint venture between DuPont (see forthcoming corporate profile) and Bayer. The capital invested in the plant is over EUR 50 million, and production is due to start in 2003. "With a capacity of 80,000 metric tonnes per year," said Dr. Jürgen Dahmer, head of the Bayer Plastics Business Group, "we are setting up the world's biggest production facility for polybutylene terephthalate (PBT)."[128]

Bayer AG and Monsanto are old friends. 'In 1954 Bayer AG formed a joint venture with Monsanto Chemical Corp., which was called Mobay Chemical Corp. In 1967, Bayer acquired Monsanto's 50 percent ownership in Mobay, making it a wholly owned subsidiary.[129]
In 1995 Bayer acquired Monsanto's styrenics business. Monsanto kept managing the plastics operation under an operating agreement with Bayer.[130]

Online business-to-business (B2B) transactions
Bayer is expanding its activities in electronic commerce, and within a few years the company will be doing about 5 billion Euro a year in business through Internet auctions, electronic marketplaces or interactive customer portals (Bayer Annual Report 2000). Bayer is both a participant in and co-founder of a number of large electronic B2B marketplaces, at which raw materials and products, supplies, scientific expertise and services, even complete pre-assembled systems for production facilities are traded.

An example of such an Internet marketplace is Omnexus (www.omnexus.com) for thermoplastics, founded by major chemical companies such as BASF, Dow, DSM, DuPont and Solvay.[131]

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