Bayer AG has denied having knowledge of the results of its blood-thinner drug trial before selling $5.75 billion worth of bonds to investors. The trial was abruptly halted earlier this week due to a lack of efficacy. This development has raised concerns and prompted questions from investors and analysts who are now questioning whether the company was aware of the trial outcome before conducting the debt sale.
In response to these concerns, a Bayer spokesperson stated that the results of the OCEANIC-AF study on the drug, called Asundexian, were not yet available at the time the bond was priced. The spokesperson reiterated that all relevant information and risks were included in the bond prospectus.
The aftermath of the drug development setback, combined with a major jury verdict regarding the company's controversial weedkiller Roundup, has resulted in a decline in Bayer's shares and bonds. This has increased the likelihood that the company will have to tap into the $16 billion set aside for related lawsuits, and potentially even more.
Bayer sold the bonds with tenors ranging from three to 30 years on November 16th. However, the notes have experienced a drop of up to 1.6 cents on the dollar and the spread has expanded by 25 basis points over US Treasuries since pricing, as reported by Trace data.
Following the halt of the drug study, Bayer held discussions with investors in an effort to address their concerns. However, the spokesperson declined to provide any further comments on the matter.
The recent setbacks experienced by Bayer, including the significant trial loss and the discontinuation of a promising drug, have had a profound impact on the company's investors. CreditSights analysts Andrew Brady and Jarah Cotton noted, "Investors are stinging from the $5.75 billion bond placement."
As Bayer faces increased uncertainty regarding its share price and potential legal costs, it remains to be seen how the company will navigate these challenges and reassure its investors.